Delaware
|
76-0380342
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
Page
Number
|
||
PART
I. FINANCIAL INFORMATION
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||
Item
1.
|
3
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|
3
|
||
4
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||
5
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||
6
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||
Item
2.
|
46
|
|
46
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||
46
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||
47
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||
61
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||
67
|
||
67
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||
Item
3.
|
69
|
|
Item
4.
|
69
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PART
II. OTHER INFORMATION
|
||
Item
1.
|
70
|
|
Item
1A.
|
70
|
|
Item
2.
|
70
|
|
Item
3.
|
70
|
|
Item
4.
|
70
|
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Item
5.
|
70
|
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Item
6.
|
71
|
|
72
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Revenues
|
||||||||||||||||
Natural
gas sales
|
$ | 686.2 | $ | 2,183.3 | $ | 2,291.8 | $ | 6,369.2 | ||||||||
Services
|
690.2 | 700.2 | 2,003.7 | 2,053.7 | ||||||||||||
Product
sales and other
|
284.3 | 349.3 | 797.0 | 1,025.9 | ||||||||||||
Total
Revenues
|
1,660.7 | 3,232.8 | 5,092.5 | 9,448.8 | ||||||||||||
Operating
Costs, Expenses and Other
|
||||||||||||||||
Gas
purchases and other costs of sales
|
665.2 | 2,179.4 | 2,240.5 | 6,405.7 | ||||||||||||
Operations
and maintenance
|
280.3 | 353.5 | 797.6 | 948.1 | ||||||||||||
Depreciation,
depletion and amortization
|
202.9 | 166.8 | 616.2 | 490.5 | ||||||||||||
General
and administrative
|
83.7 | 73.1 | 238.8 | 222.7 | ||||||||||||
Taxes,
other than income taxes
|
36.4 | 48.0 | 98.8 | 147.0 | ||||||||||||
Other
expense (income)
|
(14.5 | ) | 4.1 | (18.1 | ) | 1.3 | ||||||||||
Total
Operating Costs, Expenses and Other
|
1,254.0 | 2,824.9 | 3,973.8 | 8,215.3 | ||||||||||||
Operating
Income
|
406.7 | 407.9 | 1,118.7 | 1,233.5 | ||||||||||||
Other
Income (Expense)
|
||||||||||||||||
Earnings
from equity investments
|
59.8 | 34.6 | 139.9 | 118.5 | ||||||||||||
Amortization
of excess cost of equity investments
|
(1.4 | ) | (1.4 | ) | (4.3 | ) | (4.3 | ) | ||||||||
Interest,
net
|
(103.0 | ) | (98.3 | ) | (296.2 | ) | (293.8 | ) | ||||||||
Other,
net
|
12.9 | 4.3 | 43.8 | 30.5 | ||||||||||||
Total
Other Income (Expense)
|
(31.7 | ) | (60.8 | ) | (116.8 | ) | (149.1 | ) | ||||||||
Income
from Continuing Operations Before Income Taxes
|
375.0 | 347.1 | 1,001.9 | 1,084.4 | ||||||||||||
Income
Taxes
|
(11.3 | ) | (14.2 | ) | (42.8 | ) | (35.8 | ) | ||||||||
Income
from Continuing Operations
|
363.7 | 332.9 | 959.1 | 1,048.6 | ||||||||||||
Discontinued
Operations (Note 8):
|
||||||||||||||||
Adjustment
to gain on disposal of North System
|
- | - | - | 1.3 | ||||||||||||
Income
from Discontinued Operations
|
- | - | - | 1.3 | ||||||||||||
Net
Income
|
363.7 | 332.9 | 959.1 | 1,049.9 | ||||||||||||
Net
Income attributable to Noncontrolling Interests
|
(4.2 | ) | (3.1 | ) | (11.9 | ) | (11.2 | ) | ||||||||
Net
Income attributable to Kinder Morgan Energy Partners, L.P.
|
$ | 359.5 | $ | 329.8 | $ | 947.2 | $ | 1,038.7 | ||||||||
Calculation
of Limited Partners’ interest in Net Income
|
||||||||||||||||
Attributable
to Kinder Morgan Energy Partners, L.P.:
|
||||||||||||||||
Income
from Continuing Operations
|
$ | 359.5 | $ | 329.8 | $ | 947.2 | $ | 1,037.4 | ||||||||
Less:
General Partner’s interest
|
(236.2 | ) | (205.6 | ) | (692.7 | ) | (588.9 | ) | ||||||||
Limited
Partners’ interest
|
123.3 | 124.2 | 254.5 | 448.5 | ||||||||||||
Add:
Limited Partners’ interest in Discontinued Operations
|
- | - | - | 1.3 | ||||||||||||
Limited
Partners’ interest in Net Income
|
$ | 123.3 | $ | 124.2 | $ | 254.5 | $ | 449.8 | ||||||||
Limited
Partners’ Net Income per Unit:
|
||||||||||||||||
Income
from Continuing Operations
|
$ | 0.43 | $ | 0.48 | $ | 0.92 | $ | 1.76 | ||||||||
Income
from Discontinued Operations
|
- | - | - | - | ||||||||||||
Net
Income
|
$ | 0.43 | $ | 0.48 | $ | 0.92 | $ | 1.76 | ||||||||
Weighted
average number of units used in computation of Limited Partners’ Net
Income per unit
|
286.6 | 258.8 | 277.9 | 255.5 | ||||||||||||
Per
unit cash distribution declared
|
$ | 1.05 | $ | 1.02 | $ | 3.15 | $ | 2.97 |
September 30,
2009
|
December 31,
2008
|
|||||||
ASSETS
|
||||||||
Current
Assets
|
||||||||
Cash
and cash equivalents
|
$ | 168.8 | $ | 62.5 | ||||
Restricted
deposits
|
10.1 | - | ||||||
Accounts,
notes and interest receivable, net
|
683.2 | 987.9 | ||||||
Inventories
|
56.6 | 44.2 | ||||||
Gas
imbalances
|
15.7 | 14.1 | ||||||
Gas
in underground storage
|
51.9 | - | ||||||
Fair
value of derivative contracts
|
24.4 | 115.3 | ||||||
Other
current assets
|
20.8 | 20.4 | ||||||
Total
Current Assets
|
1,031.5 | 1,244.4 | ||||||
Property,
plant and equipment, net
|
13,873.2 | 13,241.4 | ||||||
Investments
|
2,555.7 | 954.3 | ||||||
Notes
receivable
|
189.9 | 178.1 | ||||||
Goodwill
|
1,097.6 | 1,058.9 | ||||||
Other
intangibles, net
|
199.3 | 205.8 | ||||||
Fair
value of derivative contracts
|
411.9 | 796.0 | ||||||
Deferred
charges and other assets
|
195.5 | 206.9 | ||||||
Total
Assets
|
$ | 19,554.6 | $ | 17,885.8 | ||||
LIABILITIES
AND PARTNERS’ CAPITAL
|
||||||||
Current
Liabilities
|
||||||||
Current
portion of debt
|
$ | 155.6 | $ | 288.7 | ||||
Cash
book overdrafts
|
33.2 | 42.8 | ||||||
Accounts
payable
|
411.4 | 855.6 | ||||||
Accrued
interest
|
91.0 | 172.3 | ||||||
Accrued
taxes
|
87.2 | 51.9 | ||||||
Deferred
revenues
|
64.9 | 41.1 | ||||||
Gas
imbalances
|
8.2 | 12.4 | ||||||
Fair
value of derivative contracts
|
198.3 | 129.5 | ||||||
Accrued
other current liabilities
|
123.9 | 187.8 | ||||||
Total
Current Liabilities
|
1,173.7 | 1,782.1 | ||||||
Long-Term
Liabilities and Deferred Credits
|
||||||||
Long-term
debt
|
||||||||
Outstanding
|
10,247.4 | 8,274.9 | ||||||
Value
of interest rate swaps
|
574.6 | 951.3 | ||||||
Total
Long-term debt
|
10,822.0 | 9,226.2 | ||||||
Deferred
revenues
|
11.8 | 12.9 | ||||||
Deferred
income taxes
|
200.3 | 178.0 | ||||||
Asset
retirement obligations
|
84.1 | 74.0 | ||||||
Fair
value of derivative contracts
|
292.9 | 92.2 | ||||||
Other
long-term liabilities and deferred credits
|
367.0 | 404.1 | ||||||
Total
Long-Term Liabilities and Deferred Credits
|
11,778.1 | 9,987.4 | ||||||
Total
Liabilities
|
12,951.8 | 11,769.5 | ||||||
Commitments
and Contingencies (Notes 4 and 10)
|
||||||||
Partners’
Capital
|
||||||||
Common
Units
|
3,874.1 | 3,458.9 | ||||||
Class
B Units
|
82.7 | 94.0 | ||||||
i-Units
|
2,658.9 | 2,577.1 | ||||||
General
Partner
|
215.9 | 203.3 | ||||||
Accumulated
other comprehensive loss
|
(306.2 | ) | (287.7 | ) | ||||
Total
Kinder Morgan Energy Partners, L.P. Partners’ Capital
|
6,525.4 | 6,045.6 | ||||||
Noncontrolling
interests
|
77.4 | 70.7 | ||||||
Total
Partners’ Capital
|
6,602.8 | 6,116.3 | ||||||
Total
Liabilities and Partners’ Capital
|
$ | 19,554.6 | $ | 17,885.8 |
Nine
Months Ended
September
30,
|
||||||||
2009
|
2008
|
|||||||
Cash
Flows From Operating Activities
|
||||||||
Net
Income
|
$ | 959.1 | $ | 1,049.9 | ||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Depreciation,
depletion and amortization
|
616.2 | 490.5 | ||||||
Amortization
of excess cost of equity investments
|
4.3 | 4.3 | ||||||
Income
from the allowance for equity funds used during
construction
|
(22.6 | ) | - | |||||
Income
from the sale or casualty of property, plant and equipment and other net
assets
|
(18.1 | ) | (13.0 | ) | ||||
Earnings
from equity investments
|
(139.9 | ) | (118.5 | ) | ||||
Distributions
from equity investments
|
153.1 | 115.3 | ||||||
Proceeds
from termination of interest rate swap agreements
|
144.4 | - | ||||||
Changes
in components of working capital:
|
||||||||
Accounts
receivable
|
227.3 | (13.6 | ) | |||||
Other
current assets
|
(52.7 | ) | 11.1 | |||||
Inventories
|
(11.8 | ) | (6.8 | ) | ||||
Accounts
payable
|
(346.2 | ) | (90.6 | ) | ||||
Accrued
interest
|
(81.3 | ) | (65.3 | ) | ||||
Accrued
liabilities
|
(59.0 | ) | 68.4 | |||||
Accrued
taxes
|
35.4 | 18.9 | ||||||
Rate
reparations, refunds and other litigation reserve
adjustments
|
(15.5 | ) | (10.7 | ) | ||||
Other,
net
|
(15.7 | ) | (6.8 | ) | ||||
Net
Cash Provided by Operating Activities
|
1,377.0 | 1,433.1 | ||||||
Cash
Flows From Investing Activities
|
||||||||
Acquisitions
of assets
|
(27.5 | ) | (9.0 | ) | ||||
Repayments
for Trans Mountain Pipeline
|
- | 23.4 | ||||||
Repayments
from customers
|
109.6 | - | ||||||
Capital
expenditures
|
(1,075.4 | ) | (1,914.4 | ) | ||||
Sale
or casualty of property, plant and equipment, and other net assets net of
removal costs
|
9.1 | 48.8 | ||||||
(Investments
in) Net proceeds from margin deposits
|
(13.2 | ) | 40.3 | |||||
Contributions
to equity investments
|
(1,619.1 | ) | (341.6 | ) | ||||
Distributions
from equity investments
|
- | 89.1 | ||||||
Natural
gas stored underground and natural gas liquids line-fill
|
- | (2.5 | ) | |||||
Net
Cash Used in Investing Activities
|
(2,616.5 | ) | (2,065.9 | ) | ||||
Cash
Flows From Financing Activities
|
||||||||
Issuance
of debt
|
5,871.9 | 6,575.7 | ||||||
Payment
of debt
|
(4,025.4 | ) | (5,293.8 | ) | ||||
Repayments
from related party
|
2.5 | 1.8 | ||||||
Debt
issue costs
|
(12.3 | ) | (11.2 | ) | ||||
(Decrease)
Increase in cash book overdrafts
|
(9.6 | ) | 51.7 | |||||
Proceeds
from issuance of common units
|
815.5 | 384.3 | ||||||
Contributions
from noncontrolling interests
|
11.0 | 6.7 | ||||||
Distributions
to partners and noncontrolling interests:
|
||||||||
Common
units
|
(599.2 | ) | (501.9 | ) | ||||
Class
B units
|
(16.7 | ) | (15.2 | ) | ||||
General
Partner
|
(680.3 | ) | (557.6 | ) | ||||
Noncontrolling
interests
|
(16.3 | ) | (13.9 | ) | ||||
Other,
net
|
(0.3 | ) | 3.1 | |||||
Net
Cash Provided by Financing Activities
|
1,340.8 | 629.7 | ||||||
Effect
of exchange rate changes on cash and cash equivalents
|
5.0 | (3.0 | ) | |||||
Increase
(Decrease) in Cash and Cash Equivalents
|
106.3 | (6.1 | ) | |||||
Cash
and Cash Equivalents, beginning of period
|
62.5 | 58.9 | ||||||
Cash
and Cash Equivalents, end of period
|
$ | 168.8 | $ | 52.8 | ||||
Noncash
Investing and Financing Activities
|
||||||||
Assets
acquired by the assumption or incurrence of liabilities
|
$ | 3.7 | $ | 3.4 | ||||
Assets
acquired by the issuance of units
|
$ | 5.0 | $ | 116.0 | ||||
Supplemental
Disclosures of Cash Flow Information
|
||||||||
Cash
paid during the period for interest (net of capitalized
interest)
|
$ | 387.8 | $ | 352.3 | ||||
Cash
paid during the period for income taxes
|
$ | 2.3 | $ | 35.0 |
Products
Pipelines
|
Natural Gas
Pipelines
|
CO
2
|
Terminals
|
Kinder Morgan
Canada
|
Total
|
|||||||||||||||||||
Balance
as of December 31, 2008
|
$ | 263.2 | $ | 288.4 | $ | 46.1 | $ | 257.6 | $ | 203.6 | $ | 1,058.9 | ||||||||||||
Acquisitions
and purchase price adjustments.
|
- | - | - | 10.6 | - | 10.6 | ||||||||||||||||||
Currency
translation adjustments
|
- | - | - | - | 28.1 | 28.1 | ||||||||||||||||||
Balance
as of September 30, 2009
|
$ | 263.2 | $ | 288.4 | $ | 46.1 | $ | 268.2 | $ | 231.7 | $ | 1,097.6 |
September 30,
2009
|
December 31,
2008
|
|||||||
Customer
relationships, contracts and agreements
|
||||||||
Gross
carrying amount
|
$ | 247.6 | $ | 246.0 | ||||
Accumulated
amortization
|
(61.2 | ) | (51.1 | ) | ||||
Net
carrying amount
|
186.4 | 194.9 | ||||||
Technology-based
assets, lease value and other
|
||||||||
Gross
carrying amount
|
15.7 | 13.3 | ||||||
Accumulated
amortization
|
(2.8 | ) | (2.4 | ) | ||||
Net
carrying amount
|
12.9 | 10.9 | ||||||
Total
Other intangibles, net
|
$ | 199.3 | $ | 205.8 |
September 30,
2009
|
December 31,
2008
|
|||||||
Common
units
|
199,876,437 | 182,969,427 | ||||||
Class
B units
|
5,313,400 | 5,313,400 | ||||||
i-units
|
83,754,953 | 77,997,906 | ||||||
Total
limited partner units
|
288,944,790 | 266,280,733 |
Three
Months Ended September 30,
|
||||||||||||||||||||||||
2009
|
2008
|
|||||||||||||||||||||||
KMP
|
Noncontrolling
interests
|
Total
|
KMP
|
Noncontrolling
interests
|
Total
|
|||||||||||||||||||
Beginning
Balance
|
$ | 6,267.7 | $ | 74.3 | $ | 6,342.0 | $ | 3,185.7 | $ | 42.5 | $ | 3,228.2 | ||||||||||||
Units
issued as consideration in the acquisition of assets
|
- | - | - | 116.0 | - | 116.0 | ||||||||||||||||||
Units
issued for cash
|
145.9 | - | 145.9 | (0.2 | ) | - | (0.2 | ) | ||||||||||||||||
Distributions
paid in cash
|
(448.1 | ) | (5.5 | ) | (453.6 | ) | (377.2 | ) | (5.0 | ) | (382.2 | ) | ||||||||||||
Express/Jet
Fuel Pipelines acquisition
|
- | - | - | 77.7 | 2.0 | 79.7 | ||||||||||||||||||
KMI
going-private transaction expenses
|
1.5 | - | 1.5 | 7.2 | - | 7.2 | ||||||||||||||||||
Cash
contributions
|
- | 2.4 | 2.4 | - | 0.8 | 0.8 | ||||||||||||||||||
Comprehensive
income (loss):
|
||||||||||||||||||||||||
Net
Income
|
359.5 | 4.2 | 363.7 | 329.8 | 3.1 | 332.9 | ||||||||||||||||||
Other
comprehensive loss:
|
||||||||||||||||||||||||
Change
in fair value of derivatives utilized for hedging purposes
|
34.7 | 0.3 | 35.0 | 1,291.0 | 13.2 | 1,304.2 | ||||||||||||||||||
Reclassification
of change in fair value of derivatives to net
income
|
20.8 | 0.2 | 21.0 | 201.7 | 2.0 | 203.7 | ||||||||||||||||||
Foreign
currency translation adjustments
|
143.0 | 1.5 | 144.5 | (69.6 | ) | (0.6 | ) | (70.2 | ) | |||||||||||||||
Adjustments
to pension and other postretirement benefit plan
liabilities
|
0.4 | - | 0.4 | 0.7 | (0.1 | ) | 0.6 | |||||||||||||||||
Total
other comprehensive
|
198.9 | 2.0 | 200.9 | 1,423.8 | 14.5 | 1,438.3 | ||||||||||||||||||
Comprehensive
income
|
558.4 | 6.2 | 564.6 | 1,753.6 | 17.6 | 1,771.2 | ||||||||||||||||||
Ending
Balance
|
$ | 6,525.4 | $ | 77.4 | $ | 6,602.8 | $ | 4,762.8 | $ | 57.9 | $ | 4,820.7 |
Nine
Months Ended September 30,
|
||||||||||||||||||||||||
2009
|
2008
|
|||||||||||||||||||||||
KMP
|
Noncontrolling
interests
|
Total
|
KMP
|
Noncontrolling interests
|
Total
|
|||||||||||||||||||
Beginning
Balance
|
$ | 6,045.6 | $ | 70.7 | $ | 6,116.3 | $ | 4,435.7 | $ | 54.2 | $ | 4,489.9 | ||||||||||||
Units
issued as consideration pursuant to common unit compensation plan for
non-employee directors
|
0.2 | - | 0.2 | 0.3 | - | 0.3 | ||||||||||||||||||
Units
issued as consideration in the acquisition of assets
|
5.0 | - | 5.0 | 116.0 | - | 116.0 | ||||||||||||||||||
Units
issued for cash
|
815.1 | - | 815.1 | 383.8 | - | 383.8 | ||||||||||||||||||
Distributions
paid in cash
|
(1,296.2 | ) | (16.3 | ) | (1,312.5 | ) | (1,074.7 | ) | (13.9 | ) | (1,088.6 | ) | ||||||||||||
Trans
Mountain Pipeline acquisition
|
25.7 | 0.3 | 26.0 | 23.2 | 0.2 | 23.4 | ||||||||||||||||||
Express/Jet
Fuel Pipelines acquisition
|
(1.9 | ) | - | (1.9 | ) | 77.7 | 2.0 | 79.7 | ||||||||||||||||
Kinder
Morgan North 40 terminal land acquisition
|
(0.9 | ) | - | (0.9 | ) | - | - | - | ||||||||||||||||
KMI
going-private transaction expenses
|
4.3 | - | 4.3 | 7.2 | - | 7.2 | ||||||||||||||||||
Cash
contributions
|
- | 11.0 | 11.0 | - | 6.7 | 6.7 | ||||||||||||||||||
Other
adjustments
|
(0.2 | ) | - | (0.2 | ) | - | - | - | ||||||||||||||||
Comprehensive
income (loss):
|
||||||||||||||||||||||||
Net
Income
|
947.2 | 11.9 | 959.1 | 1,038.7 | 11.2 | 1,049.9 | ||||||||||||||||||
Other
comprehensive loss:
|
||||||||||||||||||||||||
Change
in fair value of derivatives utilized for hedging purposes
|
(265.9 | ) | (2.7 | ) | (268.6 | ) | (760.5 | ) | (7.8 | ) | (768.3 | ) | ||||||||||||
Reclassification
of change in fair value of derivatives to net
income
|
34.0 | 0.3 | 34.3 | 624.3 | 6.4 | 630.7 | ||||||||||||||||||
Foreign
currency translation adjustments
|
215.9 | 2.2 | 218.1 | (113.0 | ) | (1.1 | ) | (114.1 | ) | |||||||||||||||
Adjustments
to pension and other postretirement benefit plan
liabilities
|
(2.5 | ) | - | (2.5 | ) | 4.1 | - | 4.1 | ||||||||||||||||
Total
other comprehensive loss
|
(18.5 | ) | (0.2 | ) | (18.7 | ) | (245.1 | ) | (2.5 | ) | (247.6 | ) | ||||||||||||
Comprehensive
income
|
928.7 | 11.7 | 940.4 | 793.6 | 8.7 | 802.3 | ||||||||||||||||||
Ending
Balance
|
$ | 6,525.4 | $ | 77.4 | $ | 6,602.8 | $ | 4,762.8 | $ | 57.9 | $ | 4,820.7 |
Notional quantity
|
|
Derivatives
designated as hedging contracts
|
|
Crude
oil
|
26.4
million barrels
|
Natural
gas(a)
|
43.8
billion cubic feet
|
Derivatives
not designated as hedging contracts
|
|
Crude
oil
|
0.1
million barrels
|
Natural
gas(a)
|
1.5
billion cubic feet
|
(a)
|
Notional
quantities are shown net.
|
Derivatives in fair value hedging
relationships
|
Location of gain/(loss) recognized in income on
derivative
|
Amount of gain/(loss) recognized in income on
derivative(a)
|
Hedged items in fair value hedging
relationships
|
Location of gain/(loss) recognized in income on
related hedged item
|
Amount of gain/(loss) recognized in income on
related hedged items(a)
|
|||||||||||||||||
Three
Months
|
Three
Months
|
|||||||||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||||||||
Interest
rate swap agreements
|
Interest,
net – income/(expense)
|
$ | 108.5 | $ | 70.3 |
Fixed
rate debt
|
Interest,
net – income/(expense)
|
$ | (108.5 | ) | $ | (70.3 | ) | |||||||||
Total
|
$ | 108.5 | $ | 70.3 |
Total
|
$ | (108.5 | ) | $ | (70.3 | ) | |||||||||||
Nine
Months
|
Nine
Months
|
|||||||||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||||||||
Interest
rate swap agreements
|
Interest,
net – income/(expense)
|
$ | (361.3 | ) | $ | 61.2 |
Fixed
rate debt
|
Interest,
net – income/(expense)
|
$ | 361.3 | $ | (61.2 | ) | |||||||||
Total
|
$ | (361.3 | ) | $ | 61.2 |
Total
|
$ | 361.3 | $ | (61.2 | ) |
(a)
|
Amounts
reflect the change in the fair value of interest rate swap agreements and
the change in the fair value of the associated fixed rate debt which
exactly offset each other as a result of no hedge
ineffectiveness. Amounts do not reflect the impact on interest
expense from the interest rate swap agreements under which we pay variable
rate interest and receive fixed rate
interest.
|
Derivatives in cash flow hedging
relationships
|
Amount of gain/(loss) recognized in OCI on
derivative (effective portion)
|
Location of gain/(loss) reclassified from
Accumulated OCI into income (effective portion)
|
Amount of gain/(loss) reclassified from
Accumulated OCI into income (effective portion)
|
Location of gain/(loss) recognized in income on
derivative (ineffective portion and amount excluded from effectiveness
testing)
|
Amount of gain/(loss) recognized in income on
derivative (ineffective portion and amount excluded from effectiveness
testing)
|
|||||||||||||||||||||
Three
Months
|
Three
Months
|
Three
Months
|
||||||||||||||||||||||||
2009
|
2008
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||||||||||
Energy
commodity derivative contracts
|
$ | 35.0 | $ | 1,304.2 |
Revenues-natural
gas sales
|
$ | 4.8 | $ | (1.6 | ) |
Revenues
|
$ | (5.4 | ) | $ | - | ||||||||||
Revenues-product
sales and other
|
(53.5 | ) | (215.4 | ) | ||||||||||||||||||||||
Gas
purchases and other costs of sales
|
27.7 | 13.3 |
Gas
purchases and other costs of sales
|
- | - | |||||||||||||||||||||
Total
|
$ | 35.0 | $ | 1,304.2 |
Total
|
$ | (21.0 | ) | $ | (203.7 | ) |
Total
|
$ | (5.4 | ) | $ | - | |||||||||
Nine
Months
|
Nine
Months
|
Nine
Months
|
||||||||||||||||||||||||
2009 | 2008 | 2009 | 2008 | 2009 | 2008 | |||||||||||||||||||||
Energy
commodity derivative contracts
|
$ | (268.6 | ) | $ | (768.3 | ) |
Revenues-natural
gas sales
|
$ | 11.3 | $ | (4.9 | ) |
Revenues
|
$ | (5.4 | ) | $ | - | ||||||||
Revenues-product
sales and other
|
(66.4 | ) | (598.2 | ) | ||||||||||||||||||||||
Gas
purchases and other costs of sales
|
20.8 | (27.6 | ) |
Gas
purchases and other costs of sales
|
- | (2.4 | ) | |||||||||||||||||||
Total
|
$ | (268.6 | ) | $ | (768.3 | ) |
Total
|
$ | (34.3 | ) | $ | (630.7 | ) |
Total
|
$ | (5.4 | ) | $ | (2.4 | ) |
Derivatives not designated as
hedging
contracts
|
Location of gain/(loss)
recognized
in income on derivative
|
Amount of gain/(loss)
recognized
in income on derivative
|
||||||||
Three
Months Ended September 30,
|
||||||||||
2009
|
2008
|
|||||||||
Energy
commodity derivative contracts
|
Gas
purchases and other costs of sales
|
$ | (0.8 | ) | $ | 12.2 | ||||
Total
|
$ | (0.8 | ) | $ | 12.2 | |||||
Nine
Months Ended
September
30,
|
||||||||||
2009
|
2008
|
|||||||||
Energy
commodity derivative contracts
|
Gas
purchases and other costs of sales
|
$ | (3.1 | ) | $ | (0.9 | ) | |||
Total
|
$ | (3.1 | ) | $ | (0.9 | ) |
Asset position
|
||||
Interest
rate swap agreements
|
$ | 344.8 | ||
Energy
commodity derivative contracts
|
91.5 | |||
Gross
exposure
|
436.3 | |||
Netting
agreement impact
|
(82.3 | ) | ||
Net
exposure
|
$ | 354.0 |
Credit
Ratings Downgraded(a)
|
Incremental
obligations
|
Cumulative
obligations(b)
|
||||||
One
notch to BBB-/Baa3
|
$ | 71.8 | $ | 116.9 | ||||
Two
notches to below BBB-/Baa3 (below investment grade)
|
$ | 63.9 | $ | 180.8 |
(a)
|
If
there are split ratings among the independent credit rating agencies, most
counterparties use the higher credit rating to determine our incremental
collateral obligations, while the remaining use the lower credit
rating. Therefore, a one notch downgrade to BBB-/Baa3 by one
agency would not trigger the entire $71.8 million incremental
obligation.
|
(b)
|
Includes
current posting at current rating.
|
|
▪
|
Level
1 Inputs—quoted prices (unadjusted) in active markets for identical assets
or liabilities that the reporting entity has the ability to access at the
measurement date;
|
|
▪
|
Level
2 Inputs—inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or
indirectly. If the asset or liability has a specified
(contractual) term, a Level 2 input must be observable for substantially
the full term of the asset or liability;
and
|
|
▪
|
Level
3 Inputs—unobservable inputs for the asset or liability. These
unobservable inputs reflect the entity’s own assumptions about the
assumptions that market participants would use in pricing the asset or
liability, and are developed based on the best information available in
the circumstances (which might include the reporting entity’s own
data).
|
Asset
fair value measurements using
|
||||||||||||||||
Total
|
Quoted
prices in
active
markets
for
identical
assets
(Level
1)
|
Significant
other
observable
inputs
(Level
2)
|
Significant
unobservable
inputs
(Level
3)
|
|||||||||||||
As
of September 30, 2009
|
||||||||||||||||
Energy
commodity derivative contracts(a)
|
$ | 91.5 | $ | 0.1 | $ | 22.7 | $ | 68.7 | ||||||||
Interest
rate swap agreements
|
344.8 | - | 344.8 | - | ||||||||||||
As
of December 31, 2008
|
||||||||||||||||
Energy
commodity derivative contracts(b)
|
$ | 164.2 | $ | 0.1 | $ | 108.9 | $ | 55.2 | ||||||||
Interest
rate swap agreements
|
747.1 | - | 747.1 | - |
Liability
fair value measurements using
|
||||||||||||||||
Total
|
Quoted
prices in
active
markets
for
identical
liabilities
(Level
1)
|
Significant
other
observable
inputs
(Level
2)
|
Significant
unobservable
inputs
(Level
3)
|
|||||||||||||
As
of September 30, 2009
|
||||||||||||||||
Energy
commodity derivative contracts(c)
|
$ | (387.8 | ) | $ | - | $ | (349.0 | ) | $ | (38.8 | ) | |||||
Interest
rate swap agreements
|
(103.4 | ) | - | (103.4 | ) | - | ||||||||||
As
of December 31, 2008
|
||||||||||||||||
Energy
commodity derivative contracts(d)
|
$ | (221.7 | ) | $ | - | $ | (210.6 | ) | $ | (11.1 | ) | |||||
Interest
rate swap agreements
|
- | - | - | - |
(a)
|
Level
1 consists primarily of NYMEX natural gas futures. Level 2
consists primarily of OTC West Texas Intermediate hedges and OTC natural
gas hedges that are settled on NYMEX. Level 3 consists
primarily of natural gas basis swaps and West Texas Intermediate
options.
|
(b)
|
Level
1 consists primarily of NYMEX natural gas futures. Level 2
consists primarily of OTC West Texas Intermediate hedges and OTC natural
gas hedges that are settled on NYMEX. Level 3 consists
primarily of West Texas Intermediate options and West Texas Sour
hedges.
|
(c)
|
Level
2 consists primarily of OTC West Texas Intermediate hedges and OTC natural
gas hedges that are settled on NYMEX. Level 3 consists primarily of West
Texas Sour hedges, natural gas basis swaps and West Texas Intermediate
options.
|
(d)
|
Level
2 consists primarily of OTC West Texas Intermediate
hedges. Level 3 consists primarily of natural gas basis swaps,
natural gas options and West Texas Intermediate
options.
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Derivatives-net
asset (liability)
|
||||||||||||||||
Beginning
of Period
|
$ | 24.0 | $ | (233.0 | ) | $ | 44.1 | $ | (100.3 | ) | ||||||
Realized
and unrealized net losses
|
2.7 | 133.4 | (19.1 | ) | (52.9 | ) | ||||||||||
Purchases
and settlements
|
3.2 | 19.0 | 4.9 | 72.6 | ||||||||||||
Transfers
in (out) of Level 3
|
- | - | - | - | ||||||||||||
End
of Period
|
$ | 29.9 | $ | (80.6 | ) | $ | 29.9 | $ | (80.6 | ) | ||||||
Change
in unrealized net losses relating to contracts still held at end of
period
|
$ | (0.1 | ) | $ | 138.5 | $ | (29.5 | ) | $ | (22.3 | ) |
September
30, 2009
|
December
31, 2008
|
|||||||||||||||
Carrying
Value
|
Estimated
Fair
Value
|
Carrying
Value
|
Estimated
Fair
Value
|
|||||||||||||
Total
Debt
|
$ | 10,403.0 | $ | 11,086.0 | $ | 8,563.6 | $ | 7,627.3 |
|
▪
|
Products
Pipelines— the transportation and terminaling of refined petroleum
products, including gasoline, diesel fuel, jet fuel and natural gas
liquids;
|
|
▪
|
Natural
Gas Pipelines—the sale, transport, processing, treating, storage and
gathering of natural gas;
|
|
▪
|
CO
2
—the
production and sale of crude oil from fields in the Permian Basin of West
Texas and the transportation and marketing of carbon dioxide used as a
flooding medium for recovering crude oil from mature oil
fields;
|
|
▪
|
Terminals—the
transloading and storing of refined petroleum products and dry and liquid
bulk products, including coal, petroleum coke, cement, alumina, salt and
other bulk chemicals; and
|
|
▪
|
Kinder
Morgan Canada—the transportation of crude oil and refined
products.
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Revenues
|
||||||||||||||||
Products
Pipelines
|
||||||||||||||||
Revenues
from external customers
|
$ | 216.7 | $ | 205.6 | $ | 611.6 | $ | 602.5 | ||||||||
Natural
Gas Pipelines
|
||||||||||||||||
Revenues
from external customers
|
838.8 | 2,359.4 | 2,751.2 | 6,916.6 | ||||||||||||
CO
2
|
||||||||||||||||
Revenues
from external customers
|
262.3 | 305.2 | 749.4 | 900.2 | ||||||||||||
Terminals
|
||||||||||||||||
Revenues
from external customers
|
282.8 | 306.0 | 814.2 | 886.4 | ||||||||||||
Intersegment
revenues
|
0.2 | 0.2 | 0.7 | 0.7 | ||||||||||||
Kinder
Morgan Canada
|
||||||||||||||||
Revenues
from external customers
|
60.1 | 56.6 | 166.1 | 143.1 | ||||||||||||
Total
segment revenues
|
1,660.9 | 3,233.0 | 5,093.2 | 9,449.5 | ||||||||||||
Less:
Total intersegment revenues
|
(0.2 | ) | (0.2 | ) | (0.7 | ) | (0.7 | ) | ||||||||
Total
consolidated revenues
|
$ | 1,660.7 | $ | 3,232.8 | $ | 5,092.5 | $ | 9,448.8 |
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Segment
earnings before depreciation, depletion, amortization and amortization of
excess cost of equity investments(a)
|
||||||||||||||||
Products
Pipelines(b)
|
$ | 167.9 | $ | 130.4 | $ | 468.3 | $ | 408.7 | ||||||||
Natural
Gas Pipelines
|
197.8 | 185.0 | 560.7 | 555.7 | ||||||||||||
CO
2
|
193.2 | 203.3 | 563.3 | 619.7 | ||||||||||||
Terminals
|
155.2 | 120.1 | 432.8 | 386.3 | ||||||||||||
Kinder
Morgan Canada
|
47.7 | 39.6 | 113.9 | 103.2 | ||||||||||||
Total
segment earnings before DD&A
|
761.8 | 678.4 | 2,139.0 | 2,073.6 | ||||||||||||
Total
segment depreciation, depletion and amortization
|
(202.9 | ) | (166.8 | ) | (616.2 | ) | (490.5 | ) | ||||||||
Total
segment amortization of excess cost of investments
|
(1.4 | ) | (1.4 | ) | (4.3 | ) | (4.3 | ) | ||||||||
General
and administrative expenses
|
(83.7 | ) | (73.1 | ) | (238.8 | ) | (222.7 | ) | ||||||||
Unallocable
interest expense, net of interest income
|
(107.8 | ) | (100.5 | ) | (313.7 | ) | (298.1 | ) | ||||||||
Unallocable
income tax expense
|
(2.3 | ) | (3.7 | ) | (6.9 | ) | (8.1 | ) | ||||||||
Total
consolidated net income
|
$ | 363.7 | $ | 332.9 | $ | 959.1 | $ | 1,049.9 |
September 30,
2009
|
December 31,
2008
|
|||||||
Assets
|
||||||||
Products
Pipelines
|
$ | 4,273.4 | $ | 4,183.0 | ||||
Natural
Gas Pipelines
|
7,043.1 | 5,535.9 | ||||||
CO
2
|
2,230.6 | 2,339.9 | ||||||
Terminals
|
3,540.9 | 3,347.6 | ||||||
Kinder
Morgan Canada
|
1,755.9 | 1,583.9 | ||||||
Total
segment assets
|
18,843.9 | 16,990.3 | ||||||
Corporate
assets(c)
|
710.7 | 895.5 | ||||||
Total
consolidated assets
|
$ | 19,554.6 | $ | 17,885.8 |
(a)
|
Includes
revenues, earnings from equity investments, allocable interest income, and
other, net, less operating expenses, allocable income taxes, and other
expense (income).
|
(b)
|
Nine
month 2008 amount includes a gain of $1.3 million from the October 2007
sale of our North System natural gas liquids pipeline and our 50%
ownership interest in the Heartland Pipeline Company (collectively
referred to in this report as our North System). We accounted
for the North System business as a discontinued operation; however,
because the sale did not change the structure of our internal organization
in a manner that caused a change to our reportable business segments, we
included the 2008 gain adjustment within our Products Pipelines business
segment disclosures. Except for this gain adjustment on
disposal of the North System, we recorded no other financial results from
the operations of the North System during the first nine months of
2008.
|
(c)
|
Includes
cash and cash equivalents; margin and restricted deposits; unallocable
interest receivable, prepaid assets and deferred charges; and risk
management assets related to the fair value of interest rate
swaps.
|
September 30,
2009
|
December 31,
2008
|
|||||||
Derivatives
– asset/(liability)
|
||||||||
Current
assets
|
$ | 1.6 | $ | 60.4 | ||||
Noncurrent
assets
|
$ | 15.6 | $ | 20.1 | ||||
Current
liabilities
|
$ | (43.3 | ) | $ | (13.2 | ) | ||
Noncurrent
liabilities
|
$ | (119.9 | ) | $ | (24.1 | ) |
|
▪
|
FERC
Docket Nos. OR92-8,
et
al.
—Complainants/Protestants: Chevron, Navajo, ARCO, BP WCP,
Western Refining, ExxonMobil, Tosco, and Texaco (Ultramar is an
intervenor)—Defendant: SFPP—Subject: Complaints against East
Line and West Line rates; appeals pending at the D.C.
Circuit.
|
|
▪
|
FERC
Docket No. OR92-8-025—Complainants/Protestants: BP WCP;
ExxonMobil; Chevron; ConocoPhillips; and Ultramar—Defendant:
SFPP—Subject: Complaints against East Line and West Line rates
and Watson Station Drain-Dry Charge; appeal pending at the D.C.
Circuit.
|
|
▪
|
FERC
Docket Nos. OR96-2,
et
al.
—Complainants/Protestants: All Shippers except Chevron (which is
an intervenor)—Defendant: SFPP—Subject: Complaints against all
SFPP rates;
|
|
▪
|
FERC
Docket No. OR02-4—Complainant/Protestant: Chevron—Defendant: SFPP;
Subject: Complaint against SFPP rates; dismissed and Chevron
appeal pending at the D.C.
Circuit;
|
|
▪
|
FERC
Docket Nos. OR03-5, OR04-3, OR05-4 & OR05-5—Complainants/Protestants:
BP WCP, ExxonMobil, ConocoPhillips, the Airlines (other shippers
intervened)—Defendant: SFPP—Subject: Complaints against all
SFPP rates;
|
|
▪
|
FERC
Docket Nos. OR07-1 & OR07-2—Complainant/Protestant: Tesoro—Defendant:
SFPP—Subject: Complaints against North Line and West Line
rates; held in abeyance;
|
|
▪
|
FERC
Docket Nos. OR07-3 & OR07-6—Complainants/Protestants: BP WCP, Chevron,
ConocoPhillips, ExxonMobil, Tesoro, and Valero Marketing—Defendant:
SFPP—Subject: Complaints against 2005 and 2006 indexed rate
increases; dismissed by FERC; appeal pending at D.C.
Circuit;
|
|
▪
|
FERC
Docket No. OR07-4—Complainants/Protestants: BP WCP, Chevron, and
ExxonMobil—Defendants: SFPP, Kinder Morgan G.P., Inc., and
KMI—Subject: Complaints against all SFPP rates; held in
abeyance; complaint withdrawn as to SFPP’s
affiliates;
|
|
▪
|
FERC
Docket Nos. OR07-5 & OR07-7 (consolidated) and
IS06-296—Complainants/Protestants: ExxonMobil and Tesoro—Defendants:
Calnev, Kinder Morgan G.P., Inc., and KMI—Subject: Complaints
and protest against Calnev rates; OR07-5 and IS06-296 were settled in
2008; OR07-7 complaint amendment pending before
FERC;
|
|
▪
|
FERC
Docket Nos. OR07-18, OR07-19 & OR07-22—Complainants/Protestants:
Airlines, BP WCP, Chevron, ConocoPhillips and Valero Marketing—Defendant:
Calnev—Subject: Complaints against Calnev rates; complaint
amendments pending before FERC;
|
|
▪
|
FERC
Docket No. OR07-20—Complainant/Protestant: BP WCP—Defendant:
SFPP—Subject: Complaint against 2007 indexed rate increases;
dismissed by FERC; appeal pending at D.C.
Circuit;
|
|
▪
|
FERC
Docket Nos. OR08-13 & OR08-15—Complainants/Protestants: BP WCP and
ExxonMobil—Defendant: SFPP—Subject: Complaints against all SFPP
rates and 2008 indexed rate
increases;
|
|
▪
|
FERC
Docket No. IS05-230 (North Line rate case)—Complainants/Protestants:
Shippers—Defendant: SFPP—Subject: SFPP filing to increase North
Line rates to reflect expansion; initial decision issued; pending at
FERC;
|
|
▪
|
FERC
Docket No. IS07-137—Complainants/Protestants: Shippers—Defendant:
SFPP—Subject: ULSD surcharge;
settled;
|
|
▪
|
FERC
Docket No. IS08-390—Complainants/Protestants: BP WCP, ExxonMobil,
ConocoPhillips, Valero, Chevron, the Airlines—Defendant:
SFPP—Subject: West Line rate increase; Initial Decision
expected December 2009;
|
|
▪
|
FERC
Docket No. IS09-375—Complainants/Protestants: BP, ExxonMobil, Chevron,
Tesoro, ConocoPhillips, Western, Navajo, Valero, and Southwest (other
shippers intervened)—Defendant: SFPP—Subject: Protests
regarding 2009 indexed rate increases; protests dismissed by
FERC;
|
|
▪
|
FERC
Docket No. IS09-377—Complainants/Protestants: BP, Chevron, and Tesoro
(other shippers intervened)—Defendant: Calnev—Subject: Protests
regarding 2009 index-based rate increases; protests dismissed by
FERC;
|
|
▪
|
FERC
Docket No. IS09-437—Complainants/Protestants: BP WCP, ExxonMobil,
ConocoPhillips, Valero, Chevron, Western Refining, and the
Airlines—Defendant: SFPP—Subject: East Line rate
increases;
|
|
▪
|
FERC
Docket Nos. OR09-8/OR09-18/OR09-21 (not
consolidated)—Complainants/Protestants: Chevron/Tesoro/BP WCP—Defendant:
SFPP—Subject: Complaints against July 1, 2008 (Chevron/Tesoro)
and July 1, 2009 (Tesoro/BP WCP) index-based rate
increases;
|
|
▪
|
FERC
Docket Nos. OR09-11/OR09-14 (not consolidated)—Complainants/Protestants:
BP WCP/Tesoro—Defendant: Calnev—Subject: Complaints requesting
audit of Page 700 of FERC Form No. 6 for 2007 and
2008;
|
|
▪
|
FERC
Docket Nos. OR09-12/OR09-16 (not consolidated)—Complainants/Protestants:
BP WCP/Tesoro—Defendant: SFPP—Subject: Complaints requesting
audit of Page 700 of FERC Form No. 6 for 2007 and
2008;
|
|
▪
|
FERC
Docket Nos. OR09-15/OR09-20 (not consolidated)—Complainants/Protestants:
Tesoro/BP WCP—Defendant: Calnev—Subject: Complaints against all
Calnev rates;
|
|
▪
|
FERC
Docket Nos. OR09-17/OR09-22 (not consolidated)—Complainants/Protestants:
Tesoro/BP WCP—Defendant: SFPP—Subject: Complaints against SFPP
rates; and
|
|
▪
|
FERC
Docket Nos. OR09-19/OR09-23 (not consolidated)—Complainants/Protestants:
Tesoro/BP WCP—Defendant: Calnev—Subject: Complaints against
July 1, 2009 index-based rate
increases.
|
Three Months Ended
September 30,
|
Earnings
|
|||||||||||||||
2009
|
2008
|
Increase/(Decrease
)
|
||||||||||||||
(In
millions, except percentages)
|
||||||||||||||||
Earnings
before depreciation, depletion and amortization expense
and amortization of excess cost of equity
investments(a)
|
||||||||||||||||
Products
Pipelines(b)
|
$ | 167.9 | $ | 130.4 | $ | 37.5 | 29 | % | ||||||||
Natural
Gas Pipelines(c)
|
197.8 | 185.0 | 12.8 | 7 | % | |||||||||||
CO
2
(d)
|
193.2 | 203.3 | (10.1 | ) | (5 | ) % | ||||||||||
Terminals(e)
|
155.2 | 120.1 | 35.1 | 29 | % | |||||||||||
Kinder
Morgan Canada
|
47.7 | 39.6 | 8.1 | 20 | % | |||||||||||
Segment
earnings before depreciation, depletion and amortization expense and
amortization of excess cost of equity investments
|
761.8 | 678.4 | 83.4 | 12 | % | |||||||||||
Depreciation,
depletion and amortization expense
|
(202.9 | ) | (166.8 | ) | (36.1 | ) | (22 | ) % | ||||||||
Amortization
of excess cost of equity investments
|
(1.4 | ) | (1.4 | ) | - | - | ||||||||||
General
and administrative expense(f)
|
(83.7 | ) | (73.1 | ) | (10.6 | ) | (15 | ) % | ||||||||
Unallocable
interest expense, net of interest income(g)
|
(107.8 | ) | (100.5 | ) | (7.3 | ) | (7 | ) % | ||||||||
Unallocable
income tax expense
|
(2.3 | ) | (3.7 | ) | 1.4 | 38 | % | |||||||||
Net
income
|
363.7 | 332.9 | 30.8 | 9 | % | |||||||||||
Net
income attributable to noncontrolling interests(h)
|
(4.2 | ) | (3.1 | ) | (1.1 | ) | (35 | ) % | ||||||||
Net
income attributable to Kinder Morgan Energy Partners, L.P.
|
$ | 359.5 | $ | 329.8 | $ | 29.7 | 9 | % |
Nine Months Ended
September 30,
|
Earnings
|
|||||||||||||||
2009
|
2008
|
Increase/(Decrease)
|
||||||||||||||
(In
millions, except percentages)
|
||||||||||||||||
Earnings
before depreciation, depletion and amortization expense and amortization
of excess cost of equity investments(a)
|
||||||||||||||||
Products
Pipelines(i)
|
$ | 468.3 | $ | 408.7 | $ | 59.6 | 15 | % | ||||||||
Natural
Gas Pipelines(j)
|
560.7 | 555.7 | 5.0 | 1 | % | |||||||||||
CO
2
(k)
|
563.3 | 619.7 | (56.4 | ) | (9 | ) % | ||||||||||
Terminals(l)
|
432.8 | 386.3 | 46.5 | 12 | % | |||||||||||
Kinder
Morgan Canada(m)
|
113.9 | 103.2 | 10.7 | 10 | % | |||||||||||
Segment
earnings before depreciation, depletion and amortization expense and
amortization of excess cost of equity investments
|
2,139.0 | 2,073.6 | 65.4 | 3 | % | |||||||||||
Depreciation,
depletion and amortization expense
|
(616.2 | ) | (490.5 | ) | (125.7 | ) | (26 | ) % | ||||||||
Amortization
of excess cost of equity investments
|
(4.3 | ) | (4.3 | ) | - | - | ||||||||||
General
and administrative expense(n)
|
(238.8 | ) | (222.7 | ) | (16.1 | ) | (7 | ) % | ||||||||
Unallocable
interest expense, net of interest income(o)
|
(313.7 | ) | (298.1 | ) | (15.6 | ) | (5 | ) % | ||||||||
Unallocable
income tax expense
|
(6.9 | ) | (8.1 | ) | 1.2 | 15 | % | |||||||||
Net
income
|
959.1 | 1,049.9 | (90.8 | ) | (9 | ) % | ||||||||||
Net
income attributable to noncontrolling interests(p)
|
(11.9 | ) | (11.2 | ) | (0.7 | ) | (6 | ) % | ||||||||
Net
income attributable to Kinder Morgan Energy Partners, L.P.
|
$ | 947.2 | $ | 1,038.7 | $ | (91.5 | ) | (9 | ) % |
(a)
|
Includes
revenues, earnings from equity investments, allocable interest income and
other, net, less operating expenses, allocable income taxes, and other
expense (income). Operating expenses include natural gas
purchases and other costs of sales, operations and maintenance expenses,
and taxes, other than income taxes.
|
(b)
|
2009
and 2008 amounts include a $1.1 million increase in income and a $0.7
million decrease in income, respectively, resulting from unrealized
foreign currency gains and losses on long-term debt
transactions. 2009 amount also includes a $0.1 million increase
in income from hurricane casualty gains. 2008 amount also
includes a $9.3 million decrease in income from the settlement of certain
litigation matters related to our Pacific operations’ East Line pipeline,
and a $0.2 million decrease in income related to hurricane clean-up and
repair activities.
|
(c)
|
2009
and 2008 amounts include a $0.7 million decrease in income and a $12.2
million increase in income, respectively, resulting from unrealized mark
to market gains and losses due to the discontinuance of hedge accounting
at Casper Douglas. 2009 amount also includes a $3.7 million
increase in income from hurricane casualty gains. 2008 amount
also includes a $4.4 million increase in expense related to hurricane
clean-up and repair activities.
|
(d)
|
2009
amount includes a $5.4 million unrealized loss on derivative contracts
used to hedge forecasted crude oil
sales.
|
(e)
|
2009
amount includes an $11.2 million increase in income from hurricane and
fire casualty gains. 2008 amount includes a $6.8 million
decrease in income related to fire damage and repair activities, a $4.0
million decrease in income related to hurricane clean-up and repair
activities, and a combined $1.5 million increase in expense associated
with legal liability adjustments related to certain litigation matters
involving our Elizabeth River bulk terminal and our Staten Island liquids
terminal.
|
(f)
|
Includes
unallocated litigation and environmental expenses. 2009 and
2008 amounts include increases of $1.5 million and $1.4 million,
respectively, in non-cash compensation expense allocated to us from KMI
(we do not have any obligation, nor do we expect to pay any amounts
related to these expenses). 2009 amount also includes a $0.5
million increase in expense for certain Natural Gas Pipeline asset
acquisition costs, which under prior accounting standards would have been
capitalized, and a $0.9 million decrease in expense related to capitalized
overhead costs associated with the 2008 hurricane season. 2008
amount also includes a $0.1 million increase in expense related to
hurricane clean-up and repair activities, and a $1.5 million decrease in
expense due to the adjustment of certain insurance related
liabilities.
|
(g)
|
2009
and 2008 amounts include increases in imputed interest expense of $0.4
million and $0.5 million, respectively, related to our January 1, 2007
Cochin Pipeline acquisition. 2008 amount also includes a $0.2
million increase in interest expense related to the settlement of certain
litigation matters related to our Pacific operations’ East Line
pipeline.
|
(h)
|
2009
and 2008 amounts include an increase of $0.1 million and a decrease of
$0.2 million, respectively, in net income attributable to our
noncontrolling interests, related to all of the three month 2009 and 2008
items previously disclosed in these
footnotes.
|
(i)
|
2009
and 2008 amounts include a $1.5 million increase in income and a $1.4
million decrease in income, respectively, resulting from unrealized
foreign currency gains and losses on long-term debt
transactions. 2009 amount also includes a $0.1 million increase
in income from hurricane casualty gains, and a $3.8 million increase in
expense associated with environmental liability
adjustments. 2008 amount also includes a $9.3 million decrease
in income from the settlement of certain litigation matters related to our
Pacific operations’ East Line pipeline, a $0.2 million decrease in income
related to hurricane clean-up and repair activities, and a $1.3 million
gain from the 2007 sale of our North
System.
|
(j)
|
2009
and 2008 amounts include decreases in income of $4.5 million and $0.9
million, respectively, resulting from unrealized mark to market gains and
losses due to the discontinuance of hedge accounting at Casper
Douglas. 2009 amount also includes a $3.7 million increase in
income from hurricane casualty gains. 2008 amount also includes
a $4.4 million increase in expense related to hurricane clean-up and
repair activities, and a $13.0 million gain from the sale of our 25%
equity ownership interest in Thunder Creek Gas Services,
LLC.
|
(k)
|
2009
amount includes a $5.4 million unrealized loss on derivative contracts
used to hedge forecasted crude oil
sales.
|
(l)
|
2009
amount includes an $11.2 million increase in income from hurricane and
fire casualty gains, a $0.5 million decrease in expense associated with
legal liability adjustments related to a litigation matter involving our
Staten Island liquids terminal, and a $0.1 million increase in expense
associated with environmental liability adjustments. 2008
amount includes a $6.8 million decrease in income related to fire damage
and repair activities, a $4.0 million decrease in income related to
hurricane clean-up and repair activities, and a combined $1.5 million
increase in expense associated with legal liability adjustments related to
certain litigation matters involving our Elizabeth River bulk terminal and
our Staten Island liquids terminal.
|
(m)
|
2009
amount includes a $3.7 million decrease in expense due to a certain
non-cash accounting change related to book tax accruals and foreign
exchange fluctuations, and a $14.9 million increase in expense primarily
due to certain non-cash regulatory accounting adjustments to the carrying
amount of the previously established deferred tax
liability.
|
(n)
|
Includes
unallocated litigation and environmental expenses. 2009 and
2008 amounts include increases of $4.3 million and $4.2 million,
respectively, in non-cash compensation expense allocated to us from KMI
(we do not have any obligation, nor do we expect to pay any amounts
related to these expenses). 2009 amount also includes a $0.5
million increase in expense for certain Natural Gas Pipeline asset
acquisition costs, which under prior accounting standards would have been
capitalized, a $0.1 million increase in expense for certain Express
pipeline system acquisition costs, which under prior accounting standards
would have been capitalized, and a $2.4 million decrease in expense
related to capitalized overhead costs associated with the 2008 hurricane
season. 2008 amount also includes a $0.1 million increase in
expense related to hurricane clean-up and repair activities, and a $1.5
million decrease in expense due to the adjustment of certain insurance
related liabilities.
|
(o)
|
2009
and 2008 amounts include increases in imputed interest expense of $1.2
million and $1.5 million, respectively, related to our January 1, 2007
Cochin Pipeline acquisition. 2008 amount also includes a $0.2
million increase in interest expense related to the settlement of certain
litigation matters related to our Pacific operations’ East Line
pipeline.
|
(p)
|
2009
and 2008 amounts include decreases of $0.1 million and $0.2 million,
respectively, in net income attributable to our noncontrolling interests,
related to all of the nine month 2009 and 2008 items previously disclosed
in these footnotes.
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(In
millions, except operating statistics)
|
||||||||||||||||
Revenues(a)
|
$ | 216.7 | $ | 205.6 | $ | 611.6 | $ | 602.5 | ||||||||
Operating
expenses(b)
|
(56.8 | ) | (78.7 | ) | (165.8 | ) | (209.6 | ) | ||||||||
Other
income (expense)(c)
|
0.1 | (0.1 | ) | 0.1 | 0.9 | |||||||||||
Earnings
from equity investments(d)
|
6.5 | 5.0 | 19.9 | 21.2 | ||||||||||||
Interest
income and Other, net-income(e)
|
3.5 | 0.4 | 9.8 | 2.2 | ||||||||||||
Income
tax expense
|
(2.1 | ) | (1.8 | ) | (7.3 | ) | (8.5 | ) | ||||||||
Earnings
before depreciation, depletion and amortization expense and amortization
of excess cost of equity investments
|
$ | 167.9 | $ | 130.4 | $ | 468.3 | $ | 408.7 | ||||||||
Gasoline
(MMBbl)(f)
|
101.3 | 101.1 | 301.2 | 299.5 | ||||||||||||
Diesel
fuel (MMBbl)
|
35.9 | 40.0 | 107.9 | 120.2 | ||||||||||||
Jet
fuel (MMBbl)
|
28.8 | 29.6 | 83.7 | 89.2 | ||||||||||||
Total
refined product volumes (MMBbl)
|
166.0 | 170.7 | 492.8 | 508.9 | ||||||||||||
Natural
gas liquids (MMBbl)
|
6.2 | 5.8 | 18.4 | 18.7 | ||||||||||||
Total
delivery volumes (MMBbl)(g)
|
172.2 | 176.5 | 511.2 | 527.6 |
(a)
|
2008
amounts include a $5.1 million decrease in revenues from the settlement of
certain litigation matters related to our Pacific operations’ East Line
pipeline.
|
(b)
|
Nine
month 2009 amount includes an increase in expense of $3.8 million
associated with environmental liability adjustments. 2008
amounts include a $4.2 million increase in expense from the settlement of
certain litigation matters related to our Pacific operations’ East Line
pipeline, and a $0.1 million increase in expense related to hurricane
clean-up and repair activities. Nine month 2008 amount also
includes a $3.0 million decrease in expense related to our Pacific
operations and a $3.0 million increase in expense related to our Calnev
Pipeline associated with legal liability
adjustments.
|
(c)
|
2009
amounts include a gain of $0.1 million from hurricane casualty
indemnifications. Nine month 2008 amount includes a gain of
$1.3 million from the 2007 sale of our North System. We
accounted for the North System business as a discontinued operation;
however, because the sale does not change the structure of our internal
organization in a manner that causes a change to our reportable business
segments, we included this 2008 gain adjustment within our Products
Pipelines business segment disclosures. Except for this gain
adjustment on disposal of the North System, we recorded no other financial
results from the operations of the North System during the first nine
months of 2008.
|
(d)
|
2008
amounts include an expense of $0.1 million reflecting our portion of
Plantation Pipe Line Company’s expenses related to hurricane clean-up and
repair activities.
|
(e)
|
Three
and nine month 2009 amounts include increases in income of $1.1 million
and $1.5 million, respectively, resulting from unrealized foreign currency
gains on long-term debt transactions. Three and nine
month 2008 amounts include decreases in income of $0.7 million and $1.4
million, respectively, resulting from unrealized foreign currency losses
on long-term debt transactions.
|
(f)
|
Includes
ethanol volumes.
|
(g)
|
Includes
Pacific, Plantation, Calnev, Central Florida, Cochin and Cypress pipeline
volumes.
|
EBDA
increase/(decrease)
|
Revenues
increase/(decrease)
|
|||||||||||||||
(In
millions, except percentages)
|
||||||||||||||||
Pacific
operations
|
$ | 10.2 | 17 | % | $ | 3.9 | 4 | % | ||||||||
Transmix
operations
|
8.8 | 128 | % | 8.0 | 78 | % | ||||||||||
West
Coast Terminals
|
3.4 | 25 | % | 2.9 | 14 | % | ||||||||||
Central
Florida Pipeline
|
2.8 | 26 | % | 2.7 | 20 | % | ||||||||||
Plantation
Pipeline
|
1.3 | 15 | % | (6.5 | ) | (59 | ) % | |||||||||
All
others
|
(0.4 | ) | (1 | ) % | (5.0 | ) | (9 | ) % | ||||||||
Total
Products Pipelines
|
$ | 26.1 | 19 | % | $ | 6.0 | 3 | % |
EBDA
increase/(decrease)
|
Revenues
increase/(decrease)
|
|||||||||||||||
(In
millions, except percentages)
|
||||||||||||||||
Pacific
operations
|
$ | 13.9 | 7 | % | $ | 0.4 | - | |||||||||
Transmix
operations
|
7.3 | 32 | % | 5.9 | 19 | % | ||||||||||
West
Coast Terminals
|
12.6 | 34 | % | 11.5 | 20 | % | ||||||||||
Central
Florida Pipeline
|
7.9 | 25 | % | 8.8 | 23 | % | ||||||||||
Plantation
Pipeline
|
(0.8 | ) | (3 | ) % | (18.7 | ) | (57 | ) % | ||||||||
All
others
|
11.3 | (11 | ) % | (3.9 | ) | (2 | ) % | |||||||||
Total
Products Pipelines
|
$ | 52.2 | 12 | % | $ | 4.0 | 1 | % |
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(In
millions, except operating statistics)
|
||||||||||||||||
Revenues
|
$ | 838.8 | $ | 2,359.4 | $ | 2,751.2 | $ | 6,916.6 | ||||||||
Operating
expenses(a)
|
(696.1 | ) | (2,203.3 | ) | (2,325.9 | ) | (6,464.0 | ) | ||||||||
Other
income(b)
|
3.7 | - | 3.7 | 2.7 | ||||||||||||
Earnings
from equity investments
|
48.7 | 25.6 | 104.7 | 80.4 | ||||||||||||
Interest
income and Other, net-income(c)
|
3.8 | 3.9 | 31.1 | 21.8 | ||||||||||||
Income
tax expense
|
(1.1 | ) | (0.6 | ) | (4.1 | ) | (1.8 | ) | ||||||||
Earnings
before depreciation, depletion and amortization expense and amortization
of excess cost of equity investments
|
$ | 197.8 | $ | 185.0 | $ | 560.7 | $ | 555.7 | ||||||||
Natural
gas transport volumes (Trillion Btus)(d)
|
633.3 | 512.5 | 1,683.6 | 1,495.7 | ||||||||||||
Natural
gas sales volumes (Trillion Btus)(e)
|
200.5 | 220.0 | 602.3 | 660.0 |
(a)
|
Three
and nine month 2009 amounts include decreases in income of $0.7 million
and $4.5 million, respectively, due to unrealized mark to market losses
due to the discontinuance of hedge accounting at Casper
Douglas. Three and nine month 2008 amounts include an increase
in income of $12.2 million and a decrease in income of $0.9 million,
respectively, due to unrealized mark to market gains and losses due to the
discontinuance of hedge accounting at Casper Douglas. Beginning
in the second quarter of 2008, our Casper and Douglas gas processing
operations discontinued hedge accounting. 2008 amounts also
include a $4.4 million increase in expense related to hurricane clean-up
and repair activities.
|
(b)
|
2009
amounts represent gains from hurricane casualty
indemnifications.
|
(c)
|
Nine
month 2008 amount includes a $13.0 million gain from the sale of our 25%
equity ownership interest in Thunder Creek Gas Services,
LLC.
|
(d)
|
Includes
Kinder Morgan Interstate Gas Transmission LLC, Trailblazer Pipeline
Company LLC, TransColorado Gas Transmission Company LLC, Rockies Express
Pipeline LLC, Midcontinent Express Pipeline LLC, Kinder Morgan Louisiana
Pipeline LLC and Texas intrastate natural gas pipeline group pipeline
volumes.
|
(e)
|
Represents
Texas intrastate natural gas pipeline group
volumes.
|
EBDA
increase/(decrease)
|
Revenues
increase/(decrease)
|
|||||||||||||||
(In
millions, except percentages)
|
||||||||||||||||
Rockies
Express Pipeline
|
$ | 15.9 | 84 | % | $ | - | - | |||||||||
Midcontinent
Express Pipeline
|
7.0 | n/a | - | - | ||||||||||||
Kinder
Morgan Louisiana Pipeline
|
6.1 | 205 | % | 8.5 | n/a | |||||||||||
Texas
Intrastate Natural Gas Pipeline Group
|
(6.5 | ) | (7 | ) % | (1,504.1 | ) | (67 | ) % | ||||||||
TransColorado
Pipeline
|
(2.1 | ) | (15 | ) % | (0.9 | ) | (6 | ) % | ||||||||
Kinder
Morgan Interstate Gas Transmission
|
(2.0 | ) | (7 | ) % | (8.8 | ) | (17 | ) % | ||||||||
All
others
|
(0.8 | ) | (4 | ) % | (15.3 | ) | (32 | ) % | ||||||||
Intrasegment
eliminations
|
- | - | - | - | ||||||||||||
Total
Natural Gas Pipelines
|
$ | 17.6 | (10 | ) % | $ | (1,520.6 | ) | (64 | ) % |
EBDA
increase/(decrease)
|
Revenues
increase/(decrease)
|
|||||||||||||||
(In
millions, except percentages)
|
||||||||||||||||
Rockies
Express Pipeline
|
$ | 18.2 | 31 | % | $ | - | - | |||||||||
Midcontinent
Express Pipeline
|
7.2 | n/a | - | - | ||||||||||||
Kinder
Morgan Louisiana Pipeline
|
22.0 | 365 | % | 8.5 | n/a | |||||||||||
Texas
Intrastate Natural Gas Pipeline Group
|
(34.8 | ) | (12 | ) % | (4,096.6 | ) | (62 | ) % | ||||||||
TransColorado
Pipeline
|
(2.6 | ) | (6 | ) % | (1.4 | ) | (3 | ) % | ||||||||
Kinder
Morgan Interstate Gas Transmission
|
7.5 | 9 | % | (13.3 | ) | (9 | ) % | |||||||||
All
others
|
(4.0 | ) | (6 | ) % | (65.0 | ) | (42 | ) % | ||||||||
Intrasegment
eliminations
|
- | - | 2.4 | 73 | % | |||||||||||
Total
Natural Gas Pipelines
|
$ | 13.5 | (10 | ) % | $ | (4,165.4 | ) | (60 | ) % |
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(In
millions, except operating statistics)
|
||||||||||||||||
Revenues(a)
|
$ | 262.3 | $ | 305.2 | $ | 749.4 | $ | 900.2 | ||||||||
Operating
expenses
|
(72.5 | ) | (105.4 | ) | (198.4 | ) | (292.7 | ) | ||||||||
Earnings
from equity investments
|
5.5 | 4.2 | 16.4 | 15.3 | ||||||||||||
Other,
net-expense
|
(1.2 | ) | - | (1.2 | ) | (0.2 | ) | |||||||||
Income
tax benefit expense
|
(0.9 | ) | (0.7 | ) | (2.9 | ) | (2.9 | ) | ||||||||
Earnings
before depreciation, depletion and amortization expense and amortization
of excess cost of equity investments
|
$ | 193.2 | $ | 203.3 | $ | 563.3 | $ | 619.7 | ||||||||
Carbon
dioxide delivery volumes (Bcf)(b)
|
178.3 | 171.3 | 579.7 | 530.1 | ||||||||||||
SACROC
oil production (gross)(MBbl/d)(c)
|
29.6 | 27.9 | 30.2 | 27.6 | ||||||||||||
SACROC
oil production (net)(MBbl/d)(d)
|
24.7 | 23.3 | 25.2 | 23.0 | ||||||||||||
Yates
oil production (gross)(MBbl/d)(c)
|
26.4 | 27.1 | 26.6 | 27.9 | ||||||||||||
Yates
oil production (net)(MBbl/d)(d)
|
11.7 | 12.0 | 11.8 | 12.4 | ||||||||||||
Natural
gas liquids sales volumes (net)(MBbl/d)(d)
|
9.5 | 7.6 | 9.3 | 8.7 | ||||||||||||
Realized
weighted average oil price per Bbl(e)(f)
|
$ | 51.42 | $ | 51.45 | $ | 48.27 | $ | 51.50 | ||||||||
Realized
weighted average natural gas liquids price per Bbl(f)(g)
|
$ | 40.28 | $ | 77.97 | $ | 34.31 | $ | 73.37 |
(a)
|
2009
amounts include a $5.4 million unrealized loss (from a decrease in
revenues) on derivative contracts used to hedge forecasted crude oil
sales.
|
(b)
|
Includes
Cortez, Central Basin, Canyon Reef Carriers, Centerline and Pecos pipeline
volumes.
|
(c)
|
Represents
100% of the production from the field. We own an approximately
97% working interest in the SACROC unit and an approximately 50% working
interest in the Yates unit.
|
(d)
|
Net
to us, after royalties and outside working
interests.
|
(e)
|
Includes
all of our crude oil production
properties.
|
(f)
|
Hedge
gains/losses for crude oil and natural gas liquids are included with crude
oil.
|
(g)
|
Includes
production attributable to leasehold ownership and production attributable
to our ownership in processing plants and third party processing
agreements.
|
EBDA
increase/(decrease)
|
Revenues
increase/(decrease)
|
|||||||||||||||
(In
millions, except percentages)
|
||||||||||||||||
Sales
and Transportation Activities
|
$ | (30.2 | ) | (37 | ) % | $ | (32.6 | ) | (35 | ) % | ||||||
Oil
and Gas Producing Activities
|
25.5 | 21 | % | (16.0 | ) | (7 | ) % | |||||||||
Intrasegment
eliminations
|
- | - | 11.1 | 51 | % | |||||||||||
Total
CO
2
|
$ | (4.7 | ) | (2 | ) % | $ | (37.5 | ) | (12 | ) % |
EBDA
increase/(decrease)
|
Revenues
increase/(decrease)
|
|||||||||||||||
(In
millions, except percentages)
|
||||||||||||||||
Sales
and Transportation Activities
|
$ | (60.1 | ) | (27 | ) % | $ | (58.3 | ) | (24 | ) % | ||||||
Oil
and Gas Producing Activities
|
9.1 | 2 | % | (112.8 | ) | (16 | ) % | |||||||||
Intrasegment
eliminations
|
- | - | 25.7 | 43 | % | |||||||||||
Total
CO
2
|
$ | (51.0 | ) | (8 | ) % | $ | (145.4 | ) | (16 | ) % |
▪
|
decreases
of $28.7 million (42%) and $45.7 million (27%), respectively, in carbon
dioxide sales revenues. The decreases were entirely price related,
as the segment’s average price received for all carbon dioxide sales
decreased 46% and 38%, respectively, in the three and nine month periods
ended September 30, 2009, when compared to last
year.
|
▪
|
decreases
of $3.4 million (15%) and $9.5 million (14%), respectively, in carbon
dioxide and crude oil pipeline transportation revenues. The
decreases were mainly due to lower carbon dioxide transportation revenues
from our Central Basin Pipeline and to lower crude oil transportation
revenues from our Wink Pipeline, relative to 2008. The decreases in
transportation revenues from Wink were due primarily to lower pipeline
loss allowance revenues resulting from lower market prices for crude oil
when compared to 2008.
|
▪
|
an
increase of $5.1 million (3%) and a decrease of $12.5 million (2%),
respectively, in crude oil sales revenues. The 3% increase in
revenues in the third quarter of 2009 resulted from a corresponding 3%
increase in sales volumes, as our realized weighted average price per
barrel was flat across both third quarter periods. The 2% decrease
in revenues for the comparable nine month periods was entirely price
related, as our realized weighted average price per barrel decreased 6% in
the first nine months of 2009, when compared to the same nine month period
a year ago.
|
▪
|
decreases
of $19.1 million (35%) and $87.6 million (50%), respectively, in natural
gas liquids sales revenues. With respect to natural gas liquids, our
realized weighted average price per barrel decreased 48% and 53%,
respectively, in the three and nine periods of 2009 versus 2008, but sales
volumes increased 25% and 7%, respectively, in both comparable periods,
due in part to the negative impacts from Hurricane Ike in the third
quarter of 2008;
|
▪
|
decreases
of $2.0 million (22%) and $12.7 million (40%), respectively, in other
combined revenues, including natural gas sales, net profit interests and
other service revenues. The quarterly decrease was driven by lower
natural gas sales revenues in 2009, due to lower market prices for gas
since the end of the third quarter of 2008, and the comparable nine month
period decrease was driven by lower net profit interests revenues, which
represent our share of the net proceeds from natural gas liquids, residue
gas and processing fees derived from the Snyder gasoline
plant;
|
▪
|
decreases
of $26.5 million (29%) and $72.9 million (28%), respectively, in oil and
gas related field operating and maintenance expenses, including all cost
of sales and fuel and power expenses. The decreases were
primarily due to lower prices charged by the industry’s material and
service providers (for items such as outside services, maintenance, and
well workover services), which impacted rig costs, other materials and
services, and capital and exploratory costs; and in part due to the
successful renewal of lower priced service and supply contracts negotiated
by our CO
2
segment since the end of the third quarter of 2008;
and
|
▪
|
decreases
of $15.0 million (74%) and $49.0 million (85%), respectively, in taxes,
other than income tax expenses. The decreases were primarily due to
lower period-to-period severance tax expenses—for the comparable three
month periods, the decrease in severance tax expenses related to the
decrease in natural gas liquids sales revenues, and for the comparable
nine month periods, the decrease related to both lower liquids and crude
oil sales revenues and a $20.9 million favorable adjustment to our accrued
severance tax liabilities due to prior year
overpayments.
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(In
millions, except operating statistics)
|
||||||||||||||||
Revenues
|
$ | 283.0 | $ | 306.2 | $ | 814.9 | $ | 887.1 | ||||||||
Operating
expenses(a)
|
(137.6 | ) | (175.1 | ) | (395.1 | ) | (483.9 | ) | ||||||||
Other
income (expense)(b)
|
10.7 | (4.0 | ) | 14.3 | (3.6 | ) | ||||||||||
Earnings
from equity investments
|
0.2 | 0.7 | 0.3 | 2.4 | ||||||||||||
Interest
income and Other, net-income (expense)
|
1.3 | (1.3 | ) | 2.4 | 1.4 | |||||||||||
Income
tax expense(c)
|
(2.4 | ) | (6.4 | ) | (4.0 | ) | (17.1 | ) | ||||||||
Earnings
before depreciation, depletion and amortization expense and amortization
of excess cost of equity investments
|
$ | 155.2 | $ | 120.1 | $ | 432.8 | $ | 386.3 | ||||||||
Bulk
transload tonnage (MMtons)(d)
|
21.1 | 27.5 | 58.0 | 79.1 | ||||||||||||
Liquids
leaseable capacity (MMBbl)
|
55.6 | 54.2 | 55.6 | 54.2 | ||||||||||||
Liquids
utilization %
|
96.7 | % | 98.2 | % | 96.7 | % | 98.2 | % |
(a)
|
Nine
month 2009 amount includes a $0.5 million decrease in expense associated
with legal liability adjustments related to a litigation matter involving
our Staten Island liquids terminal, and a $0.1 million increase in expense
associated with environmental liability adjustments. 2008
amounts include a $3.6 million increase in expense related to hurricane
clean-up and repair activities, a $1.5 million increase in expense related
to fire damage and repair activities, and a combined $1.5 million increase
in expense associated with legal liability adjustments related to certain
litigation matters involving our Elizabeth River bulk terminal and our
Staten Island liquids terminal.
|
(b)
|
2009
amounts include gains of $11.3 million from hurricane and fire casualty
indemnifications. 2008 amounts include losses of $5.3 million
from asset write-offs related to fire damage, and losses of $0.8 million
from asset write-offs related to hurricane
damage.
|
(c)
|
2009
amounts include a $0.1 million increase in expense related to hurricane
and fire casualty gains. 2008 amounts include a $0.4 million
decrease in expense related to hurricane clean-up and repair activities
and hurricane related asset
write-offs.
|
(d)
|
Volumes
for acquired terminals are included for all
periods.
|
EBDA
increase/(decrease)
|
Revenues
increase/(decrease)
|
|||||||||||||||
(In
millions, except percentages)
|
||||||||||||||||
Lower
River (Louisiana)
|
$ | 7.6 | 238 | % | $ | (2.7 | ) | (11 | ) % | |||||||
Gulf
Coast
|
4.6 | 14 | % | 4.7 | 11 | % | ||||||||||
Texas
Petcoke
|
3.3 | 26 | % | (0.4 | ) | (1 | ) % | |||||||||
Mid
River
|
(3.0 | ) | (36 | ) % | (9.7 | ) | (37 | ) % | ||||||||
Ohio
Valley
|
(2.8 | ) | (42 | ) % | (5.7 | ) | (30 | ) % | ||||||||
All
others
|
0.6 | 1 | % | (14.9 | ) | (9 | ) % | |||||||||
Intrasegment
eliminations
|
- | - | 0.2 | 94 | % | |||||||||||
Total
Terminals
|
$ | 10.3 | 8 | % | $ | (28.5 | ) | (9 | ) % |
EBDA
increase/(decrease)
|
Revenues
increase/(decrease)
|
|||||||||||||||
(In
millions, except percentages)
|
||||||||||||||||
Lower
River (Louisiana)
|
$ | 19.4 | 118 | % | $ | (9.5 | ) | (12 | ) % | |||||||
Gulf
Coast
|
10.0 | 10 | % | 11.9 | 10 | % | ||||||||||
Texas
Petcoke
|
4.0 | 9 | % | (7.7 | ) | (7 | ) % | |||||||||
Mid
River
|
(10.9 | ) | (46 | ) % | (31.8 | ) | (44 | ) % | ||||||||
Ohio
Valley
|
(7.4 | ) | (42 | ) % | (15.6 | ) | (31 | ) % | ||||||||
All
others
|
3.9 | 2 | % | (32.5 | ) | (7 | ) % | |||||||||
Intrasegment
eliminations
|
- | - | 0.5 | 69 | % | |||||||||||
Total
Terminals
|
$ | 19.0 | 5 | % | $ | (84.7 | ) | (10 | ) % |
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(In
millions, except operating statistics)
|
||||||||||||||||
Revenues
|
$ | 60.1 | $ | 56.6 | $ | 166.1 | $ | 143.1 | ||||||||
Operating
expenses
|
(19.1 | ) | (18.6 | ) | (52.4 | ) | (51.3 | ) | ||||||||
Earnings
from equity investments
|
(1.1 | ) | (0.9 | ) | (1.4 | ) | (0.8 | ) | ||||||||
Interest
income and Other, net-income
|
10.3 | 3.5 | 19.2 | 9.6 | ||||||||||||
Income
tax benefit (expense)(a)
|
(2.5 | ) | (1.0 | ) | (17.6 | ) | 2.6 | |||||||||
Earnings
before depreciation, depletion and amortization expense and amortization
of excess cost of equity investments
|
$ | 47.7 | $ | 39.6 | $ | 113.9 | $ | 103.2 | ||||||||
Transport
volumes (MMBbl)(b)
|
28.1 | 22.6 | 75.0 | 63.5 |
(a)
|
Nine
month 2009 amount includes both a $3.7 million decrease in expense due to
a certain non-cash accounting change related to book tax accruals and
foreign exchange fluctuations related to the Express pipeline system, and
a $14.9 million increase in expense primarily due to certain non-cash
regulatory accounting adjustments to Trans Mountain’s carrying amount of
the previously established deferred tax
liability.
|
(b)
|
Represents
Trans Mountain pipeline system
volumes.
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(In
millions-income (expense))
|
||||||||||||||||
General
and administrative expenses(a)
|
$ | (83.7 | ) | $ | (73.1 | ) | $ | (238.8 | ) | $ | (222.7 | ) | ||||
Unallocable
interest expense, net of interest income(b)
|
$ | (107.8 | ) | $ | (100.5 | ) | $ | (313.7 | ) | $ | (298.1 | ) | ||||
Unallocable
income tax expense
|
$ | (2.3 | ) | $ | (3.7 | ) | $ | (6.9 | ) | $ | (8.1 | ) | ||||
Net
income attributable to noncontrolling interests(c)
|
$ | (4.2 | ) | $ | (3.1 | ) | $ | (11.9 | ) | $ | (11.2 | ) |
(a)
|
Three
and nine month 2009 amounts include increases in expense of $1.5 million
and $4.3 million, respectively, and three and nine month 2008 amounts
include increases in expense of $1.4 million and $4.2 million,
respectively, from non-cash compensation expense allocated to us from
KMI. We do not have any obligation, nor do we expect, to pay
any amounts related to these expenses. Three and nine month
2009 amounts also include decreases in expense of $0.9 million and $2.4
million, respectively, related to capitalized overhead costs associated
with the 2008 hurricane season, and increases in expense of $0.5 million
for certain Natural Gas Pipeline asset acquisition costs, which under
prior accounting standards would have been capitalized. Nine
month 2009 amounts also include a $0.1 million increase in expense for
certain Express pipeline system acquisition costs, which under prior
accounting standards would have been capitalized. 2008 amounts
also include a $0.1 million increase in expense related to hurricane
clean-up and repair activities, and a $1.5 million decrease in expense due
to the adjustment of certain insurance related
liabilities.
|
(b)
|
Three
and nine month 2009 amounts include increases in imputed interest expense
of $0.4 million and $1.2 million, respectively, and three and nine month
2008 amounts include increases in imputed interest expense of $0.5 million
and $1.5 million, respectively, all related to our 2007 Cochin Pipeline
acquisition. 2008 amounts also include a $0.2 million increase
in interest expense related to the settlement of certain litigation
matters related to our Pacific operations’ East Line
pipeline.
|
(c)
|
Three
and nine month 2009 amounts include a $0.1 million increase and a $0.1
million decrease, respectively, in net income attributable to
noncontrolling interests, and 2008 amounts include a $0.2 million decrease
in net income attributable to noncontrolling interests, all related to the
combined effect of the three and nine month 2009 and 2008 items previously
disclosed in the footnotes to the tables included in “—Results of
Operations.”
|
▪
|
cash
distributions and sustaining capital expenditures with existing cash and
cash flows from operating
activities;
|
▪
|
expansion
capital expenditures and working capital deficits with retained cash
(resulting from including i-units in the determination of cash
distributions per unit but paying quarterly distributions on i-units in
additional i-units rather than cash), additional borrowings, the issuance
of additional common units or the proceeds from purchases of additional
i-units by KMR;
|
▪
|
interest
payments with cash flows from operating activities;
and
|
▪
|
debt
principal payments with additional borrowings, as such debt principal
payments become due, or by the issuance of additional common units or the
proceeds from purchases of additional i-units by
KMR.
|
▪
|
a
$210.4 million decrease in cash inflows relative to net changes in working
capital items, primarily driven by higher payments in 2009 for (i) natural
gas storage on our Kinder Morgan Texas Pipeline system; (ii) the
settlement of certain refined products imbalance liabilities owed to U.S.
military customers of our Products Pipelines business segment; (iii)
employee-related bonus and general partner incentive funding; and (iv)
reductions in customer
deposits;
|
▪
|
a
combined $49.1 million decrease in cash from (i) undistributed earnings
from equity investees; (ii) income from the allowance for equity funds
used during construction; and (iii) income from the dispositions of
property, plant and equipment and other net
assets;
|
▪
|
a
$144.4 million increase in cash from an interest rate swap termination
payment we received in January 2009, when we terminated a
fixed-to-variable interest rate swap agreement having a notional principal
amount of $300 million and a maturity date of March 15,
2031;
|
▪
|
a
$37.8 million increase in cash related to higher distributions received
from equity investments during the first nine months of 2009—chiefly due
to incremental distributions of $41.8 million received from West2East
Pipeline LLC, the sole owner of Rockies Express Pipeline LLC. We
began receiving distributions on our 51% equity interest in West2East
Pipeline LLC in the second quarter of 2008. When construction of the
Rockies Express Pipeline is completed, our ownership interest will be
reduced to 50% and the capital accounts of West2East Pipeline LLC will be
trued-up to reflect our 50% economic interest in the project;
and
|
▪
|
a
$34.9 million increase in cash from overall lower partnership income—after
adjusting for depreciation, depletion and amortization expenses. The
year-to-year increase in partnership income from our five reportable
business segments in the first nine months of 2009 compared to the first
nine months of 2008 is discussed above in “—Results of Operations”
(including all of the certain items disclosed in the associated table
footnotes).
|
▪
|
a
$1,277.5 million increase in cash used due to higher contributions to
equity investees in the first nine months of 2009, relative to the first
nine months a year ago. The increase was primarily driven by
incremental contributions to West2East Pipeline LLC, Midcontinent Express
Pipeline LLC, and Fayetteville Pipeline LLC to partially fund both their
respective Rockies Express, Midcontinent Express, and Fayetteville Express
Pipeline construction and/or pre-construction costs, and the repayment of
senior notes by Rockies Express in August 2009. As discussed in Note
2 to our interim consolidated financial statements included elsewhere in
this report, we contributed a combined $1,610.3 million during the first
nine months of 2009 for these three pipeline projects. During the
same period last year, we contributed a combined $333.5 million to
partially fund our proportionate share of the Rockies Express and
Midcontinent Express pipeline construction
costs;
|
▪
|
an
$89.1 million increase in cash used related to a return of capital
received from Midcontinent Express Pipeline LLC in February 2008.
During that month, Midcontinent entered into and then made borrowings
under a new $1.4 billion three-year, unsecured revolving credit facility
due February 28, 2011. Midcontinent then made distributions (in
excess of cumulative earnings) to its two member owners to reimburse them
for prior contributions made to fund its pipeline construction
costs;
|
▪
|
a
$53.5 million increase in cash used due to higher period-to-period
payments for margin and restricted deposits in 2009 compared to 2008,
associated largely with our utilization of derivative contracts to hedge
(offset) against the volatility of energy commodity price
risks;
|
▪
|
a
$41.9 million increase in cash used for the acquisition of assets,
relative to 2008. The increase was driven by the $18.0 million we
paid to acquire certain terminal assets from Megafleet Towing Co., Inc. in
April 2009 (discussed in Note 2) and the $23.4 million contribution we
received from KMI in April 2008 as a result of certain true-up provisions
in our Trans Mountain acquisition
agreement;
|
▪
|
an
$839.0 million decrease in cash used for capital expenditures—largely due
to the higher investment undertaken in the first nine months of 2008 to
construct our Kinder Morgan Louisiana Pipeline and to expand our Trans
Mountain crude oil and refined petroleum products pipeline system;
and
|
▪
|
a
$109.6 million decrease in cash used due to our receipt, in the first nine
months of 2009, of the full repayment of a $109.6 million loan we made in
December 2008 to a single customer of our Texas intrastate natural gas
pipeline group.
|
▪
|
a
$564.2 million increase in cash from overall debt financing
activities—which include our issuances and payments of debt and our debt
issuance costs. The period-to-period increase in cash from overall
financing activities was primarily due to (i) a $148.9 million increase in
cash due to higher net issuances and repayments of senior notes in the
first nine months of 2009; (ii) a $589.1 million increase in cash due to
net commercial paper repayments in the first nine months of 2008; and
(iii) a $185.0 million decrease in cash from lower net borrowings under
our bank credit facility in the first nine months of
2009;
|
▪
|
a
$431.2 million increase in cash from higher partnership equity
issuances. The increase relates to the combined $815.5 million we
received, after commissions and underwriting expenses, from the sales of
additional common units in the first nine months of 2009 (discussed in
Note 5 to our consolidated financial statements included elsewhere in this
report), versus the combined $384.3 million we received from two separate
offerings of common units in the first nine months of 2008. The
$384.3 million in proceeds received in 2008 included $60.1 million from
the issuance of 1,080,000 common units in a privately negotiated
transaction completed in February 2008, and $324.2 million from the
issuance of 5,750,000 additional common units pursuant to a public
offering completed in March 2008. We used the proceeds from these
offerings to reduce the borrowings under our commercial paper
program;
|
▪
|
a
$223.9 million decrease in cash due to higher partnership distributions
paid in the first nine months of 2009, when compared to the same period
last year. The increase in distributions to all partners, including
our common and Class B unitholders, our general partner and our
noncontrolling interests, was due to an increase in the per unit cash
distributions paid, an increase in the number of units outstanding, and an
increase in our general partner incentive distributions. The
increase in our general partner incentive distributions resulted from both
increased cash distributions per unit and an increase in the number of
common units and i-units outstanding. Further information regarding
our distributions is included below in “—Partnership Distributions;”
and
|
▪
|
a
$61.3 million decrease in cash inflows from net changes in cash book
overdrafts—resulting from timing differences on checks issued but not yet
presented for payment.
|
▪
|
price
trends and overall demand for natural gas liquids, refined petroleum
products, oil, carbon dioxide, natural gas, electricity, coal and other
bulk materials and chemicals 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 implemented by the Federal Energy Regulatory
Commission or the California Public Utilities
Commission;
|
|
▪
|
our
ability to acquire new businesses and assets and integrate those
operations into our existing operations, as well as our ability to expand
our facilities;
|
|
▪
|
difficulties
or delays experienced by railroads, barges, trucks, ships or pipelines in
delivering products to or from our terminals or
pipelines;
|
|
▪
|
our
ability to successfully identify and close acquisitions and make
cost-saving changes in operations;
|
|
▪
|
shut-downs
or cutbacks at major refineries, petrochemical or chemical 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 from exploration and production
areas that we serve, such as the Permian Basin area of West Texas, the
U.S. Rocky Mountains and the Alberta 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;
|
|
▪
|
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;
|
|
▪
|
our
ability to offer and sell equity securities and debt securities or obtain
debt financing in sufficient amounts 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,
and/or place us at competitive disadvantages compared to our competitors
that have less debt or have other adverse
consequences;
|
|
▪
|
interruptions
of electric power supply to our facilities due to natural disasters, power
shortages, strikes, riots, terrorism, war or other
causes;
|
|
▪
|
our
ability to obtain insurance coverage without significant levels of
self-retention of risk;
|
|
▪
|
acts
of nature, sabotage, terrorism or other similar acts causing damage
greater than our insurance coverage
limits;
|
|
▪
|
capital
and credit markets conditions, inflation and 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
timing and extent of changes in commodity prices for oil, natural gas,
electricity and certain agricultural
products;
|
|
▪
|
the
extent of our success in discovering, developing and producing oil and gas
reserves, including the risks inherent in exploration and development
drilling, well completion and other development
activities;
|
▪
|
engineering
and mechanical or technological difficulties that we may experience with
operational equipment, in well completions and workovers, and in drilling
new wells;
|
▪
|
the
uncertainty inherent in estimating future oil and natural gas production
or reserves;
|
▪
|
the
ability to complete expansion projects on time and on
budget;
|
▪
|
the
timing and success of our business development efforts;
and
|
▪
|
unfavorable
results of litigation and the fruition of contingencies referred to in
Note 10 to our consolidated financial statements included elsewhere in
this report.
|
4.1 —
|
Certain
instruments with respect to long-term debt of Kinder Morgan Energy
Partners, L.P. and its consolidated subsidiaries which relate to debt that
does not exceed 10% of the total assets of Kinder Morgan Energy Partners,
L.P. and its consolidated subsidiaries are omitted pursuant to Item 601(b)
(4) (iii) (A) of Regulation S-K, 17 C.F.R. sec.229.601. Kinder
Morgan Energy Partners, L.P. hereby agrees to furnish supplementally to
the Securities and Exchange Commission a copy of each such instrument upon
request.
|
||
4.2
—
|
Certificate
of the Vice President and Chief Financial Officer and the Vice President
and Treasurer of Kinder Morgan Management, LLC and Kinder Morgan G.P.,
Inc., on behalf of Kinder Morgan Energy Partners, L.P., establishing the
terms of the 5.80% Senior Notes due 2021, and the 6.50% Senior Notes due
2039.
|
||
|
11
—
|
Statement
re: computation of per share earnings.
|
|
12
—
|
Statement
re: computation of ratio of earnings to fixed charges.
|
||
31.1
—
|
Certification
by CEO pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of
1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
||
31.2
—
|
Certification
by CFO pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of
1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
||
32.1
—
|
Certification
by CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
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32.2
—
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Certification
by CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
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||
101 —
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Interactive
data files pursuant to Rule 405 of Regulation S-T: (i) our
Consolidated Statements of Income for the three and nine month periods
ended September 30, 2009 and 2008; (ii) our Consolidated Balance
Sheets as of September 30, 2009 and December 31, 2008;
(iii) our Consolidated Statements of Cash Flows for the nine months
ended September 30, 2009 and 2008; and (iv) the notes to our
Consolidated Financial Statements, tagged as blocks of
text.
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KINDER
MORGAN ENERGY PARTNERS, L.P.
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|||
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Registrant
(A Delaware limited partnership)
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By:
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KINDER
MORGAN G.P., INC.,
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its
sole General Partner
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By:
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KINDER
MORGAN MANAGEMENT, LLC,
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the
Delegate of Kinder Morgan G.P.,
Inc.
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Date:
October 30, 2009
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By:
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/s/
Kimberly Dang
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|||||
Kimberly
A. Dang
Vice
President and Chief Financial Officer
(principal
financial and accounting officer)
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(1)
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the
sum of the present values, calculated as of the Redemption Date,
of:
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|
•
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each
interest payment that, but for the redemption, would have been payable on
the Note, or portion of a Note, being redeemed on each interest payment
date occurring after the Redemption Date, excluding any accrued interest
for the period prior to the Redemption Date;
and
|
|
•
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the
principal amount that, but for the redemption, would have been payable at
the stated maturity of the Note, or portion of a Note, being
redeemed;
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(2)
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the
principal amount of the Note, or portion of a Note, being
redeemed.
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/s/
Kimberly A. Dang
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Kimberly
A. Dang
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Vice
President and Chief Financial Officer
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/s/ David D. Kinder | |
David
D. Kinder
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Vice
President and Treasurer
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Nine Months Ended
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Nine Months Ended
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|||||||
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September 30, 2009
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September 30, 2008
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||||||
Earnings:
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||||||||
Pre-tax
income from continuing operations before adjustment for noncontrolling
interests and equity earnings (including amortization of excess cost of
equity investments) per statements of income
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$ | 866.3 | $ | 970.2 | ||||
Add:
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||||||||
Fixed
charges
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356.2 | 343.5 | ||||||
Amortization
of capitalized interest
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2.8 | 2.0 | ||||||
Distributed
income of equity investees
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153.1 | 114.9 | ||||||
Less:
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||||||||
Interest
capitalized from continuing operations
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(28.6 | ) | (29.7 | ) | ||||
Noncontrolling
interests in pre-tax income of subsidiaries with no fixed
charges
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(0.1 | ) | (0.2 | ) | ||||
Income
as adjusted
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$ | 1,349.7 | $ | 1,400.7 | ||||
Fixed
charges:
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||||||||
Interest
and debt expense, net per statements of income (includes amortization of
debt discount, premium, and debt issuance costs; excludes capitalized
interest)
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$ | 342.5 | $ | 328.2 | ||||
Add:
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||||||||
Portion
of rents representative of the interest factor
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13.7 | 15.3 | ||||||
Fixed
charges
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$ | 356.2 | $ | 343.5 | ||||
Ratio
of earnings to fixed charges
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3.79 | 4.08 |
1.
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I
have reviewed this quarterly report on Form 10-Q of Kinder Morgan Energy
Partners, L.P.;
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2.
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Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
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3.
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Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
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4.
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The
registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
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|
a)
|
designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
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b)
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designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
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c)
|
evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
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d)
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disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
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5.
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The
registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent
functions):
|
|
a)
|
all
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information;
and
|
|
b)
|
any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
|
/s/
Richard D. Kinder
|
||
Richard
D. Kinder
|
||
Chairman
and Chief Executive Officer of Kinder Morgan Management, LLC, the delegate
of Kinder Morgan G.P., Inc., the General Partner of Kinder Morgan Energy
Partners, L.P.
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of Kinder Morgan Energy
Partners, L.P.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
a)
|
designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
b)
|
designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
c)
|
evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
d)
|
disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent
functions):
|
|
a)
|
all
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information;
and
|
|
b)
|
any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
|
Date: October
30, 2009
|
||
/s/
Kimberly A. Dang
|
|
|
Kimberly
A. Dang
|
||
Vice
President and Chief Financial Officer of Kinder Morgan Management, LLC,
the delegate of Kinder Morgan G.P., Inc., the General Partner of Kinder
Morgan Energy Partners, L.P.
|
Dated: October
30, 2009
|
/s/
Richard D. Kinder
|
|
Richard
D. Kinder
|
||
Chairman
and Chief Executive Officer of Kinder Morgan Management, LLC, the delegate
of Kinder Morgan G.P., Inc., the General Partner of Kinder Morgan Energy
Partners, L.P.
|
Dated: October
30, 2009
|
/s/
Kimberly A. Dang
|
|
Kimberly
A. Dang
|
||
Vice
President and Chief Financial Officer of Kinder Morgan Management, LLC,
the delegate of Kinder Morgan G.P., Inc., the General Partner of Kinder
Morgan Energy Partners, L.P.
|