v2.4.0.8
Guarantee of Securities of Subsidiaries (Notes)
3 Months Ended
Mar. 31, 2014
Guarantees [Abstract]  
Guarantees [Text Block]
Guarantee of Securities of Subsidiaries
    
KMI had guaranteed the payment of the outstanding senior notes issued by El Paso LLC (formerly known as El Paso Corporation) as a result of the EP acquisition. These notes were also guaranteed by El Paso, El Paso LLC’s direct parent. El Paso Issuing Corporation (Finance Corp), a direct subsidiary of El Paso LLC, is the co-issuer of these notes. The aggregate principal amount of these series of El Paso LLC senior notes are referred to as the “Guaranteed Notes”. On October 3, 2013, El Paso LLC transferred substantially all of its assets to El Paso Holdco pursuant to an internal restructuring transaction. In connection with such internal restructuring, El Paso Holdco succeeded El Paso LLC as issuer with respect to the Guaranteed Notes, and El Paso LLC ceased to be an obligor with respect to the Guaranteed Notes. Prior to the internal restructuring, El Paso Holdco had been presented as the “Guarantor Subsidiary” and is now presented as one of the “Subsidiary Issuers.” KMI continues to guarantee the payment of the Guaranteed Notes. Finance Corp’s obligations as a co-issuer and primary obligor continue to be joint and several with the obligations of El Paso Holdco as issuer. As of both March 31, 2014, and December 31, 2013, approximately $3.8 billion of these guaranteed notes are outstanding. Subject to the limitations set forth in the applicable supplemental indentures, the guarantee of KMI is full and unconditional and joint and several, and guarantee the Guaranteed Notes through their respective maturity dates, the latest of which is in 2037. Finance Corp has no subsidiaries and no independent assets or operations. A significant amount of KMI’s income and cash flow are generated by its subsidiaries. As a result, the funds necessary to meet KMI’s debt service and/or guarantee obligations are provided in large part by distributions or advances from its subsidiaries. Included among the non-guarantor subsidiaries are KMP, KMR and EPB, along with KMGP, the general partner of KMP and El Paso Pipeline GP Company, L.L.C., the general partner of EPB. In the following condensed consolidating financial information, KMI is “Parent Guarantor,” and El Paso Holdco and Finance Corp are the “Subsidiary Issuers.” Both of the Subsidiary Issuers are 100% owned by KMI.
Condensed Consolidating Statement of Income for the Three Months Ended March 31, 2014
(In Millions)
(Unaudited)
 
Parent Guarantor
 
Subsidiary Issuers
 
Non-guarantor Subsidiaries
 
Eliminations
 
Consolidated KMI
Revenues
$
9

 
$

 
$
4,048

 
$
(10
)
 
$
4,047

 
 
 
 
 
 
 
 
 
 
Costs, expenses and other
 
 
 
 
 
 
 
 
 
Costs of sales

 

 
1,643

 

 
1,643

     Depreciation, depletion and amortization

 

 
496

 

 
496

     Other operating expenses
8

 

 
763

 
(10
)
 
761

Total costs, expenses and other
8

 

 
2,902

 
(10
)
 
2,900

 
 
 
 
 
 
 
 
 
 
Operating income
1

 

 
1,146

 

 
1,147

 
 
 
 
 
 
 
 
 
 
Other income (expense)
 
 
 
 
 
 
 
 
 
     Earnings from equity investments
345

 
127

 
99

 
(472
)
 
99

     Interest, net
(73
)
 
(65
)
 
(310
)
 

 
(448
)
     Amortization of excess cost of equity investments and other, net
1

 

 
2

 

 
3

 
 
 
 
 
 
 
 
 
 
Income from continuing operations before income taxes
274

 
62

 
937

 
(472
)
 
801

 
 
 
 
 
 
 
 
 
 
Income tax benefit (expense)
13

 
(13
)
 
(200
)
 

 
(200
)
 
 
 
 
 
 
 
 
 
 
Net income
287

 
49

 
737

 
(472
)
 
601

 
 
 
 
 
 
 
 
 
 
Net income attributable to noncontrolling interests

 

 
(331
)
 
17

 
(314
)
 
 
 
 
 
 
 
 
 
 
Net income attributable to controlling interests
$
287

 
$
49

 
$
406

 
$
(455
)
 
$
287










Condensed Consolidating Statement of Income for the Three Months Ended March 31, 2013
(In Millions)
(Unaudited)
 
Parent Guarantor
 
Subsidiary Issuers
 
Non-guarantor Subsidiaries
 
Eliminations
 
Consolidated KMI
Revenues
$
9

 
$

 
$
3,058

 
$
(7
)
 
$
3,060

 
 
 
 
 
 
 
 
 
 
Costs, expenses and other
 
 
 
 
 
 
 
 
 
Costs of sales

 

 
970

 

 
970

     Depreciation, depletion and amortization

 

 
415

 

 
415

     Other operating expenses
3

 
(3
)
 
665

 
(7
)
 
658

Total costs, expenses and other
3

 
(3
)
 
2,050

 
(7
)
 
2,043

 
 
 
 
 
 
 
 
 
 
Operating income
6

 
3

 
1,008

 

 
1,017

 
 
 
 
 
 
 
 
 
 
Other income (expense)
 
 
 
 
 
 
 
 
 
     Earnings from equity investments
339

 
142

 
101

 
(481
)
 
101

     Interest, net
(65
)
 
(106
)
 
(231
)
 

 
(402
)
     Amortization of excess cost of equity investments, gain on sale of investments and other, net

 
(1
)
 
222

 

 
221

 
 
 
 
 
 
 
 
 
 
Income from continuing operations before income taxes
280

 
38

 
1,100

 
(481
)
 
937

 
 
 
 
 
 
 
 
 
 
Income tax benefit (expense)
12

 

 
(291
)
 

 
(279
)
 
 
 
 
 
 
 
 
 
 
Income from continuing operations
292

 
38

 
809

 
(481
)
 
658

 
 
 
 
 
 
 
 
 
 
Loss from discontinued operations, net of tax

 

 
(2
)
 

 
(2
)
 
 
 
 
 
 
 
 
 
 
Net income
292

 
38

 
807

 
(481
)
 
656

 
 
 
 
 
 
 
 
 
 
Net income attributable to noncontrolling interests

 

 
(388
)
 
24

 
(364
)
 
 
 
 
 
 
 
 
 
 
Net income attributable to controlling interests
$
292

 
$
38

 
$
419

 
$
(457
)
 
$
292




Condensed Consolidating Statement of Comprehensive Income for the Three Months Ended March 31, 2014
(In Millions)
(Unaudited)
 
Parent Guarantor
 
Subsidiary Issuers
 
Non-guarantor Subsidiaries
 
Eliminations
 
Consolidated KMI
Net income
$
287

 
$
49

 
$
737

 
$
(472
)
 
$
601

Other comprehensive loss, net of tax
 
 
 
 
 
 
 
 
 
Change in fair value of derivatives utilized for hedging purposes
(19
)
 
(2
)
 
(44
)
 
20

 
(45
)
Reclassification of change in fair value of derivatives to net income
6

 

 
13

 
(5
)
 
14

Foreign currency translation adjustments
(25
)
 

 
(60
)
 
23

 
(62
)
Adjustments to pension and other postretirement benefit plan liabilities

 

 
(2
)
 
1

 
(1
)
Total other comprehensive loss
(38
)
 
(2
)
 
(93
)
 
39

 
(94
)
Comprehensive income
249

 
47

 
644

 
(433
)
 
507

Comprehensive income attributable to noncontrolling interests

 

 
(258
)
 

 
(258
)
Comprehensive income attributable to controlling interests
$
249

 
$
47

 
$
386

 
$
(433
)
 
$
249




Condensed Consolidating Statement of Comprehensive Income for the Three Months Ended March 31, 2013
(In Millions)
(Unaudited)
 
Parent Guarantor
 
Subsidiary Issuers
 
Non-guarantor Subsidiaries
 
Eliminations
 
Consolidated KMI
Net income
$
292

 
$
38

 
$
807

 
$
(481
)
 
$
656

Other comprehensive loss, net of tax
 
 
 
 
 
 
 
 
 
Change in fair value of derivatives utilized for hedging purposes
(16
)
 
1

 
(30
)
 
14

 
(31
)
Reclassification of change in fair value of derivatives to net income
(4
)
 
(1
)
 
(6
)
 
5

 
(6
)
Foreign currency translation adjustments
(17
)
 

 
(32
)
 
16

 
(33
)
Adjustments to pension and other postretirement benefit plan liabilities
(1
)
 
(3
)
 
(1
)
 
4

 
(1
)
Total other comprehensive loss
(38
)
 
(3
)
 
(69
)
 
39

 
(71
)
Comprehensive income
254

 
35

 
738

 
(442
)
 
585

Comprehensive income attributable to noncontrolling interests

 

 
(331
)
 

 
(331
)
Comprehensive income attributable to controlling interests
$
254

 
$
35

 
$
407

 
$
(442
)
 
$
254





Condensed Consolidating Balance Sheet as of March 31, 2014
(In Millions)
(Unaudited)
 
Parent Guarantor
 
Subsidiary Issuers
 
Non-guarantor Subsidiaries
 
Eliminations
 
Consolidated KMI
ASSETS
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
56

 
$

 
$
457

 
$

 
$
513

All other current assets
642

 
3

 
2,826

 
(322
)
 
3,149

Property, plant and equipment, net
25

 

 
36,927

 

 
36,952

Investments

 

 
5,962

 

 
5,962

Investments in affiliates
20,437

 
6,151

 

 
(26,588
)
 

Goodwill

 
8,062

 
16,501

 

 
24,563

Notes receivable from affiliates

 

 
1,993

 
(1,993
)
 

Other non-current assets
208

 
844

 
4,679

 
(816
)
 
4,915

Total assets
$
21,368

 
$
15,060

 
$
69,345

 
$
(29,719
)
 
$
76,054

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
Current portion of debt
$
660

 
$
317

 
$
1,435

 
$

 
$
2,412

All other current liabilities
247

 
124

 
3,607

 
(322
)
 
3,656

Long-term debt
3,117

 
3,987

 
27,695

 

 
34,799

Notes payable to affiliates
1,993

 

 

 
(1,993
)
 

Deferred income taxes
2,295

 

 
3,120

 
(816
)
 
4,599

Other long-term liabilities and deferred credits
256

 
71

 
1,827

 

 
2,154

     Total liabilities
8,568

 
4,499

 
37,684

 
(3,131
)
 
47,620

 
 
 
 
 
 
 
 
 
 
Stockholders’ equity
 
 
 
 
 
 
 
 
 
Total KMI equity
12,800

 
10,561

 
15,603

 
(26,164
)
 
12,800

Noncontrolling interests

 

 
16,058

 
(424
)
 
15,634

     Total stockholders’ equity
12,800

 
10,561

 
31,661

 
(26,588
)
 
28,434

Total liabilities and stockholders’ equity
$
21,368

 
$
15,060

 
$
69,345

 
$
(29,719
)
 
$
76,054




Condensed Consolidating Balance Sheet as of December 31, 2013
(In Millions)

 
Parent Guarantor
 
Subsidiary Issuers
 
Non-guarantor Subsidiaries
 
Eliminations
 
Consolidated KMI
ASSETS
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
83

 
$

 
$
515

 
$

 
$
598

All other current assets
945

 
38

 
2,763

 
(476
)
 
3,270

Property, plant and equipment, net
10

 

 
35,837

 

 
35,847

Investments

 

 
5,951

 

 
5,951

Investments in affiliates
20,336

 
6,651

 

 
(26,987
)
 

Goodwill

 
8,062

 
16,442

 

 
24,504

Notes receivable from affiliates

 

 
1,993

 
(1,993
)
 

Other non-current assets
227

 
841

 
4,759

 
(812
)
 
5,015

Total assets
$
21,601

 
$
15,592

 
$
68,260

 
$
(30,268
)
 
$
75,185

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
Current portion of debt
$
175

 
$
400

 
$
1,731

 
$

 
$
2,306

All other current liabilities
228

 
135

 
3,882

 
(476
)
 
3,769

Long-term debt
3,371

 
3,999

 
26,517

 

 
33,887

Notes payable to affiliates
1,993

 

 

 
(1,993
)
 

Deferred income taxes
2,426

 

 
3,037

 
(812
)
 
4,651

Other long term liabilities and deferred credits
315

 
69

 
1,903

 

 
2,287

     Total liabilities
8,508

 
4,603

 
37,070

 
(3,281
)
 
46,900

 
 
 
 
 
 
 
 
 
 
Stockholders’ equity
 
 
 
 
 
 
 
 
 
Total KMI equity
13,093

 
10,989

 
15,596

 
(26,585
)
 
13,093

Noncontrolling interests

 

 
15,594

 
(402
)
 
15,192

     Total stockholders’ equity
13,093

 
10,989

 
31,190

 
(26,987
)
 
28,285

Total liabilities and stockholders’ equity
$
21,601

 
$
15,592

 
$
68,260

 
$
(30,268
)
 
$
75,185



 Condensed Consolidating Statement of Cash Flows for the Three Months Ended March 31, 2014
(In Millions)
(Unaudited)
 
Parent Guarantor
 
Subsidiary Issuers
 
Non-guarantor Subsidiaries
 
Eliminations
 
Consolidated KMI
Net cash provided by (used in) operating activities
$
526

 
$
(88
)
 
$
1,287

 
$
(607
)
 
$
1,118

 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities
 
 
 
 
 
 
 
 
 
Business acquisitions

 

 
(960
)
 

 
(960
)
Acquisitions of other assets and investments

 

 
(30
)
 

 
(30
)
Capital expenditures
(15
)
 

 
(830
)
 

 
(845
)
Loans to related party

 

 
(17
)
 

 
(17
)
Funding to affiliates
(235
)
 
(1
)
 
(43
)
 
279

 

Investments in KMP and EPB
(11
)
 

 

 
11

 

Contributions to investments

 

 
(36
)
 

 
(36
)
Distributions from equity investments in excess of cumulative earnings
10

 

 
38

 
(10
)
 
38

Natural gas storage and natural gas and liquids line-fill

 

 
21

 

 
21

Other, net

 

 
10

 

 
10

Net cash (used in) provided by investing activities
(251
)
 
(1
)
 
(1,847
)
 
280

 
(1,819
)
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities
 
 
 
 
 
 
 
 
 
Issuance of debt
643

 

 
4,548

 

 
5,191

Payment of debt
(408
)
 
(83
)
 
(3,693
)
 

 
(4,184
)
Funding from affiliates
39

 
172

 
68

 
(279
)
 

Debt issuance costs
(2
)
 

 
(10
)
 

 
(12
)
Cash dividends
(425
)
 

 

 

 
(425
)
Repurchases of shares and warrants
(149
)
 

 

 

 
(149
)
Distributions to parent

 

 
(610
)
 
610

 

Contributions from noncontrolling interests

 

 
688

 
(4
)
 
684

Distributions to noncontrolling interests

 

 
(479
)
 

 
(479
)
Net cash (used in) provided by financing activities
(302
)
 
89

 
512

 
327

 
626

 
 
 
 
 
 
 
 
 
 
Effect of exchange rate changes on cash and cash equivalents

 

 
(10
)
 

 
(10
)
 
 
 
 
 
 
 
 
 
 
Net decrease in cash and cash equivalents
(27
)
 

 
(58
)
 

 
(85
)
Cash and cash equivalents, beginning of period
83

 

 
515

 

 
598

Cash and cash equivalents, end of period
$
56

 
$

 
$
457

 
$

 
$
513

Condensed Consolidating Statement of Cash Flows for the Three Months Ended March 31, 2013
(In Millions)
(Unaudited)
 
Parent Guarantor
 
Subsidiary Issuers
 
Non-guarantor Subsidiaries
 
Eliminations
 
Consolidated KMI
Net cash provided by operating activities
$
335

 
$
21

 
$
943

 
$
(532
)
 
$
767

 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities
 
 
 
 
 
 
 
 
 
Acquisitions of assets and investments

 

 
(4
)
 

 
(4
)
Capital expenditures
(11
)
 

 
(587
)
 

 
(598
)
Proceeds from sale of investments

 

 
491

 

 
491

Repayment from related party

 

 
10

 

 
10

Funding to affiliates
(65
)
 
(181
)
 
(167
)
 
413

 

Drop down assets to KMP
988

 

 
(988
)
 

 

Investments in KMP and EPB
(7
)
 
(1
)
 

 
8

 

Contributions to investments
(6
)
 

 
(40
)
 
6

 
(40
)
Distributions from equity investments in excess of cumulative earnings

 

 
37

 

 
37

Natural gas storage and natural gas and liquids line-fill

 

 
10

 

 
10

Other, net

 

 
(22
)
 

 
(22
)
Net cash provided by (used in) investing activities
899

 
(182
)
 
(1,260
)
 
427

 
(116
)
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities
 
 
 
 
 
 
 
 
 
Issuance of debt
520

 

 
2,699

 

 
3,219

Payment of debt
(1,230
)
 
(50
)
 
(1,811
)
 

 
(3,091
)
Funding from affiliates
55

 
166

 
192

 
(413
)
 

Debt issuance costs

 

 
(7
)
 

 
(7
)
Cash dividends
(384
)
 

 

 

 
(384
)
Repurchases of warrants
(80
)
 

 

 

 
(80
)
Distributions to parent

 

 
(530
)
 
530

 

Contributions from noncontrolling interests

 

 
471

 
(6
)
 
465

Distributions to noncontrolling interests

 

 
(375
)
 

 
(375
)
Other, net

 

 
6

 
(6
)
 

Net cash (used in) provided by financing activities
(1,119
)
 
116

 
645

 
105

 
(253
)
 
 
 
 
 
 
 
 
 
 
Effect of exchange rate changes on cash and cash equivalents

 

 
(6
)
 

 
(6
)
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in cash and cash equivalents
115

 
(45
)
 
322

 

 
392

Cash and cash equivalents, beginning of period
3

 
45

 
666

 

 
714

Cash and cash equivalents, end of period
$
118

 
$

 
$
988

 
$

 
$
1,106