Author Topic: KMI - Kinder Morgan  (Read 128305 times)

CorpRaider

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Re: KMI - Kinder Morgan
« Reply #40 on: January 29, 2014, 07:31:54 AM »
Maybe they are announcing a buyout with a 30%+ premium paid in cash that some of us seem to fear.


alertmeipp

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Re: KMI - Kinder Morgan
« Reply #41 on: January 29, 2014, 07:55:19 AM »
well, i have some now, hard assets with stable cash flow should do us well.

CorpRaider

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Re: KMI - Kinder Morgan
« Reply #42 on: January 29, 2014, 08:41:26 AM »
Here's the analyst day link with presentations.  I listened to some of it and read through the main presentation.  There is some discussion of the warrants versus stock repurchases near the end.  Also a nice chart setting forth their historic an projected costs of capital ROICs and ROE.

http://www.kindermorgan.com/investor/presentations/presentations.cfm

ItsAValueTrap

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Re: KMI - Kinder Morgan
« Reply #43 on: January 29, 2014, 09:29:29 AM »
Trap,

Did you look at the Jeffries note? SEP spends ~$18k per mile on maintenance and EPB spends $3. Do you not agree with how Jeffries looks at it?

I agree distributable cash flow can be misleading. I like the "fully loaded" method Jeffries employs, which gives KMI credit for ebitda based on its percentage ownership of the distributable cash flow, which takes into account the GP split.

They held a conference call addressing that.
http://seekingalpha.com/article/1704582-kinder-morgan-energy-partners-investors-webcast-transcript

Their track record in pipeline safety seems to be fine, though I could have done more work crunching PHMSA data.
"It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price. " -Buffett

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ItsAValueTrap

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Re: KMI - Kinder Morgan
« Reply #44 on: January 29, 2014, 06:25:12 PM »
The 2010 10-K describes how KMP was able to increase its dividend and why the distributions of cash to KMI fell:

On May 28, 2010, the Federal Energy Regulatory Commission, referred to in this report as the FERC, approved a settlement agreement that our subsidiary SFPP, L.P. reached with 11 of 12 shippers regarding various rate challenges.  We refer to this settlement agreement as the Historical Cases Settlement, and it resolved a wide range of rate challenges dating back as early as 1992.  The Historical Cases Settlement resolved all but two of the cases outstanding between SFPP and the eleven shippers, and we do not expect any material adverse impacts on our business from the remaining two unsettled cases.  The twelfth shipper entered into a separate settlement agreement with SFPP, L.P. in February 2011.  The FERC has not yet acted on the second settlement.  In 2010, we recognized a $172.0 million expense due to adjustments of our liabilities related to both the Historical Cases Settlement and other matters related to SFPP and other rate litigation, and in June 2010, we made settlement payments to various shippers totaling $206.3 million.  Our cash distributions of $4.40 per unit to our limited partners for 2010 were not impacted by these rate case litigation settlement payments because, from a cash perspective, a portion of our partnership distributions for the second quarter of 2010 was a distribution of cash from interim capital transactions, rather than a distribution of cash from operations;

I made a mistake earlier.
"It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price. " -Buffett

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ItsAValueTrap

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Re: KMI - Kinder Morgan
« Reply #45 on: January 29, 2014, 06:30:01 PM »
One of the slides in the analysts conference goes over growth targets.
http://www.kindermorgan.com/investor/presentations/2014_Analysts_Conf_01_Overview.pdf

Long-term Growth Targets

KMI 3-year targeted dividend/share CAGR of about 8% (2013-2016)

KMP / KMR 3-year targeted LP distribution/unit CAGR of about 5% (2013-2016)

EPB LP distribution/unit growth expected to resume in 2017 with growth projects coming online beginning in 2016

Key Assumptions

2013 actual results as base year

Growth varies by year

No major acquisitions assumed

----
I'm guessing that management will overdeliver like it has in the past.  Any accretive acquisitions by KMP or EPB will grow KMI's fees from its IDRs.
"It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price. " -Buffett

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ItsAValueTrap

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Re: KMI - Kinder Morgan
« Reply #46 on: January 29, 2014, 11:33:56 PM »
Here's my writeup on the company:  http://wp.me/p1mOGr-Fl
"It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price. " -Buffett

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alertmeipp

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Re: KMI - Kinder Morgan
« Reply #47 on: January 30, 2014, 04:29:57 AM »
Nice write up.

At expiration, the warrants should be worth 1.28X their original price.  (35.47 * 1.13^3.33 40) / 3.16

How do you get 1.13? Are u using 5% dividend and 8% growth rate?

Does warrant strike price get adjusted based on the dividend?

james22

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Re: KMI - Kinder Morgan
« Reply #48 on: January 30, 2014, 09:55:11 AM »
How do you believe Enbridge (EEQ) compares, ItsAValueTrap?

sys

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Re: KMI - Kinder Morgan
« Reply #49 on: January 30, 2014, 11:40:41 AM »
Here's my writeup on the company:  http://wp.me/p1mOGr-Fl

thanks for sharing that, i found it useful.