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Kinder Morgan Energy Partners Message Board

  • tuxedotex tuxedotex Jun 16, 2003 6:51 PM Flag

    Is this right?

    I'm still trying to figure out if I made a wise move by investing in KMP. My understanding is:

    1. KMP pays a distribution quarterly, not a dividend.

    2. KMP does not pay tax on the money it distributes, and the distribution is not a taxable event to me, the unit holder.

    3. Instead, when I sell my KMP, I will pay a capital gains tax on the difference between the current price and my cost basis, which will have been reduced by all the distributions I will have received.

    4. The capital gains tax rate, whether long-term or short-term, will be based only on my original purchase date, and not on the dates of any subsequent distributions.

    Are these statements right or wrong?

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    • Actually, your patience and forbearance in continuing to engage him are commendable. Just no reason to call anyone names. People will form their own opinions, and elevate you on a pedistal if you can maintain a professional decorum. Not meant to be a criticism, just an observation. Amazing that you were able to come up with all the refutations.

    • I lost all patience with that individual. I apologize if I offended anyone other than the target of that frustration.

    • I don't know if it pays to be so vitreolic in these discussions, but in this case we do appear to be dealing with a teenager.

    • billyjoerobidoux said: "Does that mean KMR shareholders can convert their shares to KMP? After all, they are the same."

      No. The exchange privilege ended earlier this year.

    • Thanks for the apology. That was very big of you.

    • "Separate withstanding KMR owns shares of KMP. "

      should read "Separate class withstanding, KMR owns shares of KMP."

    • You need to learn to read. From your own statement..."to purchase I-units from us". Get that, purchase. The ownership constitutes a limited partnership interest in KMP. YOU proved my point for me; idoit. Separate withstanding KMR owns shares of KMP. They are not KMP shares. At one time the price of KMR = KMP so that one share of KMR bought one share of KMP. That is now not the case. One share of KMR equates to less than one share ownership of a KMP share.

      No apology coming b/c I am right.

    • "KMR became a limited partner in us by using substantially all
      of the net proceeds from that offering to purchase i-units from us. The i-units
      are a separate class of limited partner interests in us and are issued only to

      Get that: "separate class of limited partner interests"

      I won't hold my breath for an apology.

    • Don't even respond to this guy any more. His arguments are provacative, but completely based upon false pretenses.

      He actually claims that you should 'add' the KMR equity market value to KMP's equity when calculating KMP's yield. This clown is ignoring many facts, most notably that a securities return is broken down into several components (i.e., distribution/dividend and capital gain). To judge a stock on yield alone is foolish, as a 'total return' approach is more feasible. The yield is a function of the equity's market value........if the equity goes up, the yield goes down and vice versa. I am willing to see a stock's yield fall as a result of its equity increasing in value. It would be a different story if the yield fell as a result of the distribution/dividend falling. Neither KMP's distribution, nor its stock value has fallen........

      What is lost in yield as a stock's value increases, is earned in capital gain!

    • You stated..."That's simply false. You have no evidence of that because it's not true."

      No proof? Here is your freaking proof. This is straight from the kinder morgan web site. Look under investor relations.

      Kinder Morgan Management, LLC (NYSE: KMR), is a limited liability company, and its only significant assets are the partnership units it owns in KMP. KMR shareholders receive distributions in the form of additional shares equivalent in value to the cash distributions received by KMP common unitholders.

      You are the biggest idiot I have ever met. Not only do you lack basic math skills; you have no comprehensive abilities. You "sir" have no business stating that anything anyone else says is false. You have zero truth in anything you state. I have proven it over and over and over. Every time I have proven your posts to be false, your only retort has been to state more untruths. I have a suggestion...go back to the sandbox little boy and learn from your intellectual superiors. You do not have the needed skills to participate in adult life. The only thing you are qualified to say is "Do you want fries with that?"

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