Kinder Morgan Expects to Distribute$4.20 Per Unit for 2009

HOUSTON, Nov 24, 2008 (BUSINESS WIRE) -- Kinder Morgan Energy Partners, L.P. (NYSE:KMP) today announced its preliminary projections for next year, stating that it expects KMP to declare cash distributions of $4.20 per unit for 2009.

KMP Chairman and CEO Richard D. Kinder said, "Our preliminary expectations are to grow our distribution per unit by about 4.5 percent in 2009 compared to our 2008 budget of $4.02 per unit. Considering the existing turmoil in the financial markets and the dismal economic outlook, we are gratified that we expect KMP not only to maintain, but to increase, its distribution next year. We anticipate our business segments will generate approximately $2.85 billion in distributable cash flow in 2009, an increase of about $250 million over the 2008 budget."

KMP's expectations assume an average West Texas Intermediate (WTI) crude oil price of $68 per barrel in 2009. The overwhelming majority of cash generated by KMP's assets is fee based and is not sensitive to commodity prices. In its CO2 segment, the company hedges the majority of its oil production but does have exposure to unhedged volumes, the majority of which are natural gas liquids. For 2009, every $1 change in the average WTI crude oil price per barrel is expected to impact the CO2 segment by approximately $6 million (or about 0.2 percent of our combined business segments' anticipated distributable cash flow). If the average WTI crude oil price per barrel in 2009 is the same as the price experienced in 2008 (about $100 per barrel), then KMP would generate distributable cash flow that could support cash distributions of approximately $4.52 per unit for 2009. This sensitivity to the WTI price is very similar to what the company experienced in 2008.

The board of directors will review and approve KMP's 2009 budget at its January board meeting and that budget will be discussed in detail during the company's annual analyst meeting Jan. 29, 2009, in Houston. Kinder Morgan remains committed to transparency and will continue to publish its budget on the company's web site, www.kindermorgan.com. The 2009 budget will be the standard by which KMP measures its performance next year and will be a target for determining employee bonuses.

Kinder Morgan Management, LLC

Kinder Morgan Management LLC (NYSE:KMR) announced its preliminary projections for 2009 and expects to declare distributions of $4.20 per share. The distribution to KMR shareholders will be paid in the form of additional KMR shares. The distribution is calculated by dividing the cash distribution to KMP unitholders by KMR's average closing price for the 10 trading days prior to KMR's ex-dividend date.

Kinder Morgan Energy Partners, L.P. (NYSE:KMP) is a leading pipeline transportation and energy storage company in North America. KMP owns an interest in or operates more than 25,000 miles of pipelines and 165 terminals. Its pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and its terminals store petroleum products and chemicals and handle bulk materials like coal and petroleum coke. KMP is also the leading provider of CO2 for enhanced oil recovery projects in North America. One of the largest publicly traded pipeline limited partnerships in America, KMP has an enterprise value of over $20 billion. The general partner of KMP is owned by Knight Inc. (formerly Kinder Morgan, Inc.), a private company.

The non-generally accepted accounting principles, or non-GAAP, financial measure of segment distributable cash flow is presented in this news release. Our non-GAAP financial measure should not be considered as an alternative to GAAP measures such as net income or any other GAAP measure of liquidity or financial performance.

Segment distributable cash flow is a significant metric used by us and by external users of our financial statements, such as investors, research analysts, commercial banks and others because it serves as an indicator of our success in providing a cash return on investment.

We define segment distributable cash flow to be segment net income before DD&A, less sustaining capital expenditures. Management uses this measure and believes it is important to users of our financial statements because it believes the measure effectively reflects our business' ongoing cash generation capacity. Management uses this measure in its analysis of segment performance and managing our business. We believe segment distributable cash flow is a significant performance metric because it enables us and external users of our financial statements to better understand the ability of our segments to generate cash on an ongoing basis. We believe it is useful to investors because it is a measure that management believes is important and that our chief operating decision makers use for purposes of making decisions about allocating resources to our segments and assessing the segments' respective performance.

We believe the GAAP measure most directly comparable to segment distributable cash flow is segment earnings before DD&A.

Our non-GAAP measure described above should not be considered as an alternative to GAAP net income, segment earnings before DD&A or any other GAAP measure. Segment distributable cash flow is not a financial measure in accordance with GAAP and has important limitations as an analytical tool. You should not consider this non-GAAP measure in isolation or as a substitute for an analysis of our results as reported under GAAP. Because segment distributable cash flow excludes some but not all items that affect net income and because distributable cash flow measures are defined differently by different companies in our industry, our segment distributable cash flow may not be comparable to distributable cash flow measures of other companies. Management compensates for the limitations of this non-GAAP measure by reviewing our comparable GAAP measures, understanding the differences between the measures and taking this information into account in its analysis and its decision making processes.

This news release includes forward-looking statements. Although Kinder Morgan believes that its expectations are based on reasonable assumptions, it can give no assurance that such assumptions will materialize. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein are enumerated in Kinder Morgan's Forms 10-K and 10-Q as filed with the Securities and Exchange Commission.

SOURCE:

Kinder Morgan Energy Partners, L.P.
Media Relations
Larry Pierce, 713-369-9407
or
Investor Relations
Mindy Mills, 713-369-9490
www.kindermorgan.com