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Kinder Morgan Management LLC Message Board

jim_hairball 18 posts  |  Last Activity: Jul 29, 2014 2:38 PM Member since: Jun 12, 1999
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  • jim_hairball jim_hairball Jul 29, 2014 2:38 PM Flag

    Activist Investor? Jack Ma
    Yahoo owns a part of Alibaba, but Alibaba can control what Yahoo does, and will.

  • jim_hairball by jim_hairball Jul 29, 2014 10:53 AM Flag

    I ask Wells Fargo to pay me in fractional shares this Q instead of cash. We shall see come 8/14.

  • jim_hairball by jim_hairball Jul 25, 2014 5:39 PM Flag

    Back to back sell off after earnings strike one
    Sold auto seat division to chinese buyers, chinese always low ball american companies strike two
    Now BE (Heating/AC) division reported lower margins strike three
    I sell and look for companies that are doing things well, JCI needs to do better IMHO.

  • Reply to

    Fire the useless CEO now. More pop

    by mccormickred Jul 24, 2014 6:38 PM
    jim_hairball jim_hairball Jul 25, 2014 2:15 AM Flag

    Marissa will be given her golden parachute in time. When Yahoo is bought out by Alibaba or Softbank, they will sell off Yahoo USA to some one like FB, AAPL, GOOG, or MSFT, then they will send Marissa packing with suitcases of money.

  • Reply to

    Wells Fargo on KMI/KMP merger

    by jim_hairball Jul 19, 2014 2:44 PM
    jim_hairball jim_hairball Jul 23, 2014 11:19 AM Flag

    • Cons, Unknowns. In addition to the upfront DCF dilution, leverage at a combined KMP would likely be
    over 5x, potentially endangering the partnership’s investment-grade credit rating. We also don’t know what
    the tax implications of a KMP/KMI buyout would be for Mr. Kinder and other shareholders (a large tax bill
    might make it a tough sell). Further, KMI shareholders (including management) would presumably want to
    be kept “whole” on their annual cash flow (from KMP distributions versus KMI dividends). Also, we’re not
    sure that KMI shareholders would want to own MLP paper (see ETE’s purchase of SUG). Finally, eliminating
    the GP would be bucking the trend right now. The value of the GP currency continues to grow and the
    optionality afforded by a GP, in terms of effectuating M&A and benefiting from it, is highly valuable.
    Management would likely think long and hard before giving that up.
    • Another View--Maybe The Current State Of Kinder Morgan Isn’t So Bad? While the MLP investor
    market is fixated on Kinder Morgan’s relative under performance versus the broad MLP indices and the GPs
    (for KMI), perhaps there’s another way to view this. Kinder Morgan’s (specifically KMI) size, liquidity, and
    breadth of operations appeals to a broader audience of investors. Perhaps it’s just reaching a new state of
    maturity. The growth rate might be slowing but the value proposition is still there relative to other dividend paying
    energy corporations. Perhaps the right comp group for KMI is really Chevron, Oxy, Shell, Exxon, and
    ConocoPhillips (as examples). These companies have delivered median 45.1% dividend growth over the past
    three years versus 44.8% for KMI. KMI has generated a 43.9% total return over the past three years
    compared to a median of 31.6% for energy majors listed above and 51.9% for high-yielding stocks in the
    S&P 500. So maybe management will do nothing and simply recognize that they’ve “graduated” to a different
    playing field.

  • Reply to

    Wells Fargo on KMI/KMP merger

    by jim_hairball Jul 19, 2014 2:44 PM
    jim_hairball jim_hairball Jul 23, 2014 11:07 AM Flag

    Yahoo message boards have there issues trying to post more from Wells Fargo
    • Restructuring--What Does That Mean? The basic options to “fix” the cost
    of capital are well known at this point. KMP could acquire KMI and eliminate the
    IDRs. KMI could do a reset of the IDRs. Or KMI could do a partial reset, reducing
    the IDR max tier (e.g. 25% versus 50%). Management could also take KMI private
    and restructure the IDRs within a private vehicle, making it a bit easier to
    maneuver. To be clear, none of these options are new ideas and we are highly
    confident management has explored these scenarios (and many others) many
    times in the past. Management has always been about maximizing unit/
    shareholder value and we don’t think that’s changed. The only question in our
    minds is this: Will the underperformance of Kinder Morgan and the cost of
    capital disadvantage finally drive management to take some sort of action?
    • Restructuring Pros. We won’t go through the math here on a potential KMP
    buyout of KMI other than to say it would appear to be highly dilutive (on the face
    of it). The benefits would be fairly obvious: a lower cost of capital, better
    alignment of management/unitholder incentives, and potential acceleration in
    the distribution growth rate longer term. A lower cost of capital would also allow
    KMP to avoid undertaking higher-risk organic growth projects and also help
    support previously uneconomic acquisition/M&A opportunities (e.g., KMP
    acquiring EPB). But if it was simple, Kinder Morgan would have done it already.

  • jim_hairball by jim_hairball Jul 19, 2014 2:44 PM Flag

    • Kinder Morgan! Renewed chatter of a potential restructuring of the Kinder
    Morgan family of companies dominated discussions this week in MLP-land.
    Kinder reported softish Q2 earnings but announced potential natural gas and
    NGL pipeline projects that could add $8B to its backlog. However, the real story
    was management’s commentary during the earnings Q&A session, which
    indicated that Kinder is open to a potential restructuring transaction.
    • The Issue. Wall Street (and management) have been ruminating on potential
    options for Kinder Morgan to improve its valuation given the lag in performance
    relative to its peers (and the overall sector) since the beginning of 2013. While
    there’s been much noise concerning maintenance capex, CO2 earnings, etc., the
    crux of the issue is simple, in our view. Kinder has been the greatest victim of its
    own success in utilizing the MLP structure to grow. The result is (1) a high GP
    burden (44% of total distributions go to the GP), which increases its cost of equity
    and reduces accretion to LP unit holders (all else equal), and (2) the company’s
    large size, which makes “moving the needle” on growth more difficult.

  • jim_hairball by jim_hairball Jul 16, 2014 5:48 PM Flag

    Questions about “cost of capital”... or in other words doing something to boost share price by cleaning up the structure of KMI & KMP & KMR & EPB. Rich says he is always exploring all options about the potential of fixing this. But then again this is basically what he always says.
    Lower share price increases cost of capital since when company raises cash it does a 50/50 ratio between debt & equity. Lower share price therefore increases shares needed to raise capital.

  • Reply to

    barrons interview

    by jim_hairball Jul 16, 2014 2:04 PM
    jim_hairball jim_hairball Jul 16, 2014 2:09 PM Flag

    Tortoise according to it's own website has KMP as it's 2nd largest holding and KMR as it's 9th largest holding.

  • jim_hairball by jim_hairball Jul 16, 2014 2:04 PM Flag

    Q: Barron's has questioned how MLPs account for maintenance capital expenditures, including Kinder Morgan ( KMI ), which Tortoise owns. What are your thoughts?

    A: You have to be careful: What makes up that distributable cash flow is operating income or Ebitda. You start with Ebitda, you back out interest expenses or your debt burden, and you back out maintenance capital expenditures. That leaves distributable cash flow -- what's available to pay out. There could be an inherent conflict of interest: Management may want to skimp on maintenance capital expenditures because that would increase what is paid out -- distributable cash flow. If a management team is trying to cut corners, cut the maintenance capital expenditures, you could have an issue. We ask: Have the companies reinvested appropriately? Have they accounted for it appropriately? Have they disclosed appropriately to investors? We invest in managements that are running assets for the long term.

  • jim_hairball by jim_hairball Jul 12, 2014 12:14 PM Flag

    Johnson Control Could Jump 20%
    Industrial conglomerate Johnson Controls is wheeling and dealing its way into more-profitable businesses. Why the stock could jump 20%.
    Despite investors' recent infatuation with corporate deal making, Johnson Controls ' May disposal of its auto-interiors business didn't generate a lot of love. The low-key Milwaukee-based company put 95% of the business—think dashboards and overhead panels—into a joint venture with a unit of SAIC Motor, China's enormous state-owned car maker. Johnson's stock didn't move much in reaction, but it should have. The transaction gives added credibility to Johnson's vow to manage its capital more aggressively, a commitment that could have a very favorable long-term effect on its share price.
    The deal gets Johnson Controls (ticker: JCI) out of the day-to-day slough of operating in a low margin, slow-growth business and gives it with a 30% stake in a division of SAIC (600104.China). The joint venture will have about $7.5 billion in annual revenues, margins of roughly 6%, and top-line growth of 8% once it gets underway in 2015. (The Johnson unit was losing money.) It will have 15% of the global interiors markets and 25% of the fast-growing Chinese market, the company estimates. "That's where the new-car buyers are going to be," says Alex Molinaroli, who has accelerated the pace of activity at Johnson since being promoted to president and CEO in October.
    Johnson will also get a sizable annual dividend—expected to total $100 million in the first year.
    Adds Chief Financial Officer Bruce McDonald, "We've really changed the profile of our interiors business from being a disadvantaged business that was in low-growth regions with a high cost base" to a global company with access to low-cost tooling, manufacturing equipment, and thousands of engineers from low-cost countries like China and those of Eastern Europe...

  • jim_hairball jim_hairball Jun 30, 2014 4:06 PM Flag

    Well since I owned this "dead money" mlp for 10 years. It has become a pretty darn big pile of money. Without stating exactly how much I have, I will give an example.
    I buy this "dead money" mlp instead of buying bonds.
    I own KMR so my distributions in reinvested. Over 10 years bonds make 2% per year and KMR distributes 8% plus an additional 4% in growth via increased distributions
    $100,000 at 2% for 10 years is $121,899
    $100,000 at 12% for 10 years is $310,504
    Darn BIG pile of "dead money after 10 years.

  • jim_hairball by jim_hairball Jun 3, 2014 2:16 PM Flag

    The news today for CRZO is a new presentation available at CRZO website. Chip Johnson talks up CRZO's Utica play with condensate. CRZO is a small company so a big well (Rector well) can move the stock price, as in today's stock price being up about 5% to 60.

  • Reply to

    show me the money

    by jim_hairball May 22, 2014 2:17 PM
    jim_hairball jim_hairball May 22, 2014 9:19 PM Flag

    When is the last time this company increased the distribution?????
    How many MLP's have gone so long without increasing their distribution????
    The answer is likely LINE is in the BOTTOM 10% bracket.
    That is the group that fails in most people's books.
    Made money on this dog, but had the common sense to trade out of it for BBEP,
    a MLP that can increase their distribution every year.
    That is what well managed MLPs do.
    Do you want to invest your money in the worst in class or do you try to find something better?

  • jim_hairball by jim_hairball May 22, 2014 2:17 PM Flag

    LINE failed to raise any cash in this deal. Looking to sell assets and cannot get any money for them. The best they can do is horse trading. Swapping their junk assets for another company's junk assets. LINE is such a bad trader that one assumes that LINE shareholders will suffer once again.

  • Reply to


    by jim_hairball May 19, 2014 11:27 AM
    jim_hairball jim_hairball May 21, 2014 2:07 AM Flag

    You bet I am still here. Chip Johnson is my hero. It does matter what price you bought in at and I will do some bragging. Got in at $21.50, and sold dogs like APA and DVN to own CRZO
    Already own too much oil like stocks. Own BBEP, swapped out of LINE another dog for BBEP.
    Have owned KMR for years. Probably too much oil for in my portfolio. But Kinder Morgan's business is mostly pipelines. Oil accounts for about 12% of Kinder Morgan's DCF.
    Doing simple math
    CRZO 7.2% of my portfolio
    BBEP 4.7% of my portfolio
    KMR 36.9 % of my portfolio but only 12% of that is oil
    Therefore 16.3% of my portfolio is oily.
    All 3 companies are best of breed imho.

  • jim_hairball by jim_hairball May 19, 2014 11:47 AM Flag

    Johnson Controls Inc. (JCI) plans to spin off its automotive-interiors business into a joint venture with China’s Yanfeng Automotive Trim Systems Co., which will be the majority owner.

    Johnson Controls, the biggest U.S. auto-parts maker, will retain its seating business, spokesman Fraser Engerman said in an interview. Yanfeng will own 70 percent of the new Shanghai-based venture, with Johnson Controls owning the remainder, the companies said in a statement. It will have revenue of about $7.5 billion, according to the companies.

  • jim_hairball by jim_hairball May 19, 2014 11:27 AM Flag

    • Summary: Last week, we hosted Carrizo management on investor meetings in
    multiple countries across Europe. In attendance were Andy Agosto, VP, Business
    Development, and Jeff Hayden, VP, Investor Relations. Overall, we would
    characterize the meetings as positive and were impressed with management’s
    confidence in their ability to deliver on their 2014 guidance. While recent
    outperformance (17% vs. the EPX YTD) led some to question if they have already
    missed the move in CRZO, we believe upside potential remains for several
    reasons. The company is poised to put up 50%+ oil growth 2014 in our view, and
    should fairly easily repeat that growth in 2015 if the company chooses to add an
    additional rig in the Eagle Ford--this is our assumption and we are now modeling
    50% yr/yr crude growth in 2015 vs. the Street’s ~35%. And this growth should
    not come at the expense of the balance sheet: we still believe Carrizo will be able
    to maintain a net debt-to-EBITDA ratio under 2.0x, which is a self-imposed
    target. Further, potential downspacing, additional formations, and expected well
    results offer potential catalysts in the Eagle Ford, Niobrara, and Utica over the
    coming quarters. Lastly, we think Street models still have to be trued up for a few
    items, including interest expense savings if management chooses to refinance
    their 8 5/8s bonds, which become callable this August. Based on details laid out
    within this note, we are adjusting our 2015E EPS to $4.7

78.38-0.06(-0.08%)Jul 30 4:03 PMEDT

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