Kinder Morgan Energy Partners (KMP) is one of the most popular master limited partnerships [MLPs] in the U.S. The company is the largest holder and operator of petroleum product pipelines in the U.S., carrying over two million barrels per day of jet fuel, Gasoline, natural gas liquids and diesel fuel. In addition, the partnership has the capability to carry 9 billion cubic feet/day of natural gas. As I explained in a previous article, KMP has three classes of Units: Class B units, common units and i-units. The difference between class B and common units is that class B units are not traded on the stock exchange, while Common units trade on the stock exchange and represent a limited liability. However, i-units are held by the general partner of the partnership, which is Kinder Morgan Inc. (KMI), though it has delegated its authority to Kinder Morgan Management LLC (KMR). On the other hand, all of the class B units are held by a subsidiary of KMI.

Due to the high percentage of income being distributed; it is imperative for the partnership to have a strong balance sheet and impressive statement of operations. Here, I have analyzed the profitability trends, cash flow trends and leverage indicators of the partnership.

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