Linda E. Carlisle Comments on PTP Structures in Tax Notes Today

"Kinder Morgan Consolidates, Converting Two PTP Pipeline Operators"
Tax Notes Today
08.12.14Linda E. Carlisle commented on the announcement that Kinder Morgan Energy Partners LP and El Paso Pipeline Partners LP would be acquired by C corporation Kinder Morgan Inc., abandoning their publically traded partnership (PTP). Some speculate the move is a commentary on the PTP structure, while analysts said Kinder Morgan's PTP had unique circumstances that made for a higher cost of capital, limiting their flexibility. According to Carlisle, PTPs make frequent distributions to their unit holders, "so you don't have a lot of cash left in the entity to make acquisitions." Speculating on their reasons for the change, Carlisle said, "Kinder may want to do other things. That may be another reason to get out of the PTP structure."
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