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IPO Watch: 2011

Kinder Morgan

IPO Filing Date: Nov. 23, 2010

Expected IPO Date: Feb 7, 2011



Amount of Proceeds Sought: $2.2 billion

Expected Offering Price: $26 to $29

Expected Number of Shares to Be Sold: 80 million

Use of Proceeds: All of the common stock being sold is being sold by existing investors. Kinder Morgan will not receive any proceeds from the offering.



Expected Ticker Symbol: KMI (KMI) (NYSE)



Lead Underwriters: Goldman Sachs and Barclays Capital

Co-Managers: Bank of America Merrill Lynch, Citi, Credit Suisse, Deutsche Bank Securities, J.P. Morgan, Wells Fargo Securities, Madison Williams, Morgan Keegan, Raymond James, RBC Capital Markets and Simmons & Company International



About the Company: Kinder Morgan is an energy company with stakes in a number of energy companies.

Kinder Morgan is owned by private-equity groups Carlyle Group, Riverstone Holdings, Highstar Capital and Goldman Sachs (GS) funds.

The most important cash generator for Kinder Morgan is Kinder Morgan Energy Partners (KMP).

The IPO corresponds to Kinder Morgan's master limited partnership interest in Kinder Morgan Energy. Kinder Morgan owns the general partner and about 11% of the limited partner interest of Kinder Morgan Energy Partners.

KMP's operations are conducted through its subsidiaries, which are grouped in five business segments: products pipelines, natural gas pipelines, carbon dioxide used for increasing the production of oil, terminals and Kinder Morgan Canada.

With the completion of the offering, common stock owned by the public will represent about a 13.5% interest in Kinder Morgan, or about 15.5% if the underwriters fully exercise their option to buy additional shares of common stock.

About 95% of the distributions Kinder Morgan received from subsidiaries for both the nine months ended Sept. 30, 2010 and the year ended Dec. 31, 2009 were attributable to the Partnership. A decline in the Partnership's revenues or increases in its general and administrative expenses, principal and interest payments for existing and future debt, tax expenses, working capital requirements or other cash needs would limit the amount of cash the partnership could distribute to Kinder Morgan, which would materially reduce the amount of cash available for shareholder dividends.

For the year ended Dec. 31, 2009, Kinder Morgan reported that total revenue fell about 41% to $7.19 billion from $12.09 billion in 2008, while net income improved to $496 million vs. loss of $3.60 billion the year before.

Competitors:

Kinder Morgan's product pipelines compete against those owned and operated by major oil companies, other independent products pipelines, trucking and marine transportation firms and railcars.

IPO Scorecard:



Actual IPO Date: Feb. 10, 2011

Actual Proceeds Raised: $2.9 billion

Actual Offering price: $30

Actual Number of Shares Sold: 95.5 million



First Day Closing Price: $31.05

Share Price as of Midday Feb. 11: $31.65, up 5.5%

IPO First Day Return: 3.5%

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