Analysis of Geographic Areas
Kinder Morgan Inc. operates in 3 regions: U.S.; Canada; and Mexico and other foreign.
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. | 0.27 | 0.29 | 0.27 | 0.25 | 0.27 |
| Canada | 300.00 | 0.60 | 0.16 | 0.20 | 0.22 |
| Mexico and other foreign | 0.93 | 1.22 | 1.61 | 1.41 | 1.90 |
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 asset turnover ratios across different geographic regions reveals divergent efficiency trends between 2015 and 2019, characterized by domestic stability, foreign decline, and extreme volatility in Canadian operations.
- United States Operations
- Asset utilization in the U.S. remained remarkably consistent over the five-year period. The ratio fluctuated minimally between a low of 0.25 in 2016 and a peak of 0.29 in 2018, ending 2019 at 0.27. This indicates a stable relationship between the asset base and revenue generation within the domestic market.
- Canadian Operations
- A significant anomaly is observed in the Canadian region. Following a slight downward trend from 0.22 in 2015 to 0.16 in 2017, the ratio experienced an exponential increase to 0.60 in 2018 and a dramatic surge to 300.00 in 2019. This extreme escalation suggests a fundamental change in the regional balance sheet, likely resulting from a massive divestiture of assets or a significant restructuring of asset ownership while maintaining revenue streams.
- Mexico and Other Foreign Operations
- A clear downward trend is evident in Mexico and other foreign territories. The asset turnover ratio declined from 1.90 in 2015 to 0.93 in 2019. This steady decrease indicates a reduction in the efficiency of asset utilization, as each unit of asset generated progressively less revenue over the observed period.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
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 | 12,833) | 13,596) | 13,073) | 12,459) | 13,797) |
| Long-term assets, excluding goodwill and other intangibles | 46,709) | 47,468) | 47,928) | 49,125) | 51,679) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 0.27 | 0.29 | 0.27 | 0.25 | 0.27 |
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
= 12,833 ÷ 46,709 = 0.27
The analysis of U.S. area asset turnover from 2015 to 2019 reveals a period of relative stability in operational efficiency, characterized by a consistent contraction of the long-term asset base and fluctuating revenue streams.
- Revenue Performance
- Revenues from external customers exhibited volatility throughout the observed period. After a decrease from 13,797 million US$ in 2015 to 12,459 million US$ in 2016, revenues experienced a gradual recovery, peaking at 13,596 million US$ in 2018. This trend reversed in 2019, with revenues declining to 12,833 million US$.
- Long-Term Asset Base
- A consistent downward trend is observed in long-term assets, excluding goodwill and other intangibles. The asset value decreased every year, moving from 51,679 million US$ in 2015 to 46,709 million US$ in 2019. This steady reduction indicates a contraction in the capital base utilized within the U.S. geographic area.
- Area Asset Turnover Ratio
- The asset turnover ratio remained relatively stable, fluctuating within a tight range between 0.25 and 0.29. The lowest efficiency was recorded in 2016 at 0.25, coinciding with the period's lowest revenue. The ratio peaked in 2018 at 0.29, reflecting a period where revenue growth aligned with a continuing decrease in the asset base. By 2019, the ratio normalized to 0.27, returning to the same level recorded in 2015 and 2017.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
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 | 300) | 447) | 503) | 483) | 479) |
| Long-term assets, excluding goodwill and other intangibles | 1) | 748) | 3,071) | 2,399) | 2,193) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 300.00 | 0.60 | 0.16 | 0.20 | 0.22 |
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
= 300 ÷ 1 = 300.00
The financial trajectory of the Canadian operations between 2015 and 2019 is characterized by a significant divergence between revenue generation and the asset base, culminating in a near-total divestment of long-term assets.
- Revenue Trends
- Revenues from external customers remained relatively stable during the first three years of the period, increasing slightly from 479 million USD in 2015 to a peak of 503 million USD in 2017. A downward trend emerged thereafter, with revenues falling to 447 million USD in 2018 and experiencing a further decline to 300 million USD by December 31, 2019.
- Long-term Asset Base
- Long-term assets, excluding goodwill and other intangibles, showed a steady increase from 2,193 million USD in 2015 to 3,071 million USD in 2017. This trend reversed sharply in 2018, where assets plummeted to 748 million USD. By the end of 2019, the asset base was reduced to a nominal value of 1 million USD, indicating a comprehensive exit or restructuring of physical assets within the region.
- Area Asset Turnover Analysis
- The area asset turnover ratio initially trended downward from 0.22 in 2015 to 0.16 in 2017, as asset growth outpaced revenue increases. In 2018, the ratio rose to 0.60, reflecting the sharp reduction in the asset denominator. By 2019, the ratio reached an anomalous 300.00; this extreme spike is a mathematical result of the asset base effectively disappearing while the segment continued to report 300 million USD in revenue, rather than a reflection of improved operational efficiency.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
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 | 76) | 101) | 129) | 116) | 127) |
| Long-term assets, excluding goodwill and other intangibles | 82) | 83) | 80) | 82) | 67) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 0.93 | 1.22 | 1.61 | 1.41 | 1.90 |
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
= 76 ÷ 82 = 0.93
The financial performance in Mexico and other foreign regions is characterized by a steady decline in operational efficiency between 2015 and 2019. While the investment in long-term assets remained relatively stable after 2016, the revenue generated from these assets decreased significantly, leading to a consistent erosion of the asset turnover ratio.
- Revenue Performance
- Revenues from external customers exhibited volatility with a clear downward trajectory over the analyzed period. After reaching a peak of 129 million US dollars in 2017, revenues declined to 101 million US dollars in 2018 and further dropped to 76 million US dollars by the end of 2019. This represents a substantial reduction in top-line performance compared to the 127 million US dollars reported in 2015.
- Long-Term Asset Trends
- The asset base, excluding goodwill and other intangibles, showed an initial increase from 67 million US dollars in 2015 to 82 million US dollars in 2016. For the remainder of the period, the asset value remained stagnant, fluctuating minimally between 80 million and 83 million US dollars. This indicates that the company maintained a consistent level of physical investment in these regions despite falling revenues.
- Area Asset Turnover Analysis
- The area asset turnover ratio demonstrates a marked decline in efficiency, falling from 1.90 in 2015 to 0.93 in 2019. Although a temporary recovery to 1.61 occurred in 2017, the subsequent years saw a sharp decrease. The fact that the ratio dropped below 1.00 by 2019 suggests that the region is generating less than one dollar of revenue for every dollar invested in long-term assets, signaling a significant decrease in the productivity of the foreign asset base.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
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. | 12,833) | 13,596) | 13,073) | 12,459) | 13,797) |
| Canada | 300) | 447) | 503) | 483) | 479) |
| Mexico and other foreign | 76) | 101) | 129) | 116) | 127) |
| Total | 13,209) | 14,144) | 13,705) | 13,058) | 14,403) |
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).
Total revenues from external customers exhibited volatility between 2015 and 2019. After an initial decline in 2016, total revenues recovered steadily through 2018, reaching $14,144 million, before contracting again in 2019 to $13,209 million. The revenue stream is heavily concentrated in the United States, with international contributions diminishing over the five-year period.
- United States Revenue Trends
- The U.S. market remains the primary source of revenue, accounting for the vast majority of the total. Revenue in this region decreased from $13,797 million in 2015 to $12,459 million in 2016, followed by a recovery period that peaked at $13,596 million in 2018. A subsequent decline occurred in 2019, with revenues falling to $12,833 million.
- Canadian Market Performance
- Revenues from Canada showed relative stability from 2015 to 2017, peaking at $503 million. A downward trend followed, with a notable decrease to $447 million in 2018 and a further sharp decline to $300 million in 2019, representing a reduction of approximately 37% compared to 2015 levels.
- Mexico and Other Foreign Markets
- This segment contributed the smallest portion of total revenues and experienced a steady decline after 2017. Following a high of $129 million in 2017, revenues dropped to $101 million in 2018 and reached a period low of $76 million by the end of 2019.
- Geographic Concentration Analysis
- An increasing reliance on the U.S. market is observed. The combined contribution of Canada, Mexico, and other foreign territories declined from $606 million in 2015 to $376 million in 2019, indicating a contraction in international operations relative to domestic activities.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Long-term assets, excluding goodwill and other intangibles
Kinder Morgan Inc., long-term assets, excluding goodwill and other intangibles by geographic area
US$ in millions
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| U.S. | 46,709) | 47,468) | 47,928) | 49,125) | 51,679) |
| Canada | 1) | 748) | 3,071) | 2,399) | 2,193) |
| Mexico and other foreign | 82) | 83) | 80) | 82) | 67) |
| Total | 46,792) | 48,299) | 51,079) | 51,606) | 53,939) |
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).
Total long-term assets, excluding goodwill and other intangibles, experienced a consistent decline from 2015 to 2019, decreasing from 53,939 million US$ to 46,792 million US$. This represents an overall reduction of approximately 13.2% over the five-year period, driven primarily by reductions in both domestic and Canadian holdings.
- United States Asset Trends
- The U.S. market represents the vast majority of the asset base. A steady downward trajectory is observed, with assets falling from 51,679 million US$ in 2015 to 46,709 million US$ in 2019. This continuous decline indicates a gradual reduction in the carrying value of domestic long-term assets over the period analyzed.
- Canadian Asset Volatility and Divestment
- Assets in Canada exhibited significant volatility. An initial growth phase occurred between 2015 and 2017, where assets peaked at 3,071 million US$. This was followed by a precipitous decline in 2018 to 748 million US$, culminating in a near-total exit from the region by December 31, 2019, with remaining assets valued at only 1 million US$.
- Mexico and Other Foreign Assets
- Foreign assets outside of Canada and the U.S. remained marginal and relatively stagnant. Values fluctuated within a narrow range between 67 million US$ and 83 million US$, indicating no significant strategic expansion or contraction in these geographies.
- Geographic Concentration Analysis
- The geographic distribution of assets shifted toward an almost exclusive concentration in the United States. While the U.S. accounted for approximately 95.8% of the total in 2015, this proportion increased to approximately 99.8% by 2019, coinciding with the divestment of Canadian operations.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?