Analysis of Geographic Areas
Kinder Morgan Inc. operates in 3 regions: U.S.; Canada; and Mexico and other foreign.
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- Income Statement
- Analysis of Solvency Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Present Value of Free Cash Flow to Equity (FCFE)
- Debt to Equity since 2010
- Price to Operating Profit (P/OP) since 2010
- Price to Sales (P/S) since 2010
- Aggregate Accruals
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Area Asset Turnover
Kinder Morgan Inc., asset turnover by geographic area
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| U.S. | |||||
| Canada | |||||
| Mexico and other foreign |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
- U.S. Asset Turnover Ratio
- The U.S. geographic area asset turnover ratio demonstrates relative stability over the five-year period. Starting at 0.27 in 2015, it experienced a slight decline to 0.25 in 2016, but rebounded to 0.27 in 2017. The ratio peaked at 0.29 in 2018 before returning to 0.27 in 2019, indicating consistent asset utilization with minor fluctuations.
- Canada Asset Turnover Ratio
- The asset turnover ratio for Canada shows significant volatility. From 0.22 in 2015, it gradually declined to 0.16 by 2017. A dramatic increase occurred in 2018, with the ratio surging to 0.6, followed by an extraordinarily large jump to 300 in 2019. This outlier value in 2019 may suggest either a data anomaly or an unusual operational circumstance significantly affecting asset turnover in Canada.
- Mexico and Other Foreign Asset Turnover Ratio
- The ratio for Mexico and other foreign assets displays a decreasing trend overall. It started at a high point of 1.9 in 2015, decreased to 1.41 in 2016, and moderately recovered to 1.61 in 2017. Afterward, it declined to 1.22 in 2018 and further dropped to 0.93 in 2019, indicating a consistent reduction in asset turnover efficiency over the period.
- Overall Insights
- Among the regions analyzed, the U.S. shows steady asset turnover performance with minimal fluctuation. Canada exhibits extreme volatility, particularly the anomalous spike in 2019 that demands further investigation. Mexico and other foreign areas have a declining asset turnover ratio, reflecting potentially decreasing efficiency or asset base expansion not matched by proportional revenue generation. The contrasting trends highlight regional disparities in asset utilization and operational effectiveness.
Area Asset Turnover: U.S.
Kinder Morgan Inc.; U.S.; area asset turnover calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenues from external customers | |||||
| Long-term assets, excluding goodwill and other intangibles | |||||
| Area Activity Ratio | |||||
| Area asset turnover1 | |||||
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Area asset turnover = Revenues from external customers ÷ Long-term assets, excluding goodwill and other intangibles
= ÷ =
- Revenues from external customers
- Revenues experienced a decline from 13,797 million US dollars in 2015 to 12,459 million US dollars in 2016. There was a partial recovery in 2017, increasing to 13,073 million US dollars, followed by a further increase to 13,596 million US dollars in 2018. However, revenues decreased again in 2019, ending at 12,833 million US dollars. Overall, the revenue demonstrated moderate fluctuations with no sustained upward or downward trend over the five-year period.
- Long-term assets, excluding goodwill and other intangibles
- Long-term assets exhibited a consistent declining trend throughout the observed period. Starting from 51,679 million US dollars at the end of 2015, the value decreased steadily each year to reach 46,709 million US dollars by the end of 2019. This represents a reduction of approximately 9.6% over the five years, indicating a shrinking asset base in this category.
- Area asset turnover
- The area asset turnover ratio showed slight variability within a narrow range. It began at 0.27 in 2015, dropped to 0.25 in 2016, and then increased to 0.27 in 2017 and 0.29 in 2018. In 2019, the ratio returned to 0.27. This pattern suggests relatively stable efficiency in using assets to generate revenue, with a minor peak in asset turnover efficiency in 2018.
Area Asset Turnover: Canada
Kinder Morgan Inc.; Canada; area asset turnover calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenues from external customers | |||||
| Long-term assets, excluding goodwill and other intangibles | |||||
| Area Activity Ratio | |||||
| Area asset turnover1 | |||||
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Area asset turnover = Revenues from external customers ÷ Long-term assets, excluding goodwill and other intangibles
= ÷ =
- Revenues from external customers
- The revenue showed a modest increase from 479 million USD in 2015 to 503 million USD in 2017, indicating a gradual growth over these three years. However, in the following years, there was a noticeable decline, with revenues falling to 447 million USD in 2018 and then sharply decreasing to 300 million USD by 2019. This trend suggests a significant reduction in sales or external customer demand in the latter part of the period analyzed.
- Long-term assets, excluding goodwill and other intangibles
- The long-term assets exhibited a steady increase from 2193 million USD in 2015 to 3071 million USD in 2017, reflecting continued investment or asset accumulation. However, a dramatic reduction occurred thereafter, with assets dropping sharply to 748 million USD in 2018 and further plummeting to a nominal 1 million USD by 2019. This sharp decline may indicate major asset disposals, impairments, or reclassification within the reporting period.
- Area asset turnover ratio
- The asset turnover ratio declined from 0.22 in 2015 to 0.16 in 2017, suggesting a decrease in efficiency in using assets to generate revenue. Contrastingly, in 2018, the ratio increased significantly to 0.6, indicating improved utilization of the area assets in generating sales. The value recorded in 2019 is an extreme outlier at 300, which likely reflects an exceptional event or a calculation anomaly due to the near-zero asset base recorded in the same year.
Area Asset Turnover: Mexico and other foreign
Kinder Morgan Inc.; Mexico and other foreign; area asset turnover calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenues from external customers | |||||
| Long-term assets, excluding goodwill and other intangibles | |||||
| Area Activity Ratio | |||||
| Area asset turnover1 | |||||
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Area asset turnover = Revenues from external customers ÷ Long-term assets, excluding goodwill and other intangibles
= ÷ =
The financial data for the "Mexico and other foreign" geographic area displays several notable trends over the five-year period ending December 31, 2019.
- Revenues from external customers
- Revenues exhibit a declining trend, starting at US$127 million in 2015 and decreasing to US$76 million by the end of 2019. This represents a reduction of approximately 40% over the period. The most significant drop occurs between 2017 and 2019, indicating potential challenges in market demand or competitive dynamics.
- Long-term assets, excluding goodwill and other intangibles
- Long-term assets show moderate fluctuations but remain relatively stable overall. The value increased from US$67 million in 2015 to a peak of US$83 million in 2018, followed by a slight decrease to US$82 million in 2019. This suggests continued investment or asset retention in the region despite the declining revenue.
- Area asset turnover ratio
- The asset turnover ratio, which measures the efficiency of asset use to generate revenue, declined significantly throughout the period. From a high of 1.9 in 2015, it fell continuously to 0.93 in 2019. This decline indicates that assets are generating less revenue over time, reflecting deteriorating operational efficiency or underutilization of assets in the geographic area.
In summary, the data reveals a persistent decline in revenues and asset turnover ratio, while long-term assets have been maintained at a relatively stable level. This could imply that although the company sustains its asset base, its ability to convert assets into revenue is diminishing, potentially signaling inefficiencies or external market pressures affecting this geographic segment.
Revenues from external customers
Kinder Morgan Inc., revenues from external customers by geographic area
US$ in millions
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| U.S. | |||||
| Canada | |||||
| Mexico and other foreign | |||||
| Total |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
- U.S. Revenue Trend
- The revenue generated from the U.S. market shows a fluctuating pattern over the five-year period. Starting at 13,797 million USD in 2015, it declined to 12,459 million USD in 2016. This was followed by a gradual increase to 13,073 million USD in 2017 and 13,596 million USD in 2018. However, in 2019, the revenue again decreased to 12,833 million USD. Overall, the U.S. revenue in 2019 is slightly below the level observed in 2015, indicating some volatility in this region's performance.
- Canada Revenue Trend
- Revenues from Canada displayed a generally downward trend during the period under review. After beginning at 479 million USD in 2015, the revenue remained relatively stable in 2016 and 2017 with small increases to 483 million USD and 503 million USD, respectively. However, a noticeable decline took place in the subsequent two years, dropping to 447 million USD in 2018 and further steeply falling to 300 million USD in 2019. This trend suggests declining business or reduced market activity in Canada towards the end of the period.
- Mexico and Other Foreign Revenue Trend
- The revenues from Mexico and other foreign markets experienced a consistent decline throughout the period. Starting from 127 million USD in 2015, the revenue decreased to 116 million USD in 2016, slightly recovered to 129 million USD in 2017, then dropped again to 101 million USD in 2018 and further to 76 million USD in 2019. The overall decreasing trajectory indicates deteriorated revenue contributions from these regions over time.
- Total Revenue Analysis
- Total revenues from all geographic areas combined mirror the general patterns observed in the constituent regions. Total revenue decreased from 14,403 million USD in 2015 to 13,058 million USD in 2016, followed by a recovery peaking at 14,144 million USD in 2018. By 2019, total revenue decreased to 13,209 million USD. The fluctuations are primarily influenced by the changes in the U.S. market, given its dominant share in total revenues. The consistent downward trends in Canadian and Mexico/other foreign revenues contributed to the overall volatility and modest reduction in total revenues by the end of the period.
Long-term assets, excluding goodwill and other intangibles
Kinder Morgan Inc., long-term assets, excluding goodwill and other intangibles by geographic area
US$ in millions
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| U.S. | |||||
| Canada | |||||
| Mexico and other foreign | |||||
| Total |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
The analysis of the annual geographic area long-term assets, excluding goodwill and other intangibles, reveals several notable trends over the five-year period ending December 31, 2019.
- U.S. Assets
- The U.S. long-term assets exhibit a consistent downward trend across the years. Starting at $51,679 million in 2015, these assets decreased each year to reach $46,709 million in 2019. The decline is steady, with the most significant annual decrease occurring between 2015 and 2016. This trend suggests a gradual reduction or reallocation of long-term assets within the U.S. geographic segment.
- Canada Assets
- Canada's long-term assets show an initial increase from $2,193 million in 2015 to $3,071 million in 2017. However, there is a sharp decline in 2018 to $748 million, followed by a further dramatic drop to $1 million in 2019. This sharp reduction in the last two years indicates a significant divestment or impairment event affecting Canadian assets or a possible reclassification.
- Mexico and Other Foreign Assets
- The long-term assets in Mexico and other foreign regions remain relatively stable and minimal throughout the period. Values fluctuate slightly around the $80 million mark, with a low of $67 million in 2015 and a high of $83 million in 2018. No substantial growth or decline is observed in this segment.
- Total Long-Term Assets
- The total long-term assets excluding goodwill and other intangibles declined steadily from $53,939 million in 2015 to $46,792 million in 2019. This overall decline primarily reflects the decreasing trend in U.S. assets and the sharp reduction in Canadian assets from 2018 onward. The relatively minor and stable foreign assets have little impact on the total trend.