Investor Frequently Asked Questions

- For more information on Kinder Morgan please refer to our investor presentations and our SEC filings
-

The following description is intended for informational purposes only and should not be construed as offering tax advice; consult your tax advisor for more information.

►  What is Kinder Morgan's strategy?
Kinder Morgan is the largest midstream and the third largest energy company in North America. We own an interest in or operate approximately 80,000 miles of pipelines and 180 terminals. Our pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and our terminals store petroleum products and chemicals and handle such products as ethanol, coal, petroleum coke and steel.
- Focused on stable fee-based assets that are core to North American energy infrastructure with market-leading positions in each segment of our business
- Leverage our asset footprint to seek attractive capital investment opportunities, both expansion and acquisition
- For more information on Kinder Morgan please refer to our investor presentations, and our SEC filings

►  How does Kinder Morgan make money?
Kinder Morgan is focused on cash flow and makes its money typically by charging fees for use of the capacity of its pipelines, terminals and other assets; these assets are concentrated in the two master limited partnerships, or MLPs;
- Kinder Morgan Energy Partners, L.P. (KMP) is a diversified midstream energy MLP owning principally fee-based pipeline and terminal assets that transport and or store natural gas, refined products (such as gasoline, jet fuel and diesel), bulk products (such as coal, petcoke and steel), crude oil and carbon dioxide, as well as other products
- El Paso Pipeline Partners, L.P. (EPB) is a pure-play natural gas pipeline MLP focused on fee-based interstate natural gas transportation and liquefied natural gas (LNG) terminals
- Kinder Morgan, Inc. (KMI) is a corporation that owns principally the general partners, or GPs, of the two MLPs; it also owns approximately 11% of the KMP common units/KMR shares and 42% of the EPB common units outstanding and receives cash distributions/share dividends, as applicable, on those outstanding interests

►  What are all of the equity securities within the Kinder Morgan family?

There are 4 publicly traded equities within the Kinder Morgan family:
-   Kinder Morgan, Inc. (KMI, NYSE)
-   Kinder Morgan Energy Partners, L.P. (KMP, NYSE)
-   Kinder Morgan Management, LLC (KMR, NYSE)
-   El Paso Pipeline Partners, L.P. (EPB, NYSE)


►  What type of equity interest do the different Kinder Morgan securities represent, and       what form of yield does each pay out?
The equity securities of Kinder Morgan represent different ways of participating in the cash flow generated by the two MLPs, each offering unique dividend and tax characteristics, as described below:
- KMI is structured as a C-corp, and pays a regular cash dividend to its shareholders (qualified)
- KMP is structured as an MLP, and pays a cash distribution to its limited partners, or LPs
- KMR is structured as an LLC (structured as a C-corp for federal income tax purposes) and pays an in-kind share dividend to its shareholders (based on the KMP cash distribution, but in additional shares of KMR)
- EPB is structured as an MLP, and pays a cash distribution to its LPs

►  What is an "MLP"?
An MLP, or master limited partnership, is a legal entity that generally has two types of partners: limited partners ("LPs"), which are represented by partnership interests referred to as units, and a general partner ("GP"), which operates / manages the business of the partnership on behalf of all partners. Kinder Morgan Energy Partners, L.P. and El Paso Pipeline Partners, L.P. are both MLPs, each with LPs and a GP:
- The LP interests of Kinder Morgan Energy Partners, L.P. are represented by the KMP common units and KMR shares
- The LP interests of El Paso Pipeline Partners, L.P. are represented by the EPB common units
- The GP interests of both KMP and EPB are owned by Kinder Morgan, Inc. (whose shareholders are represented by KMI)

►  What tax documents are attributable to the different Kinder Morgan securities?
The Kinder Morgan equity securities have different levels of annual tax reporting:
- KMI shareholders receive an annual 1099 pertaining to their dividend income (no K-1 or UBTI)
- KMP unitholders receive an annual K-1 detailing their portion of partnership income/deductions
- KMR shareholders do not receive any annual tax document (no K-1 or UBTI)
- EPB unitholders receive an annual K-1 detailing their portion of partnership income/deductions

►  When did each Kinder Morgan entity begin trading?
- Kinder Morgan, Inc. IPO on February 10, 2011 under ticker symbol "KMI"
- Kinder Morgan Energy Partners, L.P. began trading February 18, 1997 under ticker symbol "KMP" (predecessor IPO July 30, 1992 under ticker symbol "ENP")
- Kinder Morgan Management, LLC IPO on May 14, 2001 under ticker symbol "KMR"
- El Paso Pipeline Partners, L.P. IPO on November 15, 2007 under ticker symbol "EPB"

►  Can I have an investor packet sent to me?

Yes, you can request an investor information packet by following these links (by entity):
-   KMI investor kit
-   KMP / KMR investor kit
-   EPB investor kit


►  Where can I sign up to automatically receive information updates?

You can sign up to automatically receive e-mail alerts at the following links (by entity):
-   KMI e-mail alerts
-   KMP / KMR e-mail alerts
-   EPB e-mail alerts


►  Which KM securities have had stock or unit splits?
Only KMP has had a split:
- KMP has had 2-for-1 unit splits in its history, one declared on 09/2/1997 and another declared on 07/19/2001

►  Who is Kinder Morgan's transfer agent and how can I contact them?

The transfer agent for all Kinder Morgan entities is Computershare, who can be contacted at Computershare transfer agent, or by phone (by entity):
-   KMI (800) 847-4351
-   KMP (800) 519-3111
-   KMR (877) 373-6374
-   EPB (888) 417-4835


►  What is Kinder Morgan's fiscal year-end?

Our fiscal year (for all entities) follows the calendar year; the first quarter ends March 31, second quarter ends June 30, third quarter ends September 30, and fourth quarter ends December 31.


►  Do any of the Kinder Morgan entities have a dividend / distribution reinvestment plan       (DRIP)?

No, none of the Kinder Morgan entities offer a DRIP; however, because KMR's dividend is automatically paid in additional shares of KMR it effectively functions as a DRIP.


►  Does Kinder Morgan offer a direct investment program?

No, all securities of Kinder Morgan must be bought through a broker.


►  Which securities generate a K-1?

K-1s are only issued to unitholders of KMP and EPB; no K-1 is issued to shareholders of KMI or KMR.


►  How can I get my K-1, and who can I call to discuss estate and or tax questions, or to       correct information, relating to my K-1?
As noted above, K-1s are only issued to holders of KMP and EPB; copies of K-1s and K-1 support are available as follows (by entity):
- KMP by phone at (800) 232 1627, or on the internet at KMP K-1 support
- EPB by phone at (866) 709-8274, or on the internet at EPB K-1 support K-1 support is primarily a service offered to provide K-1s, correct information, answer questions such as general partnership information, website access, etc. This support should not be relied on for tax advice; please consult a tax advisor for more information.

►  In what states do I have to report income tax pursuant to the K-1?
Unitholders owe tax on their share of income allocable to each state in which an MLP operates:
- Practically, after the MLP’s income is divided among all partners and all states, and depreciation and other deductions applied, each  unitholder’s income in each state may be too small to tax, except for those with large holdings.
- Due to frequent tax law changes by the states, you should consult your tax advisor concerning states for which you are required to report income taxes. If you are required to file state income tax returns, you should report your share of partnership tax items attributable to the particular state on the state tax return.
- Our K-1s are sent to holders of KMP and EPB and include a schedule of states in which we operate and the amount of tax items attributable to each state. Please see our sample KMP K-1 and sample EPB K-1 for sample state schedules.

►  How can I get my 1099 for KMI or KMR?

You only receive a 1099 for KMR if you sell; if you own KMI or KMR shares through a broker, please contact your brokerage firm for your 1099. If you own KMI or KMR shares directly, please contact Computershare to request your 1099 (contact number by entity):
-   KMI (800) 847-4351
-   KMR (877) 373-6374


►  Why does KMR pay an in-kind share dividend?

KMR was created in 2001 to offer another way to effectively invest in Kinder Morgan Energy Partners, L.P.; by virtue of paying its dividend in additional shares, KMR offers the following benefits:
-   No annual K-1 is issued but rather a 1099 when shares are sold
-   No tax withholding for domestic or foreign investors
-   No UBTI concerns
-   Automatic dividend reinvestment


►  How do I calculate the dividend for KMR?
KMR's dividend is based on KMP's cash LP distribution, but paid in additional shares instead of cash:
- The KMR dividend is calculated by dividing the declared KMP quarterly cash distribution per unit by the average closing price of KMR for the 10 days preceding the ex-dividend date
- The resulting fraction represents the amount of new KMR shares payable for every whole KMR share owned
For example:
- $1.29 (declared KMP distribution per unit for 4Q 2012) ÷ $82.294 (average KMR closing price Jan 14-28 of 2012) = 0.015676. The 4Q 2012 dividend for a KMR shareholder who owns 1,000 shares would be 0.015676 x 1,000, or 15.676 shares.
For more information please refer to KMP's and KMR's regular 10-Q and 10-K reports, which are filed with the SEC.

►  How do I calculate KMR's dividend yield?
KMR's dividend is based on KMP's cash LP distribution, but paid in additional shares instead of cash; the KMR dividend yield is calculated by taking KMP's latest declared quarterly cash distribution, annualized (x 4) and dividing it by the KMR share price.

►  How are MLPs taxed?
The following is intended for informational purposes only and should not be construed as offering tax advice; consult your tax advisor for more information.
- Pass-Through – An MLP, like all partnerships, is a pass-through entity which means it passes on federally taxable income to its unitholders and pays no federal income tax itself.
- Allocated Income – Each unitholder is allocated an allocable share of the MLP’s income, gains, losses, and credits (reported on K-1s). The unitholder generally pays ordinary tax on this allocated net income.
- Distributions – are generally considered a “return of capital” and are not taxed when received. Tax on your distributions is deferred until you sell your units or until your adjusted basis reaches zero. If your basis reaches zero, future cash distributions will be taxed as capital gains in the year received.
- Basis – Your units’ initial basis is equal to the amount paid to purchase your units. Cash distributions reduce your basis, and your share of taxable partnership income (after deductions) increases your basis.
- Passive Loss – A unitholder’s K-1 will state his share of partnership income, gain, loss, deductions, and credits. If the result is net income, the unitholder pays tax on it at his individual tax rate. If the result is a net loss, it is considered a “passive loss” and may be carried forward and used to offset future income from the same partnership. This passive loss may not be used to offset income from other sources.
- Tax Deferred Distribution – Often you hear someone say that “80% of the MLP’s distribution is tax-deferred.” As long as your distribution is less than your basis, that distribution is 100% tax-deferred. What they mean is your share of the MLP’s net taxable income equals 20% of the tax-deferred cash distribution. This percentage is just an example and your actual taxable income may be different. Further, when looking at the cumulative tax shield for a partnership, you should take into account passive loss carry forwards.
- Gain on Sale – When you sell your units, your taxable gain equals the difference between the sales price and your adjusted basis. The gain resulting from basis reductions due to depreciation allocation (as well as certain other items) is taxed at ordinary income rates (this is called “recapture”). The rest of the gain is taxed at capital gains rates.

►  How do I update my address?
To update your K-1 information (KMP & EPB only), contact the K-1 center as follows (by entity):
-   KMP by phone at (800) 232 1627, or on the internet at KMP K-1 support
-   EPB by phone at (866) 709-8274, or on the internet at EPB K-1 support
To update your contact information for KMI or KMR please speak to your broker, or, if you own your shares directly, please contact Computershare at (800) 847-4351.