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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Bill/WA who wrote (154270)	3/2/2002 9:32:53 AM
From: Tommaso	Respond to of 436258

No really good reason to pick KMP except that the holders of that stock seem to be the ones that are getting cheated the most--as best I can tell--and also it's the specific stock mentioned by Wulff. From the NY TImes Article: In the last year or two, Kinder Morgan has been selling pipeline assets to its affiliate, Kinder Morgan Energy, and relying on Kinder Morgan Energy's distributions for an increasing share of its profit. In a practice that has become common, the Kinder Morgan unit that is the general partner of the energy partnership owns just a 2% stake, but collects a disproportionate share of the distributions. Kinder Morgan Energy last year paid out distributions of about $473 million. The general partner received $181.2 million, or 38% of the total. "This is Enron's 'asset-lite' strategy. The limited partners own the assets and the general partner gets the profits," says Kurt Wulff, who owns a small equity research firm in Needham, Mass. Michael Morgan, CFO and president of Kinder Morgan and William Morgan's son, said Kinder Morgan rewards its limited partners as well as the general partner. He said the structure of the company may be confusing to some, but "this is all widely disclosed and publicly available stuff." Kinder Morgan has become reliant on the energy partnership's distributions. Kinder Morgan estimates that 46% of its profit will come from Kinder Morgan Energy distributions this year, up from 25% in 2000. Last year, Chief Executive and Chairman Mr. Kinder and William Morgan, who is vice chairman, created Kinder Morgan Management as a financing vehicle. Kinder Morgan Management, whose stock is held by institutions which avoid partnership units, owns an 18% stake in Kinder Morgan Energy. Analysts such as Ms. Coale also fret that Kinder Morgan's growth may be tough to keep up. To keep distributions increasing about 25% a year, the energy partnership must continue to gobble up assets. Kinder Morgan maintains that it can keep growth going by getting more from underused assets and building growing markets. The Wulff analysis: mcdep.com