Kinder Morgan (NYSE: KMI) reported Q4 EPS of $0.08, $0.11 worse than the analyst estimate of $0.19. Revenue for the quarter came in at $3.39 billion versus the consensus estimate of $3.54 billion.

2017 Outlook

On Dec. 5, 2016, KMI issued its preliminary 2017 financial projections and said it expects to declare dividends of $0.50 per share and to achieve distributable cash flow of approximately $4.46 billion and Adjusted EBITDA of approximately $7.2 billion for the year. KMI also expects to invest $3.2 billion in growth projects during 2017, to be funded with internally generated cash flow without needing to access equity markets, and to end the year with a net debt-to-Adjusted EBITDA ratio of approximately 5.4 times. KMI’s 2017 budget assumes a joint venture partner on the company’s Trans Mountain expansion project and contributions from that partner to fund its share of growth capital, but does not include any potential proceeds in excess of the partner’s share of expansion capital to recognize the value created in developing the project to this stage. KMI does not provide budgeted net income attributable to common stockholders (the GAAP financial measure most directly comparable to distributable cash flow and Adjusted EBITDA) due to the inherent difficulty and impracticality of predicting certain amounts required by GAAP, such as ineffectiveness on commodity, interest rate and foreign currency hedges, unrealized gains and losses on derivatives marked to market, and potential changes in estimates for certain contingent liabilities.

KMI’s expectations assume average annual prices for West Texas Intermediate (WTI) crude oil of $53 per barrel and Henry Hub natural gas of $3 per MMBtu, which were consistent with forward pricing during the company’s budget process. The vast majority of cash generated by KMI is fee-based and therefore is not directly exposed to commodity prices. The primary area where KMI has commodity price sensitivity is in its CO2 segment, where KMI hedges the majority of its next 12 months of oil production to minimize this sensitivity. For 2017, the company estimates that every $1 per barrel change in the average WTI crude oil price impacts distributable cash flow by approximately $6 million and each $0.10 per MMBtu change in the price of natural gas impacts distributable cash flow by approximately $1 million.

For earnings history and earnings-related data on Kinder Morgan (KMI) click here.