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Acquisitions and Divestitures (Notes) | 12 Months Ended
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Dec. 31, 2023
Business Combination and Asset Acquisition [Abstract] |
Acquisitions and Divestitures |
3. | Acquisitions and Divestitures
Business Combinations For acquired businesses, we recognize the identifiable assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree at their estimated fair values on the date of acquisition with any excess purchase price over the fair value of net assets acquired recorded to goodwill. Determining the fair value of these items requires management’s judgment and the utilization of an independent valuation specialist, if applicable, and involves the use of significant estimates and assumptions. Our allocation of the purchase price for acquisitions completed during the years ended December 31, 2023, 2022 and 2021 are detailed below:
|  |  |  |  | Assignment of Purchase Price |  |
Ref |  | Acquisition | Purchase price |  | Current assets |  | Property, plant & equipment |  | Other long-term assets |  | Current liabilities |  | Long-term liabilities |  | Non-controlling interest |  | Resulting goodwill
|  |  | (In millions)
(1) |  | STX Midstream(a) | $ | 1,831 |  |  | $ | 41 |  |  | $ | 1,199 |  |  | $ | 552 |  |  | $ | (11) |  |  | $ | (2) |  |  | $ | (104) |  |  | $ | 156 |
(2) |  | Diamond M | 13 |  |  | — |  |  | 25 |  |  | — |  |  | — |  |  | (12) |  |  | — |  |  | — |
(3) |  | North American Natural Resources | 132 |  |  | 2 |  |  | 5 |  |  | 64 |  |  | — |  |  | — |  |  | — |  |  | 61 |
(4) |  | Mas Ranger, LLC | 358 |  |  | 9 |  |  | 31 |  |  | 320 |  |  | (2) |  |  | — |  |  | — |  |  | — |
(5) |  | Kinetrex Energy | 318 |  |  | 18 |  |  | 49 |  |  | 272 |  |  | (6) |  |  | (68) |  |  | — |  |  | 53 |
(6) |  | Stagecoach | 1,258 |  |  | 53 |  |  | 1,187 |  |  | 24 |  |  | (6) |  |  | — |  |  | — |  |  | — |
(a)The purchase price allocation for the STX Midstream Acquisition is preliminary. (1) STX Midstream Pipeline System (STX Midstream) Acquisition On December 28, 2023, we completed the acquisition of STX Midstream from NextEra Energy Partners for a purchase price of $1,831 million, including preliminary purchase price adjustments for working capital. Other long-term assets includes $357 million related to customer relationships with weighted average amortization period of 15 years and $192 million related to a 50% equity investment interest in Dos Caminos, LLC. The acquisition includes a 90% interest in NET Mexico Pipeline LLC. The goodwill consists primarily of synergies expected from the business combination and is tax deductible. The acquired assets are included in our Natural Gas business segment. The determination of fair value utilized valuation methodologies including discounted cash flows for the customer relationships intangible assets and the equity method investment and the replacement cost approach for the property, plant and equipment. The significant assumptions made in performing these valuations include the discount rate utilized to value the customer relationships intangible assets and equity method investment and replacement costs used to value property, plant and equipment. (2) Diamond M Acquisition On June 1, 2023, we completed the acquisition of the Diamond M Field from Parallel Petroleum LLC for a purchase price of $13 million, including purchase price adjustments for working capital. The acquired assets, which are adjacent to our SACROC field, are included in our CO 2 business segment. (3) North American Natural Resources Acquisition On August 11, 2022, we completed the acquisition of seven landfill assets with the purchase of North American Natural Resources, Inc. and, its sister companies, North American Biofuels, LLC and North American-Central, LLC (NANR) consisting of GTE facilities in Michigan and Kentucky for $132 million, including purchase price adjustments for working capital. Other long-term assets within the purchase price allocation consists of intangibles related to gas rights and customer contracts with a weighted average amortization period of approximately 13 years. The goodwill associated with this acquisition is tax deductible. The acquired assets align with our strategy to invest in low-carbon energy and are included as part of our new Energy Transition Ventures group within our CO 2 business segment. During November 2023, the seller exercised its option to repurchase one of the landfill assets for an insignificant amount. (4) Mas Ranger Acquisition On July 19, 2022, we completed an acquisition of three landfill assets with the purchase of Mas Ranger, LLC and its subsidiaries from Mas CanAm, LLC, comprising an RNG facility in Arlington, Texas and medium Btu facilities in Shreveport, Louisiana and Victoria, Texas for $358 million including purchase price adjustments for working capital. Other long-term assets within the purchase price allocation reflects an intangible related to a customer contract with an amortization period of approximately 17 years. The acquired assets align with our strategy to invest in low-carbon energy and are included as part of our new Energy Transition Ventures group within our CO 2 business segment. (5) Kinetrex Acquisition On August 20, 2021, we completed the acquisition of Indianapolis-based Kinetrex Energy (Kinetrex) from an affiliate of Parallel49 Equity for $318 million, including purchase price adjustments for working capital. Other long-term assets within the purchase price allocation includes $63 million related to an equity investment and $199 million related to a customer relationship with an amortization period of approximately 10 years. Kinetrex was a supplier of LNG in the Midwest and a producer and supplier of RNG under long-term contracts to transportation service providers. At the acquisition date, Kinetrex had a 50% interest in the largest RNG facility in Indiana, and we commenced construction on three additional landfill-based RNG facilities in September 2021. The acquired assets align with our strategy to invest in low-carbon energy and are included as part of our new Energy Transition Ventures group within our CO 2 business segment. (6) Stagecoach Acquisition On July 9, 2021 and November 24, 2021, we completed the acquisitions of Stagecoach and its subsidiaries, a natural gas pipeline and storage joint venture between Consolidated Edison, Inc. and Crestwood Equity Partners, LP, for approximately $1,258 million, including a purchase price adjustment for working capital. Other long-term assets within the purchase price allocation relates to customer contracts with a weighted average amortization period of less than two years. The determination of fair value utilized valuation methodologies including discounted cash flows and the cost approach. The significant assumptions made in performing these valuations include a discount rate of approximately 12%, future revenues and replacement costs. To compute estimated future cash flows for Stagecoach, transportation and storage revenue forecasts were developed based on projected demand and future rates for services in the Northeast market areas. Pro Forma Information Pro forma consolidated income statement information that gives effect to the above acquisitions as if they had occurred as of January 1 of each year preceding each transaction is not presented because it would not be materially different from the information presented in our accompanying consolidated statements of income. Divestitures Sale of Interest in ELC On September 26, 2022, we completed the sale of a 25.5% ownership interest in ELC. We received net proceeds of $557 million which were used to reduce short-term borrowings. As we continue to have a controlling financial interest in ELC, we recorded an increase of $190 million to “Additional paid in capital” for the impact of the change in our ownership interest in ELC, which is reflected on our accompanying consolidated statement of stockholders’ equity for the year ended December 31, 2022. We continue to own a 25.5% interest in and operate ELC. We continue to consolidate ELC. We have determined that ELC is a variable interest entity and Southern Liquefaction Company, LLC (SLC), which is indirectly controlled by us, is the primary beneficiary because it has the ability to direct the activities that most significantly impact ELC’s economic performance and the right to receive benefits and the obligation to absorb losses. In addition to being the operator of ELC, the evaluation of ELC as a variable interest entity and SLC as the primary beneficiary included consideration of the following: (i) a liquefaction service agreement between ELC and its customer was designed for recovery by ELC of actual costs for operating and maintaining ELC’s facilities, which reduces the risk for all equity owners to absorb losses resulting from cost variability; and (ii) substantially all ELC’s activities involve KMI subsidiaries under common control that provide services for and benefit from the operations of ELC. The following table shows the carrying amount and classification of ELC’s assets and liabilities in our consolidated balance sheets:
| December 31,
| 2023 |  | 2022
| (In millions)
Assets |  |  |
Current assets | $ | 46 |  |  | $ | 34 |
Property, plant and equipment, net | 1,162 |  |  | 1,197 |
Deferred charges and other assets | 5 |  |  | 6 |
Liabilities |  |  |
Current liabilities | $ | 15 |  |  | $ | 15 |
Other long-term liabilities and deferred credits | 25 |  |  | 5 |
We receive distributions from ELC, indirectly, through our interest in SLC, but otherwise, the assets of ELC cannot be used to settle our obligations. ELC’s creditors have no recourse against our general credit and the obligations of ELC may only be settled using the assets of ELC. ELC does not guarantee our debt or other similar commitments. Sale of an Interest in NGPL Holdings LLC On March 8, 2021, we and Brookfield Infrastructure Partners L.P. (Brookfield) completed the sale of a combined 25% interest in our joint venture, NGPL Holdings LLC (NGPL Holdings), to a fund controlled by ArcLight Capital Partners, LLC (ArcLight). We received net proceeds of $412 million for our proportionate share of the interests sold, which included the transfer of $125 million of our $500 million related party promissory note receivable from NGPL Holdings to ArcLight with quarterly interest payments at 6.75%. We recognized a pre-tax gain of $206 million for our proportionate share, which is included within “Other, net” in our accompanying consolidated statement of income for the year ended December 31, 2021. After a subsequent transfer of third party interest, we and Arclight now each hold a 37.5% interest in NGPL Holdings.

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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 Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//205-20/tableOfContent + Details
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