Kinder morgan, inc. increases quarterly dividend to $0.44 per share;
expects to exceed 2014 budgeted dividend per share
Houston--(business wire)--kinder morgan, inc. (nyse: kmi) reported third quarter cash available to pay dividends of $435 million, up from $424 million for the same period a year ago, and remains on track to meet or exceed its published annual budget of $1.78 billion in cash available to pay dividends. for the first nine months of the year, the company reported cash available to pay dividends of $1.340 billion, up 9 percent from $1.231 billion for the same period in 2013. kmi’s board of directors announced an increase in the quarterly cash dividend to $0.44 per share ($1.76 annualized), up 7 percent from $0.41 per share ($1.64 annualized) for the same period last year, payable on nov. 17, 2014, to shareholders of record as of oct. 31, 2014. chairman and ceo richard d. kinder said, “kmi had a good third quarter, reflecting continued strong performance at kinder morgan energy partners and at el paso pipeline partners. since our second quarter earnings release in july, we have increased our project backlog of expansion and joint venture investments at kmi to $17.9 billion from $17 billion, notwithstanding $1.1 billion in projects that were placed into service in the third quarter and thus removed from the backlog. projects in the backlog have a high certainty of completion and will drive future growth at the company across all of our business segments. additionally, since dec. 1, 2013, kinder morgan’s natural gas pipelines companywide have entered into new and pending firm transport capacity commitments totaling 6.4 billion cubic feet per day (bcf/d). this represents about 9 percent of the current daily natural gas demand in the united states and compares to 5.3 bcf/d when second quarter earnings were announced. we currently move about one-third of the natural gas consumed in america, and certain industry experts are projecting gas demand will increase by about 35 percent to approximately 100 bcf/d over the next 10 years. as the largest natural gas pipeline operator in north america, and with the substantial cash flow being produced by our other market leading businesses, we are confident that kmi is well positioned to grow for many years.” kim dang joins office of the chairman the kinder morgan companies have named chief financial officer kim dang to the office of the chairman. ms. dang will be involved in the strategic and policy decisions of the company, the day-to-day management of the company and the company’s capital allocation to new investments. “i’m delighted to add kim to the office of the chairman in recognition of her contributions over the years, as well as the considerable talent and experience she will bring to bear on continuing our success at kinder morgan,” said kinder. the office of the chairman also includes chairman and ceo rich kinder and president and chief operating officer steve kean. 2014 outlook kmi now expects to exceed its published annual budget dividend of $1.72 per share for 2014. kmi announced aug. 10, 2014, that it will acquire all of the publicly held shares/units of kinder morgan energy partners, kinder morgan management and el paso pipeline partners in an approximately $70 billion transaction. the boards of all of the kinder morgan companies voted to recommend the transaction to their respective unitholders and shareholders. after the transaction, kmi will have a projected dividend of $2.00 per share for 2015, a 16 percent increase over the budgeted 2014 kmi dividend target of $1.72 per share. kmi has received all necessary regulatory approvals except that its registration statement on form s-4 has not yet been declared effective by the securities and exchange commission. the company expects to announce the dates of the shareholder meeting in the near future and continues to anticipate the transaction will close before year end. for more information on this transaction, please visit the kinder morgan web site at www.kindermorgan.com. kinder morgan is the largest midstream and the third largest energy company in north america with a combined enterprise value of approximately $120 billion. it owns an interest in or operates approximately 80,000 miles of pipelines and 180 terminals. its pipelines transport natural gas, gasoline, crude oil, co2 and other products, and its terminals store petroleum products and chemicals and handle such products as ethanol, coal, petroleum coke and steel. kinder morgan, inc. (nyse: kmi) owns the general partner interests of kinder morgan energy partners, l.p. (nyse: kmp) and el paso pipeline partners, l.p. (nyse: epb), along with limited partner interests in kmp and epb and shares in kinder morgan management, llc (nyse: kmr). for more information please visit www.kindermorgan.com. please join kinder morgan at 4:30 p.m. eastern time on wednesday, oct. 15 at www.kindermorgan.com for a live webcast conference call on the company’s third quarter earnings. the non-generally accepted accounting principles, or non-gaap, financial measure of cash available to pay dividends is presented in this news release. cash available to pay dividends is a significant metric used by us and by external users of our financial statements, such as investors, research analysts, commercial banks and others, to compare basic cash flows generated by us to the cash dividends we expect to pay our shareholders on an ongoing basis. management uses this metric to evaluate our overall performance. cash available to pay dividends is also an important non-gaap financial measure for our shareholders because it serves as an indicator of our success in providing a cash return on investment. this financial measure indicates to investors whether or not we are generating cash flow at a level that can sustain or support an increase in the quarterly dividends we are paying. our dividend policy provides that, subject to applicable law, we will pay quarterly cash dividends generally representing the cash we receive from our subsidiaries less any cash disbursements and reserves established by our board of directors. cash available to pay dividends is also a quantitative measure used in the investment community because the value of a share of an entity like kmi that pays out all or a substantial proportion of its cash flow is generally determined by the dividend yield (which in turn is based on the amount of cash dividends the corporation pays to its shareholders). the economic substance behind our use of cash available to pay dividends is to measure and estimate the ability of our assets to generate cash flows sufficient to pay dividends to our investors. we believe the gaap measure most directly comparable to cash available to pay dividends is income from continuing operations. a reconciliation of cash available to pay dividends to income from continuing operations is provided in this release. our non-gaap measure described above should not be considered as an alternative to gaap net income and has important limitations as an analytical tool. our computation of cash available to pay dividends may differ from similarly titled measures used by others. you should not consider this non-gaap measure in isolation or as a substitute for an analysis of our results as reported under gaap. management compensates for the limitations of this non-gaap measure by reviewing our comparable gaap measures, understanding the differences between the measures and taking this information into account in its analysis and its decision making processes. this news release includes forward-looking statements. these forward-looking statements are subject to risks and uncertainties and are based on the beliefs and assumptions of management, based on information currently available to them. although kinder morgan believes that these forward-looking statements are based on reasonable assumptions, it can give no assurance that such assumptions will materialize. important factors that could cause actual results to differ materially from those in the forward-looking statements herein include those enumerated in kinder morgan’s reports filed with the securities and exchange commission. forward-looking statements speak only as of the date they were made, and except to the extent required by law, kinder morgan undertakes no obligation to update or review any forward-looking statement because of new information, future events or other factors. because of these uncertainties, readers should not place undue reliance on these forward-looking statements. important additional information and where to find it this communication may be deemed to be solicitation material in respect of the proposed acquisition by kmi of each of kinder morgan energy partners, l.p. (“kmp”), kinder morgan management, llc (“kmr”) and el paso pipeline partners, l.p. (“epb”) (collectively, the “proposed transactions”). kmi has filed with the securities and exchange commission (“sec”) an amendment to its registration statement on form s-4 (“registration statement”), which contains a preliminary proxy statement for kmi and a preliminary proxy statement / prospectus for each of kmp, kmr and epb. the registration statement has not yet been declared effective by the sec. each of kmi, kmp, kmr and epb plan to mail to their respective security holders, as applicable, a proxy statement or proxy statement / prospectus in connection with the proposed transactions following the registration statement being declared effective by the sec. the registration statement, the preliminary kmi proxy statement and each preliminary proxy statement / prospectus contain important information about kmi, kmp, kmr, epb, the proposed transactions and related matters. investors and security holders are urged to read carefully the registration statement, the applicable proxy statement or proxy statement / prospectus and any other documents that have been filed or will be filed with the sec, including the definitive kmi proxy statement and each definitive proxy statement / prospectus, in connection with the proposed transactions or incorporated by reference in the proxy statement or the applicable proxy statement / prospectus. investors and security holders will be able to obtain copies of the kmi proxy statement and each proxy statement / prospectus as well as other filings containing information about kmi, kmp, kmr and epb, without charge, at the sec’s website, http://www.sec.gov. copies of documents filed with the sec by kmi, kmp, kmr and epb will be made available free of charge on kinder morgan, inc.’s website at http://www.kindermorgan.com/investor/ or by written request by contacting the investor relations department of kmi, kmp, kmr or epb at the following address: 1001 louisiana street, suite 1000, houston, texas 77002, attention: investor relations or by phone at (713) 369-9490 or by email at km_ir@kindermorgan.com. no offer or solicitation this communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. no offer of securities shall be made except by means of a prospectus meeting the requirements of section 10 of the securities act of 1933, as amended. participants in the solicitation kmi, kmp, kmr and epb, and their respective directors and executive officers, may be deemed to be participants in the solicitation of proxies in respect of the proposed transactions. information regarding the directors and executive officers of kmi is contained in kmi’s form 10-k for the year ended december 31, 2013, and its proxy statement filed on april 9, 2014, each of which has been filed with the sec. information regarding the directors and executive officers of kmp’s general partner and kmr, the delegate of kmp’s general partner, is contained in kmp’s form 10-k for the year ended december 31, 2013, which has been filed with the sec. information regarding the directors and executive officers of kmr is contained in kmr’s form 10-k for the year ended december 31, 2013, which has been filed with the sec. information regarding the directors and executive officers of epb’s general partner is contained in epb’s form 10-k for the year ended december 31, 2013, which has been filed with the sec. notes notes (1) outstanding kmi warrants and convertible preferred securities were anti-dilutive during the periods presented. notes notes (1) amounts exclude the preferred interest in general partner of kmp.
