Kinder Morgan, Inc. (NYSE:KMI) Q4 2019 Earnings Conference Call - Final Transcript

Jan 22, 2020 • 04:30 pm ET


Kinder Morgan, Inc. (NYSE:KMI) Q4 2019 Earnings Conference Call - Final Transcript


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Welcome to the Quarterly Earnings Conference Call. At this time, all participants are in a listen-only mode until the question-and-answer session of today's conference. [Operator Instructions]. I would like to inform all parties that today's conference is being recorded. If you have any objections, you may disconnect at this time. I will now turn the call over to Mr. Rich Kinder, Executive Chairman of Kinder Morgan. Thank you sir, you may begin.

Richard D. Kinder

Thank you, Denise. Before we begin, as usual, I'd like to remind you that KMI's earnings release today and this call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934 as well as certain non-GAAP financial measures. Before making any investment decisions, we strongly encourage you to read our full disclosures on forward-looking statements and use of non-GAAP financial measures set forth at the end of our earnings release as well as review our latest filings with the SEC for important material assumptions, expectations, and risk factors that may cause actual results to differ materially from those anticipated and described in such forward-looking statements.

Before turning the call over to Steve and the team, let me begin this call by touching upon the state of the energy segment of our economy as we start this new decade. As a share of the S&P 500, the energy business has declined from 16% at its high point in 2008 to about 4% today. There are many explanations for this deterioration in relative value and some of them are frankly beyond the control of our industry, but let me concentrate on a few things I believe our business needs to do if we are to succeed and prosper in this challenging environment. We need to show our investors that we have a path forward to produce reasonable returns for our shareholders on a sustainable long-term basis. This means that as an industry we have to produce positive cash flow from our operations and use it to benefit our shareholders. We also have to constantly explain why fossil fuels and particularly natural gas have a long runway of future utilization under even the most bullish scenarios for converting the world's economy to renewable fuels. A range of research have been published underpinning this position, but it often gets overwhelmed by sloganeering and political noise. Finally, we have as an industry to do as much as we reasonably can to reduce our emissions becoming part of the solution, not part of the problem. I've outlined on previous calls the success we and others in the midstream segment have had in lowering our methane emissions and the whole industry needs to move forward on this track and report results in a transparent way.

Now let me apply the financial part of what I've just said to Kinder Morgan. Our strategy is in many ways a conservative one, which I think is in keeping with the nature of the industry in which we