Kinder Morgan Energy Partners Distributes $4.98 Per Unit for 2012 – Meets Annual Budget

  Kinder Morgan Energy Partners Distributes $4.98 Per Unit for 2012 – Meets
  Annual Budget

   Increases Quarterly Distribution to $1.29 Per Unit, Up 11% From 4Q 2011

Business Wire

HOUSTON -- January 16, 2013

Kinder Morgan Energy Partners, L.P. (NYSE: KMP) today increased its quarterly
cash distribution per common unit to $1.29 ($5.16 annualized) payable on Feb.
14, 2013, to unitholders of record as of Jan. 31, 2013. This represents an 11
percent increase over the fourth quarter 2011 cash distribution per unit of
$1.16 ($4.64 annualized) and is up from $1.26 per unit ($5.04 annualized) for
the third quarter of 2012. KMP has increased the distribution 46 times since
current management took over in February 1997.

Chairman and CEO Richard D. Kinder said, “KMP had a strong fourth quarter and
a very successful year overall. We will distribute our budget of $4.98 per
unit for the full year, which represents an 8 percent increase over the 2011
distribution of $4.61 per unit. KMP also produced cash in excess of our
distribution target of approximately $30 million. For 2012, all five of KMP’s
business segments recorded higher results than in the previous year and
generated $4.384billion in segment earnings before DD&A and certain items, a
20 percent increase from $3.639billion in 2011. Highlights included
contributions from the drop down of 100 percent of Tennessee Gas Pipeline
(TGP) and 50 percent of El Paso Natural Gas (EPNG), record export coal volumes
in our Terminals business and strong oil production at SACROC in our CO[2
]segment. KMP invested $2.1 billion in expansions and acquisitions during 2012
(not including dropdowns), which exceeded our budget of $1.7 billion. We see
exceptional growth opportunities across all of our business segments, as there
is a need to build additional midstream infrastructure to move or store oil,
gas and liquids from the prolific shale plays in the United States and the
oilsands in Alberta, along with increasing demand for export coal and CO[2].
We currently have identified approximately $11 billion in expansion and joint
venture investments at KMP that we have, or are confident that we will soon
have, under contract and we are pursuing customer commitments for many more
projects.”

KMP reported fourth quarter distributable cash flow before certain items of
$495million, up 16 percent from $425 million for the comparable period in
2011. Distributable cash flow per unit before certain items was $1.35 compared
to $1.27 for the fourth quarter last year. Fourth quarter net income before
certain items was $669million compared to $491 million for the same period in
2011. Including certain items, net income was $619million compared to $479
million for the fourth quarter last year. Certain items for the fourth quarter
totaled a net loss of approximately $50 million (the majority of which
pertained to damage to KMP terminals in the Northeast from Hurricane Sandy)
versus a net loss of $12 million for the same period last year. It is
anticipated that the hurricane losses will largely be offset by insurance
recoveries, which will be reported as a certain item gain when they are
received.

For the year, distributable cash flow before certain items was$1.78 billion,
up 17 percent from $1.53 billion for 2011. Distributable cash flow per unit
before certain items was $5.07 compared to $4.68 per unit for the same period
last year. Net income before certain items was $2.24 billion compared to $1.76
billion for 2011. Including certain items, net income was $1.36billion versus
$1.27 billion last year. Certain items for the year totaled a net loss of
$888million versus a net loss of $491 million for the comparable period in
2011. The certain items in 2012 were primarily attributable to the loss on
disposal and re-measurement of discontinued operations to fair value related
to the KMP assets that were divested in order to obtain Federal Trade
Commission approval for Kinder Morgan, Inc.’s (NYSE: KMI) acquisition of El
Paso Corporation.

Overview of Business Segments

The Products Pipelines business produced fourth quarter segment earnings
before DD&A and certain items of $176 million, up 9 percent from $161 million
for the comparable period in 2011. For the year, Products Pipelines produced
$703 million in segment earnings before DD&A and certain items, up 1 percent
from $694 million in 2011, but below its published annual budget of 6 percent
growth.

“The increase in earnings compared to the fourth quarter of 2011 was driven by
higher volumes and revenues from the Cochin Pipeline and our Southeast
Terminals, along with contributions from the Kinder Morgan Crude and
Condensate Pipeline which was completed in the second quarter,” Kinder said.
“For the year, NGL volumes and revenues were up approximately 22 percent and
17 percent, respectively.”

Total refined products volumes decreased 1.2 percent versus the fourth quarter
of 2011 (although the Florida, southern California and Arizona markets showed
increases) and declined by 1.5 percent year over year. Overall segment
gasoline volumes (including transported ethanol on the Central Florida
Pipeline) were up 1.5 percent compared to the fourth quarter of 2011,
reflecting increases across the products pipeline system except at CALNEV.
Overall segment diesel volumes declined 6.2percent versus the fourth quarter
of 2011, attributable to continuing weak market demand on the West Coast and
lower volumes on CALNEV due to a competing pipeline, along with lower volumes
on Plantation due to favorable Gulf Coast diesel export economics. Overall
segment commercial and military jet fuel volumes were down 3.9percent
compared to the fourth quarter of 2011, but virtually flat year over year.

The Products Pipelines segment handled 9.4 million barrels of biofuels
(ethanol and biodiesel) in the fourth quarter, up 22 percent from the same
period a year ago spearheaded by the August 2012 acquisition of a biofuel
transload terminal in South Carolina. For the year, 34.4million barrels of
biofuels were handled, up 11 percent from 2011. This segment continues to make
investments in assets across its operations to accommodate more biofuels.

The Natural Gas Pipelines business produced fourth quarter segment earnings
before DD&A and certain items of $474 million, up 64 percent from $290 million
for the comparable period in 2011. For the year, Natural Gas Pipelines
produced $1.37 billion in segment earnings before DD&A and certain items, up
44 percent from $951 million in 2011, and well ahead of its published annual
budget of 19 percent growth due to the dropdowns described below.

“Growth in the fourth quarter compared to the same period last year was driven
by the TGP and EPNG dropdowns, along with the June 2012 purchase of 50 percent
of certain midstream assets,” Kinder explained. “Fourth quarter earnings in
this segment also benefited from good results at the Texas intrastates, our
Eagle Ford assets, Kinder Morgan Treating and the Fayetteville Express
Pipeline. This segment’s earnings were impacted in the fourth quarter by the
November divestitures of our Rockies assets, but that impact was more than
mitigated by the dropdowns.”

For the full year, growth in the segment was driven by the previously noted
dropdowns and acquisition, along with good results from Kinder Morgan Treating
(which benefited from the SouthTex acquisition), Fayetteville Express (which
realized contracts ramping up), the Eagle Ford assets and a full year of
contributions from KinderHawk.

Overall segment transport volumes were up 6 percent in the fourth quarter
compared to the same period last year and up 11 percent for the full year.
These increases represented higher volumes on Fayetteville Express, solid
throughput on the Texas intrastates (due in part to Eagle Ford Gathering
volumes, and higher industrial and Mexico demand), and higher throughput for
natural gas fired power generation on TGP (up 12 percent versus 2011). Sales
volumes on the Texas intrastates were up 8 percent compared to the fourth
quarter last year and 9 percent for the full year compared to 2011.

The CO[2] business produced fourth quarter segment earnings before DD&A and
certain items of $337 million, up 20 percent from $281million for the same
period in 2011. For the year, CO[2] produced $1.326 billion of segment
earnings before DD&A and certain items, up 21percent from $1.094 billion in
2011, but short of its published annual budget for 26 percent growth due to
lower NGL prices. NGL prices were about 22 percent lower than budgeted.

“Our CO[2] business had a remarkable year and would have achieved its budget
if it weren’t for low NGL prices,” Kinder said. “For 2012, growth was driven
by increased oil production at SACROC and the Katz Field, record NGL
production at the Snyder Gasoline Plant and slightly higher oil prices versus
2011. Growth in the fourth quarter was led by strong volumes at SACROC, with
oil production reaching over 30,000 barrels per day, and record NGL
production.”

Oil production at the SACROC Unit increased to 30.6 thousand barrels per day
(MBbl/d) in the fourth quarter, up 10 percent from 27.8 MBbl/d for the same
period last year, and above plan for the year. Production continued to be
relatively stable at the Yates Field, which produced 20.8 MBbl/d in the fourth
quarter, about a 5 percent decline compared to the same period last year, but
above third quarter production and just slightly below plan for the full year.
Production at the Katz Field was 1.8 MBbl/d in the fourth quarter, up
significantly from 1.0 MBbl/d for the same period last year, but flat with the
third quarter and well below its annual plan. The average West Texas
Intermediate (WTI) crude oil price for the full year was $94.21, slightly
higher than the budgeted projection of $93.75.

NGL production for the fourth quarter was a record 19.7 MBbl/d, up 14 percent
from the same period in 2011. For 2012, NGL production also set a record, 13
percent higher than last year.

This segment is an area where KMP is exposed to commodity price risk, but that
risk is partially mitigated by a long-term hedging strategy intended to
generate more stable realized prices. The realized weighted average oil price
per barrel for the year, with all hedges allocated to oil, was $87.72 versus
$69.73 for 2011. The realized weighted average NGL price per barrel for the
year, allocating none of the hedges to NGLs, was $50.95 compared to $65.61 for
2011.

The Terminals business produced fourth quarter segment earnings before DD&A
and certain items of $198 million, up 7 percent from $184million for the
comparable period in 2011. For the year, Terminals produced $752 million, up 7
percent from $701 million in 2011, and just below its published annual budget
of 8percent growth. Existing assets accounted for about 85percent of the
growth in the fourth quarter and 80 percent of the growth for the full year,
with acquisitions making up the rest.

“Internal growth in the fourth quarter was driven by our liquids terminals on
the Houston Ship Channel and in New York Harbor (due to increased volumes and
rates attributable to new and restructured contracts, as well as incremental
tank capacity), higher demand for export coal, and increased steel tonnage at
Fairless Hills,” Kinder said. “Export coal volumes increased by more than 18
percent in the fourth quarter versus the same period last year. On the
acquisition side, our additional equity investment in December 2011 in Watco
Companies, which owns the largest privately held short line railroad business
in the United States, contributed about 15percent of the growth in the fourth
quarter. I also would like to commend all of our employees who worked 24-7 to
resume operations at our Northeast Terminals within days following Hurricane
Sandy, which helped restore gasoline service within the region.”

For the full year, export coal volumes increased by almost 38 percent to a
record of approximately 20.7 million tons versus 2011, led by the Pier IX, IMT
and Port of Houston terminals. Domestic coal volumes declined. Good results
from the liquids terminals noted above also benefited earnings for 2012. In
addition to Watco, the purchase in June 2011 of the Port Arthur, Texas
terminal that handles petcoke for the Total refinery contributed to annual
growth in this segment.

For 2012, Terminals handled 65.3 million barrels of ethanol, up 7 percent from
2011. Combined, the terminals and products pipelines business segments handled
98.4 million barrels of ethanol, an increase of 8 percent over 2011. KMP
continues to handle approximately 30percent of the ethanol used in the United
States.

Kinder Morgan Canada produced fourth quarter segment earnings before DD&A and
certain items of $71 million, up 38 percent from $51 million for the same
period in 2011. For the year, Kinder Morgan Canada produced segment earnings
before DD&A and certain items of $229 million, up 15 percent from $199 million
in 2011, and well ahead of its published annual budget of 1 percent growth.

“Growth in the fourth quarter compared to the same period last year primarily
resulted from favorable book taxes, but also reflected strong results at
Express-Platte,” Kinder said. Trans Mountain volumes increased compared to the
fourth quarter last year due to a pressure restriction in 2011 that was lifted
earlier in 2012.

2013 Outlook

As previously announced, KMP expects to declare cash distributions of $5.28
per unit for 2013, a 6 percent increase over its 2012 distribution of $4.98
per unit. KMP’s 2013 budget projection includes the expected purchase (drop
down) of 50 percent of El Paso Natural Gas Pipeline and a 50 percent stake in
midstream assets from KMI, which would give KMP 100percent ownership of these
assets. (KMR also expects to declare distributions of $5.28 per share for 2013
and the distribution to KMR shareholders will be paid in the form of
additional KMR shares.)

In 2013, KMP expects to:

  *Generate over $5.4 billion in business segment earnings before DD&A
    (adding back KMP’s share of joint venture DD&A), an increase of about $0.9
    billion over 2012.
  *Distribute over $2 billion to its limited partners.

  *Produce excess cash flow of more than $30 million above the distribution
    target of $5.28 per unit.
  *Invest approximately $2.9 billion in expansions (including contributions
    to joint ventures) and small acquisitions (excluding the dropdowns from
    KMI). Over $625 million of the equity required for this investment program
    is expected to be funded by KMR dividends.

KMP’s expectations assume an average WTI crude oil price of approximately
$91.68 per barrel in 2013, which approximated the forward curve at the time
this budget was prepared. The overwhelming majority of cash generated by KMP’s
assets is fee based and is not sensitive to commodity prices. In its CO[2]
segment, the company hedges the majority of its oil production, but does have
exposure to unhedged volumes, a significant portion of which are natural gas
liquids. For 2013, the company expects that every $1 change in the average WTI
crude oil price per barrel will impact the CO[2 ]segment by approximately
$6million, or approximately 0.1percent of KMP’s combined business segments’
anticipated segment earnings before DD&A.

The boards of directors of the Kinder Morgan companies approved the 2013
budgets at the January board meeting and the budgets will be discussed in
detail during the company’s annual analyst conference on Jan. 30, 2013, in
Houston. The conference begins at 8 a.m. CT and will be webcast live.

Other News

Products Pipelines

  *KMP completed a $77 million expansion at its Carson Terminal in California
    by placing the final two storage tanks of the project in service in the
    fourth quarter. In total, KMP constructed seven new tanks for an
    incremental 560,000 barrels of refined petroleum products storage capacity
    at the facility. All of the tanks are leased under long-term agreements
    with large U.S. oil refiners. The project was finished on budget and ahead
    of schedule. Also in the fourth quarter, KMP completed facility
    modifications to provide for receipt, storage and blending of biodiesel at
    the company’s Las Vegas, Nev., Phoenix, Ariz., and Fresno, Calif.,
    terminals. The company expects to begin blending at these facilities by
    the end of January 2013.
  *KMP is nearing completion on the Lake Pontchartrain portion of the
    approximately $220million Parkway Pipeline and initial construction
    activities continue on land in Louisiana and Mississippi. The 141-mile,
    16-inch pipeline, a joint venture with Valero, will transport gasoline and
    diesel from a refinery in Norco, La., to an existing petroleum
    transportation hub in Collins, Miss., which is owned by Plantation Pipe
    Line Company. The pipeline will have an initial capacity of 110,000
    barrels per day (bpd) with the capability to expand to over 200,000 bpd,
    and is supported by a long-term throughput agreement with a major refiner.
    The project is on schedule to be in service in September 2013.

  *Construction is underway on an approximately $90 million project to build
    a 27-mile, 12-inch diameter lateral pipeline with associated receipt
    facilities for the Kinder Morgan Crude Condensate pipeline to Phillips
    66’s Sweeny Refinery in Brazoria County, Texas. KMP will provide Phillips
    66 with a significant portion of the lateral pipeline’s initial 30,000bpd
    of capacity, which is expandable to 100,000 bpd. KMP is also constructing
    a five-bay truck offloading facility and three new storage tanks with
    approximately 360,000barrels of crude/condensate capacity at stations in
    DeWitt and Wharton counties in Texas. KMP anticipates initial deliveries
    to begin at the beginning of the fourth quarter of 2013 and the entire
    system to be operational by year end.
  *KMP continues design and pre-construction activities for its approximately
    $200 million petroleum condensate processing facility located near the
    company’s Galena Park terminal on the Houston Ship Channel. The facility,
    which is supported by a fee-based contract with BP North America, has an
    anticipated throughput capacity of about 50,000 bpd and can be expanded to
    process 100,000 bpd. Kinder Morgan expects the facility to be in service
    in the first quarter of 2014. In light of the growth of Eagle Ford shale
    NGL production and the associated need for additional condensate
    processing capacity, KMP expects to obtain additional customer commitments
    to underwrite an expansion at this facility.
  *KMP is in the final permitting stage for its Cochin Pipeline Reversal
    Project which will allow the company to offer a new service to move light
    condensate from Kankakee County, Ill., to existing terminal facilities
    near Fort Saskatchewan, Alberta. The company received more than 100,000
    bpd of binding commitments for a minimum 10-year term during a successful
    open season earlier this year. Pending obtaining a final permit for the
    approximately $260million project, modifications to the western leg of
    the Cochin Pipeline to Fort Saskatchewan will begin. In addition to the
    pipeline modifications, Cochin will build a tank farm with 1 million
    barrels of storage and associated piping where Cochin will interconnect
    with Explorer Pipeline Company’s pipeline in Kankakee County. KMP expects
    light condensate shipments to begin as early as July 1, 2014.

Natural Gas Pipelines

Kinder Morgan currently has announced approximately $2.7 billion of major
projects across all of its natural gas pipeline assets, about half of which is
at KMP. This includes projects that were either placed in service during the
fourth quarter of 2012 or are planned to be placed in service during 2013 or
later.

  *TGP placed the approximately $55 million Northeast Supply Diversification
    Project in service Nov. 1, 2012, on time and under budget. The project,
    which is fully subscribed, creates an additional 250,000 dekatherms per
    day of firm service capacity from the prolific Marcellus shale region
    along TGP’s system and serves existing markets in New England and the
    Niagara Falls area of New York.
  *In December 2012, the Federal Energy Regulatory Commission (FERC) issued a
    notice to proceed with TGP’s MPP project in Pennsylvania. Selective tree
    clearing is anticipated to begin this month, followed by construction of
    pipeline and compression this spring. The approximately $86 million
    project, which is fully subscribed, will provide about 240,000dekatherms
    per day of additional firm Marcellus transportation capacity. The project
    includes nearly 8 miles of 30-inch diameter pipeline looping, system
    modifications and upgrades to allow bi-directional flow at four existing
    compressor stations in Pennsylvania. Construction is anticipated to occur
    primarily this summer and the project is expected to be in service in
    November of 2013.

  *Also in December, TGP’s Northeast Upgrade Project received FERC notice to
    proceed with construction of compressor stations, pipeyards or tree
    clearing in certain counties in Pennsylvania and New Jersey. Last week
    FERC issued an order denying rehearing of the certificate order and
    denying requests for stay of the construction. Additional approvals
    covering planned work in Pennsylvania and New Jersey are pending.
    Construction of the mainline pipeline and compression is anticipated to
    begin this spring. The approximately $450 million, FERC-certificated
    project will boost system capacity on TGP’s system by approximately 636
    million cubic feet per day (MMcf/d) via five segment loops and system
    upgrades and provide additional takeaway capacity from the Marcellus shale
    area. The project, which is fully subscribed, has a targeted in-service
    date of November 2013.
  *In the fourth quarter, EPNG, owned by KMP and KMI, entered into a 25-year
    precedent agreement in connection with plans to build a new pipeline to
    serve customers in Mexico. Terms call for EPNG, acting through its
    affiliate Sierrita Gas Pipeline (formerly Sasabe Pipeline), to initially
    provide approximately 200 MMcf/d of firm transportation capacity via a
    new, 60-mile, 36-inch diameter lateral pipeline that would extend from
    EPNG’s existing south mainlines, near Tucson, Ariz., to the U.S.-Mexico
    border, terminating at Sasabe, Ariz. The proposed $200 million Sierrita
    Gas Pipeline would interconnect via a new international border crossing
    with a 36-inch diameter natural gas pipeline to be built in Mexico.
    Subject to regulatory approvals, construction of the pipeline would begin
    in the first quarter of 2014, with anticipated in service in the fall of
    2014.
  *KMP closed its previously announced transaction with Tallgrass Energy
    Partners in November 2012 to sell Kinder Morgan Interstate Gas
    Transmission (KMIGT), Trailblazer Pipeline Company, the Casper-Douglas
    natural gas processing and West Frenchie Draw treating facilities in
    Wyoming, and the company’s 50 percent interest in the Rockies Express
    Pipeline (REX). KMP received approximately $1.8 billion in cash from the
    transaction. Including the proportionate amount of REX debt, this amount
    is equivalent to a value of $3.3billion.

CO[2]

  *Construction continues on both primary and booster compression for KMP’s
    $255 million expansion on its Doe Canyon Unit CO[2] source field in
    southwestern Colorado. The company is making good progress on the project,
    which will increase capacity from 105 MMcf/d to 170 MMcf/d, and is on
    schedule and on budget. The primary compression is expected to be in
    service in the fourth quarter of 2013 and the booster compression in the
    second quarter of 2014.
  *KMP is increasing the capacity on its Wink Pipeline System that moves
    crude from the company’s West Texas oil fields to Western Refining
    Company’s facility in El Paso, Texas. Wink had record volumes in 2012 and
    KMP is expanding the pipeline’s capacity from 132,000 bpd to 145,000 bpd
    to meet expected higher future refinery throughput requirements at
    Western’s refinery. The expansion project is progressing and should be
    completed in the third quarter this year.

Terminals

KMP currently has more than $1.4 billion of approved major projects in this
segment. The company is experiencing strong demand in particular for liquids
storage capacity and coal exports in its terminals business.

  *KMP recently announced an expansion project and acquisition that will
    provide additional infrastructure to help meet growing demand for liquids
    storage and dock services along the Gulf Coast. The combined investment of
    approximately $170 million will include the purchase of 42 acres,
    construction of a new ship dock to handle ocean going vessels and building
    1.2 million barrels of liquids storage tanks. The company entered into a
    letter of intent with a major ship channel refiner to develop six
    150,000-barrel tanks and four 75,000-barrel tanks with connectivity to its
    Galena Park Terminal and to the refiner’s location. The project will
    alleviate existing dock congestion at Kinder Morgan’s Houston Ship Channel
    terminals and provide additional export capacity value.
  *Construction continues on the approximately $430 million Battleground Oil
    Specialty Terminal (BOSTCO) located on the Houston Ship Channel. The first
    phase of the project includes construction of 52 storage tanks that will
    have a capacity of 6.5 million barrels for handling residual fuels and
    other black oil terminal services. Terminal service agreements or letters
    of intent have been executed with customers for almost all of the
    capacity. Commercial operations are expected to begin in the third quarter
    of 2013. KMP now owns 55 percent of BOSTCO following Transmontaigne’s
    purchase of an interest in BOSTCO in December 2012.
  *Construction also continues on the Edmonton terminal expansion in
    Strathcona County, Alberta. The approximately $310 million project entails
    building 3.6 million barrels of new merchant and system tank storage, and
    is expected to be fully completed in December 2013. The project is
    supported by long-term commercial contracts with major Canadian producers.
    In addition, Kinder Morgan is now finalizing agreements to support the
    construction of an additional 1.2 million barrels of merchant storage with
    anticipated completion in the fourth quarter of 2014. This second phase of
    expansion would cost approximately $112 million. When completed, total
    storage capacity at the Edmonton facility will be 9.4 million barrels,
    including the existing Trans Mountain system facility and the North 40
    merchant terminal.
  *Deeprock Development, a joint venture between KMP, Deeprock Energy
    Resources and Mercuria Energy, executed a long-term terminal lease and
    operating agreement with Pony Express Pipeline (now owned by Tallgrass
    Energy Partners) to handle up to 350,000 barrels per day of crude oil from
    Pony Express. Deeprock Development is expanding its Cushing, Okla.,
    terminal which will be the pipeline staging area and provide connectivity
    to up to six destinations. As part of the expansion, three to six new
    250,000-barrel tanks and at least one 24-inch pipeline to south Cushing
    will be constructed. KMP will have a 51 percent equity interest in the
    project and will invest between $16 million and $26 million depending on
    the number of tanks built. Deeprock Development is targeting a start-up
    date of June 30, 2014.

  *KMP is investing approximately $29 million to expand its Pier IX Terminal
    in Newport News, Va., and has entered into a long-term agreement with a
    major U.S. coal producer to utilize Pier IX for exporting coal.

Kinder Morgan Canada

  *As recently announced, KMP has updated the binding commercial support for
    its proposed expansion of the Trans Mountain pipeline system following
    completion of a supplemental open season. Thirteen companies in the
    Canadian producing and oil marketing business signed firm contracts
    bringing the total volume of committed shippers to approximately 700,000
    bpd. These additional commitments will result in an increase in the
    proposed expansion capacity from 750,000 bpd to 890,000 bpd and increase
    the capital investment in the project from $4.1 billion to $5.4 billion.
    The expansion will complete the twinning of the existing Trans Mountain
    pipeline system from Strathcona County, Alberta, to Burnaby, British
    Columbia. Trans Mountain expects to file a Facilities Application with the
    National Energy Board (NEB) in late 2013 for authorization to build and
    operate the necessary facilities for the proposed expansion. The
    application will include the environmental, socio-economic, Aboriginal
    engagement, landowner and public consultation, and engineering components,
    and initiate a comprehensive regulatory and public review process. If
    approvals are received as planned, the expansion is expected to be
    operational in 2017.
  *As previously announced, KMP entered into a definitive agreement in
    December 2012 to sell its one-third interest in the Express-Platte
    pipeline system to Spectra Energy Corp for approximately $380 million.
    KMP’s joint venture partners in Canada (Ontario Teachers’ Pension Plan
    Board and Borealis Infrastructure, the infrastructure investment arm of
    the OMERS pension plan) are also selling their interests in the pipeline
    system, as Spectra Energy Corp is purchasing 100 percent of
    Express-Platte. The transaction is subject to customary consents and
    regulatory approvals, and is expected to close in the second quarter of
    2013. Express-Platte is a 1,700-mile oil pipeline system connecting
    Canadian and U.S. producers to refineries in the Rocky Mountain and
    Midwest regions of the United States.

Financings

  *KMP sold common units valued at approximately $151 million under its
    at-the-market program during the fourth quarter, bringing the total to
    almost $550 million for the year.
  *KMP conducted a secondary offering in December which issued 4.5 million
    shares and raised approximately $348 million. The funds were used to repay
    commercial paper debt.

Upcoming Organizational Changes

With the final distribution of KMI shares from the sponsor investors to
management in December 2012 (which wrapped up the KMI management-led buyout),
Richard D. Kinder will continue as chairman and CEO of Kinder Morgan, but
certain members of our corporate and business unit management have indicated
their intention to retire or take a different role in the organization. In
each case, the position will be filled by a long-time Kinder Morgan employee.
The transition will be largely complete by the end of the first quarter of
2013, and each person who is retiring has indicated his willingness to work
beyond the first quarter as necessary to ensure a smooth transition. The key
changes are as follows:

  *Park Shaper, president of Kinder Morgan, will be retiring as president of
    Kinder Morgan, but will remain a member of the KMI board. He will resign
    from the boards of directors of KMR and the general partners of EPB and
    KMP effective March 31, 2013. “Park has been with Kinder Morgan since the
    early days and has contributed an extraordinary amount to our success over
    the years,” Kinder said. “I am delighted that he will continue to be
    involved as a member of the KMI board.” Shaper stated, “My 13 years at
    Kinder Morgan have been an incredible opportunity for me, and I have truly
    enjoyed and benefited from working alongside Rich, Steve Kean and all of
    the remarkable Kinder Morgan employees. The time is right for me to spend
    more time with my family, and I look forward to continuing to serve on the
    KMI board.”
  *Steve Kean, currently executive vice president and COO and a member of the
    boards of directors of KMI and the general partner of EPB, will become
    president and COO of Kinder Morgan effective March 31, 2013. Kean has also
    been elected to the boards of directors of KMR and the general partner of
    KMP effective March 31, 2013. Kean has been with Kinder Morgan for 11
    years, the last six as COO. He has also served as president of the Texas
    Intrastate Pipeline Group and as president of Natural Gas Pipelines.
    Kinder and Kean will comprise the Office of the Chairman of Kinder Morgan.
  *Jeff Armstrong, president of Kinder Morgan Terminals, will become vice
    president of corporate strategy for Kinder Morgan. “We are seeing an
    unprecedented number of opportunities in North American energy that cut
    across business unit lines,” Kinder said. “Jeff is ideally suited to help
    us identify ways to coordinate our efforts across Kinder Morgan and look
    for opportunities to extend our business model to new, related lines of
    business.” Armstrong will be succeeded as president of the Terminals
    business segment by John Schlosser. Schlosser is currently vice president
    of business development for Terminals and has been with Kinder Morgan
    (including his time with a predecessor company) since 1999.
  *Tom Bannigan, president of Products Pipelines, is retiring and will be
    succeeded by Ron McClain, currently vice president of operations and
    engineering for the Products Pipelines group. McClain has been with Kinder
    Morgan (or predecessor companies) for more than 30 years and has headed
    operations and engineering for Products Pipelines since 2005. He
    previously was vice president of engineering for Natural Gas Pipelines.
  *Tim Bradley, president of Kinder Morgan CO[2], is retiring and will be
    succeeded by Jim Wuerth, who is currently vice president of finance and
    accounting for the CO[2] segment. Wuerth has been with Kinder Morgan
    (including his time with a predecessor company) for more than 30 years.

  *Joe Listengart, vice president and general counsel, will be stepping down
    from his current position and will be succeeded by Dave DeVeau, currently
    vice president and deputy general counsel. DeVeau has been with Kinder
    Morgan since 2001 and has been deputy general counsel since 2006.
    Listengart will continue working for the company, assisting as needed on
    significant transactions and other matters. Adam Forman, vice president
    and deputy general counsel, will assume the additional role of corporate
    secretary for the Kinder Morgan entities, reporting to DeVeau.
  *David Kinder, vice president of Corporate Development and treasurer, will
    be retiring and will be succeeded by Dax Sanders as vice president of
    Corporate Development. Sanders has been with the company in a variety of
    senior commercial and financial roles over the last 12 years (including
    Corporate Development), with the exception of a two-year period while he
    earned his MBA at Harvard Business School.
  *Kim Dang, vice president and CFO, will continue as CFO and will also
    assume responsibility for treasury and investor relations. Dang has been
    with the company for 11 years, the last six as CFO, and has served in
    senior roles in finance, accounting and investor relations. David Michels,
    currently vice president of finance, will become vice president of finance
    and investor relations for Kinder Morgan and CFO of EPB, reporting to
    Dang. Also reporting to Dang will be Anthony Ashley. Currently director of
    finance, Ashley will become vice president and treasurer for Kinder
    Morgan.
  *In addition to Rich Kinder, Kean, Dang and Armstrong, the other members of
    the senior management team that are staying with Kinder Morgan include Tom
    Martin, president of Natural Gas Pipelines, along with his entire senior
    commercial management team; Ian Anderson, president of Kinder Morgan
    Canada; and Jim Street, vice president of Human Resources and
    Administration.

Rich Kinder stated, “I am grateful for the tremendous contributions over the
years from Park, Tom, Tim, Joe and David, and I sincerely appreciate their
commitment to ensure a smooth transition. Though it is always difficult to see
talented people leave the organization, I am pleased that all of those who are
being promoted are very capable, have long tenures with Kinder Morgan and are
enthusiastic about their new roles. I am very optimistic about the future of
Kinder Morgan, especially considering the approximately $12 billion in growth
projects we have identified, and believe this team will continue to deliver
value to our unitholders and shareholders.”

Kinder Morgan Management, LLC

Shareholders of KMR will also receive a $1.29 dividend ($5.16 annualized)
payable on Feb. 14, 2013, to shareholders of record as of Jan. 31, 2013. The
dividend to KMR shareholders will be paid in the form of additional KMR
shares. The dividend is calculated by dividing the cash distribution to KMP
unitholders by KMR’s average closing price for the 10 trading days prior to
KMR’s ex-dividend date.

Kinder Morgan Energy Partners, L.P. (NYSE: KMP) is a leading pipeline
transportation and energy storage company and one of the largest publicly
traded pipeline limited partnerships in America. It owns an interest in or
operates approximately 46,000 miles of pipelines and 180 terminals. The
general partner of KMP 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 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.

Please join Kinder Morgan at 4:30 p.m. Eastern Time on Wednesday, Jan. 16, at
www.kindermorgan.com for a LIVE webcast conference call on the company’s
fourth 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 segment earnings before depreciation, depletion,
amortization and amortization of excess cost of equity investments, 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 cash taxes paid and
sustaining capital expenditures for KMP, plus DD&A less sustaining capital
expenditures for Rockies Express through Oct. 31, 2012, Midcontinent Express,
Fayetteville Express, KinderHawk through second quarter 2011, EagleHawk, Eagle
Ford, El Paso Natural Gas, Bear Creek Storage Company, Red Cedar, Cypress and
EP Midstream Investment Co., LLC, our equity method investees, less equity
earnings plus cash distributions received for Express and Endeavor, additional
equity investees. 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 segment
earnings before DD&A and certain items in its analysis of segment performance
and managing our business. We believe segment 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 the ability of our
segments 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
about allocating resources to our segments and assessing the segments’
respective 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. Segment earnings before DD&A
as presented in our GAAP financials is the measure most directly comparable to
segment earnings before DD&A and certain items. Segment earnings before DD&A
and certain items is calculated by removing the certain items attributable to
a segment, which are specifically identified in the footnotes to the
accompanying tables, from segment earnings before DD&A. In addition, segment
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, segment earnings before DD&A or any other GAAP
measure. Distributable cash flow before certain items and segment 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. Segment 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 Kinder Morgan 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 Kinder Morgan’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, Kinder
Morgan 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.


Kinder Morgan Energy Partners, L.P. and Subsidiaries
Preliminary Consolidated Statement of Income
(Unaudited)
(in millions except per unit amounts)
                                                               
                          Three Months Ended December         Year Ended December 31,
                          31,
                          2012              2011              2012               2011
                                                                                 
Revenues                  $ 2,510          $ 1,923          $ 8,642           $ 7,889  
                                                                                 
Costs, expenses
and other
Operating                   1,391             1,055             4,521              4,768
expenses
Depreciation,
depletion and               297               243               1,093              928
amortization
General and                 114               86                493                473
administrative
Taxes, other
than income                 54                41                223                174
taxes
Other expense              -               4               (28    )          (11    )
(income)
                           1,856           1,429           6,302            6,332  
Operating                   654               494               2,340              1,557
income
                                                                                 
Other income
(expense)
Earnings from
equity                      114               69                339                224
investments
Amortization of
excess cost of              (2    )           (2    )           (7     )           (7     )
equity
investments
Interest, net               (174  )           (133  )           (635   )           (513   )
Other, net                 4               7               18               (149   )
                                                                                 
Income before               596               435               2,055              1,112
income taxes
                                                                                 
Income taxes               10              (12   )          (30    )          (45    )
                                                                                 
Income from
continuing                  606               423               2,025              1,067
operations
                                                                                 
Income from
discontinued                15                56                160                201
operations
Loss on
remeasurement
to fair value              (2    )          -               (829   )          -      
and disposal of
discontinued
operations
(Loss) income
from                        13                56                (669   )           201
discontinued
operations
                                                                                 
Net income                 619             479             1,356            1,268  
                                                                                 
Net income
attributable to            (5    )          (4    )          (17    )          (10    )
Noncontrolling
Interests
                                                                                 
Net income
attributable to           $ 614            $ 475            $ 1,339           $ 1,258  
KMP
                                                                                 
                                                                                 
Calculation of
Limited
Partners'
interest in net
income (loss)
attributable to
KMP
Income from
continuing
operations                $ 601             $ 419             $ 2,001            $ 1,059
attributable to
KMP
Less:
Pre-acquisition
earnings                    -                 -                 (23    )           -
allocated to
General Partner
Add: Drop-down
asset group
severance                   9                 -                 9                  -
expense
allocated to
General Partner
Less: General
Partner's                  (386  )          (303  )          (1,410 )          (1,173 )
remaining
interest
Limited
Partners'                   224               116               577                (114   )
interest
Add: Limited
Partners'
interest in                13              55              (655   )          197    
discontinued
operations
Limited
Partners'                 $ 237            $ 171            $ (78    )         $ 83     
interest in net
income
                                                                                 
Limited
Partners' net
income (loss)
per unit:
Income from
continuing                $ 0.61            $ 0.35            $ 1.64             $ (0.35  )
operations
Income (loss)
from                       0.03            0.16            (1.86  )          0.60   
discontinued
operations
Net income                $ 0.64           $ 0.51           $ (0.22  )         $ 0.25   
(loss)
Weighted
average units              368             334             351              326    
outstanding
                                                                                 
Declared
distribution /            $ 1.29           $ 1.16           $ 4.98            $ 4.61   
unit
                                                                                 
                                                                                 
                          Three Months Ended December         Year Ended December 31,
                          31,
                          2012              2011              2012               2011
Segment
earnings before
DD&A and
amortization of
excess
investments
Products                  $ 178             $ 159             $ 670              $ 463
Pipelines
Natural Gas                 472               227               1,349              546
Pipelines
CO[2]                       334               276               1,322              1,099
Terminals                   144               179               709                704
Kinder Morgan              71              52              229              202    
Canada
                          $ 1,199          $ 893            $ 4,279           $ 3,014  
                                                                                          


Kinder Morgan Energy Partners, L.P. and Subsidiaries
Preliminary Earnings Contribution by Business Segment
(Unaudited)
(in millions except per unit amounts)
                                                              
                          Three Months Ended                 Year Ended December 31,
                          December 31,
                          2012              2011             2012               2011
Segment
earnings before
DD&A and amort.
of excess
investments (1)
Products                  $ 176             $ 161            $ 703              $ 694
Pipelines
Natural Gas                 474               290              1,374              951
Pipelines (2)
CO[2]                       337               281              1,326              1,094
Terminals                   198               184              752                701
Kinder Morgan              71              51             229              199    
Canada
Total                      1,256           967            4,384            3,639  
                                                                                
Segment DD&A
and
amortization of
excess
investments
Products                  $ 31              $ 28             $ 121              $ 109
Pipelines
Natural Gas                 87                49               253                163
Pipelines (3)
CO[2]                       115               110              441                439
Terminals                   52                51               205                195
Kinder Morgan              14              14             56               56     
Canada
Total                      299             252            1,076            962    
                                                                                
Segment
earnings
contribution
Products                  $ 145             $ 133            $ 582              $ 585
Pipelines (1)
Natural Gas                 387               241              1,121              788
Pipelines (1)
CO[2 ](1)                   222               171              885                655
Terminals (1)               146               133              547                506
Kinder Morgan               57                37               173                143
Canada (1)
General and
administrative              (108  )           (86  )           (432   )           (387   )
(1) (4)
Interest, net              (180  )          (138 )          (632   )          (531   )
(1) (5)
Net income
before certain              669               491              2,244              1,759
items
Certain items
Loss on
disposal and
remeasurement               (2    )           -                (829   )           (167   )
of discontinued
operations to
fair value
Allocated
non-cash                    -                 2                -                  (82    )
compensation
Acquisition                 (5    )           -                (8     )           (2     )
costs (6)
Legal expenses              -                 (2   )           -                  (3     )
(7)
Legal reserves              -                 (1   )           (9     )           (235   )
(8)
Pre-acquisition
earnings
allocated to                -                 -                23                 -
General Partner
(9)
Environmental               (2    )           (3   )           (36    )           (10    )
reserves
Mark to market
and
ineffectiveness             (3    )           (5   )           (11    )           5
of certain
hedges (10)
Insurance
deductible,
casualty losses             (51   )           (4   )           (41    )           (3     )
and
reimbursements
(11)
Gain (loss) on
sale of assets
and asset                   -                 1                15                 16
disposition
expenses (12)
Release of tax
reserves
related to                  18                -                18                 -
pre-acquisition
periods (13)
Severance (14)              (5    )           -                (9     )           -
Write-off of
under collected             -                 -                -                  (10    )
fuel (15)
Other (16)                 -               -              (1     )          -      
Sub-total                   (50   )           (12  )           (888   )           (491   )
certain items
Net income                $ 619            $ 479           $ 1,356           $ 1,268  
Less:
Pre-acquisition
earnings                    -                 -                (23    )           -
allocated to
General Partner
Add: Drop-down
asset group
severance                   9                 -                9                  -
expense
allocated to
General Partner
Less: General
Partner's
remaining                   (386  )           (304 )           (1,403 )           (1,175 )
interest in net
income (17)
Less:
Noncontrolling             (5    )          (4   )          (17    )          (10    )
Interests in
net income
Limited
Partners' net             $ 237            $ 171           $ (78    )         $ 83     
income (loss)
                                                                                
Net income
before certain            $ 669             $ 491            $ 2,244            $ 1,759
items
Less:
Noncontrolling             (6    )          (4   )          (22    )          (17    )
Interest before
certain items
Net income
attributable to             663               487              2,222              1,742
KMP before
certain items
Less: General
Partner's
interest in net            (387  )          (304 )          (1,412 )          (1,180 )
income before
certain items
(17)
Limited
Partners' net               276               183              810                562
income before
certain items
Depreciation,
depletion and               339               299              1,252              1,133
amortization
(18)
Book (cash)                 (9    )           8                (2     )           27
taxes - net
Express &
Endeavor                    -                 7                3                  15
contribution
Sustaining
capital                    (111  )          (72  )          (285   )          (212   )
expenditures
(19)
DCF before                $ 495            $ 425           $ 1,778           $ 1,525  
certain items
                                                                                
Net income /
unit before               $ 0.75           $ 0.55          $ 2.31            $ 1.72   
certain items
DCF / unit
before certain            $ 1.35           $ 1.27          $ 5.07            $ 4.68   
items
Weighted
average units              368             334            351              326    
outstanding
                                                                                         


Notes ($ million)
(1)    Excludes certain items:
         4Q 2011 - Products Pipelines $(2), CO2 $(5), Terminals $(5), KMC $1,
         general and administrative $(1)
         YTD 2011 - Products Pipelines $(231), Natural Gas Pipelines $(177),
         CO2 $5, Terminals $3, KMC $3, general and administrative expense
         $(94)
         4Q 2012 - Products Pipelines $2, Natural Gas Pipelines $11, CO2 $(3),
         Terminals $(54), general and administrative expense $(8), interest
         expense $2
         YTD 2012 - Products Pipelines $(33), Natural Gas Pipelines $(687),
         CO2 $(4), Terminals $(43), general and administrative expense $(70),
         interest expense $(20)
         Includes $63 in 4Q 2011 and $238 YTD 2011, and $15 in 4Q 2012 and
(2)      $167 YTD 2012 related to assets classified for GAAP purposes as
         discontinued operations.
         Excludes $0 in 4Q 2012 and $131 YTD 2012 from our drop down asset
        group for periods prior to our acquisition date of August 1, 2012,
         which is included in certain items above.
         Includes $7 in 4Q 2011 and $27 YTD 2011, and $0 in 4Q 2012 and $7 YTD
(3)      2012 of DD&A expense related to assets classified for GAAP purposes
         as discontinued operations.
         Excludes $0 in 4Q 2012 and $31 YTD 2012 of DD&A expense from our drop
         down asset group for periods prior to our acquisition date of August
         1, 2012, which is included in certain items above.
         General and administrative expense includes income tax that is not
         allocable to the segments: 4Q 2011 - $1, YTD 2011 - $8, 4Q 2012 - $2,
(4)      YTD 2012 - $9. Excludes $0 in 4Q 2012 and $56 YTD 2012 of G&A expense
         from our drop down asset group for periods prior to our acquisition
         date of August 1, 2012, which is included in certain items above.
         Interest expense excludes interest income that is allocable to the
         segments: 4Q 2011 - $5, YTD 2011 - $20, 4Q 2012 - $4, YTD 2012 - $17.
(5)      Excludes $0 in 4Q 2012 and $21 YTD 2012 of interest expense from our
         drop down asset group for periods prior to our acquisition date of
         August 1, 2012, which is included in certain items above.
(6)      Acquisition expense items related to closed acquisitions previously
         capitalized under prior accounting standards.
(7)      Legal expenses associated with Certain Items such as legal
         settlements and pipeline failures.
(8)      Legal reserve adjustments related to the rate case and right-of-way
         litigation of west coast Products Pipelines.
(9)      Earnings from our drop down asset group for periods prior to our
         acquisition date of August 1, 2012.
(10)     Actual gain or loss will continue to be taken into account in
         earnings before DD&A at time of physical transaction.
(11)     Insurance deductible, write-off of assets, expenses and insurance
         reimbursements related to casualty losses.
(12)     Gain or loss on sale of assets and expenses related to the
         preparation of assets for sale.
         Franchise and income tax adjustments related to the drop down assets
(13)     made in the current period but pertaining to periods prior to the
         acquisition.
(14)     Drop-down asset group severance expense allocated to the General
         Partner.
(15)     Natural Gas Pipelines write-off of receivable for fuel
         under-collected prior to 2011.
         Imputed interest on Cochin acquisition, FX gain on Cochin note
(16)     payable, and Terminals severance and overhead credit on certain items
         capex.
         General Partner's interest in net income reflects a reduction for the
(17)     KinderHawk acquisition GP incentive giveback of $8 in 4Q and $29 YTD
         2011, and $7 in 4Q and $26 YTD 2012.
         Includes Kinder Morgan Energy Partner's (KMP) share of Rockies
         Express (REX) (prior to Nov 2012), Midcontinent Express (MEP),
(18)     Fayetteville Express (FEP), KinderHawk (2011), Cypress, EagleHawk,
         Eagle Ford (2012), Midstream (2012), Red Cedar, EPNG (2012), and Bear
         Creek (2012) DD&A: 4Q 2011 - $47, YTD 2011 - $171, and 4Q 2012 - $40,
         YTD 2012 - $176.
         Includes KMP share of REX, MEP, FEP, Cypress, EagleHawk, Eagle Ford,
(19)     Red Cedar, Midstream, EPNG, and Bear Creek sustaining capital
         expenditures: 4Q 2011 - $7, YTD 2011 - $10, and 4Q 2012 - $6, YTD
         2012 - $19.
         


Volume Highlights
(historical pro forma for acquired assets)
                                                            
                    Three Months Ended December         Year Ended December 31,
                    31,
                    2012              2011              2012              2011
Products
Pipelines
Pacific,
Calnev, and
CFPL
(MMBbl)
Gasoline              67.5              66.7              268.9             272.4
(1)
Diesel                26.8              28.6              105.3             110.6
Jet Fuel             20.2            21.4            85.7            85.3    
Sub-Total
Refined
Product               114.5             116.7             459.9             468.3
Volumes -
excl.
Plantation
Plantation
(MMBbl)
Gasoline              34.9              34.1              126.4             125.6
Diesel                9.0               9.6               36.2              38.3
Jet Fuel             6.4             6.3             24.9            25.2    
Sub-Total
Refined
Product               50.3              50.0              187.5             189.1
Volumes -
Plantation
Total
(MMBbl)
Gasoline              102.4             100.8             395.3             398.0
(1)
Diesel                35.8              38.2              141.5             148.9
Jet Fuel             26.6            27.7            110.6           110.5   
Total
Refined               164.8             166.7             647.4             657.4
Product
Volumes
NGLs (2)             8.6             6.3             31.7            26.1    
Total
Delivery              173.4             173.0             679.1             683.5
Volumes
(MMBbl)
Ethanol               9.1               7.4               33.1              30.4
(MMBbl) (3)
                                                                          
Natural Gas
Pipelines
(4) (5)
Transport
Volumes               1,486.5           1,400.2           5,866.0           5,273.2
(Bcf)
Sales
Volumes               221.9             206.0             879.1             804.7
(Bcf)
                                                                          
CO[2]
Southwest
Colorado
Production            1.2               1.2               1.2               1.3
- Gross
(Bcf/d) (6)
Southwest
Colorado
Production            0.5               0.5               0.5               0.5
- Net
(Bcf/d) (6)
Sacroc Oil
Production
- Gross               30.6              27.8              29.0              28.6
(MBbl/d)
(7)
Sacroc Oil
Production
- Net                 25.4              23.2              24.1              23.8
(MBbl/d)
(8)
Yates Oil
Production
- Gross               20.8              21.8              20.8              21.7
(MBbl/d)
(7)
Yates Oil
Production
- Net                 9.2               9.7               9.3               9.6
(MBbl/d)
(8)
Katz Oil
Production
- Gross               1.8               1.0               1.7               0.5
(MBbl/d)
(7)
Katz Oil
Production
- Net                 1.5               0.8               1.4               0.4
(MBbl/d)
(8)
NGL Sales
Volumes               10.0              8.8               9.5               8.5
(MBbl/d)
(9)
Realized
Weighted
Average Oil         $ 85.84           $ 70.33           $ 87.72           $ 69.73
Price per
Bbl (10)
(11)
Realized
Weighted
Average NGL         $ 49.38           $ 65.84           $ 50.95           $ 65.61
Price per
Bbl (11)
                                                                          
Terminals
Liquids
Leasable              60.1              60.2              60.1              60.2
Capacity
(MMBbl)
Liquids
Utilization           93.2    %         94.5    %         93.2    %         94.5    %
%
Bulk
Transload
Tonnage               21.9              25.0              96.6              99.8
(MMtons)
(12)
Ethanol               15.4              16.1              65.3              61.0
(MMBbl)
                                                                          
Trans
Mountain
(MMBbls -             26.2              24.7              106.1             99.9
mainline
throughput)
                                                                                    

                                                
      Gasoline volumes include ethanol                Includes McElmo Dome and
(1)   pipeline volumes.                        (6)    Doe Canyon sales
                                                      volumes.
                                                      Represents 100%
(2)   Includes Cochin and Cypress.             (7)    production from the
                                                      field.
      Total ethanol handled including                 Represents KMP's net
(3)   pipeline volumes included in             (8)    share of the production
      gasoline volumes above.                         from the field.
      Includes Texas Intrastates, KMNTP,
(4)   Monterrey, TransColorado, MEP,           (9)    Net to KMP.
      KMLA, FEP, TGP, and EPNG pipeline
      volumes.
(5)   Volumes for acquired pipelines are       (10)   Includes all KMP crude
      included for all periods.                       oil properties.
                                                      Hedge gains/losses for
                                             (11)   Oil and NGLs are
                                                      included with Crude Oil.
                                             (12)   Includes KMP's share of
                                                      Joint Venture tonnage.
                                                      


KINDER MORGAN ENERGY PARTNERS, L.P. AND SUBSIDIARIES
PRELIMINARY ABBREVIATED CONSOLIDATED BALANCE SHEET
(Unaudited)
(in millions)
                                                          
                                               December 31,       December 31,
                                               2012               2011
ASSETS
                                                                  
Cash and cash equivalents                      $ 518              $ 409
Other current assets                           1,726              1,167
Property, plant and equipment, net             19,638             15,596
Investments                                    3,048              3,346
Goodwill, deferred charges and other           7,199              3,585
assets
TOTAL ASSETS                                   $ 32,129           $ 24,103
                                                                  
LIABILITIES AND PARTNERS' CAPITAL
                                                                  
Liabilities
Notes payable and current maturities           $ 1,155            $ 1,638
of long-term debt
Other current liabilities                      2,045              1,481
Long-term debt                                 14,714             11,183
Debt fair value adjustments                    1,461              1,055
Other                                          1,175              1,142
Total liabilities                              20,550             16,499
                                                                  
Partners' capital
Accumulated other comprehensive income         163                3
Other partners' capital                        11,161             7,505
Total KMP partners' capital                    11,324             7,508
Noncontrolling interests                       255                96
Total partners' capital                        11,579             7,604
TOTAL LIABILITIES AND PARTNERS'                $ 32,129           $ 24,103
CAPITAL
                                                                  
                                                                  
Total Debt, net of cash and cash
equivalents, and excluding
the debt fair value adjustments                $ 15,351           $ 12,412
                                                                  
Segment earnings before DD&A and               $ 4,560            $ 3,810
certain items
G&A                                            (432)              (388)
Income taxes                                   40                 55
EBITDA ^(1)                                    $ 4,168            $ 3,477
                                                                  
Debt to EBITDA                                 3.7                3.6
                                                                  

     
        EBITDA includes add back of KMP's share of REX (prior to Nov 2012),
(1)     MEP, FEP, Cypress, EagleHawk, Eagle Ford (beginning 2012), Red Cedar,
        Midstream (beginning 2Q 2012), EPNG (beginning in 3Q 2012), and Bear
        Creek (beginning in 3Q 2012) DD&A.
        

Contact:

Kinder Morgan Energy Partners, L.P.
Larry Pierce, (713) 369-9407
Media Relations
larry_pierce@kindermorgan.com
or
Peter Staples, (713) 369-9221
Investor Relations
peter_staples@kindermorgan.com
www.kindermorgan.com