KMI, KMP Expect to 'Meet or Beat' 2001 EPS Estimates

Kinder Morgan Inc. (KMI) said last week that it expects to "meet or beat" the consensus 2001 estimate for recurring earnings per share (EPS) of $1.88, representing a near 47% increase over the $1.28 per share the company posted in 2000. The company said it also believes it will meet or beat the third quarter earnings per share of $0.45.

"KMI is producing significant cash flow, with Kinder Morgan Energy Partner serving as the primary driver of KMI's earnings," said CEO Richard D. Kinder. "Additionally, Natural Gas Pipeline Company of America has done an outstanding job of re-contracting roll-over capacity and also expects to add more electric generation load than previously anticipated."

The CEO also noted that KMI's strong cash flow, combined with its strengthened balance sheet, enabled KMI to announce plans last month to repurchase $300 million of its outstanding common stock. The company said it expects to complete the share repurchase plan, which will be immediately accretive to EPS, by the end of 2002. Kinder said the company projects earnings per share to grow 30-35% percent in 2002.

Kinder Morgan Energy Partners LP (KMP) also went on the record last week, announcing that it to expects to "meet or beat" the consensus 2001 estimate for EPS of $1.56, as well as the consensus third quarter estimate for earnings of $0.36. The company also reported that it "remains confident" that it will be able to raise the annual distribution again this year to at least $2.20 per unit from $2.10. KMP, which has increased the distribution 10 times since its formation in February 1997, also expects 2002 year-end annualized distributions to be greater than $2.50 per unit.

"We are coming off of a record second quarter in which we declared a two-for-one split of KMP's units and KMR's (Kinder Morgan Management LLC) shares, said CEO Kinder. "During the third quarter, we continue to experience solid internal growth and strong performance by pipeline and terminal assets that we acquired earlier this year. Additionally, we continue to see strong opportunities on the acquisition front, and we expect to announce a number of accretive acquisitions within the next 30 days.

"While we likely will see a slight decrease in commercial jet fuel volumes this month due to the tragic attack that resulted in the grounding of commercial aircraft, we expect this to have virtually no impact on KMP's cash flow and earnings," Kinder said. "Commercial jet fuel accounts for less than 15% of the total volumes transported on our two major products pipelines and represents only about 1.5% of KMP's total revenues. We continue to experience strong demand for gasoline, which is the primary product that we transport via our products pipelines, and we expect jet fuel demand for military use will likely increase."

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