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Gold/Mining/Energy : Big Dog's Boom Boom Room

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To: Dennis Roth who wrote (158589)	10/19/2011 12:50:13 PM
From: Dennis Roth	1 Recommendation Read Replies (1) of 206097

Kinder Morgan Inc. (KMI) to buy El Paso Corp. (EP) Now I Know What You Did Last Summer 7 pages, 5 exhibits Download Link: sendspace.com Key Takeaways: Management stated that dividend growth is set to accelerate at KMI to 12.5% (from 10.0%), and KMP/KMR’s distribution growth will acclerate to 7.0% (from 5.0%). On the flip side, El Paso Pipeline Partner’s (EPB) distribution growth is expected to slow to 9.0% (from our estimate of 11.3%) (See EPB: 9% Ain’t So Bad; Reiterate Outperform). Furthermore, the acquisition of EP’s pipeline assets enhances Kinder Morgan’s cash flow stability given management estimates that natural gas pipelines, which produce stable, predictable cash flows, will comprise 58% of EBITDA on a pro-forma basis. Transaction Has a High Probability of Closing in 2Q12: Kinder Morgan Expects to Use KMR as a Financing Tool: We Do Not Expect a Higher Bid to Emerge for EP: No Change to Estimates or Ratings at this time: At this time we are not changing our estimates or target prices on KMI/KMP/KMR. We will provide an update after working through the details of the transaction.

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