Kinder Morgan Inc. (NYSE:KMI)

Pipelines (Natural gas, liquids, crude oil and CO2)

The value of pipelines remained relatively stable over the five-year period, with minor fluctuations. It started at $19,855 million in 2015, slightly decreased to $19,341 million in 2016, increased to $20,157 million in 2017, then saw a small dip to $19,727 million in 2018, and finally returned to nearly its initial value at $19,856 million in 2019. Overall, the pipeline assets show a stable valuation without significant growth or decline.

Equipment (Natural gas, liquids, crude oil, CO2, and terminals)

This category demonstrates a consistent upward trend throughout the period. Beginning at $22,979 million in 2015, it showed steady increases each year, reaching $25,791 million in 2019. The growth indicates ongoing investments or enhancements in equipment assets, with the 2019 figure approximately 12% higher than in 2015.

Other

Assets classified as "Other" experienced some variability but generally trended upward until 2017, rising from $4,719 million in 2015 to $5,570 million in 2017. After this peak, there was a slight decline to $5,447 million in 2018 and further to $5,360 million in 2019. Despite the minor decreases in the last two years, the overall increase from 2015 to 2019 suggests expansion or reclassification of miscellaneous assets.

Land and land rights-of-way

This asset category showed a gradual decline over the period. Starting at $1,450 million in 2015, the value slightly decreased each year to $1,356 million by 2019. This trend could reflect dispositions, impairments, or limited acquisitions of land assets during the timeframe.

Construction work in process (CWIP)

CWIP showed a notable degree of fluctuation. It started at $2,395 million in 2015 and decreased to $2,161 million in 2016. The value significantly increased to $2,995 million in 2017, followed by a drop to $2,312 million in 2018, and a pronounced decline to $1,006 million in 2019. This volatility may indicate uneven capital expenditure patterns, with substantial completion of projects or slowdown in new construction activities toward the end of the period.

Property, plant and equipment, gross

The gross property, plant, and equipment balance fluctuated but showed an overall increase from $51,398 million in 2015 to around $53,369 million in 2019. The peak occurred in 2017 at $54,330 million. These changes reflect the combined effect of asset acquisitions, disposals, and construction activity, maintaining a relatively stable asset base with slight growth over the five years.

Accumulated depreciation, depletion and amortization

This accumulated expense category increased steadily in magnitude each year, starting from -$10,851 million in 2015 and reaching -$16,950 million in 2019. The continuous increase in accumulated depreciation indicates ongoing usage and aging of the asset base, as expected in capital intensive industries, and contributes to the decline in net asset values.

Property, plant and equipment, net

The net value of property, plant, and equipment declined consistently over the five-year period. Beginning at $40,547 million in 2015, it decreased to $38,705 million in 2016, then slightly recovered to $40,155 million in 2017, before declining again in 2018 and 2019 to $37,897 million and $36,419 million, respectively. The overall decline of approximately 10% over the period reflects the impact of depreciation exceeding new investments or asset additions.

Average Age Ratio

The average age ratio shows a consistent upward trend over the five-year period, increasing from 21.72% in 2015 to 32.59% in 2019. This indicates that, relative to the estimated total useful life, the property, plant, and equipment (PP&E) are aging progressively each year, suggesting an ongoing increase in asset aging.

Estimated Total Useful Life

The estimated total useful life fluctuates slightly, starting at 24 years in 2015, rising to 26 years by 2017, before declining back to 24 years in 2019. This variability may reflect reassessments of asset longevity or changing operational conditions affecting the lifespan estimations of PP&E.

Estimated Age (Time Elapsed Since Purchase)

The estimated age steadily increases each year, moving from 5 years in 2015 up to 8 years in 2019. This progression is expected as assets age over time. Notably, the increment is generally one year annually, except for the period between 2017 and 2018, which remains constant at 7 years, possibly indicating limited new asset acquisitions or retirements during that interval.

Estimated Remaining Life

The estimated remaining life shows a decline overall, starting at 19 years in 2015 and 2017, decreasing slightly to 18 years in 2018, and further down to 16 years in 2019. This decreasing trend aligns with the aging assets and suggests a shortening horizon before the assets are fully depreciated or require replacement.

Accumulated Depreciation, Depletion, and Amortization

The accumulated depreciation, depletion, and amortization consistently increased each year from 2015 to 2019. The value rose from $10,851 million in 2015 to $16,950 million in 2019, indicating a growing charge over time against the company's property, plant, and equipment assets. This suggests ongoing usage and aging of the assets.

Property, Plant, and Equipment, Gross

The gross value of property, plant, and equipment remained relatively stable during the period under review. It was $51,398 million in 2015, noted a slight decrease to $51,011 million in 2016, then increased to $54,330 million in 2017 before decreasing marginally to $53,256 million in 2018 and $53,369 million in 2019. This points to moderate investment activity with minimal volatility in the asset base.

Land and Land Rights-of-Way

Values for land and land rights-of-way showed a gradual decline across the years. From $1,450 million in 2015, the amount dipped slightly to $1,431 million in 2016, increased marginally in 2017 to $1,456 million, and then declined again to $1,378 million in 2018 and further to $1,356 million in 2019. The modest declines may indicate divestments or revaluations related to land assets.

Average Age Ratio

The average age ratio exhibited a clear upward trend over the period measured, increasing steadily from 21.72% in 2015 to 32.59% in 2019. This indicates that the asset base is aging, with a larger proportion of the property, plant, and equipment approaching the later stages of its useful life. This trend may have implications for future capital expenditure requirements and asset replacement strategies.

Property, Plant and Equipment, Gross

The gross value of property, plant, and equipment showed a slight fluctuation over the five-year period. Starting at $51,398 million in 2015, it decreased marginally to $51,011 million in 2016, followed by an increase to $54,330 million in 2017. Afterwards, it declined slightly to $53,256 million in 2018 and marginally rose again to $53,369 million in 2019. Overall, the asset base remained relatively stable with minor variations but demonstrated a general upward trend from 2016 onward.

Land and Land Rights-of-Way

The value associated with land and land rights-of-way generally exhibited a decreasing trend throughout the period. Beginning at $1,450 million in 2015, the amount gradually declined each year to reach $1,356 million in 2019. This steady reduction indicates possible disposals or revaluations affecting this asset category.

Depreciation, Depletion, and Amortization Expense

The depreciation, depletion, and amortization expense charged against property, plant, and equipment showed some variability but demonstrated an overall upward trajectory. The expense decreased slightly from $2,059 million in 2015 to $1,970 million in 2016, then increased incrementally each year to reach $2,176 million in 2019. This upward trend reflects increasing charges, possibly due to additions in asset base or changes in depreciation policies.

Estimated Total Useful Life

The estimated total useful life of property, plant, and equipment exhibited minimal fluctuation throughout the period. It ranged from 24 to 26 years, starting at 24 years in 2015, rising to 26 years in 2017, then decreasing back to 24 years by 2019. The stability in useful life estimates suggests consistent depreciation assumptions over time.

The financial data for the property, plant, and equipment category reveals several noteworthy trends over the five-year period ending December 31, 2019.

Accumulated depreciation, depletion and amortization

This figure has shown a consistent upward trajectory throughout the period, increasing from $10,851 million in 2015 to $16,950 million in 2019. This steady growth indicates continuous consumption of asset value, reflecting the aging asset base and ongoing depreciation charges. The increase suggests substantial historical investment in property, plant, and equipment and their ongoing usage over time.

Depreciation, depletion, and amortization expense charged against property, plant and equipment

Annual expense figures fluctuated slightly but remained relatively stable, ranging between $1,970 million and $2,176 million. The expense decreased marginally from $2,059 million in 2015 to $1,970 million in 2016, then experienced a gradual increase to $2,176 million by 2019. This pattern may indicate stable asset additions balanced against the retirement or full depreciation of older assets.

Time elapsed since purchase

The reported age of assets increased steadily from 5 years in 2015 to 8 years in 2019. This suggests that the asset base is aging, which aligns with the increasing accumulated depreciation. The incremental rise in asset age points to a gradual acquisition pace or slower asset turnover in recent years.

In summary, the data exhibits a growing accumulated depreciation consistent with an aging asset base, stable annual depreciation expenses, and an increasing average asset age. These trends collectively suggest that while Kinder Morgan Inc. continues to use its assets effectively, it may face future considerations regarding asset replacement or upgrades as the property, plant, and equipment continue to age.

Property, Plant, and Equipment, Net

The net value of property, plant, and equipment exhibited a declining trend over the five-year period. Beginning at $40,547 million in 2015, the amount decreased to $36,419 million by the end of 2019. This suggests a consistent reduction, potentially due to depreciation, asset disposals, or a lack of substantial capital expenditures to offset these reductions.

Land and Land Rights-of-Way

Values for land and land rights-of-way remained relatively stable but slightly declined over the years. Starting at $1,450 million in 2015, the figure fluctuated modestly and settled at $1,356 million in 2019. This minor decrease indicates limited changes or disposals in these assets, showing relative stability compared to overall property, plant, and equipment values.

Depreciation, Depletion, and Amortization Expense Charged Against Property, Plant and Equipment

The depreciation and amortization expense demonstrated an overall increasing trend, rising from $2,059 million in 2015 to $2,176 million in 2019. This upward movement suggests a growing expense burden, which could be due to aging assets or the increasing amortization of intangible assets related to property, plant, and equipment.

Estimated Remaining Life

The estimated remaining life of property, plant, and equipment declined from 19 years in 2015 to 16 years by 2019. This diminishing lifespan correlates with the trends of increasing depreciation expenses and decreasing net asset values, indicating the assets are aging and approaching the end of their useful life.