Table of Contents

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FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION**Washington, DC 20549**

| x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)    OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended**March 31, 2004**or

o  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)    OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________to_____________Commission file number 1-06446**Kinder Morgan, Inc.**(Exact name of registrant as specified in its charter)

Kansas
  
48-0290000
(State or other jurisdiction of    incorporation or organization)
  
(I.R.S. Employer    Identification No.)  
500 Dallas    Street, Suite 1000, Houston, Texas 77002
(Address of principal executive offices, including zip    code)  
(713)    369-9000
(Registrant's telephone number, including area code)    
(Former name, former address and former fiscal year, if    changed since last report)
Indicate by check mark whether the registrant: (1) has filed allreports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filing requirements forthe past 90 days.

Yes x  No o

Indicate by check mark whether the registrant is an accelerated filer(as defined in Rule 12b-2 of the Exchange Act).

Yes x  No o

The number of shares outstanding of the registrant's common stock, $5par value, as of April 30, 2004 was 124,075,167 shares.

KINDER MORGAN, INC. AND SUBSIDIARIESFORM 10-QQUARTER ENDED MARCH 31, 2004Contents
  
Page    NumberPART I.FINANCIAL    INFORMATIONItem 1.Financial    Statements (Unaudited)  
   Consolidated Balance Sheets 
3-4
   Consolidated Statements of Operations
5
   Consolidated Statements of Cash Flows 
6
   Notes to Consolidated Financial    Statements
7-22  Item    2.
Management's Discussion and Analysis of    Financial
   Condition and Results of Operations
23-36  Item 3.
Quantitative and    Qualitative Disclosures About Market Risk
36  Item    4.
Controls and Procedures
36  PART II.
OTHER    INFORMATION  Item 1.
Legal Proceedings
37  Item 2.Changes    in Securities, Use of Proceeds and Issuer Purchases        of Equity    Securities
37  Item 3.
Defaults Upon Senior    Securities
37  Item 4.
Submission    of Matters to a Vote of Security Holders 
37  Item 5.
Other Information
37  Item 6.
Exhibits and Reports on Form    8-K
38  SIGNATURE
39
2
**PART I. - FINANCIAL INFORMATION
*Item 1.  FinancialStatements.*
CONSOLIDATED BALANCE SHEETS(Unaudited)Kinder Morgan, Inc. and Subsidiaries****March 31,**December 31,**2004**2003
(In    thousands)**ASSETS:****Current Assets:**Cash and Cash Equivalents 
$    15,534 
$    11,076 Restricted Deposits 
     64,952 
     17,158 Accounts Receivable, Net:   Trade 
     80,088 
     75,903    Related Parties 
      4,592 
      1,584 Inventories 
     19,077 
     22,096 Gas Imbalances 
      5,448 
     33,320 Other 
    108,725 
    115,183 
    298,416 
    276,320    **Investments:**Kinder Morgan Energy Partners 
  2,145,910 
  2,106,312 Goodwill 
    947,730 
    972,380 Other 
    205,233 
    208,860 
  3,298,873 
  3,287,552    **Property, Plant and Equipment, Net**
  6,075,137 
  6,083,937 **  ****Deferred Charges and Other Assets**
    421,804 
    388,902   **Total Assets**
$10,094,230 
$10,036,711 
=========== 
=========== 
The accompanying notes are an integral part of these statements.

3
**CONSOLIDATED BALANCE SHEETS (Unaudited)Kinder Morgan, Inc. and Subsidiaries****March 31,**December 31,**2004**2003
(In thousands    except shares)**LIABILITIES AND STOCKHOLDERS' EQUITY:****Current Liabilities:**Current Maturities of Long-term Debt 
$   505,000 
$     5,000 Notes Payable 
     97,200 
    127,900 Accounts Payable:   Trade 
     36,138 
     61,385    Related Parties 
          - 
     10,632 Accrued Interest 
     33,603 
     68,596 Accrued Taxes 
     82,443 
     35,795 Gas Imbalances 
     30,237 
     38,494 Other 
    117,478 
    128,559 
    902,099 
    476,361 **  ****Other Liabilities and Deferred Credits:**Deferred Income Taxes 
  2,493,159 
  2,477,329 Other 
    171,280 
    197,435 
  2,664,439 
  2,674,764   **Long-term Debt:**  Outstanding Notes and    Debentures 
  2,337,510 
  2,837,487   Deferrable Interest Debentures    Issued to Subsidiary Trusts 
    283,600 
    283,600   Value of Interest Rate Swaps 
    131,604 
     88,242   
  2,752,714 
  3,209,329   **Minority Interests in Equity of    Subsidiaries**
  1,036,203 
  1,010,140   **Stockholders' Equity:**Common Stock-  Authorized - 150,000,000    Shares, Par Value $5 Per Share  Outstanding - 132,944,416 and    132,229,622 Shares,    Respectively,    Before Deducting 8,927,884 and 8,912,660    Shares Held in    Treasury 
    664,722 
    661,148 Additional Paid-in Capital 
  1,807,899 
  1,780,761 Retained Earnings 
    789,946 
    732,492 Treasury Stock 
   (447,754)
   (446,095)Deferred Compensation 
    (33,893)
    (36,506)Accumulated Other Comprehensive Loss 
    (42,145)
    (25,683)Total Stockholders' Equity 
  2,738,775 
  2,666,117   **Total Liabilities and Stockholders'    Equity**
$10,094,230 
$10,036,711 
=========== 
=========== 
The accompanying notes are an integral part of these statements.

4
**CONSOLIDATED STATEMENTSOF OPERATIONS (Unaudited)Kinder Morgan, Inc. and Subsidiaries****Three Months Ended March 31,**2004**2003
(In thousands    except per share amounts)**Operating Revenues:**Natural Gas Transportation and Storage 
$ 198,793 
$ 182,853 Natural Gas Sales 
  137,102 
  122,999 Other 
   16,691 
   13,016     Total Operating    Revenues 
  352,586 
  318,868   **Operating Costs and Expenses:**Gas Purchases and Other Costs of Sales 
  133,471 
  112,955 Operations and Maintenance 
   36,194 
   29,901 General and Administrative 
   22,288 
   16,408 Depreciation and Amortization 
   29,481 
   29,625 Taxes, Other Than Income Taxes 
    8,381 
    7,174     Total Operating    Costs and Expenses 
  229,815 
  196,063   **Operating Income**
  122,771 
  122,805   **Other Income and (Expenses):**Equity in Earnings of Kinder Morgan Energy    Partners 
  128,767 
  111,495 Equity in Earnings of Other Equity    Investments 
    2,807 
    2,483 Interest Expense, Net 
  (32,434)
  (39,974)Interest Expense - Deferrable Interest    Debentures 
   (5,478)
        - Minority Interests 
   (9,308)
  (15,921)Other, Net 
      759 
      996     Total Other Income    and (Expenses) 
   85,113 
   59,079   **Income Before Income Taxes**
  207,884 
  181,884 Income Taxes 
   80,842 
   70,814   **Net Income**
$ 127,042 
$ 111,070 
========= 
=========   **Basic Earnings Per Common Share**
$    1.03 
$    0.91 
========= 
========= Number of Shares Used in Computing Basic    Earnings Per Common    Share (Thousands) 
  123,715 
  121,877 
========= 
=========   **Diluted Earnings Per Common Share**
$    1.02 
$    0.90 
========= 
========= Number of Shares Used in Computing Diluted    Earnings Per Common    Share (Thousands) 
  124,938 
  123,078 
========= 
=========   **Dividends Per Common Share**
$  0.5625 
$  0.1500 
========= 
========= 
The accompanying notes are an integral part of these statements.

5
**CONSOLIDATED STATEMENTSOF CASH FLOWS (Unaudited)Kinder Morgan, Inc. and SubsidiariesIncrease (Decrease) in Cash and Cash Equivalents****Three Months Ended March 31,**2004**2003
(In    thousands)**Cash Flows From Operating Activities:**Net Income 
$   127,042 
$   111,070 Adjustments to Reconcile Net Income to Net    Cash Flows       from Operating Activities:    Depreciation and    Amortization 
     29,481 
     29,625     Deferred Income    Taxes 
     31,213 
     30,350     Equity in Earnings    of Kinder Morgan Energy Partners 
   (128,767)
   (111,495)    Distributions from    Kinder Morgan Energy Partners 
    101,411 
     86,965     Equity in Earnings    of Other Investments 
     (2,807)
     (2,483)    Minority Interests    in Income of Consolidated Subsidiaries 
      9,308 
     10,443     Deferred Purchased    Gas Costs 
      3,662 
     (7,129)    Net Gains on Sales    of Facilities 
       (389)
          -     Changes in Gas in    Underground Storage 
     30,045 
     38,575     Changes in Working    Capital Items 
    (30,619)
    (52,105)    Proceeds from    Termination of Interest Rate Swap 
          - 
     28,147     Other, Net 
     (1,784)
      1,999 Net Cash Flows Provided by Continuing    Operations 
    167,796 
    163,962 Net Cash Flows Used in Discontinued    Operations 
       (358)
       (366)**Net Cash Flows Provided by Operating    Activities**
    167,438 
    163,596   **Cash Flows From Investing Activities:**Capital Expenditures 
    (19,923)
    (19,480)Investment in Kinder Morgan Energy Partners    (Note 7) 
    (17,504)
          - Investment in Margin Deposits 
    (47,794)
     (3,895)Other Investments 
       (280)
     (7,945)Proceeds from Sales of Other Assets 
        510 
      2,629 **Net Cash Flows Used in Investing    Activities**
    (84,991)
    (28,691)  **Cash Flows From Financing Activities:**Short-term Debt, Net 
    (30,700)
    331,900 Long-term Debt Retired 
          - 
   (500,317)Issuance of Shares by Kinder Morgan    Management 
     15,000 
          - Common Stock Issued 
     23,219 
      9,538 Short-term Advances (To) From    Unconsolidated Affiliates 
    (13,640)
     40,235 Repurchase of Kinder Morgan Management LLC    Shares 
          - 
       (928)Treasury Stock Acquired 
     (2,097)
     (3,092)Cash Dividends, Common Stock 
    (69,588)
    (18,289)Minority Interests, Net 
       (108)
       (140)Securities Issuance Costs 
        (75)
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