---

---

---

---

•	the availability of drop-down assets and the terms and timing of sales from us to KMP and EPB;

•	the timing and extent of changes in price trends and overall demand for NGL, refined petroleum products, oil, CO2, natural gas, electricity, coal, steel and other bulk materials and chemicals and certain agricultural products in North America;

•	economic activity, weather, alternative energy sources, conservation and technological advances that may affect price trends and demand;

•	changes in our tariff rates required by the FERC, the CPUC, Canada’s NEB or another regulatory agency;

•	our ability to acquire new businesses and assets and integrate those operations into our existing operations, and make cost-saving changes in operations, particularly if we undertake multiple acquisitions in a relatively short period of time, as well as our ability to expand our facilities;

•	our ability to safely operate and maintain our existing assets and to access or construct new pipeline, gas processing and NGL fractionation capacity;

•	our ability to attract and retain key management and operations personnel;

•	difficulties or delays experienced by railroads, barges, trucks, ships or pipelines in delivering products to or from our terminals or pipelines;

•	shut-downs or cutbacks at major refineries, petrochemical or chemical plants, natural gas processing plants, ports, utilities, military bases or other businesses that use our services or provide services or products to us;

•	changes in crude oil and natural gas production (and the NGL content of natural gas production) from exploration and production areas that we serve, such as the Permian Basin area of West Texas, the shale plays in Oklahoma, Ohio, Pennsylvania and Texas, and the U.S. Rocky Mountains and the Alberta, Canada oil sands;

•	changes in laws or regulations, third-party relations and approvals, and decisions of courts, regulators and governmental bodies that may adversely affect our business or our ability to compete;

•	interruptions of electric power supply to our facilities due to natural disasters, power shortages, strikes, riots, terrorism (including cyber attacks), war or other causes;

•	the uncertainty inherent in estimating future oil, natural gas, and CO2 production or reserves that we may experience;

•	the ability to complete expansion projects and construction of our vessels on time and on budget;

•	the timing and success of our business development efforts, including our ability to renew long-term customer contracts;

•	changes in accounting pronouncements that impact the measurement of our results of operations, the timing of when such measurements are to be made and recorded, and the disclosures surrounding these activities;

---

•	changes in tax law, particularly as it relates to partnerships or other pass-through” entities;

•	our ability to offer and sell debt securities, and KMP’s and EPB’s ability to offer and sell equity securities and debt securities or obtain debt financing in sufficient amounts and on acceptable terms to implement that portion of our business plan that contemplates growth through acquisitions of operating businesses and assets and expansions of our facilities;

•	our indebtedness, which could make us vulnerable to general adverse economic and industry conditions, limit our ability to borrow additional funds, place us at a competitive disadvantage compared to our competitors that have less debt, or have other adverse consequences;

•	our ability to obtain insurance coverage without significant levels of self-retention of risk;

•	acts of nature, sabotage, terrorism (including cyber attacks) or other similar acts or accidents causing damage to our properties greater than our insurance coverage limits;

•	possible changes in our and our subsidiaries credit ratings;

•	capital and credit markets conditions, inflation and fluctuations in interest rates;

•	the political and economic stability of the oil producing nations of the world;

•	national, international, regional and local economic, competitive and regulatory conditions and developments;

•	our ability to achieve cost savings and revenue growth;

•	foreign exchange fluctuations;

•	the extent of KMP’s success in developing and producing CO2 and oil and gas reserves, including the risks inherent in development drilling, well completion and other development activities;

•	engineering and mechanical or technological difficulties that KMP may experience with operational equipment, in well completions and workovers, and in drilling new wells; and

•	unfavorable results of litigation and the outcome of contingencies referred to in Note 16 “Litigation, Environmental and Other” to our consolidated financial statements.

---

---

•

On March 1, 2013, KMP acquired from us both the remaining 50% ownership interest KMP did not already own in EPNG and the remaining 50% ownership interest it did not already own in the EP midstream assets for an aggregate consideration of approximately $1.7 billion, consisting of cash paid, common units issued and debt assumed. In this report, we refer to this acquisition of assets from us as the March 2013 drop-down transaction; the combined group of assets acquired from us effective March 1, 2013 as the March 2013 drop-down asset group; and the EP midstream assets or Kinder Morgan Altamont LLC (formerly, El Paso Midstream Investment Company, L.L.C.) as the midstream assets. KMP acquired its initial 50% ownership interest in the midstream assets effective June 1, 2012 from an investment vehicle affiliated with KKR for consideration of $289 million in common units.

---

•

On May 1, 2013, KMP closed its previously announced acquisition of Copano. KMP acquired all of Copano’s outstanding units for a total purchase price of approximately $5.2 billion (including assumed debt and all other assumed liabilities). The transaction was a 100% unit for unit transaction with an exchange ratio of 0.4563 of KMP’s common units for each Copano common unit. KMP issued 43,371,210 of its common units valued at approximately $3.7 billion as consideration for the Copano acquisition (based on the $86.08 closing market price of a common unit on the NYSE on the May 1, 2013 issuance date). In association with KMP’s Copano acquisition, we, as general partner of KMP, waived $75 million of incremental incentive distributions for 2013, and intend to forgo incentive distributions of $120 million for 2014, $120 million for 2015, $110 million for 2016 and annual amounts thereafter decreasing by $5 million per year from this level.

•

In April 2013, KMP completed construction and began transportation service on a newly expanded segment of its DeWitt/Karnes (DK) natural gas pipeline system. The DK pipeline system runs through DeWitt County and Karnes County, Texas, and in 2012, Copano initiated an approximately $120 million expansion project to extend the 24-inch diameter pipeline approximately 65 miles southwest into McMullen County, Texas. The expansion was based on a fee-based agreement with a single customer whereby KMP provides midstream gathering and handling services in exchange for committed production volumes;

•

In April 2013, KMP commissioned the first of two 400 MMcf/d cryogenic unit expansions at its Houston Central processing plant located in Colorado County, Texas. KMP expects to complete the second expansion in mid-2014, and when completed, total processing capacity at the Houston Central plant will be approximately 1.5 Bcf/d. The current estimate of total project construction costs including expansion of the pipeline capacity upstream of the plant is approximately $250 million;

•	TGP continues to move forward on its approximately $83 million Rose Lake expansion project in northeastern Pennsylvania. The project will provide long-term firm transportation service for two shippers that have fully subscribed 230 MDth/d of firm capacity. Subject to regulatory approvals, a November 1, 2014, in-service date is anticipated;

•

On July 2, 2013, KMP’s wholly-owned subsidiary Sierrita Gas Pipeline LLC entered into a Subscription Agreement with KMP, MGI Enterprises U.S. LLC (an affiliate of PEMEX) and MIT Pipeline Investment Americas, Inc. (an affiliate of Mitsui), whereby MGI and MIT acquired equity interests of 35% and 30%, respectively, in Sierrita in exchange for capital contributions. Each member of Sierrita, including KMP, contributed approximately $5 million, determined based on the anticipated cash requirement of Sierrita through the end of September 2013. Following the execution of a First Amended and Restated LLC Agreement, KMP now operates and owns a 35% equity interest in Sierrita Gas Pipeline LLC, and the investment is accounted for under the equity method of accounting.

•

On September 1, 2013, TGP sold certain natural gas facilities located offshore in the Gulf of Mexico and onshore in the state of Louisiana to Kinetica Partners LLC for an aggregate consideration of $32 million in cash. TGP’s investment in the net assets sold in this transaction totaled $89 million, and as a result of the sale, TGP recognized both a $93 million increase in regulated assets and a $36 million gain from the sale of assets in 2013;

---

•

Field survey work continues for TGP’s fully subscribed approximately $77 million Connecticut expansion project. The project will provide 72 MDth/d of additional long-term natural gas capacity to two local distribution customers. The project includes constructing approximately 13-miles of new pipeline loops along the TGP system in Connecticut, New York and Massachusetts, and acquiring an existing pipeline lateral from another operator. Pending regulatory approvals, the expansion project is expected to be operational on November 1, 2016;

•

The proposed Cameron LNG liquefaction facility at Hackberry, Louisiana, in which we do not own an interest, received Department of Energy conditional approval for non-Free Trade Agreement export on February 11, 2014, and TGP continues to advance plans to transport 900 MDth/d of natural gas to the future facility under long-term agreements. Following a binding open season in the summer of 2013, TGP awarded 300 MDth/d of capacity to a subsidiary of MMGS Inc. (Mitsui) for a 20-year agreement to transport natural gas earmarked for the liquefaction facility, which is slated to begin LNG exports in the second half of 2017. Earlier in 2013, TGP announced a binding, 20-year agreement with anchor shipper Mitsubishi Corporation to ship 600 MDth/d of natural gas for the proposed project. Future shipments by TGP are part of its approximately $138 million Southwest Louisiana Supply Project;

•

On November 1, 2013, TGP completed and placed into service its previously announced $504 million Northeast Upgrade project. The project expanded TGP’s pipeline facilities in Pennsylvania and New Jersey and provides for additional takeaway capacity from the Marcellus shale gas formation. The fully-subscribed project increased system capacity on TGP’s 300 Line system by approximately 636 MDth/d through five segment loops and system upgrades at four existing compressor stations and one meter upgrade in New Jersey;

•

On November 1, 2013, TGP completed and placed into service its previously announced $54 million Marcellus Pooling project. The fully subscribed project provides approximately 240 MDth/d of additional firm transportation capacity from the Marcellus shale gas formation. The expansion included approximately eight miles of 30-inch diameter pipeline looping, system modifications and upgrades to allow bi-directional flow at four existing compressor stations in Pennsylvania;

•

TGP completed a successful binding open season in December for incremental, north-to-south natural gas transportation capacity on the TGP system totaling 500 MDth/d, which was awarded to five different shippers. The awarded capacity will provide firm transportation service for Marcellus and Utica production from receipt points as far north as Mercer, Pennsylvania, for delivery to multiple delivery points on the Gulf Coast. TGP will invest approximately $156 million in this Utica Backhaul project. Capacity bids exceeded the capacity offered, and TGP is exploring further capacity expansions for its customers;

•

TGP signed a binding, 15-year firm transportation agreement with Seneca Resources Corporation to ship 158 MDth/d of natural gas to eastern Canadian markets on the Niagara Expansion Project. Subject to regulatory approvals, the approximately $26 million project is expected to begin service November 1, 2015. Seneca will be the foundation shipper for TGP’s Niagara Expansion Project, designed to provide transportation from the Marcellus Shale in Pennsylvania to TGP’s interconnect with TransCanada Pipeline in Niagara County, New York, to serve growing markets for U.S. gas in eastern Canada; and

•

KMP is investing approximately $126 million for additional compression and pipeline system modifications to expand the Kinder Morgan Texas and Mier-Monterrey pipelines.  The project is supported by three customers in Mexico that entered into long-term firm transportation contracts for more than 200 MMcf/d of capacity, which will be phased in from 2014 through 2016.  A fourth customer has also contracted for 150 MMcf/d of the project’s capacity on an interim basis for use prior to the effective date of the contracts with the other customers, accelerating the timing of the expansion for a projected initial in-service date of September 1, 2014.

•

EPB announced in December that Shell US Gas & Power gave notice to EPB’s Elba Liquefaction Company joint venture to move forward on Phase II of the jointly owned natural gas liquefaction project at Elba Island LNG terminal near Savannah, Ga. EPB’s SLC unit owns 51% of the Elba Liquefaction Company joint venture. The additional capacity will range from 70 MMcf/d (0.5 million tonnes per year) up to 140 MMcf/d (1.0 million tonnes per year), with EPB’s share of estimated capital expenditure for Phase II at the maximum volume of 140 MMcf/d of approximately $224 million. At full development, the Elba liquefaction project is expected to have total capacity of approximately 350 MMcf/d of natural gas (2.5 million tonnes per year of LNG) at a cost of approximately $1.5 billion. Subject to regulatory approvals, Phase I is anticipated to be in service in late 2016 or early 2017 and Phase II is expected to be in service in 2017-2018.

---

•

SNG and Elba Express will invest approximately $279 million to expand its systems following successful open seasons held in August 2013 for incremental, long-term natural gas transportation service. The open seasons generated customer interest in incremental capacity of greater than 700,000 Dth/d that will support southeastern U.S. infrastructure growth and the needs of customers in Georgia, South Carolina and northern Florida. EEC customers have expressed interest that could add incremental capacity of approximately 300,000 Dth/d to the project, which, if constructed, would bring the total capacity of the expansions to approximately 1 Bcf/d. EEC expects an in-service date as early as June 2016 pending regulatory approvals.

•

SNG placed its Rose Hill Project into service on schedule in November, which involved facility modifications to benefit both SNG and TGP, a subsidiary of KMP. The approximately $25 million SNG portion of the project allows SNG customers to shift about 450,000 Dth/d to different receipt locations including an interconnection between SNG and TGP. The approximately $9 million TGP portion of the project improved the delivery capabilities from TGP to SNG.

•

Construction continues on the WYCO High Plains Expansion Project, a joint venture between CIG and Xcel Energy. The project began partial service in November of 2013, and the approximately $22 million project (EPB’s share is $11 million) is expected to be completed in the spring of this year. CIG is constructing approximately 8 miles of pipeline and making other modifications to provide additional takeaway capacity from the Denver-Julesburg Basin and link this prolific basin with CIG’s High Plains pipeline system. The project is supported by two shippers who signed long-term contracts for an initial 250,000 Dth/d.

•

On June 1, 2013, KMP acquired certain oil and gas properties, rights, and related assets in the Permian Basin of West Texas from Legado Resources LLC for approximately $285 million (before working capital adjustments and excluding assumed liabilities). The acquisition of the Goldsmith Landreth San Andres oil field unit includes more than 6,000 acres located in Ector County, Texas. The acquired oil field is in the early stages of CO2 flood development and includes a residual oil zone along with a classic San Andres waterflood. The field currently produces approximately 1,230 Bbl/d of oil, and as part of the transaction, KMP obtained a long-term supply contract (now held by one of its wholly-owned subsidiaries) for up to 150 MMcf/d of CO2;

•	Construction continues on KMP’s approximately $214 million Yellow Jacket Central Facility expansion at the McElmo Dome CO2 source field in southwest Colorado. The first of four planned expansion projects is expected to be operational by November 2014. These expansions will increase CO2 production from 1.1 Bcf/d to 1.23 Bcf/d;

•

In September 2013, KMP completed the parallel (primary) compression portion of its previously announced $255 million investment to expand the CO2 capacity of its approximately 87%-owned Doe Canyon Deep unit in southwestern Colorado. Doe Canyon is now producing about 200 MMcf/d of CO2, substantially higher than the initial projection of 170 MMcf/d. Construction was completed and the booster compression was available for service in mid-December 2013. Additional well drilling and completions in the field have allowed continued production without operation of the booster compression. Booster compression operation is expected to begin in late 2015. Final work continues on pipeline insulation, painting, and final cleanup and is expected to be complete in early April of 2014. KMP plans to drill approximately 18 more wells during the next ten years, with four expected to be drilled in 2014; and

•

Work continues on the expansion of KMP’s Wink Pipeline System, which transports crude oil from the company’s West Texas oil fields to Western Refining Company’s facility in El Paso, Texas. KMP is in the process of increasing Wink’s capacity from 132 MBbl/d to 145 MBbl/d to meet expected higher future throughput requirements at Western’s refinery. KMP anticipates that the new facilities will be online in the first quarter of 2014.

•

On September 3, 2013, KMP and Valero Energy Corporation completed construction and placed into service the previously announced Parkway Pipeline, a new 141-mile, 16-inch diameter pipeline that transports refined petroleum products from refineries located in Norco, Louisiana, to Plantation Pipe Line Company’s (KMP’s approximately 51%-owned equity investee) petroleum transportation hub located in Collins, Mississippi. KMP will operate and own a 50% equity interest in the Parkway Pipeline LLC, which has an initial capacity of 110 MBbl/d, with the ability to

---

•

Construction continues on the approximately $360 million petroleum condensate processing facility located near KMP’s Galena Park terminal on the Houston Ship Channel. Supported by a long-term, fee-based agreement with BP North America for substantially all 100 MBbl/d of throughput capacity at the facility, the project includes building two separate units to split condensate into its various components and the construction of storage tanks for the almost 2 MMBbl of product that will be split at the facility. The first phase of the splitter is scheduled to be commissioned in June 2014 and the second phase is expected to come online in the second quarter of 2015;

•

KMP continues to make progress on pipeline modifications for its approximately $310 million Cochin Reversal project to move light condensate from Kankakee County, Illinois, to existing terminal facilities near Fort Saskatchewan, Alberta. Construction also is underway on the 1 MMBbl storage capacity Kankakee tank farm and associated pipeline facilities where Cochin will interconnect with the Explorer Pipeline and the Enterprise TEPPCO Pipeline. The project remains on schedule for a late June 2014 in-service date;

•

Tank and pipeline construction continues on KMP’s approximately $109 million expansion of its KMCC pipeline to ConocoPhillips’ central delivery facility in Karnes County, Texas. The project, supported by a long-term contract with ConocoPhillips, will extend the 178-mile pipeline 31 miles west from the company’s DeWitt Station (west of Cuero, Texas) to ConocoPhillips’ central delivery facility in Helena, Texas. KMP expects to complete the project in the third quarter of 2014;

•

In January 2014, KMP completed and placed into service its approximately $101 million, 27-mile Sweeny Lateral pipeline, which transports Eagle Ford crude and condensate from its KMCC pipeline to Phillips 66’s Sweeny Refinery in Brazoria County, Texas. The two 120,000-barrel storage tanks and seven truck offloading racks at KMP’s DeWitt County station are also complete and in service, and the new pumps and two 120,000-barrel storage tanks at KMP’s Wharton County pump station will be completed February, 2014;

•

KMP has entered into an agreement with a large Eagle Ford Shale producer to extend the KMCC pipeline farther into the Eagle Ford Shale in South Texas. KMP will invest approximately $74 million to build an 18-mile lateral pipeline northwest from its DeWitt Station to a new facility in Gonzales County, where it will construct 300 MBbl of storage, a pipeline pump station and truck offloading facilities. The lateral will have a capacity of 300 MBbl/d and will enable KMP to batch Eagle Ford Gathering LLC crude oil and condensate from the new Gonzales Station via KMCC to its delivery points on the Houston Ship Channel and the soon to be in service Sweeny Lateral pipeline serving the Phillips 66 Sweeny Refinery in Brazoria County, Texas. Construction on the pipeline will start later this month and the project is expected to be completed in the first quarter of 2015;

•

In December 2013, KMP and NOVA Chemicals Corporation announced a letter of intent to develop a new products pipeline from the Utica Shale. Under the agreement, KMP’s Cochin pipeline will construct, own and operate a 210-mile pipeline from multiple fractionation facilities in Harrison County, Ohio, to KMP’s Cochin pipeline near Riga, Michigan, where the company will then move product via Cochin east to Windsor, Ontario, Canada. The proposed approximately $300 million KMP Utica To Ontario Pipeline Access (UTOPIA) would transport previously refined or fractionated NGL, including ethane and propane. UTOPIA is expected to have an initial 50 MBbl/d of capacity, which is expandable to more than 75 MBbl/d, and anticipates a mid-year 2017 in-service date, pending NOVA’s execution of a definitive agreement during the binding open season (which is expected in 2014) and timely receipt of necessary permitting and regulatory approvals; and

•

KMP and Targa Resources Partners signed a letter of intent in December 2013 to form a joint venture to construct new NGL fractionation facilities at Mont Belvieu, Texas, to provide services for producers in the Utica and Marcellus Shale resource plays in Ohio, West Virginia and Pennsylvania.  The obligations under the letter of intent are conditioned upon a successful open season and the construction of the Utica Marcellus Texas Pipeline (UMTP). UMTP is a proposed joint venture between MarkWest Utica EMG and KMP (also announced in the third quarter of 2013), of up to 150 MBbl/d expandable to 400 MBbl/d of maximum pipeline capacity over time. The new NGL fractionation facilities would be located adjacent to Targa’s existing fractionation facilities at Mont Belvieu and would provide fractionation services for customers of UMTP. To allow shippers time to assess their Gulf Coast fractionation and pipeline needs, the binding open season currently under way for the proposed Y-grade UMTP has been extended until February 28, 2014. UMTP would involve the abandonment and conversion of over 1,000 miles of our existing TGP system, currently in natural gas service, and building approximately 200 miles of new pipeline.

---

•

KMP entered into a long term agreement in January 2014 with BP North America (BP) for pipeline transportation of Eagle Ford condensate to the Houston Ship Channel.  The $28 million project includes construction of tankage and truck rack receipt facilities at the KMCC Helena Station in Karnes County, Texas and is scheduled to be operational in the first quarter of 2015.  This new origin facility will provide additional supply for the 100 MBbl/d condensate processing facility subscribed to by BP and currently under construction by KMCC in Galena Park, Texas.

•

In December 2013, KMP and its Double Eagle joint venture signed a long term agreement with Anadarko for firm transportation service of Eagle Ford condensate to the Houston Ship Channel.  Improvements include construction of tanks and a pump station near Gardendale in LaSalle County, Texas and a new ten mile pipeline joining the Double Eagle and KMCC pipeline systems at Helena Station in Karnes County, Texas.  KMP’s share of the total project cost is approximately $45 million and the facilities are expected to be operational in early 2015.

•

In August 2013, KMP completed and commissioned for service its previously announced petroleum coke terminal located at BP’s Whiting refinery in Hammond, Indiana. KMP expects that the terminal will handle approximately 2.2 million tons of petroleum coke per year for the next three years, and this volume is supported by a 20-year service contract with BP. KMP invested approximately $62 million for the construction of this facility, which includes nine conveyors, a 30,000-ton storage barn and a fleet of 190 railcars to move approximately 6,000 tons of petroleum coke per day;

•

As of the date of this report, construction continues on the previously announced three phase export coal expansion project at KMP’s International Marine Terminals facility (IMT), a multi-product, import-export facility located in Myrtle Grove, Louisiana and owned 66 2/3% by KMP. In August 2013, KMP completed the project’s $83 million phase one, which added approximately 800,000 tons of ground storage to the facility. The remaining two phases entail adding a new continuous barge unloader, a new coal reclaim conveyor system and an additional five million tons of coal throughput capacity. KMP expects the entire project to be operational in the second quarter of 2014 and currently, its estimated share of the total expansion project at International Marine Terminals (including all phases) is approximately $150 million;

•

Construction continues on KMP’s investment of $106 million to meet customer demand in the Houston Ship Channel with a new barge dock adjacent to KMP’s Pasadena terminal and nine new storage tanks (with total capacity of 1.2 MMBbl at its Galena Park terminal. The new barge dock is expected to help relieve current dock congestion on the Houston Ship Channel and will enable KMP to handle up to 50 barges per month. The tanks are expected to be placed in-service as they are completed beginning in the third quarter of 2014 and ending in the first quarter of 2015. The barge dock is slated for a fourth quarter 2015 completion;

•

KMP’s 185-acre Battleground Oil Specialty Terminal Company LLC project located on the Houston Ship Channel is continuing to progress toward completion. Thirty-one of the 51 storage tanks built during phase one construction have been placed in service and the remaining tanks will come online during the first half of 2014. A two-berth ship dock and 12 barge berths were also placed in service in October, 2013. Phase two construction also continues and involves building an additional 0.9 MMBbl of storage capacity. BOSTCO expects phase two to begin service in the third quarter of 2014. The approximately $500 million BOSTCO terminal is fully subscribed for a total capacity of 7.1 MMBbl and is able to handle ultra-low sulfur diesel, residual fuels and other black oil terminal services. KMP owns 55% of and operates BOSTCO;

•

KMP is preparing a 42-acre site along the Houston Ship Channel for construction of a new ship dock to handle ocean going vessels and 1.5 MMBbl of liquids storage tanks. The approximately $172 million project is supported by a long-term contract with a major ship channel refiner to construct the tanks and connect KMP’s Galena Park terminal to the refiner’s location. Construction is scheduled to begin in the second quarter of 2014 and the project is expected to be in service in the first quarter of 2016;

•

Construction continues at KMP’s Edmonton Terminal expansion in Alberta, Canada. By the end of February 2014, nine tanks with a capacity of 3.4 MMBbl will be in service and phase one will be complete. Construction also continues on phase two, which will add an incremental 1.2 MMBbl storage capacity and is expected to be completed in late 2014. The approximately $419 million project is supported by long-term contracts with major producers and refiners;

---

•

In December 2013, KMP announced a joint venture with Imperial Oil to build the Edmonton Rail Terminal, a crude oil loading facility, near its Edmonton storage terminal on land adjacent to Imperial’s Strathcona Refinery. Construction is underway on the Edmonton Rail Terminal, which will be capable of loading one to three unit trains per day totaling 100 MBbl/d at startup, with the potential to expand up to 250 MBbl/d. The new rail terminal will be connected via pipeline to the Trans Mountain terminal and will be capable of sourcing crude oil handled by KMP for delivery by rail to North American markets and refineries. The rail will be constructed and operated by KMP and will connect to both Canadian National and Canadian Pacific mainlines. The joint venture is investing approximately $175 million in the project, and KMP will invest an additional approximately $100 million in pipeline connections and new staging tanks. The facility is expected to be in service at the end of 2014; and

•

On January 17, 2014, KMP acquired American Petroleum Tankers (APT) and State Class Tankers (SCT) from affiliates of The Blackstone Group and Cerberus Capital Management for an aggregate consideration of approximately $962 million in cash. APT and SCT are engaged in the marine transportation of crude oil, condensate and refined products in the U.S. domestic trade, commonly referred to as the Jones Act trade. KMP expects that the transaction will be immediately accretive to cash available to its unitholders.

•

On March 14, 2013, KMP closed the previously announced sale of both its one-third equity ownership interest in the Express pipeline system and its subordinated debenture investment in Express to Spectra Energy Corp. For the divestiture of its investments, KMP received net cash proceeds of $402 million (after settlements of both final working capital balances and transaction related selling costs), and it recorded both a pre-tax gain amount of $224 million and an associated increase in income tax expense of $84 million; and

•

Trans Mountain Pipeline filed a Facilities Application with Canada’s NEB in December 2013 requesting authorization to build and operate the necessary facilities for the proposed $5.4 billion pipeline system expansion. With this filing, the proposed project will undergo a comprehensive public regulatory review. For the past 18 months, Kinder Morgan Canada has engaged and will continue to engage extensively with landowners, Aboriginal groups, communities and stakeholders along the proposed expansion route, and marine communities. The next step is for the NEB to establish a hearing schedule that corresponds to the federal government’s legislated 15-month review and decision time frame. Thirteen companies in the Canadian producing, refining and oil export business have signed firm contracts representing a total volume commitment of approximately 708 MBbl/d. Kinder Morgan Canada received approval of the commercial terms related to the expansion from the NEB in May of 2013. The proposed expansion will increase capacity on Trans Mountain from approximately 300 MBbl/d to 890 MBbl/d. If approvals are received as planned, the expansion is expected to be operational at the end of 2017.

•	On January 18, 2013, we completed the sale of our equity interests in the Bolivia to Brazil Pipeline that we had acquired as part of the EP acquisition for $88 million. See Note 3 “Acquisitions and Divestitures” to our consolidated financial statements.

•	For information about our 2013 debt offerings and retirements, see Note 8 “Debt” to our consolidated financial statements. For information about our 2013 equity offerings, see Note 10 “Stockholders’ Equity-Non-Controlling Interests-Contributions” to our consolidated financial statements.

•

As previously announced, KMP anticipates that for the year 2014, (i) it will declare total annual cash distributions of $5.58 per unit, a 5% increase over its cash distributions of $5.33 per unit for 2013; (ii) its business segments will generate approximately $6.4 billion in EBDA , including amortization of excess cost of equity investments and its proportionate share of all DD&A of its unconsolidated joint ventures accounted for under the equity-method of accounting; (iii) it will distribute over $2.5 billion to its limited partners; (iv) it will produce excess cash flow of approximately $15 million above its cash distribution target of $5.58 per unit; and (v) it will invest approximately $3.6

---

•

EPB expects to declare total cash distribution of $2.60 per unit for 2014, an approximate 2% increase over the $2.55 per unit distributions for 2013. EPB’s 2014 budget includes the expected purchase (drop-down transaction) from us of a 50% interest in Ruby Pipeline Holding Company, L.L.C., a 50% interest in Gulf LNG Holdings Group, LLC and a 47.5% interest in Young Gas Storage Company, LTD. The positive impact from the expected drop-down transaction at attractive multiples will be largely offset by the impacts of the SNG and WIC rate case settlements and expected lower rates on contract renewals on the WIC system. In 2014, EPB expects its regulated pipeline and storage assets, along with its LNG business, to generate earnings before DD&A of approximately $1.3 billion (adding back EPB’s share of joint venture DD&A), an increase of almost $90 million compared to 2013. EPB also has approximately $1.3 billion of expansion projects under contract with customers, which will benefit its unitholders in 2016 and beyond. Generally, EPB’s base cash flows (that is, cash flows not attributable to acquisitions or expansions) are relatively stable from year to year and are largely supported by reservation charges under firm transportation and storage contracts.

•

KMI expects to declare dividends of $1.72 per share for 2014, an 8% increase over its 2013 declared dividend of $1.60 per share. Growth in 2014 cash dividends is expected to be driven by continued strong performance at KMP and contributions from EPB. The growth at KMI from KMP and EPB cash distributions will be partially offset by the loss of income from the 2013 and expected 2014 sales (drop-down) of certain assets to EPB, as described above.

---

•	focus on stable, fee-based energy transportation and storage assets that are central to the energy infrastructure of growing markets within North America;

•	increase utilization of our existing assets while controlling costs, operating safely, and employing environmentally sound operating practices;

•	leverage economies of scale from incremental acquisitions and expansions of assets that fit within our strategy and are accretive to cash flow; and

•	maximize the benefits of our financial structure to create and return value to our stockholders.

•	Natural Gas Pipelines—for all periods presented in our financial statements this segment consists of approximately 68,000 miles of natural gas transmission pipelines and gathering lines, plus natural gas storage, treating and processing facilities, through which natural gas is gathered, transported, stored, treated, processed and sold and other equity interests.

•	CO2—KMP—which produces, markets and transports, through approximately 1,500 miles of pipelines, CO2 to oil fields that use CO2 to increase production of oil; owns interests in and/or operate four primary oil fields in West Texas; and owns and operates a 450-mile crude oil pipeline system in West Texas;

•

Products Pipelines—KMP—which consists of approximately 9,000 miles of refined petroleum products and crude oil and condensate pipelines that deliver refined petroleum products (gasoline, diesel fuel and jet fuel), NGL, crude oil, condensate and bio-fuels to various markets; plus approximately 62 associated product terminals and petroleum pipeline transmix processing facilities serving customers across the U.S.;

•	Terminals—KMP—which consists of approximately 122 owned or operated liquids and bulk terminal facilities and approximately 10 rail transloading and materials handling facilities located throughout the U.S. and portions of Canada, which together transload, store and deliver a wide variety of bulk, petroleum, petrochemical and other liquids products for customers across the U.S. and Canada

•	Kinder Morgan Canada—KMP—which transports crude oil and refined petroleum products through approximately 800 miles of pipelines from Alberta, Canada to marketing terminals and refineries in British Columbia and the state of Washington; plus five associated product terminal facilities; and

•	Other—which primarily includes several physical natural gas contracts with power plants associated with EP’s legacy trading activities. These contracts obligate EP to sell natural gas to these plants and have various expiration dates ranging from 2012 to 2028. This segment also included an interest in the Bolivia to Brazil Pipeline, which we sold for $88 million on January 18, 2013.

---

---

---

---

---

---

---

---

---

---

(a)	Includes active wells and wells temporarily shut-in.  As of December 31, 2013, KMP did not operate any productive wells with multiple completions.

---

(b)	Consists of injection, water supply, disposal wells and service wells temporarily shut-in.  A disposal well is used for disposal of salt water into an underground formation and an injection well is a well drilled in a known oil field in order to inject liquids and/or gases that enhance recovery.

(c)	Consists of development wells in the process of being drilled as of December 31, 2013. A development well is a well drilled in an already discovered oil field.

---

---

---

---

---

---

---

---

•	Order No. 436 (1985) which required open-access, nondiscriminatory transportation of natural gas;

•	Order No. 497 (1988) which set forth new standards and guidelines imposing certain constraints on the interaction between interstate natural gas pipelines and their marketing affiliates and imposing certain disclosure requirements regarding that interaction; and

•

Order No. 636 (1992) which required interstate natural gas pipelines that perform open-access transportation under blanket certificates to “unbundle” or separate their traditional merchant sales services from their transportation and storage services and to provide comparable transportation and storage services with respect to all natural gas supplies. Natural gas pipelines must now separately state the applicable rates for each unbundled service they provide (i.e., for the natural gas commodity, transportation and storage).

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

(a)	Dividend information is for dividends declared with respect to that quarter.  Generally, our declared dividends are paid after we receive quarterly distributions from KMP and EPB, which are paid within 45 days after the end of each quarter.

---

(a)

On October 16, 2013, we announced that our board of directors had approved a separate share and warrant repurchase program, authorizing us to repurchase in the aggregate up to $250 million of additional shares and warrants. This $250 million program is in addition to the previously announced repurchase programs, including our board authorized $350 million share and warrant repurchase program that was announced on July 17, 2013.

---

(a)	Dividends for the fourth quarter of each year are declared and paid during the first quarter of the following year.

(b)	Excludes debt fair value adjustments.  Increases (decreases) to long-term debt for debt fair value adjustments for KMI and its subsidiaries (excluding KMP, EPB and their respective subsidiaries) totaled $771 million, $901 million, $40 million, $12 million and $(14) million as of December 31, 2013, 2012, 2011, 2010 and 2009, respectively.

(c)	Excludes debt fair value adjustments.  Increases to long-term debt for debt fair value adjustments totaled $1,214 million, $1,698 million, $1,055 million, $582 million and $308 million as of December 31, 2013, 2012, 2011, 2010 and 2009, respectively.

(d)	Excludes debt fair value adjustments.  Decrease to long-term debt for debt fair value adjustments totaled $8 million as of both December 31, 2012 and 2013.

•	helping customers by providing safe and reliable energy, bulk commodity and liquids products transportation, storage and distribution; and

•	creating long-term value for our shareholders.

•	Natural Gas Pipelines—(i) the ownership and operation of major interstate and intrastate natural gas pipeline and storage systems; (ii) the ownership and/or operation of associated natural gas gathering systems and natural gas

---

•	CO2-KMP—(i) the production, transportation and marketing of CO2, to oil fields that use CO2 to increase production of oil; (ii) ownership interests in and/or operation of oil fields and gas processing plants in West Texas; and (iii) the ownership and operation of a crude oil pipeline system in West Texas;

•	Products Pipelines-KMP— the ownership and operation of refined petroleum products and crude oil and condensate pipelines that deliver refined petroleum products (gasoline, diesel fuel and jet fuel), NGL, crude oil, condensate and bio-fuels to various markets, plus the ownership and/or operation of associated product terminals and petroleum pipeline transmix facilities;

•	Terminals-KMP—the ownership and/or operation of liquids and bulk terminal facilities and rail transloading and materials handling facilities located throughout the U.S. and portions of Canada;

•	Kinder Morgan Canada-KMP—the ownership and operation of the Trans Mountain pipeline system that transports crude oil and refined petroleum products from Edmonton, Alberta, Canada to marketing terminals and refineries in British Columbia, Canada and the state of Washington, plus the Jet Fuel aviation turbine fuel pipeline that serves the Vancouver (Canada) International Airport; and

•	Other—primarily includes several physical natural gas contracts with power plants associated with EP’s legacy trading activities. These contracts obligate EP to sell natural gas to these plants and have various expiration dates ranging from 2012 to 2028.

---

---

---

---

---

---

---

(a)

Based on (i) KMP distributions of $5.33, $4.98 and $4.61 per common unit declared for the years ended December 31, 2013, 2012 and 2011, respectively; (ii) 381 million, 340 million and 319 million aggregate common units, Class B units and i-units (collectively KMP units) outstanding as of April 29, 2013, April 30, 2012 and April 29, 2011, respectively; (iii) 433 million, 347 million and 330 million KMP units outstanding as of July 31, 2013, July 31, 2012 and July 29, 2011, respectively; (iv) 438 million, 365 million and 333 million KMP units outstanding as of October 31, 2013, 2012 and 2011, respectively; (v) 444 million, 373 million and 336 million KMP units outstanding as of January 31, 2014, 2013 and 2012, respectively, and (vi) waived incentive distributions of $4 million, $26 million and $29 million for the years ended December 31, 2013, 2012 and 2011, respectively related to KMP’s acquisition of its initial 50% interest in May 2010, and subsequently, the remaining 50% interest in May 2011 of KinderHawk; and (vii) waived incentive distribution of $75 million for the year ended December 31, 2013, as a result of KMP’s acquisition of Copano. In addition, we as general partner of KMP, agreed to waive a portion of our future incentive distributions amounts equal to (i) $120 million for 2014, $120 million for 2015, $110 million for 2016, and annual amounts thereafter decreasing by $5 million per year from the 2016 level related to the Copano acquisition and (ii) $13 million for 2014, $19 million for 2015 and $6 million for 2016 related to KMP’s APT and SCT acquisitions.

(b)	Based on 28 million in 2013, 26 million as of September 30 and December 31, 2012 and 22 million in the prior periods, KMP units owned by us, multiplied by the KMP per unit distribution declared, as outlined in footnote (a) above.

(c)	Assumes that we sold the KMR shares that we received as distributions for the years ended December 31, 2013, 2012 and 2011. We did not sell any KMR shares in 2013, 2012 or 2011. We intend periodically to sell the KMR shares we receive as distributions to generate cash.

(d)	Based on (i) EPB distributions of $2.55 and $1.74 per common unit declared for the year ended December 31, 2013 and the nine months ended December 31, 2012; (ii) 216 million common units outstanding as of April 29, 2013; (iii) 218 million and 208 million common

---

(e)	Based on 90 million EPB units owned by us as of December 31, 2013 and 2012, multiplied by the EPB per unit distribution declared, as outlined in footnote (d) above.

(f)	Represents corporate general and administrative expenses, corporate sustaining capital expenditures, and other income and expense.

(g)	2013 and 2012 Cash taxes were calculated based on the income and expenses included in the table, deductions related to the income included, and use of net operating loss carryforwards of $300 million and $200 million, respectively.

(h)

Represents cash available from former EP assets that remain at KMI, including TGP, EPNG and El Paso midstream assets for the periods presented prior to their drop-down to KMP, and our 20% interest in NGPL, net of general and administrative expenses related to KMI’s EP assets. Cash available includes our share (if applicable) of pre-tax earnings, plus DD&A, and less cash taxes and sustaining capital expenditures.

(i)	Represents interest expense on debt assumed from the May 25, 2012 EP acquisition.

(j)	Represents interest associated with Kinder Morgan, Inc.’s (KMI) remaining debt issued to finance the cash portion of EP acquisition purchase price.

(k)

Excludes $310 million in after-tax expenses associated with the EP acquisition and EP Energy sale for the year ended December 31, 2012. This included (i) $101 million in employee severance, retention and bonus costs; (ii) $55 million of accelerated EP stock based compensation allocated to the post-combination period under applicable GAAP rules; (iii) $37 million in advisory fees; (iv) $68 million write-off associated with the EP acquisition (primarily due to debt repayments) or amortization of capitalized financing fees; (v) $51 million for legal fees and reserves, net of recoveries; and (vi) $19 million benefit associated with pension income.

(l)	Includes weighted average common stock outstanding and (i) for 2013, approximately 6 million of unvested restricted stock awards issued to management employees that contain rights to dividends and (ii) for 2012, Class B shares, Class C shares and unvested restricted stock awards.

(a)	Consists of the corresponding line items in our consolidated statements of income.

(b)	2012 and 2011 amounts primarily represent income from KMP’s FTC Natural Gas Pipelines disposal group, net of tax.

(c)	On May 25, 2012, we began recognizing income from our investment in EPB, and we received in the third quarter the full distribution for the second quarter as we were the holder of record as of July 31, 2012.

---

(d)	2012 and 2011 amounts include $7 million and $24 million, respectively, associated with KMP’s FTC Natural Gas Pipelines disposal group.

(e)	2013 and 2012 amounts exclude $65 million and $200 million, respectively, non-cash impairment charges on our investment in NGPL Holdco LLC. 2012 and 2011 amounts include $70 million and $87 million, respectively, associated with KMP’s FTC Natural Gas Pipelines disposal group.

(f)	Consists of the difference between cash available for distributions and the distributions received from our equity investments.

(g)

Consists of items such as hedge ineffectiveness, legal and environmental reserves, gain/loss on sale, insurance proceeds from casualty losses, and asset acquisition and/or disposition expenses. 2013 amount includes (i) $558 million gain on remeasurement of previously held equity interest in Eagle Ford Gathering to fair value; (ii) $177 million for legal reserves related to the rate case and other litigation and environmental matters on KMP’s west coast Products Pipelines; and (iii) $140 million, net of tax, gain on the sale of Express. 2011 amount includes (i) $167 million non-cash loss on remeasurement of KMP’s previously held equity interest in KinderHawk to fair value; (ii) $234 million increase to KMP’s legal reserve attributable to rate case and other litigation involving KMP’s products pipelines on the West Coast and (iii) KMP’s portion ($87 million) of a $100 million special bonus expense for non-senior employees, which KMP is required to recognize in accordance with GAAP. However, KMP had no obligation, nor did it pay any amounts in respect to such bonuses. The cost of the $100 million special bonus to non-senior employees was not borne by our Class P shareholders. In May of 2011 we paid for the $100 million of special bonuses, which included the amounts allocated to KMP, using $64 million (after-tax) in available earnings and profits reserved for this purpose and not paid in dividends to our Class A shareholders.

(h)

2013 and 2012 amounts include NGPL Holdco LLC non-cash impairment charges discussed above in footnote (e). 2012 amount also represents pre-tax (income) expense associated with the EP acquisition and EP Energy sale including (i) $160 million in employee severance, retention and bonus costs; (ii) $87 million of accelerated EP stock based compensation allocated to the post-combination period under applicable GAAP rules; (iii) $37 million in advisory fees; (iv) $108 million write-off (primarily due to repayments) or amortization of capitalized financing fees; (v) $68 million for legal fees and reserves, net of recoveries; and (vi) $29 million benefit associated with pension income.

(i)	2012 amounts represent an increase in our state effective tax rate as a result of the EP acquisition.

(j)	We define sustaining capital expenditures as capital expenditures which maintain the capacity or throughput of an asset.

(k)	Declared distribution multiplied by limited partner units outstanding on the applicable record date less units owned by us. Includes distributions on KMR shares. KMP must generate the cash to cover the distributions on the KMR shares, but those distributions are paid in additional shares and KMP retains the cash. We do not have access to that cash.

(l)	Declared distribution multiplied by EPB limited partner units outstanding on the applicable record date less units owned by us.

(m)	Consists of items such as timing and other differences between earnings and cash, KMP’s and EPB’s cash flow in excess of their distributions, non-cash purchase accounting adjustments related to the EP acquisition and going private transaction primarily associated with non-cash amortization of debt fair value adjustments, and in the year ended 2011 KMP’s crude hedges.

---