Kinder Morgan Raises Payouts

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Both Kinder Morgan Energy Partners L.P. (NYSE: KMP) and Kinder Morgan Inc. (NYSE: KMI) reported fourth quarter and full year 2012 results after markets closed today. KMP will pay a distribution of $1.29 per common unit, nearly double the consensus estimate of $0.68 and higher than last year’s distribution of $1.16 per common unit. Revenues totaled $2.5 billion compared with revenues in the same period a year ago of $1.92 billion. The consensus estimate called for revenues of $2.44 billion.

KMI will pay a cash dividend of $0.37 per share, up from $0.31 in the same period a year ago and more than the consensus estimate of $0.34 per share. Revenues totaled $3.1 billion, up from $1.94 billion in the same period a year ago and higher than the consensus estimate of $3.02 billion.

For the full year, KMP paid $4.98 in distributions and KMI paid cash dividends totaling $1.35.

Chairman and CEO Richard Kinder had this to say about KMI:

Growth was driven by continued strong performance at Kinder Morgan Energy Partners, L.P. (KMP), three quarters of contributions from El Paso Pipeline Partners, L.P. (EPB) and the natural gas assets that KMI acquired in the El Paso Corporation transaction, which closed in May 2012. As a result, KMI was able to exceed its initial annual budget of $1.35, meet our revised target to declare $1.40 per share for the full year and actually generate $1.55 in cash available per average share outstanding.

He also commented on KMP’s performance:

We see exceptional growth opportunities across all of our business segments, as there is a need to build additional midstream infrastructure to move or store oil, gas and liquids from the prolific shale plays in the United States and the oilsands in Alberta, along with increasing demand for export coal and CO2. We currently have identified approximately $11 billion in expansion and joint venture investments at KMP that we have, or are confident that we will soon have, under contract and we are pursuing customer commitments for many more projects.

KMI expects to declare 2013 cash dividends of $1.57 per share. KMP expects to distribute $5.28 per common unit in 2013.

Shares of KMI are up about 0.7% in after hours trading at $36.84 in a 52-week range of $30.51 to $40.25.

Shares of KMP are up about 2% at $89.66 in a 52-week range of $74.15 to $90.60.

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