Kinder Morgan (KMI) Expects $2 per Share in 2015 Dividends

Kinder Morgan, Inc. (NYSE: KMI) today announced its preliminary 2015 financial projections. KMI expects to declare dividends of $2.00 per share for 2015, an approximately 16 percent increase over the 2014 dividend budget of $1.72 per share.

Chairman and CEO Richard D. Kinder stated, “We believe the recently closed transaction merging the Kinder Morgan companies paves the way for superior growth at KMI for years to come. We anticipate strong growth in 2015 across our pipeline and storage businesses and currently have a backlog of approximately $18 billion in expansion projects and joint venture investments that have a high certainty of completion. We are generating strong growth even though we have revised our projected West Texas Intermediate (WTI) crude oil price to $70 per barrel. As our track record demonstrates, we own and operate a large, diversified portfolio of stable, primarily fee-based energy assets across North America which produce substantial cash flow in virtually all types of market conditions, regardless of commodity prices.”

KMI’s growth in 2015 is expected to be driven by continued high demand for North American energy infrastructure, including the transportation and storage of natural gas, natural gas liquids, crude oil and refined products. Additionally, growth is expected to be driven by contributions from our expansion projects across Kinder Morgan’s business units.

For 2015, KMI expects to:

• Generate approximately $8.2 billion in business segment earnings before DD&A (adding back KMI’s share of joint venture DD&A).
• Declare over $4.4 billion in dividends to its shareholders.
• Generate additional cash of over $500 million in excess of its dividend.
• Invest approximately $4.4 billion in expansions (including contributions to joint ventures) and small acquisitions.
• Finish the year with a Debt to EBITDA ratio of 5.6 times.

As noted above, KMI’s expectations assume an average WTI crude oil price of approximately $70 per barrel in 2015. The overwhelming majority of cash generated by KMI’s assets is fee based and is not sensitive to commodity prices. In its CO2 segment, the company hedges the majority of its oil production, but does have exposure to unhedged volumes, a significant portion of which are natural gas liquids. For 2015, the company expects that every $1 change in the average WTI crude oil price per barrel will impact the CO2 segment by approximately $7 million pre tax, or approximately 0.086 percent of KMI’s combined business segments’ anticipated segment earnings before DD&A.

The KMI board of directors will review and approve the 2015 budget at the January board meeting and the budgets will be discussed in detail during the company’s annual analyst meeting on Jan. 28, 2015, in Houston. Kinder Morgan remains committed to transparency and will continue to publish its budgets on the company’s web site, www.kindermorgan.com. The 2015 budget will be the standard by which KMI measures its performance next year, and will be a target for determining employee bonuses.

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