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Acquisitions and Divestitures (Notes) | 3 Months Ended
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Mar. 31, 2014
Acquisitions and Divestitures [Abstract] |
Acquisitions and Divestitures | Acquisitions and Divestitures Acquisitions American Petroleum Tankers and State Class Tankers Effective January 17, 2014, KMP acquired American Petroleum Tankers (APT) and State Class Tankers (SCT) for aggregate consideration of $960 million in cash, subject to purchase price adjustments (the APT acquisition). KMGP, as KMP’s general partner, has agreed to waive incentive distribution amounts of $13 million for 2014, $19 million for 2015 and $6 million for 2016 to facilitate the transaction. APT is engaged in the marine transportation of crude oil, condensate and refined products in the U.S. domestic trade, commonly referred to as the Jones Act trade. APT’s primary assets consist of a fleet of five medium range Jones Act qualified product tankers, each with 330 MBbl of cargo capacity, and each operating pursuant to long-term time charters with high quality counterparties, including major integrated oil companies, major refiners and the U.S. Navy. The vessels’ time charters have an average remaining term of approximately four years, with renewal options to extend the initial terms by an average of two years. APT’s vessels are operated by Crowley Maritime Corporation. SCT has commissioned the construction of four medium range Jones Act qualified product tankers, each with 330 MBbl of cargo capacity. The SCT vessels are scheduled to be delivered in 2015 and 2016 and are being constructed by General Dynamics’ NASSCO shipyard. KMP expects to invest approximately $214 million to complete the construction of the vessels. Upon delivery, the SCT vessels will be operated pursuant to long-term time charters with a major integrated oil company. Each of the time charters has an initial term of five years, with renewal options to extend the initial term by up to three years. The APT acquisition complements and extends KMP’s existing crude oil and refined products transportation business, and all of the acquired assets are included in the Terminals—KMP business segment. As of March 31, 2014 , KMP’s preliminary purchase price allocation related to the APT acquisition, as adjusted to date, is as follows (in millions). The evaluation of the assigned fair values is ongoing and subject to adjustment.
Preliminary Purchase Price Allocation: |
Current assets | $ | 2 |
Property, plant and equipment | 887 |
Goodwill | 68 |
Other assets | 3 |
Total assets acquired | 960 |
Cash consideration | $ | 960 |
The “Goodwill” intangible asset amount represents the future economic benefits expected to be derived from KMP’s acquisition that are not assignable to other individually identifiable, separately recognizable assets acquired. We believe the primary items that generated the goodwill are the value of the synergies created by expanding KMP’s non-pipeline liquids handling operations, and we expect the entire amount to be deductible for tax purposes. Other Effective May 1, 2013, KMP acquired all of Copano’s outstanding units for a total purchase price of approximately $5.2 billion (including assumed debt and all other assumed liabilities). The transaction was a 100% unit for unit transaction with an exchange ratio of 0.4563 of KMP’s common units for each Copano common unit. KMP issued 43,371,210 of its common units valued at $3,733 million as consideration for the Copano acquisition (based on the $86.08 closing market price of a common unit on the NYSE on the May 1, 2013 issuance date). Our accounting policy is to apply the look-through method of recording deferred taxes on the outside book tax basis differences in our investments without regard to non-tax deductible goodwill. As a result of the goodwill recorded by KMP for its Copano acquisition, KMI’s deferred tax liability and goodwill were decreased by $260 million for the portion of its outside basis difference associated with KMP’s underlying goodwill. Effective June 1, 2013, KMP acquired certain oil and gas properties, rights, and related assets located in the Goldsmith Landreth San Andres oil field unit in the Permian Basin of West Texas from Legado Resources LLC for an aggregate consideration of $298 million, consisting of $280 million in cash and assumed liabilities of $18 million (including $12 million of long-term asset retirement obligations). For additional information about KMP’s Copano and Goldsmith Landreth acquisitions (including our preliminary purchase price allocations as of December 31, 2013), see Note 3 “Acquisitions and Divestitures—Business Combinations and Acquisitions of Investments” to our consolidated financial statements included in our 2013 Form 10-K. Pro Forma Information The following summarized unaudited pro forma consolidated income statement information for the three months ended March 31, 2013, assumes that KMP’s acquisitions of (i) APT, (ii) Copano and (iii) the Goldsmith Landreth oil field unit had occurred as of January 1, 2013. We prepared the following summarized unaudited pro forma financial results for comparative purposes only. The summarized unaudited pro forma financial results may not be indicative of the results that would have occurred if these acquisitions had been completed as of January 1, 2013, or the results that will be attained in the future. Amounts presented below are in millions, except for the per share amounts:
| Pro Forma
| Three Months Ended March 31, 2013
| (Unaudited)
Revenues |  | $ | 3,610 |
Income from Continuing Operations |  | 630 |
Loss from Discontinued Operations, Net of Tax |  | (2 | )
Net Income |  | 628 |
Net Income Attributable to Noncontrolling Interests |  | (356 | )
Net Income Attributable to Kinder Morgan, Inc. |  | 272 |
Diluted Earnings per Class P Share |  | $ | 0.26 |
Divestitures Express Pipeline System Effective March 14, 2013, KMP sold both its one-third equity ownership interest in the Express pipeline system and its subordinated debenture investment in Express to Spectra Energy Corp. KMP received net cash proceeds of $402 million (after paying $1 million in the second quarter of 2013 for both a final working capital settlement and certain transaction related selling expenses), and we reported the $403 million in proceeds received in the first quarter of 2013 within “Proceeds from sales of investments” within the investing section of our accompanying consolidated statement of cash flows. Additionally, we recognized a combined $225 million pre-tax gain with respect to this sale in the first quarter of 2013, and we reported this gain amount separately as “Gain on sale of investments in Express pipeline system” on our accompanying consolidated statement of income. We also recorded an income tax expense of $84 million related to this gain on sale for the three month period, and we included this expense within “Income Tax Expense.” As of the date of sale, KMP’s equity investment in Express totaled $67 million and its note receivable due from Express totaled $110 million. BBPP Holdings Ltda On January 18, 2013, we completed the sale of our equity interests in the Bolivia to Brazil Pipeline for $88 million, which amount is included in “Proceeds from sale of investments” within the investing section of our accompanying consolidated statement of cash flows. KMP’s FTC Natural Gas Pipelines Disposal Group – Discontinued Operations As discussed in our 2013 Form 10-K, we sold KMP’s FTC Natural Gas Pipelines disposal group to Tallgrass Energy Partners, LP (now known as Tallgrass Development, LP) (Tallgrass) effective November 1, 2012. KMP and Tallgrass trued up the final consideration for the sale of KMP’s FTC Natural Gas Pipelines disposal group in the first quarter of 2013, and based on this true up, we recognized an additional $2 million loss. Subsequent Event—Drop-down of Assets to EPB On April 28, 2014, EPB announced that it will acquire from us our 50% interest in Ruby Pipeline, our 50% interest in Gulf LNG and our 47.5% interest in Young Gas Storage in May 2014. The terms of this drop-down transaction were approved on our behalf by the independent members of our board of directors and on EPB’s behalf by its general partner's board of directors following the receipt of separate fairness opinions from different investment banks.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References No definition available. + Details
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