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The following is an excerpt from a S-1/A SEC Filing, filed by KINDER MORGAN MANAGEMENT LLC on 4/30/2001.
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KINDER MORGAN MANAGEMENT LLC - S-1/A - 20010430 - THE_OFFERING

OFFERING:

i-units (entire class owned by Kinder Morgan
 Management, LLC)......................................   11.5%
Common units owned by the public.......................   68.6%
Common units and Class B units owned by Kinder Morgan,
 Inc. and affiliates...................................   17.9%
General partner interest...............................    2.0%
                                                         ------
          Total........................................  100.0%

The above chart assumes that no holder of our shares has exercised its right to exchange its shares for common units of Kinder Morgan Energy Partners, L.P.

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THE OFFERING

Shares offered................   9,000,000 shares representing limited liability
                                 company interests

Shares offered to the
  public......................   8,100,000 shares representing limited liability
                                 company interests

Shares offered to Kinder
  Morgan, Inc. ................   900,000 shares representing limited liability
                                 company interests

Shares outstanding after this
  offering....................   - 9,000,000 shares representing limited
                                   liability company interests; and

                                 - one voting share owned by Kinder Morgan G.P.,
                                   Inc.


Use of proceeds...............   We will use all of the net proceeds of the
                                 offering of our shares, expected to be
                                 approximately $588 million based on the assumed
                                 public offering price of $69.35 per share, as

follows:

- approximately $587 million for the purchase of a number of i-units from Kinder Morgan Energy Partners, L.P. that will equal the number of our shares to be sold in this offering; and

- approximately $1 million to compensate Kinder Morgan, Inc. for its purchase, exchange and tax indemnity obligations, which we refer to as the "related rights".

The i-units are a new class of Kinder Morgan Energy Partners, L.P.'s limited partner interests. Kinder Morgan Energy Partners, L.P. will use the cash it receives from the sale of i-units to us to reduce short-term debt it incurred in its acquisition of the domestic pipeline and terminal businesses of GATX Corporation. Kinder Morgan Energy Partners, L.P.'s total debt prior to this offering is approximately $3 billion. This total debt will be reduced to approximately $2.4 billion following the close of this offering. Kinder Morgan, Inc. will use the proceeds it receives from Kinder Morgan Management, LLC for general corporate purposes.

Proposed NYSE Trading
Symbol...................... KMR

Unless otherwise indicated, all information in this prospectus assumes no exercise of the underwriters' option to purchase up to 1,350,000 additional shares to cover over-allotments.

THE SHARES

Kinder Morgan Management,
  LLC ........................   Our shares are interests in Kinder Morgan
                                 Management, LLC, a limited liability company
                                 treated as a corporation for United States
                                 income tax purposes. Kinder Morgan Management,
                                 LLC will be a limited partner in Kinder Morgan
                                 Energy Partners, L.P. and will manage and
                                 control that partnership's business and
                                 affairs.

                                        8

Federal Income Tax Matters
  Associated with our
  Shares......................   Because we will be treated as a corporation for
                                 United States income tax purposes, an owner of
                                 our shares will not report on its United States
                                 income tax return any of our items of income,
                                 gain, loss and deduction. As a result of owning
                                 our shares, you will not receive a Schedule K-1
                                 and will not be subject to state tax filings in
                                 the various states in which Kinder Morgan
                                 Energy Partners, L.P. conducts business.

                                 A tax-exempt investor's ownership or sale of
                                 our shares will not generate income derived
                                 from an unrelated trade or business regularly
                                 carried on by the tax-exempt investor, which is
                                 generally referred to as unrelated business
                                 taxable income or "UBTI", unless its ownership
                                 of our shares is debt financed by it.

                                 The ownership or sale of our shares by a mutual
                                 fund will generate qualifying income to it,
                                 which generally includes interest, dividends
                                 and gains from the sale of stock or securities.
                                 Furthermore, the ownership of our shares by a
                                 mutual fund will be treated as a qualifying
                                 asset, which generally includes cash, certain
                                 receivables, government securities and other
                                 securities.

                                 There will not be any withholding taxes imposed
                                 on quarterly or other distributions of
                                 additional shares to non U.S. persons or gain
                                 from the sale of our shares by a non U.S.
                                 person provided it owns fewer than 5% of our
                                 shares and our shares are traded on a
                                 nationally recognized securities exchange.

Income Tax Matters Associated
  with i-units................   We will be subject to income taxes on our
                                 taxable income; however, the i-units owned by
                                 us generally will not be entitled to
                                 allocations of income, gain, loss or deduction
                                 of Kinder Morgan Energy Partners, L.P.
                                 Therefore, we do not anticipate that we
                                 generally will have material amounts of taxable
                                 income resulting from our ownership of the
                                 i-units. In the event that we do have taxable
                                 income, Kinder Morgan, Inc. has agreed to
                                 indemnify us for the related tax liability to
                                 the extent that liability exceeds the cash we
                                 receive relating to that income.

Distributions.................   We will make distributions on our shares only
                                 in additional shares except upon our
                                 liquidation. The fraction of an additional
                                 share distributed each quarter per share
                                 outstanding will be calculated by dividing the
                                 amount of the cash distribution declared by
                                 Kinder Morgan Energy Partners, L.P. on each
                                 common unit for that quarter by the average
                                 market price of one of our shares as determined
                                 for a ten-trading day period ending on the
                                 trading day immediately prior to the
                                 ex-dividend date for the shares.

Exchange Feature..............   At any time after the 45th day following the
                                 closing of this offering, owners of our shares
                                 may exchange some or all

                                        9

                                 of their whole shares for common units of
                                 Kinder Morgan Energy Partners, L.P. owned by
                                 Kinder Morgan, Inc. and its subsidiaries on a
                                 one for one basis. Upon exercise of this right
                                 to exchange, Kinder Morgan, Inc. may elect to
                                 deliver cash rather than common units. As of
                                 the date of this prospectus, Kinder Morgan,
                                 Inc. and its subsidiaries own 11,312,000 common
                                 units and 2,656,700 Class B units which are
                                 convertible into common units under some
                                 circumstances.

Mandatory Purchase............   If any of the events listed below occurs,
                                 Kinder Morgan, Inc. will be required to
                                 purchase all of our then outstanding shares not
                                 owned by it or its affiliates at a purchase
                                 price equal to the higher of the average market
                                 price of the shares and the common units as
                                 determined for a ten-trading day period ending
                                 on the trading day immediately prior to the
                                 date of the applicable event. The events
                                 include:

                                 - aggregate distributions or other payments by
                                   Kinder Morgan Energy Partners, L.P. on its
                                   common units, including pursuant to an issuer
                                   tender offer by Kinder Morgan Energy
                                   Partners, L.P., during a 360-day period
                                   exceeding 50% of the average market price of
                                   a common unit for the ten trading days ending
                                   on the trading day immediately prior to the
                                   beginning of that 360-day period;

                                 - an event resulting in Kinder Morgan, Inc. and
                                   its affiliates ceasing to be the beneficial
                                   owners of more than 50% of the total voting
                                   power of all shares of capital stock of the
                                   general partner of Kinder Morgan Energy
                                   Partners, L.P., unless:

                                   -- a new person or entity that becomes the
                                      beneficial owner of more than 50% of that
                                      total voting power is organized under the
                                      laws of a state in the United States and
                                      has long term unsecured debt with an
                                      investment grade credit rating (as
                                      determined by Moody's and Standard &
                                      Poor's) immediately prior to the closing
                                      of the transaction; and

                                   -- that beneficial owner assumes all
                                      obligations of Kinder Morgan, Inc. to us
                                      and to the owners of our shares;

                                 - Kinder Morgan Energy Partners, L.P. merges
                                   with another entity where Kinder Morgan
                                   Energy Partners, L.P. is not the surviving
                                   entity, or sells substantially all of its
                                   assets, unless in the transaction:

                                   -- the owners of common units receive a
                                      security that has in all material respects
                                      the same rights and privileges as the
                                      common units;

                                   -- we receive a security that has in all
                                      material respects the same rights and
                                      privileges as the i-units;

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                                   -- an owner of common units receives no
                                      consideration other than securities of the
                                      type described above and/or cash, and the
                                      amount of cash received per common unit
                                      does not exceed 33 1/3% of the average
                                      market price of a common unit for the
                                      ten-day trading period ending on the
                                      trading day immediately prior to the date
                                      of execution of the definitive agreement
                                      for the transaction; and

                                   -- no consideration is received by us, as the
                                      owner of i-units, other than the
                                      securities referred to above.

                                 For purposes of the mandatory purchase
                                 provisions, including the definitions of the
                                 mandatory purchase events, and the optional
                                 purchase provisions and the exchange
                                 provisions, Kinder Morgan, Inc. will be deemed
                                 to include Kinder Morgan, Inc., its successors
                                 by merger, and any entity that succeeds to
                                 Kinder Morgan, Inc.'s obligations under the
                                 purchase provisions, the exchange provisions,
                                 the registration rights agreement and the tax
                                 indemnification agreement in connection with an
                                 acquisition of all or substantially all of the
                                 assets of Kinder Morgan, Inc.

Optional Purchase.............   Kinder Morgan, Inc. has the right to purchase
                                 all of our shares not owned by it or its
                                 affiliates in two circumstances:

                                 - when Kinder Morgan, Inc. and its affiliates
                                   own 80% or more of our outstanding shares,
                                   and

                                 - when Kinder Morgan, Inc. and its affiliates
                                   own a number of our shares and common units
                                   which equals 80% or more of the sum of the
                                   aggregate number of our outstanding shares
                                   and the aggregate number of outstanding
                                   common units. In this second case, however,
                                   Kinder Morgan, Inc. has the right to purchase
                                   both the shares and the common units not
                                   owned by it or its affiliates, and cannot
                                   purchase either the shares or the common
                                   units alone.

                                 In these two circumstances, the purchase price
                                 per share is calculated differently. If the
                                 first circumstance exists and Kinder Morgan,
                                 Inc. elects to purchase the shares, the
                                 purchase price per share will equal 110% of the
                                 higher of:

                                 - the average closing price for the shares for
                                   the ten consecutive trading days ending five
                                   days prior to the date the notice of the
                                   purchase is mailed to the owners of our
                                   shares; and

                                 - the highest price Kinder Morgan, Inc. or its
                                   affiliates paid for such shares during the 90
                                   days prior to the giving of the notice,
                                   excluding exchanges or cash settlements
                                   pursuant to the exchange feature of the
                                   shares.

                                 If the second circumstance exists and Kinder
                                 Morgan, Inc. elects to purchase both the shares
                                 and the common units,

                                        11

                                 the purchase price per share and the purchase
                                 price per common unit will both equal the
                                 higher of:

                                 - the average closing price for the shares or
                                   common units for the 20 consecutive trading
                                   days ending five days prior to the date the
                                   notice of the purchase is mailed to the
                                   owners; and

                                 - the highest price Kinder Morgan, Inc. or its
                                   affiliates paid for such shares or common
                                   units during the 90 days prior to the giving
                                   of the notice, excluding exchanges or cash
                                   settlements pursuant to the exchange feature
                                   of the shares.

Voting Rights.................   Kinder Morgan G.P., Inc. owns all of our shares
                                 eligible to vote for the election of our
                                 directors. Owners of the class of shares issued
                                 in this offering may vote on the following
                                 matters:

                                 - on any matter submitted by Kinder Morgan
                                   Energy Partners, L.P. for a vote of the
                                   i-units as a class or as part of a vote of
                                   all units, the i-units we own will be voted
                                   proportionately to the number of affirmative
                                   and negative votes cast and abstentions and
                                   non-votes by the owners of our shares,
                                   including the voting shares. In general the
                                   i-units vote with the Kinder Morgan Energy
                                   Partners, L.P. common units and Class B units
                                   on all matters the common units and Class B
                                   units vote on, and also, as a class, on
                                   additional matters related to the i-units
                                   alone, such as amendments to the Kinder
                                   Morgan Energy Partners, L.P. partnership
                                   agreement that would have a material adverse
                                   effect on owners of the i-units in relation
                                   to the owners of other then existing classes
                                   of limited partner interests; and

                                 - on amendments to our limited liability
                                   company agreement, including the purchase or
                                   exchange provisions, the Kinder Morgan Energy
                                   Partners, L.P. registration rights agreement,
                                   the Kinder Morgan, Inc. tax indemnification
                                   agreement and the delegation of control
                                   agreement, each as described below, but only
                                   if any of these amendments would have a
                                   material adverse effect on us or the owners
                                   of our shares, except for limited amendments
                                   or changes required by law or to accomodate
                                   mergers, recapitalizations and similar
                                   transactions.

                                 Kinder Morgan, Inc. and its affiliates may not
                                 vote any shares owned by them:

                                 - on any matter involving a class vote of
                                   i-units as well as some other matters
                                   principally involving the general partner of
                                   Kinder Morgan Energy Partners, L.P. where a
                                   class vote is not required; and

                                 - on any amendment of the agreements under the
                                   circumstances described in the second bullet
                                   point in the preceding paragraph.

                                        12

                                 When Kinder Morgan, Inc. and its affiliates may
                                 not vote as described above, the relevant
                                 agreements provide that the approval of the
                                 specified percentage of the shares not owned by
                                 Kinder Morgan, Inc. and its affiliates is
                                 required.

                                 A person or group owning shares, common units
                                 or both common units and shares which
                                 constitute 20% or more of the aggregate number
                                 of issued and outstanding common units and
                                 shares cannot vote. This particular limitation,
                                 however, does not apply to Kinder Morgan, Inc.
                                 and its affiliates. However, as described
                                 above, there are a number of circumstances in
                                 which Kinder Morgan, Inc. and its affiliates
                                 may not vote their shares.

Anti-dilution Adjustments.....   Through the combined effect of the provisions
                                 in the Kinder Morgan Energy Partners, L.P.
                                 partnership agreement and the provisions of our
                                 limited liability company agreement, the number
                                 of our outstanding shares and the number of
                                 outstanding i-units will always be equal.

Our Covenants.................   Our limited liability company agreement
                                 provides:

                                 - that our activities will be limited to being
                                   a limited partner in Kinder Morgan Energy
                                   Partners, L.P. and managing and controlling
                                   its business and affairs;

                                 - that we may not issue other classes of
                                   shares; and

                                 - for the maintenance of a one-to-one
                                   relationship between the number of i-units
                                   owned by us and the number of our outstanding
                                   shares.

Covenants of Kinder Morgan
  Energy Partners, L.P........   Upon the closing of this offering, the Kinder
                                 Morgan Energy Partners, L.P. partnership
                                 agreement will be amended to provide that
                                 Kinder Morgan Energy Partners, L.P. will not:

                                 - except in liquidation, make a distribution on
                                   an i-unit other than in additional i-units or
                                   a security that has in all material respects
                                   the same rights and privileges as the
                                   i-units;

                                 - make a distribution on a common unit or Class
                                   B unit other than in cash, additional common
                                   units or Class B units or a security that has
                                   in all material respects the same rights and
                                   privileges as the common units or Class B
                                   units;

                                 - allow an owner of common units or Class B
                                   units to receive any consideration other than
                                   cash, common units or a security that has in
                                   all material respects the same rights and
                                   privileges as the common units or Class B
                                   units, or allow us as the owner of the
                                   i-units to receive any consideration other
                                   than i-units or a security that has in all
                                   material respects the same rights and
                                   privileges as the i-units, in a:

                                        13

                                   -- merger in which Kinder Morgan Energy
                                      Partners, L.P. is not the survivor, if the
                                      unitholders of Kinder Morgan Energy
                                      Partners, L.P. immediately prior to the
                                      transaction own more than 50% of the
                                      common equity securities of the survivor
                                      immediately after the transaction;

                                   -- merger in which Kinder Morgan Energy
                                      Partners, L.P. is the survivor if the
                                      unitholders of Kinder Morgan Energy
                                      Partners, L.P. immediately prior to the
                                      transaction own more than 50% of the
                                      limited partner interests in Kinder Morgan
                                      Energy Partners, L.P. immediately after
                                      the transaction; or

                                   -- recapitalization, reorganization or
                                      similar transaction;

                                 - be a party to a merger, sell substantially
                                   all of its assets to another person, or enter
                                   into similar transactions, if:

                                   -- the survivor of the merger or the other
                                      person is to be controlled by Kinder
                                      Morgan, Inc. or its affiliates after the
                                      transaction; and

                                   -- the transaction would be a mandatory
                                      purchase event;

                                 - make a tender offer for common units unless
                                   the consideration:

                                   -- is exclusively cash; and

                                   -- together with any cash payable in respect
                                      of any tender offer by Kinder Morgan
                                      Energy Partners, L.P. for the common units
                                      concluded within the preceding 360 days
                                      and the aggregate amount of any cash
                                      distributions to all owners of common
                                      units made within the preceding 360-day
                                      period is less than 12% of the aggregate
                                      average market value of all classes of
                                      units of Kinder Morgan Energy Partners,
                                      L.P. determined on the trading day
                                      immediately preceding the commencement of
                                      the tender offer;

                                       or

                                 - issue any of its i-units to any person other
                                   than us.

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