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Kinder Morgan reports flat net income in Q2, expects to put excess cash flow to use

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Kinder Morgan reports flat net income in Q2, expects to put excess cash flow to use

reportedsecond-quarter net income available to common stockholders of $333 million, or15 cents per share, unchanged from the year-ago period, while distributablecash flow tightened.

TheS&P Capital IQ consensus normalized EPS estimate for the most recentquarter was also 15 cents.

Notincluding special items, second-quarter net income available to commonstockholders came to $322 million, compared to $357 million for the same periodin 2015.

DCFdecreased to $1.05 billion, or 47 cents per share, compared to $1.10 billion,or 50 cents per share, primarily attributable to lower contributions from thecarbon dioxide segment primarily due to lower commodity prices, higherpreferred stock dividends and higher cash taxes, the company said July 20.Adjusted EBITDA was $1.76 billion, compared to $1.77 billion in the 2015 period.

"Drivenby the joint ventureswith Southern Co. onour [Southern Natural Gas Co.LLC] system and [Riverstone Investment Group LLC] on our pipeline project, we expectto end the year at a leverage ratio of 5.3 times net debt-to-adjusted EBITDA,down from our previous guidance of 5.5 times," Executive Chairman RichardKinder said in a statement.

KinderMorgan's board of directors also reported a quarterly cash dividend of 12.5cents per share during the second quarter, or 50 cents on an annualized basis,unchanged compared to the year-earlier period. Kinder Morgan's performance anddividend level resulted in $770 million of excess DCF. The second-quarterdividend is payable Aug. 15 to shareholders of record as of the close ofbusiness Aug. 1. The company expects to continue to declare dividends amountingto 50 cents per share for 2016 and use cash in excess of dividend payments tofund growth investments and strengthen its balance sheet.

"Wecontinue to expect our 2016 distributable cash flow in excess of our dividendswill exceed our 2016 growth capital expenditures, eliminating our need toaccess the capital markets to fund growth projects in 2016. Moreover, given ourefforts to high-grade our backlog, we do not expect to need to access thecapital markets to fund our growth projects for the foreseeable future beyond2016," Kinder said.