Kinder Morgan Plans 60% Dividend Increase; Authorizes $2 Bln Share Buyback

(RTTNews) - Kinder Morgan, Inc. (KMI) announced multiple steps to return significant value to shareholders as result of the substantial balance sheet improvement achieved since the end of 2015. First, KMI announced it expects to declare an annual dividend of $0.80 per share for 2018, a 60 percent increase from the expected 2017 dividend. The first 2018 increase is expected to be the first-quarter 2018 dividend. Additionally, the company plans to increase its dividend to $1.00 per share in 2019 and $1.25 per share in 2020, a growth rate of 25 percent annually.

The company's board approved a cash dividend of $0.125 per share for the quarter ($0.50 annualized) payable on August 15, 2017, to common shareholders of record as of the close of business on July 31, 2017. The board also authorized a $2 billion share buyback program, which represents approximately 5 percent of KMI's current market capitalization. KMI expects to declare dividends of $0.50 per share for 2017 and use cash in excess of dividend payments to fully fund growth investments and further strengthen its balance sheet.

Richard Kinder, executive chairman, stated: "We expect to return substantially all of our operating cash flow in excess of growth capital needs to our shareholders through increasing the dividend and repurchasing shares, while maintaining robust coverage of the dividend. This action comes on the heels of our successful initial public offering of our Canadian business, which in combination with the Elba, Utopia and SNG joint ventures drove much of our over $5.8 billion net debt reduction since the end of the third quarter of 2015."