Business Context and Reporting Period
Kinder Morgan, Inc. (KMI) filed this Form 8-K on October 11, 2012, to disclose recent developments regarding its third-quarter 2012 performance and dividend policy. The filing notes that official results of operations for the quarter ended September 30, 2012, are not yet available.
Key Financial Metrics
- Dividend Recommendation: Management intends to recommend a dividend of $0.36 per share for the third quarter of 2012.
- Annual Dividend Expectation: KMI expects to declare dividends of at least $1.40 per share for the full fiscal year 2012.
- Cash Flow Estimate: Preliminary estimates indicate cash available to pay dividends for fiscal 2012 will exceed $1,325 million.
- Non-GAAP Measure: The filing highlights "cash available to pay dividends" as a key non-GAAP metric used to evaluate the ability of assets to generate cash flows sufficient to support shareholder returns.
Material Changes Versus Prior Period
- Quarter-over-Quarter: The proposed Q3 2012 dividend of $0.36 represents a 3% increase over the Q2 2012 dividend of $0.35 per share.
- Year-over-Year: The proposed Q3 2012 dividend represents a 20% increase over the Q3 2011 dividend of $0.30 per share.
Guidance, Outlook, and Risks
Management's estimates are based on preliminary data and have not been audited, reviewed, or compiled by PricewaterhouseCoopers LLP. The filing contains forward-looking statements regarding dividend declarations and cash flow, which are subject to risks and uncertainties. Actual results may differ materially from expectations due to factors enumerated in KMI's other SEC filings. The proposed dividend is contingent upon approval by the Board of Directors.
Investor Verification Checklist
- Confirm the final approval of the $0.36 per share Q3 2012 dividend by the Board of Directors.
- Review the official audited financial statements for the quarter ended September 30, 2012, once released.
- Verify the final calculation of "cash available to pay dividends" against GAAP measures such as income from continuing operations.
- Monitor subsequent filings for any updates to the full-year 2012 dividend guidance of at least $1.40 per share.