El Paso Pipeline Partners Increases Quarterly Distribution to $0.58 Per Unit

  El Paso Pipeline Partners Increases Quarterly Distribution to $0.58 Per Unit

                 Distribution Up 18% From Third Quarter 2011

Business Wire

HOUSTON -- October 17, 2012

El Paso Pipeline Partners, L.P. (NYSE: EPB) today increased its quarterly cash
distribution per common unit to $0.58 ($2.32 annualized) payable on Nov. 14,
2012, to unitholders of record as of Oct. 31, 2012. This represents an 18
percent increase over the third quarter 2011 cash distribution per unit of
$0.49 ($1.96 annualized) and a 5percent increase from $0.55 per unit ($2.20
annualized) for the second quarter of 2012. EPB has increased its cash
distribution 18 consecutive quarters since its initial public offering in
November 2007.

Chairman and CEO Richard D. Kinder said, “EPB had a good third quarter. Our
performance reflects solid results from our stable, regulated pipeline and
storage assets, significantly increased demand from natural gas fired power
plants and contributions from dropdowns. Looking ahead, we expect EPB to
realize cost and growth synergies as a result of Kinder Morgan, Inc.’s
acquisition of El Paso Corporation, which closed in the second quarter this
year.”

EPB reported third quarter distributable cash flow before certain items of
$149 million, a 32 percent increase from $113 million for the comparable
period in 2011. Distributable cash flow per unit before certain items was
$0.71, compared to $0.55 for the third quarter last year. Third quarter net
income before certain items was $154 million compared to $118 million for the
same period in 2011. Including certain items, net income was $151 million
versus $131 million for the third quarter last year.

For the first nine months, EPB generated distributable cash flow before
certain items of $427 million, up 16 percent from $369 million for the first
three quarters of 2011. Distributable cash flow per unit before certain items
was $2.06 compared to $1.89 for the comparable period last year. Net income
before certain items was $426 million versus $405 million for the first three
quarters of 2011. Including certain items, net income was $411 million
compared to $460million for the same period last year. The 2012 certain items
for the first nine months total a net loss of $15 million, while the 2011
certain items for the first three quarters totaled a net gain of $55 million.

Business Overview

For the third quarter, EPB’s assets produced total earnings before DD&A and
certain items of $299 million, up 17 percent from $256 million for the same
period of 2011. “Growth in the quarter was driven by contributions from the
May 24 dropdown transaction in which EPB acquired the remaining 14 percent
interest in Colorado Interstate Gas (CIG) and all of Cheyenne Plains Gas
Pipeline,” Kinder said. “Additionally, EPB benefited from completed expansion
projects on Southern Natural Gas (SNG) and increased demand from natural gas
fired electric generation facilities on both SNG and CIG. Gas fired power
generation demand on SNG was up 26 percent compared to the third quarter of
2011 and 47 percent versus the first nine months of the year. CIG realized an
increase in natural gas fired power generation demand of 13 percent versus the
third quarter last year and 44 percent compared to the first three quarters of
2011.”

Outlook

As previously announced, EPB expects to grow its distributions per unit at an
annual rate of approximately 9 percent from 2011 to 2015. EPB expects to
declare cash distribution of $2.25 per unit for 2012, a 17 percent increase
over the $1.93 per unit it distributed for 2011. “EPB’s distribution is
supported by a diversified portfolio of pipeline and LNG assets which generate
consistent cash flow through various market conditions, as more than 90
percent of EPB’s revenues are derived from fixed-demand charges,” Kinder said.
In 2012, EPB expects to generate cash flow in excess of distributions of over
$95 million and earnings before DD&A of almost $1.2 billion, an increase of
approximately $80 million from 2011.

Other News

  *Southern LNG Company (SLNG) filed an application with the Department of
    Energy in August requesting long-term, multi-contract authorization to
    export up to 4 million tons per year of LNG (equivalent to approximately
    0.5 billion cubic feet of gas per day) from its Elba Island Terminal in
    Chatham County, Ga., near Savannah. The authorization would allow the
    export of LNG from the terminal to any non Free Trade Agreement (FTA)
    country. The application is the second part of a two-part export
    authorization request by SLNG. In June, SLNG received DOE authorization to
    export domestically produced LNG to FTA countries.
  *CIG has submitted an application to the FERC for a certificate of public
    convenience and necessity and authorization to construct a new, 7.75-mile,
    24-inch diameter pipeline lateral, system modifications and appurtenant
    facilities to the High Plains System to make it bi-directional, enhancing
    flexibility and transport capacity. The fully subscribed $25 million High
    Plains expansion project would provide up to 600,000 dekatherms per day
    (Dth/d) of additional takeaway capacity from the Denver-Julesburg basin to
    Kinder Morgan’s Cheyenne Hub in Weld County, Colo. Two shippers have
    signed long-term, firm-service contracts for 250,000 Dth/d of natural gas,
    with the right to ramp up to 500,000 Dth/d after the first year. CIG is
    requesting that the FERC issue the project a certificate by April 1, 2013,
    to allow time to construct and place certain facilities into service by
    June 30, 2013, with the remaining facilities to be completed by Oct. 31,
    2013.
  *SNG has executed a five-year contract extension associated with moving
    volumes from an existing Mississippi receipt point to a new location at
    Rose Hill, Miss. The volume shift, combined with facility modifications,
    will produce added system efficiencies for both SNG and Tennessee Gas
    Pipeline (owned by Kinder Morgan Energy Partners). Volumes total 285,000
    Dth/d. The incremental revenue for this receipt point has a total term
    value of more than $48 million. The project is expected to be in service
    Nov. 1, 2013.
  *SNG successfully extended 1.2 Bcf/d of firm contracts through Sept. 1,
    2014. The contracts were set to expire Sept. 1, 2013.

Financings

  *EPB sold common units valued at approximately $277.5 million in a
    secondary offering in the third quarter. EPB used the proceeds from this
    offering to repay all outstanding borrowings under the Cheyenne Plains
    credit agreement, to repay certain short-term debt and for general
    partnership purposes.

El Paso Pipeline Partners (NYSE: EPB) is a publicly traded pipeline limited
partnership. It owns an interest in or operates more than 13,000 miles of
interstate natural gas transportation pipelines in the Rockies and the
Southeast, natural gas storage facilities with a capacity of nearly 100
billion cubic feet and LNG assets in Georgia. The general partner of EPB is
owned by Kinder Morgan, Inc. (NYSE: KMI). Kinder Morgan is the largest
midstream and the third largest energy company in North America with a
combined enterprise value of approximately $100 billion. It owns an interest
in or operates approximately 75,000 miles of pipelines and 180 terminals. Its
pipelines transport natural gas, gasoline, crude oil, CO[2] and other
products, and its terminals store petroleum products and chemicals and handle
such products as ethanol, coal, petroleum coke and steel. KMI owns the general
partner interest of Kinder Morgan Energy Partners, L.P. (NYSE: KMP) and El
Paso Pipeline Partners, L.P. (NYSE: EPB), along with limited partner interests
in KMP and EPB and shares in Kinder Morgan Management, LLC (NYSE: KMR). For
more information please visit www.kindermorgan.com and
www.eppipelinepartners.com.

Please join Kinder Morgan at 4:30 p.m. Eastern Time on Wednesday, Oct. 17, at
www.kindermorgan.com for a LIVE webcast conference call which will include a
discussion of EPB’s third quarter earnings.

The non-generally accepted accounting principles, or non-GAAP, financial
measures of distributable cash flow before certain items, both in the
aggregate and per unit, and earnings before depreciation, depletion,
amortization, or DD&A, and certain items, are presented in this news release.
Our non-GAAP financial measures should not be considered as alternatives to
GAAP measures such as net income or any other GAAP measure of liquidity or
financial performance. Distributable cash flow before certain items is a
significant metric used by us and by external users of our financial
statements, such as investors, research analysts, commercial banks and others,
to compare basic cash flows generated by us to the cash distributions we
expect to pay our unitholders on an ongoing basis. Management uses this metric
to evaluate our overall performance. It also allows management to simply
calculate the coverage ratio of estimated ongoing cash flows to expected cash
distributions. Distributable cash flow before certain items is also an
important non-GAAP financial measure for our unitholders because it serves as
an indicator of our success in providing a cash return on investment. This
financial measure indicates to investors whether or not we typically are
generating cash flow at a level that can sustain or support an increase in the
quarterly distributions we are paying pursuant to our partnership agreement.
Our partnership agreement requires us to distribute all available cash.
Distributable cash flow before certain items and similar measures used by
other publicly traded partnerships are also quantitative measures used in the
investment community because the value of a unit of such an entity is
generally determined by the unit’s yield (which in turn is based on the amount
of cash  distributions the entity pays to a unitholder). The economic
substance behind our use of distributable cash flow before certain items is to
measure and estimate the ability of our assets to generate cash flows
sufficient to make distributions to our investors.

We define distributable cash flow before certain items to be limited partners’
pretax income before certain items and DD&A, less sustaining capital
expenditures for EPB, plus DD&A less sustaining capital expenditures for Bear
Creek and WYCO our equity method investees, plus other income and expenses,
net (which primarily includes deferred revenue, AFUDC equity and other
non-cash items). Distributable cash flow before certain items per unit is
distributable cash flow before certain items divided by average outstanding
units. “Certain items” are items that are required by GAAP to be reflected in
net income, but typically either (1) do not have a cash impact, for example,
goodwill impairments, allocated compensation for which we will never be
responsible, and results from assets prior to our ownership that are required
to be reflected in our results due to accounting rules regarding entities
under common control, or (2) by their nature are separately identifiable from
our normal business operations and in our view are likely to occur only
sporadically, for example legal settlements, hurricane impacts and casualty
losses. Management uses this measure and believes it is important to users of
our financial statements because it believes the measure more effectively
reflects our business’ ongoing cash generation capacity than a similar measure
with the certain items included. For similar reasons, management uses earnings
before DD&A and certain items in its analysis of the performance and
management of our business. We believe earnings before DD&A and certain items
is a significant performance metric because it enables us and external users
of our financial statements to better understand our ability to generate cash
on an ongoing basis. We believe it is useful to investors because it is a
measure that management believes is important and that our chief operating
decision makers use for purposes of making decisions and assessing our
performance.

We believe the GAAP measure most directly comparable to distributable cash
flow before certain items is net income. Our calculation of distributable cash
flow before certain items, which begins with net income after subtracting
certain items that are specifically identified in the accompanying tables, is
set forth in those tables. Net income before certain items is presented
primarily because we use it in this calculation. Earnings before DD&A as
presented in our GAAP financials is the measure most directly comparable to
earnings before DD&A and certain items. Earnings before DD&A and certain items
is calculated by removing the certain items attributable to the partnership,
which are specifically identified in the footnotes to the accompanying tables,
from earnings before DD&A. In addition, earnings before DD&A as presented in
our GAAP financials is included on the first page of the tables presenting our
financial results.

Our non-GAAP measures described above should not be considered as an
alternative to GAAP net income, earnings before DD&A or any other GAAP
measure. Distributable cash flow before certain items and earnings before DD&A
and certain items are not financial measures in accordance with GAAP and have
important limitations as analytical tools. You should not consider either of
these non-GAAP measures in isolation or as a substitute for an analysis of our
results as reported under GAAP. Because distributable cash flow before certain
items excludes some but not all items that affect net income and because
distributable cash flow measures are defined differently by different
companies in our industry, our distributable cash flow before certain items
may not be comparable to distributable cash flow measures of other companies.
Earnings before DD&A and certain items has similar limitations. Management
compensates for the limitations of these non-GAAP measures by reviewing our
comparable GAAP measures, understanding the differences between the measures
and taking this information into account in its analysis and its decision
making processes.

This news release includes forward-looking statements. These forward-looking
statements are subject to risks and uncertainties and are based on the beliefs
and assumptions of management, based on information currently available to
them. Although EPB believes that these forward-looking statements are based on
reasonable assumptions, it can give no assurance that such assumptions will
materialize. Important factors that could cause actual results to differ
materially from those in the forward-looking statements herein include those
enumerated in EPB’s reports filed with the Securities and Exchange Commission.
Forward-looking statements speak only as of the date they were made, and
except to the extent required by law, EPB undertakes no obligation to update
or review any forward-looking statement because of new information, future
events or other factors. Because of these uncertainties, readers should not
place undue reliance on these forward-looking statements.

                                                            
El Paso Pipeline Partners, L.P.
Preliminary Consolidated Statements of Income
(Unaudited)
(in millions except per unit amounts)
                                                                   
                                                                   
                      Three Months Ended           Nine Months Ended September
                      September 30,                30,
                      2012           2011^(1)      2012            2011^(1)
                                                                   
Revenues              $  368        $  366       $  1,125       $  1,143  
                                                                   
Costs, expenses
and other
Operations and           83             105           310             307
maintenance
Depreciation and         46             45            137             135
amortization
Taxes, other than       19           21          63            63     
income taxes
                        148          171         510           505    
Operating income         220            195           615             638
                                                                   
Other income
(expense)
Earnings from
equity                   4              4             11              12
investments
Interest expense,        (74   )        (70   )       (218   )        (195   )
net
Other, net              1            2           3             5      
Net income              151          131         411           460    
                                                                   
Net income
attributable to         -            (7    )      (10    )       (87    )
Noncontrolling
Interests
                                                                   
Net income
attributable to       $  151        $  124       $  401         $  373    
EPB
                                                                   
                                                                   
Calculation of
Limited Partners'
interest in net
income
attributable to
EPB
Net income
attributable to       $  151         $  124        $  401          $  373
EPB
Less:
Pre-acquisition
earnings                 -              (9    )       (22    )        (27    )
allocated to
General Partner
(2)
Plus: Severance
costs allocated          3              -             32              -
to General
Partner
Less: General
Partner's 2%             (3    )        (2    )       (8     )        (7     )
interest
allocation
Less: General
Partner's               (36   )       (18   )      (86    )       (43    )
incentive
distribution
Limited Partners'
interest in net       $  115        $  95        $  317         $  296    
income
                                                                   
Limited Partners'
net income per
unit
Net income            $  0.55       $  0.46      $  1.53        $  1.52   
Weighted average        209          206         207           195    
units outstanding
                                                                   
Declared
distribution /        $  0.58       $  0.49      $  1.64        $  1.43   
unit

    
      Retrospectively adjusted to reflect reorganization of entities under
(1)   common control and change in reporting entity due to EPB's May 24, 2012
      acquisition of Cheyenne Plains from El Paso Corporation.
(2)   Represents Cheyenne Plains' earnings prior to the May 24, 2012
      acquisition.

                                                               
El Paso Pipeline Partners, L.P.
Preliminary Reconciliation of Distributable Cash Flow to Net Income
(Unaudited)
(in millions except per unit amounts)
                                                                     
                     Three Months Ended September    Nine Months Ended
                     30,                             September 30,
                     2012            2011            2012            2011
Earnings before
DD&A and certain     $  299          $  256          $  857          $ 807
items
DD&A                   46            42            132          126   
Earnings                253             214             725            681
contribution
General and
administrative          (25    )        (29    )        (85    )       (89   )
expense
Interest expense,      (74    )       (67    )       (214   )      (187  )
net
Net income before       154             118             426            405
certain items
Certain items
Cheyenne Plains         -               13              22             41
before dropdown
CIG environmental
reserve                 -               -               6              -
adjustment
Loss on write-off       -               -               (11    )       -
of asset (1)
Non-cash
severance costs         (3     )        -               (32    )       -
(2)
Project
cancellation           -             -             -            14    
payment (3)
Sub-total certain      (3     )       13            (15    )      55    
items
Net Income             151           131           411          460   
Less:
Pre-acquisition
earnings                -               (9     )        (22    )       (27   )
allocated to
General Partner
(4)
Plus: Severance
costs allocated         3               -               32             -
to General
Partner (2)
Less: General
Partner's 2%            (3     )        (2     )        (8     )       (7    )
interest
allocation
Less: General
Partner's               (36    )        (18    )        (86    )       (43   )
incentive
distribution
Less:
Noncontrolling         -             (7     )       (10    )      (87   )
Interests in net
income
Limited Partners'      115           95            317          296   
net income
                                                                     
Net income before       154             118             426            405
certain items
Less: Net income
attributable to
Noncontrolling         -             (3     )       (10    )      (73   )
Interests before
certain items
Net income
attributable to         154             115             416            332
EPB before
certain items
Less: General
Partner's 2%            (3     )        (2     )        (8     )       (7    )
interest
allocation
Less: General
Partner's              (36    )       (18    )       (86    )      (43   )
incentive
distribution
Limited Partners'
net income before       115             95              322            282
certain items
Depreciation and        46              42              132            126
amortization (5)
Net income
attributable to
Noncontrolling          -               3               10             73
Interests before
certain items
Declared
distributions to
Noncontrolling          -               (4     )        (8     )       (42   )
Interests before
certain items (6)
Other (7)               1               -               -              (2    )
Sustaining
capital                (13    )       (23    )       (29    )      (68   )
expenditures (8)
DCF before
certain items -      $  149         $  113         $  427         $ 369   
Limited Partners
                                                                     
Net income / unit
before certain         0.55          0.46          1.56         1.45  
items
DCF / unit before    $  0.71        $  0.55        $  2.06        $ 1.89  
certain items
Weighted average       209           206           207          195   
units outstanding
                                                                     
Notes:
(1) Reflects write-off of a canceled software implementation project.
(2) Represents the non-cash severance costs allocated to EPB from El Paso as a
result of KMI's and El Paso's merger. EPB does not have any obligation nor did
EPB pay any amounts related to this expense.
(3) Reflects $17 million BG cancellation option payments related to Phase B of
SLNG's Elba III expansion offset by $3 million write-off of the related
project development costs.
(4) Represents earnings related to Cheyenne Plains prior to the May 24, 2012
acquisition.
(5) Includes EPB's share of Bear Creek and WYCO DD&A (less than $600 thousand
for each of the periods presented).
(6) Cash distributions made to the noncontrolling interest holder.
(7) Includes deferred revenue and other non-cash items such as AFUDC equity
and other items.
(8) Includes EPB's share of Bear Creek and WYCO sustaining capital
expenditures (less than $800 thousand for each of the periods presented).
                                                                     
                                                                     
Transport Volumes      7,973         7,453         7,868        7,328 
(BBtu/d)

                                                   
El Paso Pipeline Partners, L.P.
Preliminary Abbreviated Consolidated Balance Sheet
(Unaudited)
(in millions)
                                                                          
                                 September 30,          December 31,
                                 2012                   2011^(1)
ASSETS
Cash and cash equivalents        $     68               $     120
Other current assets                   274                    210
Property, plant and                    5,954                  6,040
equipment, net
Investments                            73                     71
Regulatory assets and other           226                  238     
assets
TOTAL ASSETS                     $     6,595           $     6,679   
                                                                          
LIABILITIES AND PARTNERS'
CAPITAL
                                                                          
Liabilities
Notes payable and current        $     93               $     82
maturities of long-term debt
Other current liabilities              216                    263
Long-term debt                         4,244                  4,028
Other                                 71                   75      
Total liabilities                      4,624                  4,448
                                                                          
Partners' capital
Accumulated other                      9                      (7      )
comprehensive income (loss)
Other partners' capital               1,962                2,122   
Total EPB partners' capital            1,971                  2,115
Noncontrolling interests              -                    116     
Total partners' capital               1,971                2,231   
TOTAL LIABILITIES AND            $     6,595           $     6,679   
PARTNERS' CAPITAL
                                                                          
Total Debt, net of cash and      $     4,269            $     3,990       (4 )
cash equivalents
                                                                          
EBITDA (2) (3)                   $     1,016            $     962
                                                                          
Debt to EBITDA                         4.2                    4.1         (5 )
                                                                          
                                 Twelve Months Ended
                                 September 30, 2012     December 31, 2011
Net Income (1)                   $     556              $     605
Certain items:
Cheyenne Plains before                 (35      )             (54     )
dropdown
CIG environmental reserve              (6       )             -
adjustment
Loss on write-off of asset             11                     -
Non-cash severance costs               32                     -
Project cancellation payment          -                    (14     )
Subtotal certain items                2                    (68     )
Net income before certain              558                    537
items
Add:
Depreciation and                       175                    169
amortization (3)
Interest expense, net                 283                  256     
EBITDA                           $     1,016           $     962     

    
      Retrospectively adjusted to reflect reorganization of entities under
(1)   common control and change in reporting entity due to EPB's May 24, 2012
      acquisition of Cheyenne Plains from El Paso Corporation.
(2)   Amounts represent the last twelve months.
      Includes add back of EPB's share of Bear Creek and WYCO DD&A, which was
(3)   less than $1 million for both the twelve months ended September 30, 2012
      and December 31, 2011.
      Debt as of December 31, 2011 has been retrospectively adjusted to
(4)   include Cheyenne Plains. Reported debt net of cash and cash equivalents
      as of December 31, 2011 was $3.825 million.
(5)   As of December 31, 2011, excluding Cheyenne Plains, the Debt to EBITDA
      ratio would have been 4.0.

Contact:

Kinder Morgan
Emily Mir, (713) 369-8060
Media Relations
emily_mir@kindermorgan.com
www.eppipelinepartners.com
or
Mindy Mills Thornock, (713) 369-9490
Investor Relations
mindy_thornock@kindermorgan.com
www.kindermorgan.com
 
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