“We finished ahead of our plan for 2016 year-end leverage, and we are pleased with the progress toward our targeted leverage” ratio of net debt equal to 5x adjusted EBITDA.

The balance sheet portion of the voluminous year-end earnings release shows the long-term debt balance declining from $40.6 billion to $36.1 billion during 2016, a reduction of 11%. Net interest expense declined 12% from $2,051 million in 2015 to $1,806 million in 2016.

President and CEO Steve Kean put the emphasis here: “We generated full-year 2016 distributable cashflow in excess of our dividends and growth capital expenditures, and did not access the capital markets to fund growth projects.”

For the year, the bottom line for 2016 was adjusted EBITDA of $7,245 million, down 1.7% from $7,372 million in 2015. The dominant gas pipeline division (54% of segment earnings) had a 2.3% dip in EBITDA from $4,125 million to $4,029 million year-on-year (YOY). Top performing segments for the year were terminals, up 7.4% from $1,055 million to $1,133 million YOY, and liquid product pipelines, up 8.1% from $1,096 million to $1,185 million YOY.

Transport volumes were flat in the nation’s largest family of gas pipelines, which moves roughly 28 Bcf daily in all systems.

From the macro-results, it appears that there could be trouble from a significant decline in overall gas gathering volumes. For the year, these declined from 3.54 to 2.97 Bcfd, down 16%. A steeper decline of 21% was registered in 4thQtr, down from 3.5 to 2.75 Bcfd YOY.

The trouble was primarily on the Texas Intrastate systems. In the Overview of Business Segments, KMI explains that the decline in gathered volumes was “due primarily to lower natural gas volumes on multiple systems gathering from the Eagle Ford Shale and on the KinderHawk system compared to the fourth quarter of 2015.”

Concerning the Terminals segment, CEO Kean commented, “The Terminals segment experienced strong performance at our liquids terminals, which saw record volumes for the year with over 900 million barrels of throughput handled, a 14% increase from full-year 2015.” These terminals now represent “close to 80% of the segment’s business. Growth in the liquids business during the quarter versus the fourth quarter of 2015 was driven by increased contributions from our Jones Act tankers, our refined products terminals joint venture with BP,” and other expansions.

KMI is holding the dividend level steady at 12.5ct per share per quarter, 50cts per share annually, in a continuing drive to use “cash in excess of dividend payments to fully fund growth investments and strengthen its balance sheet.”