The oil and gas downturn continues to sap value from midstream companies, including pipeline leviathan infrastructure company Kinder Morgan Inc. (NYSE: KMI).

Kinder Morgan said Jan. 20 it will write down $1.15 billion in value due to a decline in the market value of itself and similar midstream companies. The fair market value of the non-regulated midstream assets of natural gas pipelines indicates they are below book value, the company said.

For the quarter, Kinder Morgan’s net loss after its impairment and other items was $609 million compared with net income of $566 million for the fourth quarter of 2014. Though company executives say there is a disconnect between the company’s performance and shareholders’ perception, the company plans to cut dividends, focus on the highest-return projects and cut spending by nearly $1 billion.

Richard D. Kinder, executive chairman, said he was disappointed by the company’s stock performance, which declined by 65% in 2015.

On a Jan. 20 earnings call, Kinder seemed somewhat exasperated by the gap between the company’s performance and its stock price. He noted that Kinder Morgan’s free cash flow after operating, interest and capital expense is about $5 billion.

“Our fundamental businesses are doing well, notwithstanding the current weakness in our industry,” Kinder said.”The fundamentals don’t seem to matter in this ‘Chicken Little the sky is falling’ market, but they should to prudent long-term investors.”

However, Kinder Morgan did announce some strategy changes.

For one, it will cut $900 million from its 2016 capex, resulting in 2016 spending of $3.3 billion. The budget is based on WTI prices of $38 per barrel and an average 2016 Henry Hub price of $2.50 per million British thermal units.

The company will also high-grade its capital investments by reducing its capital investments backlog by $3.1 billion from the third quarter of 2015, with more reductions expected.

Kinder Morgan will also selectively enter joint venture projects as appropriate.

Kinder Morgan’s board also approved slashing its fourth-quarter cash dividend to $0.125, down from $0.51 per share in the third quarter of 2015.

“The decision to reduce our dividend was very difficult and was a direct result of the rapid and significant disconnect between the performance of our business and the performance of our stock,” Kinder said. He added that the company does not expect to tap the equity markets to fund growth projects now or beyond 2016.

In October, Kinder Morgan completed a 32 million depository share offering that generated net proceeds of $1.5 billion.

Overall, Kinder Morgan’s results exceeded expectations despite its impairment charge.

In 2015, Kinder Morgan reported $4.7 billion in distributable cash flow before certain items available to common shareholders, a 79% increase from 2014’s $2.6 billion. The increase was primarily related to the Kinder Morgan merger transactions completed in November 2014.

In 2016, Kinder Morgan expects to declare dividends of $0.50 per share and generate $4.9 billion of distributable cash flow available to equity holders. The company also anticipates generating $4.7 billion of distributable cash flow available to common shareholders, with roughly $3.6 billion of cash flow in excess of its dividend.

Kinder Morgan’s adjusted EBITDA was $1.98 billion compared with Wall Street’s consensus of $1.9 billion. Discretionary cash flow of $1.23 billion beat Deutsche Bank Markets Research estimates of $1.1 billion.

Without the asset value write-off, fourth-quarter net income was $491 million compared with $664 million for the same period in 2014.

“We think this update should help placate investor concerns, allowing the focus to turn back to the fundamentals,” said Kristina Kazarian, analyst with Deutsche Bank.

Darren Horowitz, analyst with Raymond James, said Kinder Morgan’s results beat its model and the Street despite commodity market challenges.

“With KMI being the first midstream entity to report, the fourth-quarter 2015 results are perhaps most informative simply to ‘take the temperature’ of midstream performance in a choppy energy macro-environment,” he said.

Kinder Morgan is the largest energy infrastructure company in North America, with interest or operations spanning 84,000 miles of pipelines and about 165 terminals.

Darren Barbee can be reached at dbarbee@hartenergy.com.