Kinder Morgan (KMI) Reports Q2 EPS of 15c, Increases Dividend

Kinder Morgan (NYSE: KMI) reported Q2 EPS of $0.15, may not compare to the analyst estimate of $0.19. DCF per share before certain items was $0.50. Revenue for the quarter came in at $3.46 billion versus the consensus estimate of $3.96 billion.

Kinder Morgan, Inc. (NYSE: KMI) today announced that its board of directors approved an increase in its quarterly cash dividend to $0.49 ($1.96 annualized) payable on Aug. 14, 2015, to shareholders of record as of the close of business on July 31, 2015. This represents a 14 percent increase over the second quarter 2014 dividend of $0.43 per share ($1.72 annualized) and is up from $0.48 per share ($1.92 annualized) for the first quarter of 2015. Additionally, KMI increased its project backlog of expansion and joint venture investments to $22.0 billion, an increase of approximately $3.7 billion from the first quarter.

2015 Outlook

KMI expects to declare dividends of $2.00 per share for 2015, an approximately 15 percent increase over the 2014 declared dividend of $1.74 per share. We expect to have substantial cash coverage in excess of our 2015 declared dividends; however, we expect our excess coverage to be below our budgeted coverage of $654 million as our budgeted coverage assumed an average WTI crude oil price of approximately $70 per barrel and a Henry Hub natural gas price of $3.80 per MMBtu in 2015. The overwhelming majority of cash generated by KMI’s assets is fee based and is not sensitive to commodity prices. KMI does have some commodity price sensitivity, primarily in its CO2 segment, and hedges the majority of its next 12 months of oil production to minimize this sensitivity. For 2015, the company estimated that every $1 per barrel change in average WTI crude oil price will impact KMI’s distributable cash flow by approximately $10 million, and each $0.10 per MMBtu change in the average price of natural gas will impact distributable cash flow by approximately $3 million. Even adjusting for projected commodity prices, the company expects to increase its dividends by 10 percent each year from 2016 through 2020

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