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Kinder Morgan Energy Partners, L.P. Message Board

  • cborkar cborkar Jun 22, 2014 3:06 PM Flag

    KMP AND KMI

    Can any one educate me as to the difefrence between the two companies? I understand that KMP
    is subsidiary of KMI and it does have some oil producing properties.

    Thanks,

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • KMP is not a subsidiary of KMI, both were formed as part of a partnership, not a C Corp. There are two types of partners in a Master Limited Partnership structure, a general partner (GP)and limited partners (LP). The general partner manages the master limited partnership and holds an economic interest in it. The general partner receives a percentage of the profits off the top, before the limited partners are paid. The distribution of profits come from Incentive Distribution Rights, they allow the general partners to take a higher proportion of incremental amounts over a certain threshold levels. This provides the general partner with a strong inventive to raise distributions to unitholders, which is appealing to them.

      Buy KMI. You'll be very happy when KMI has doubled a year from now.

      Sentiment: Buy

      • 1 Reply to blueskymartini
      • then why is the full name of KMI "Kinder Morgan 'Inc' " ?? (its not a corporation??)
        (disclaimer: not owner if either KMI or KMP, but considering buying one or the other)
        p.s. anyone know if any part of dividend from either of these companies is "return of capital" (ROC), as opposed to "regular" dividends???
        p.p.s. anyone know how ROC is advantageous investing strategy, since it lowers cost basis???

 
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