Kinder morgan, inc. increases quarterly dividend to $0.43 per share
Houston--(business wire)--kinder morgan, inc. (nyse: kmi) today reported second quarter cash available to pay dividends of $332 million, up 13 percent from $294 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 six months of the year, kmi reported cash available to pay dividends of $905 million, up 12 percent from $807 million for the same period last year. kmi’s board of directors increased the quarterly cash dividend to $0.43 per share ($1.72 annualized) payable on aug. 15, 2014, to shareholders of record as of july 31, 2014. this represents an 8 percent increase over the second quarter 2013 cash dividend per share of $0.40 ($1.60 annualized), and is up from the first quarter 2014 dividend of $0.42 per share ($1.68 annualized). chairman and ceo richard d. kinder said, “kmi had an excellent second quarter, reflecting continued strong performance at kinder morgan energy partners (nyse: kmp) and solid results at el paso pipeline partners (nyse: epb). our backlog of expansion and joint venture investments at the kinder morgan companies that have a high certainty of completion has grown to $17 billion, up from $16.4 billion at the time of our april earnings release. it is important to note that this increase takes into account approximately $700 million in projects that we placed into service in the second quarter, which means we have added about $1.3 billion to the backlog. more than $4.6 billion of the projects in our backlog are natural gas projects, and there continues to be tremendous demand for gas transportation capacity. across the kmi, kmp and epb pipelines, we have secured a little over 3.5 billion cubic feet per day (bcf/d) in long-term, firm transport capacity commitments since dec. 1, 2013. further, we have another approximately 1.7 bcf/d of pending transactions, the majority of which is related to lng facilities, all of which are credible lng export projects. the lng commitments, combined with another approximately 300 million cubic feet per day of other pending commitments, would bring the total long-term firm transport capacity signed up across kinder morgan’s natural gas pipelines to approximately 5.3 bcf/d since the beginning of december (slightly over 7 percent of the current daily natural gas demand in the united states). the revolutionary shale plays are redirecting the flow of gas (and producing crude, condensate and other products) across the united states, which necessitates additional midstream infrastructure. 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 over the next 10 years from approximately 74 to 100 bcf/d. we believe natural gas is the future fuel of choice, and combined with the tremendous cash flow that our other market leading businesses (co2, products pipelines, terminals and kinder morgan canada) produce, we are confident that kmi is well positioned to grow for many years to come.” 2014 outlook as previously announced, kmi expects to declare dividends of at least $1.72 per share for 2014, an 8 percent increase over its 2013 declared dividend of $1.60 per share. growth in 2014 is expected to be driven by continued strong performance at kmp and contributions from epb. other news effective at close of business april 30, kmi sold (dropped down) to epb its 50 percent interest in ruby pipeline, its 50 percent interest in gulf lng and its 47.5 percent interest in young gas storage. kmi used net proceeds of approximately $875 million from the dropdown sales to reduce term loan debt. kmi repurchased nearly 19 million warrants during the second quarter for approximately $43 million. through the first six months of the year, kmi repurchased nearly 50 million warrants for approximately $98 million. kinder morgan is the largest midstream and the fourth largest energy company in north america with a combined enterprise value of approximately $110 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, july 16 at www.kindermorgan.com for a live webcast conference call on the company’s second 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. 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.
