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**September 30, 2003**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 1-6446**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 October 31, 2003 was 123,232,365 shares.

KINDER MORGAN, INC. AND SUBSIDIARIESFORM 10-QQUARTER ENDED SEPTEMBER 30, 2003Contents
  
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
7-25  Item 2.
Management's Discussion    and Analysis of Financial
   Condition and Results of    Operations
26-42  Item    3.
Quantitative    and Qualitative Disclosures About Market Risk
42  Item    4.
Controls and Procedures
42-43  PART II.
OTHER    INFORMATION  Item 1.
Legal Proceedings
44  Item 2.
Changes in    Securities and Use of Proceeds
44  Item 3.
Defaults Upon Senior    Securities
44  Item 4.
Submission    of Matters to a Vote of Security Holders
44  Item 5.
Other Information
44  Item 6.
Exhibits and Reports on Form    8-K
44-45  SIGNATURE
46
2
**PART I. - FINANCIAL INFORMATION
*Item 1.  FinancialStatements.*
CONSOLIDATED BALANCE SHEETS(Unaudited)Kinder Morgan, Inc. and Subsidiaries****September 30,**December 31,**2003**2002
(In    thousands)**ASSETS:****Current Assets:**Cash and Cash Equivalents 
$     6,601 
$    35,653 Restricted Deposits 
      2,779 
      2,783 Accounts Receivable, Net:   Trade 
     58,995 
     82,258    Related Parties 
      1,336 
     48,054 Inventories 
     18,514 
     62,760 Gas Imbalances 
     51,190 
     32,033 Other 
    133,906 
    157,454 
    273,321 
    420,995    **Investments:**Kinder Morgan Energy Partners 
  2,105,654 
  2,034,160 Goodwill 
    969,442 
    990,878 Other 
    299,040 
    285,883 
  3,374,136 
  3,310,921    **Property, Plant and Equipment**
  6,584,327 
  6,544,418 **Less Accumulated Depreciation and    Amortization**
   (571,273)
   (496,311)
  6,013,054 
  6,048,107 **  ****Deferred Charges and Other Assets**
    218,674 
    322,727   **Total Assets**
$ 9,879,185 
$10,102,750 
=========== 
=========== 
The accompanying notes are an integral part of these statements.

3
**CONSOLIDATED BALANCE SHEETS(Unaudited)Kinder Morgan, Inc. and Subsidiaries****September 30,**December 31,**2003**2002
(In thousands    except shares)**LIABILITIES AND STOCKHOLDERS' EQUITY:****Current Liabilities:**Current Maturities of Long-term Debt 
$     5,000 
$   501,267 Notes Payable 
    191,100 
          - Accounts Payable:   Trade 
     38,460 
     88,227    Related Parties 
        373 
         50 Accrued Interest 
     33,689 
     80,158 Accrued Expenses 
     41,652 
     49,580 Accrued Taxes 
     37,632 
     27,355 Gas Imbalances 
     41,109 
     50,394 Other 
     48,210 
     69,501 
    437,225 
    866,532 **  ****Other Liabilities and Deferred Credits:**Deferred Income Taxes 
  2,516,577 
  2,435,780 Other 
    133,181 
    210,869 
  2,649,758 
  2,646,649   **Long-term Debt:**  Outstanding Notes and    Debentures 
  2,837,463 
  2,852,181   Capital Trust Securities 
    275,000 
          -   Value of Interest Rate Swaps 
    103,153 
    139,589   
  3,215,616 
  2,991,770 **Kinder Morgan-Obligated Mandatorily    Redeemable Preferred****  Capital Trust Securities of    Subsidiary Trusts Holding****  Solely Debentures of Kinder    Morgan**
          - 
    275,000   **Minority Interests in Equity of    Subsidiaries**
    991,352 
    967,802   **Stockholders' Equity:**Common Stock-  Authorized - 150,000,000    Shares, Par Value $5 Per Share  Outstanding - 131,743,406 and    129,861,650 Shares,    Respectively,    Before Deducting 8,744,575 and 8,168,241    Shares Held in    Treasury 
    658,717 
    649,308 Additional Paid-in Capital 
  1,733,933 
  1,681,042 Retained Earnings 
    701,001 
    486,062 Treasury Stock 
   (436,559)
   (406,630)Deferred Compensation 
    (36,339)
    (10,066)Accumulated Other Comprehensive Loss 
    (35,519)
    (44,719)Total Stockholders' Equity 
  2,585,234 
  2,354,997   **Total Liabilities and Stockholders'    Equity**
$ 9,879,185 
$10,102,750 
=========== 
=========== 
The accompanying notes are an integral part of these statements.

4
**CONSOLIDATED STATEMENTSOF OPERATIONS (Unaudited)Kinder Morgan, Inc. and Subsidiaries****Three Months Ended    September 30,**Nine Months Ended    September 30,**2003**2002**2003**2002
(In thousands    except per share amounts)**Operating Revenues:**Natural Gas Transportation and Storage 
$ 163,377 
$ 155,191 
$ 509,204 
$ 452,007 Natural Gas Sales 
   70,619 
   51,118 
  264,108 
  226,185 Other 
   12,987 
   18,802 
   44,404 
   52,054     Total Operating    Revenues 
  246,983 
  225,111 
  817,716 
  730,246   **Operating Costs and Expenses:**Gas Purchases and Other Costs of Sales 
   72,515 
   57,291 
  265,322 
  211,848 Operations and Maintenance 
   30,754 
   32,704 
   92,204 
   95,009 General and Administrative 
   18,761 
   16,693 
   53,955 
   53,351 Depreciation and Amortization 
   29,225 
   26,398 
   87,897 
   78,396 Taxes, Other Than Income Taxes 
    8,148 
    7,359 
   22,705 
   21,750     Total Operating    Costs and Expenses 
  159,403 
  140,445 
  522,083 
  460,354   **Operating Income**
   87,580 
   84,666 
  295,633 
  269,892   **Other Income and (Expenses):**Equity in Earnings of Kinder Morgan Energy    Partners 
  116,659 
  101,542 
  341,886 
  285,027 Equity in Earnings of Other Equity    Investments 
    3,058 
    6,623 
    8,260 
   13,051 Interest Expense - Capital Trust Securities    
   (5,478)
        - 
   (5,478)
        - Interest Expense - All Other, Net 
  (34,751)
  (40,925)
 (106,039)
 (120,283)Minority Interests 
  (10,183)
  (13,948)
  (41,580)
  (39,549)Other, Net 
       18 
      340 
      140 
    5,390     Total Other Income    and (Expenses) 
   69,323 
   53,632 
  197,189 
  143,636   **Income Before Income Taxes**
  156,903 
  138,298 
  492,822 
  413,528 Income Taxes 
   61,273 
   57,895 
  191,928 
  172,285   **Net Income**
$  95,630 
$  80,403 
$ 300,894 
$ 241,243 
========= 
========= 
========= 
=========   **Basic Earnings Per Common Share**
$    0.78 
$    0.66 
$    2.46 
$    1.97 
========= 
========= 
========= 
=========   Number of Shares Used in Computing Basic    Earnings Per Common    Share 
  123,109 
  121,736 
  122,406 
  122,352 
========= 
========= 
========= 
=========   **Diluted Earnings Per Common Share**
$    0.77 
$    0.66 
$    2.43 
$    1.95 
========= 
========= 
========= 
=========   Number of Shares Used in Computing Diluted    Earnings Per Common    Share 
  124,345 
  122,743 
  123,640 
  123,615 
========= 
========= 
========= 
=========   **Dividends Per Common Share**
$    0.40 
$    0.10 
$    0.70 
$    0.20 
========= 
========= 
========= 
========= 
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********************************** |
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