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Press release from Business Wire

Kinder Morgan Announces 2012 Financial Expectations

Monday, November 28, 2011

Kinder Morgan Announces 2012 Financial Expectations11:13 EST Monday, November 28, 2011 HOUSTON (Business Wire) -- Kinder Morgan today announced its preliminary 2012 projections for Kinder Morgan, Inc. (NYSE: KMI), Kinder Morgan Energy Partners, L.P. (NYSE: KMP) and Kinder Morgan Management, LLC (NYSE: KMR). KMI expects to declare dividends of $1.35 per share for 2012. This represents a 16.4 percent increase over KMI's 2011 budget target of $1.16 per share and a 13.4 percent increase over the 2011 dividend per share on a declared basis, which is expected to be $1.19. The 2011 per share amounts are presented as if KMI were publicly traded for all of 2011. Note that while KMI previously presented dividends per share on a paid basis, they are now being presented on a declared basis to be consistent with KMP. On a paid basis, KMI's 2012 expected dividend per share would be $1.29, which is 11.2 percent above the 2011 budgeted amount. The growth at KMI is being driven by KMP, which currently accounts for approximately 98 percent of the distributions that KMI receives. The KMI projection does not include the impact of the pending acquisition of El Paso Corporation (NYSE: EP), which is expected to close in the second quarter of 2012. The El Paso transaction is expected to be nicely accretive to KMI's dividend. The company previously announced that if the El Paso transaction were to close on Jan. 1, 2012, then KMI would expect to pay dividends per share of around $1.45 for 2012. KMP expects to declare cash distributions of $4.98 per unit for 2012, an 8.3 percent increase over its 2011 budget target of $4.60 per unit, which the company stated in October that it expects to exceed. Chairman and CEO Richard D. Kinder said, “KMP's stable and diversified assets continue to grow and produce incremental cash flow in virtually all types of market conditions. We see exceptional growth opportunities in the midstream energy sector, particularly in the natural gas shale plays and in the coal export business.” The projections for KMP and KMR also do not include any impact from the proposed acquisition of EP by KMI. In 2012, KMP expects to: Generate almost $4.4 billion in business segment earnings before DD&A (adding back KMP's share of joint venture DD&A), an increase of approximately $560 million over the 2011 forecast. Distribute almost $1.7 billion to its limited partners. Produce excess cash flow of more than $50 million above the distribution target of $4.98 per unit. Invest approximately $1.7 billion in expansions (including contributions to joint ventures) and small acquisitions. Over $490 million of the equity required for this investment program is expected to be funded by KMR dividends. KMP's expectations assume an average West Texas Intermediate (WTI) crude oil price of approximately $93.75 per barrel in 2012, which approximated the forward curve at the time the 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 CO2 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 2012, the company expects that every $1 change in the average WTI crude oil price per barrel will impact the CO2 segment by approximately $6 million, or slightly over 0.1 percent of KMP's combined business segments' anticipated segment earnings before DD&A. KMR also expects to declare distributions of $4.98 per share in 2012. The distribution to KMR shareholders will be paid in the form of additional KMR shares. The distribution 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. The boards of directors will review and approve the 2012 Kinder Morgan budgets at the January board meeting and the budgets will be discussed in detail during the company's annual analyst meeting on Jan. 25, 2012, in Houston. Kinder Morgan remains committed to transparency and will continue to publish its budgets on the company's web site, www.kindermorgan.com. The 2012 budget will be the standard by which KMI, KMP and KMR measure their performance next year and will be a target for determining employee bonuses. Kinder Morgan, Inc. (NYSE: KMI) is a leading pipeline transportation and energy storage company in North America. It owns an interest in or operates more than 37,000 miles of pipelines and 180 terminals. Its pipelines transport natural gas, gasoline, crude oil, CO2 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), one of the largest publicly traded pipeline limited partnerships in America. Combined, KMP, KMR and KMI constitute the largest midstream energy entity in the United States with an enterprise value of approximately $55 billion. For more information please visit www.kindermorgan.com. This news release includes forward-looking statements. Although Kinder Morgan believes that its expectations 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 are enumerated in Kinder Morgan's Forms 10-K and 10-Q as filed with the Securities and Exchange Commission. Kinder MorganLarry Pierce, 713-369-9407Media RelationsorMindy Mills Thornock, 713-369-9490Investor Relationswww.kindermorgan.com