"You sell, I buy and let's see who comes out ahead in the end."
I don't need to buy the best performing MLP, KMP/KMR is just too big to outperform others. KMR specifically is better to me then buying a dozen MLPs. Also Rich Kinder is well aware of the recent under-performance, that is the reason for KMI buying out KMR, KMP, EPB.
I personally am not smart enough to handle dozen k-1s every year. KMR solves all this and has done me just fine.
Also picking out the date from a few years ago when it last peaked and then claiming it has not done much since then, well if I had a crystal ball, I could do better then I have. But I don't so I just plod along with KMR which will become KMI in 2015.
BTW I did own the old KMI and know about the LBO. I did not buy into the new KMI, but now with the conversion and my cost basis. I will own a few more shares of KMI once again.
Just go look at what KMR was adjusted for dividends using Yahoo historical pricing, in 2004 when I bought in, Take today's price of $93 and divide by $13.50 you get 688% return and I played it safe back then by just buying the best of breed. Did not want to take risk and try and pick a MLP that might do better.
I knew back 2004 that other MLPs might do better, cause MLPs have different businesses within the MLP structure.
Hey my first buy of HTA was at $10.75 and loaded up when it dropped under $10.00. So I am not overly worried about GLPI for now. Factor out the dividend paid and I am down 2%, not a big deal.
I just do not like the people that run HTA making millions while the shareholders get the shaft when the dividends paid out to shareholders are so skimpy. Let CEO Scott Peters work for $1 a year and make his money on the dividend. This is what Rich Kinder does, and he has made me rich, too., eh!!!
The information I posted about estimated distribution is from a Wells Fargo monthly report on all mlps. You would need to be a wells fargo customer to access this report. The report gives information for just about all mlps.
Go figure out the analyst, people who supposedly are smart and work hard.
ATLS is The GP to ARP & APL
ATLS has 50/50 split of IDR rights with ARP & APL
Thus ATLS should only be able raises it’s distribution if ARP & APL are able to so.
Median Distribution Estimates
Yet the median distribution estimates for ARP & APL make no sense if ATLS is going to be able to raise it’s distribution by 19%. the analyst need to go back and do some more work on ARP distribution estimates, IMHO.
Anyone that thinks unitholders can vote the deal down, should just go to KMI website and type KMP voting rights into the search function and then click on links. By the way KMP & KMR unitholders have the same voting rights.. aka LIMITED... aka if the general partner quits, then unitholders have voting rights to elect a new GP.
"Owners of our shares have limited voting rights and, therefore, have little or no opportunity to influence or change our management. KMGP owns all of our shares eligible to vote on the election of our directors and, therefore, is entitled to elect all of the members of our board of directors."
"If the general partner withdraws, however, its successor may be elected by the holders of a majority of the outstanding units of all classes."
"Holders of common units have only limited voting rights on matters affecting us. Our general partner manages partnership activities"
from NY times:
At the 2005 news conference in the China World Hotel, Yahoo’s chief operating officer, Daniel Rosensweig, leaned over and whispered in Mr. Ma’s ear. “Jerry Yang had warned me that whatever you do, don’t let Jack Ma say he acquired Yahoo,” recalled Mr. Rosensweig. Mr. Ma leaned back and laughed heartily.
BABA will probably buy YHOO, then the next question is how many shares do I get of BABA for my YHOO shares.
Then for YHOO employees the question is what will Jack Ma do with them,
Has Jack Ma made a deal with Marrissa Mayer to then sell YHOO USA to some tech company like AAPL?
AAPL can probably make better use of YHOO USA, then BABA and Marrissa will probably go along with this type of deal.
Why would KMI acquire the warrants at any type of premium to the market price?
KMI probably will do what it has been doing all the time and acquire them in the open market if at all. Worse case is warrants if exercised will serve as an issuance of equity, which Kinder-Morgan has been doing every year. Raise $12 Billion to fund future expansions. KMI will do this and more anyway before the warrants can be exercised.
Don't understand what those who think they can vote down the merger are thinking
Just look into all the SEC filings, when KMI speaks of shareholder or unitholder vote. KMI holds 100% or very close to 100% of the actual voting rights. EPB is different but KMI owns close to 50% of EPB anyway so that vote is a slam dunk.
Well KMI did not merge with KMP like EPD did. KMP merged with KMI, the opposite of what EPD did. So Rich Kinder did what he said and considered other options. But it makes no difference what is stated on this message board. Lawyers always file lawsuits on every large merger suing everyone possible. In the end KMI will acquire KMP, KMR, EPB and the lawyers will spend years suing. The lawyers will settle for anything that gives them money while settling the actual unitholders losses for pennies on the dollar. IMHO KMP shareholders get 10 cents per Unit(share) in 2017.
"...Q: Would KMI ever merge with KMP the way Enterprise Products merged with its GP?
As was mentioned in our analyst day materials, KMP would consider other options if we get to a point where we
cannot deliver attractive returns to LP investors. However, we do not believe we are at that point. We would
point out that KMP has a highly attractive total return prospect, with a current yield of nearly 7% and a target
distribution growth rate of 5% for the next three years supported by organic expansion capex projects of nearly
$14 billion that we expect to place in service over the next 5 years.
KMP Unit-holders are NOT shareholders and DO NOT get to vote like regular shareholders do.
The General Partner calls the shots and the limited partners go along with the GP's decision.
Even if KMP unit-holders did get to vote, the deal would be approved easily.
Go take it to court and tell the judge how Rick Kinder made you too much money and you have to pay taxes, despite the fact that Rich Kinder told KMP unitholders that KMR was a better alternative. more then 10 years ago.
Even a Hairball sold KMP to buy KMR when Rich Kinder told me so, back in 2004.
"Of the top 30 institutional holders of KMP, 24 also own KMI. Similarly, of the top 30 institutional
holders of EPB, 26 also own KMI. So we’d assume that these holders will vote in favor of the deal given that they would benefit through their KMI exposure."
The majority of KMP holders would vote for the deal.
1) Way more then 50% of KMP also owns KMI, so more then 90% of them vote yes.
2) Of the minority that just owns KMI, more then 50% of them are short-term holders, who don't have a tax problem.
3) Only a small minority are long term holders who don't also own KMI.
Long term holders have lost the tax deferred status cause payouts over the years exceeded their cost basis, and they should have listened to Rich Kinder and sold KMP and bought KMR 10 years ago.
Just because Jim Cramer talks about buying KMP and rarely ever mentioned KMR does not give anyone a valid excuse. Jim has a job to make an entertaining show and at times dumbs down the show for the masses to improve the ratings.
Is your head spinning yet? Basically, if you purchased Kinder Morgan Energy Partners (KMP) at the end of 2002 for about $35, you would have received $46.30 in distributions since then. The first $35 in distributions would have been treated as a return of capital and therefore been non-taxable in the year received. However, they would be tax-deferred only, since a sale would have triggered a taxable event and those would have been payable at ordinary income taxes. The next $11.30 in distributions received would have been treated as long-term capital gains, which receive preferential tax treatment.
If our limited partner decided to sell at $95 today, they would essentially have a long-term capital gain of $60/unit and an ordinary gain of $35/unit. The long-term capital gain will be taxed at 15% for most unitholders, and will result in tax of $9. The ordinary income gain of $35 would be taxable at ordinary income tax rates. Let’s say you were married, and both you and your spouse were in the 25% tax bracket. This would mean that you owe $8.75 in tax on that depreciation recapture. So in total, our limited partner would owe tax of $17.75.
• Crossover Holders Of Kinder Morgan--Could The Deal Meet Resistance? We don’t think so. As
has been well documented, KMP and EPB unitholders could realize a sizable tax bill depending upon how
long they’ve owned the units. This has caused some to wonder whether KMI will need to pay a larger
premium to get the deal done. KMP and EPB are owned 75% and 55%, respectively, by retail investors, which
we don’t think will organize a protest. We then looked at the cross ownership of KMI/KMP/KMR/EPB by
institutional investors, focusing on KMP and EPB given that those unitholders are incurring the largest tax
bills. Of the top 30 institutional holders of KMP, 24 also own KMI. Similarly, of the top 30 institutional
holders of EPB, 26 also own KMI. So we’d assume that these holders will vote in favor of the deal given that
they would benefit through their KMI exposure. Finally, there just aren’t many institutional investors that
own significant stakes in KMP. Only one institutional investor owns more than 1% of the units outstanding.
So we just don’t think the math adds up for any protest.
Rich Kinder said the next Q which is the 3rd Q (4th Q is reported in Jan. '15) All the individual companies will pay out dividends as they have in the past. So KMI, KMP, EPB get their cash and KMR get shares of KMR. If the merger happens in the 4th Q, then in Jan. '15 only KMI will exist and KMI pays out a cash dividend. The new KMI is committed to pay out a $2.00 dividend for 2015, that will be with raises of 10% a year for 5 years. As Rich said remember 2/10/5. $2.00 dividend, 10% raises for 5 years.
This special comment outlines why the separation of ownership and control inherent to the master limited partnership (MLP) corporate governance structure leads Moody’s to suppress the credit ratings of MLPs relative to public corporations with comparable financial metrics. This governance risk is in addition to the credit risks associated with the MLP business model, such as high payouts of cash flow, acquisition event risk, reliance on external funds, and liquidity risk, on which we have commented previously.
Moody’s rates 26 publicly traded MLPs (or the MLP’s public parent), most of which operate in the midstream
The central governance risk is that the general partner (GP) could use its control to extract value from the MLP
to the detriment of common unitholders and bondholders. Table One highlights the specific risks we believe that GP control presents, along with some of the mitigating steps—typically through special terms of the partnership agreement (PA)—some GPs have taken to mitigate the risk.
Risk#1: GP could use its control to extract cash from the MLP to the detriment of bondholders
Risk #2: GP may enter into related party transactions with, or provide services to, the MLP at terms
favorable to the GP
Risk #3: High takeover defenses could entrench a GP
Risk#4: Limited role of outside directors allows GP to set compensation and strategy without outside
Risk#5: A GP under bankruptcy protection could place the MLP into voluntary bankruptcy as well and
seek a substantive consolidation of assets