I understand that since KMP is at the top of its IDRs that 50% of any distribution increase must go to the GP(KMI). So I assume the rate at which KMI's dividend grows, compared to KMP, is directly tied to the number of shares outstanding for each, right? As KMP issues more shares, KMI's dividends will grow faster and faster, since there are more shares, thus more $ needing to be paid out. Is this the right idea?
KMI doesn't have to pay it out as dividends like KMP so the dividends don't go lockstep.They can use it for typical corporate expenditures (acquisitions, capital etc) besides dividends But you are generally close. If all is well managed (the best reason to buy a company), KMI will go private again because of the cash flow imbalance coming in from KMP. If something goes badly wrong, KMP could continue to pay out nicely but KMI could tank.