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Kinder Morgan Inc. said Tuesday that it expects an 18% increase in earnings next year to $5.00/share, including the impact of recently acquired Terasen Inc.. The company has budgeted earnings of $4.22/share for 2005. KMI's expected cash flow in 2006 is $775 million. The company expects to recommend to its board of directors in January that its dividend be increased to $3.50/share annually from its current level of $3.00. Kinder Morgan Energy Partners expects to declare cash distributions of $3.28 per unit for 2006. "While we expect to grow our distribution per unit about 5% in 2006, below our long-term expectations of about 8% per year growth, our business units are expected to show strong growth of about $200 million in distributable cash flow compared to their 2005 performance," said CEO Richard Kinder. "This strong operating growth is despite a significant projected increase in sustaining capital expenditures. Total expected distributable cash flow is negatively affected by increases in interest expense due to higher interest rates and G&A expense due to increasing health care costs and insurance premiums. The 2006 expectations include an excess of distributable cash flow over distributions of about $10 million." Kinder said that the forecast does not include expected results from any accretive acquisitions that might be made in 2005.
EnCana closed the previously announced sale of substantially all of its natural gas liquids business to Provident Energy Trust for US$586 million (C$697 million). The company said it expects to record an after-tax gain of US$400 million on the sale and expects after-tax cash proceeds of US$565 million on the transaction. Proceeds will be directed to debt reduction and potentially the continuation of EnCana's share purchase program.
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