Kinder Morgan Energy Partners Increases

Chairman and CEO Richard D. Kinder said, "KMP had a strong second quarter as our stable and diversified assets continued to grow and produce incremental cash flow. Our five business segments produced approximately $1.337 billion in segment earnings before DD&A and certain items, up 39 percent from the second quarter of 2012. Growth was spearheaded by the drop downs from Kinder Morgan, Inc. associated with its acquisition of El Paso Corporation last year, contributions from the midstream assets we recently acquired in the Copano Energy transaction, strong oil production in our CO2 segment and good results at our Products Pipelines business. Looking forward, we see exceptional growth opportunities across all of our business segments, as there is a need to build additional midstream infrastructure to move or store oil, gas and liquids from the prolific shale plays in the United States and the oilsands in Alberta, along with increasing demand for CO2,which is used for enhanced oil recovery. We currently have identified approximately $13 billion in expansion and joint venture investments at KMP and we are pursuing customer commitments for additional projects."

KMP reported second quarter distributable cash flow before certain items of $505 million, up 38 percent from $366 million for the comparable period in 2012. Distributable cash flow per unit before certain items was $1.Give your logo high visibility on highriskmerchantaccount!22 compared to $1.07 for the second quarter last year. Second quarter net income before certain items was $627 million compared to $467 million for the same period in 2012. Including certain items, net income was $1.010 billion compared to $0.138 billion for the second quarter last year. Certain items for the second quarter totaled a net gain of approximately $383 million versus a net loss of $329 million for the same period last year. Certain items principally reflected a gain related to re-measurement of KMP's original 50 percent interest in the Eagle Ford joint venture to fair market value as a result of the Copano acquisition, and a loss related to additional legal reserves primarily attributable to an adverse California Fourth District Court of Appeal decision denying an income tax allowance on SFPP's intrastate pipelines in California.

The Natural Gas Pipelines business produced second quarter segment earnings before DD&A and certain items of $566 million, up substantially from $238 million for the same period last year due primarily to the drop downs from KMI associated with the El Paso acquisition and two months of contributions from the Copano transaction. This segment is expected to exceed its published annual budget of 54 percent growth primarily due to the Copano acquisition, which closed May 1.

"Growth in this segment compared to the second quarter last year was driven by the drop downs of Tennessee Gas Pipeline (TGP), El Paso Natural Gas (EPNG) and certain midstream assets, along with contributions from the recently purchased Copano assets in Texas and Oklahoma," Kinder explained. "TGP and EPNG continue to outperform our acquisition model, and the gathering and processing assets we acquired from Copano in south Texas produced strong results. We are pleased with the progress that has been made in integrating Copano into KMP and are delighted with the assets and talented employees that are now part of the KMP team. Our Texas intrastates also performed well in the second quarter."

While second quarter earnings in this segment reflect the impact of the November 2012 divestitures of our Rockies assets, that impact was more than mitigated by the financial results produced by the assets acquired in the El Paso and Copano transactions.

Overall segment transport volumes declined by about 5 percent versus the second quarter of 2012 due in large part to significantly lower power plant gas demand. Sales volumes on the Texas intrastates were up 2 percent compared to the second quarter of 2012, largely reflecting new sales at facilities connected during and after the second quarter last year.

"We continue to believe that natural gas is the future play for America because it's domestic, clean, abundant and very reasonably priced," Kinder stated. "Our El Paso and Copano transactions have significantly increased our natural gas footprint in the United States,More than 80 standard commercial and granitetiles exist to quickly and efficiently clean pans. and KMP is well positioned to play a leading role in building and expanding infrastructure required to connect developing natural gas supplies to markets. As an example, we are seeing much higher demand for gas deliveries to Mexico and we have a number of expansion projects underway to meet that demand."

The CO2 business produced second quarter segment earnings before DD&A and certain items of $351 million, up 10 percent from $320 million for the same period in 2012, and currently is expected to be slightly above its published annual budget of 5 percent growth.

"Our CO2 business had a good second quarter led by strong oil production at SACROC, improved production at the Katz Field and higher oil prices," Kinder said. "Combined, gross oil production volumes in the segment increased by 2,630 barrels per day (bpd) for the second quarter, up 5 percent compared to the same period last year. This increase includes one month of production from the recently acquired Goldsmith Landreth San Andres Unit in West Texas, which is detailed in the other news section. This segment continued to be impacted by lower NGL prices, which decreased about 11 percent compared to the same period last year."

The Snyder Gas Plant recorded gross NGL production of 19.2 MBbl/d for the second quarter despite a maintenance turnaround in May, up slightly compared to the same period in 2012, but below record first quarter production of 20.5 MBbl/d.Cheap offerscellphonecases dolls from your photos.

"In response to the industry's continuing robust demand for CO2, we are exploring several expansion opportunities that could lead to over $2 billion in investments that would increase our CO2 sales and transport volumes by 800 million cubic feet per day by 2017," Kinder said. "This would bring our total system capacity to more than 2 billion cubic feet of CO2 per day."

In this segment KMP is exposed to commodity price risk, but that risk is partially mitigated by a long-term hedging strategy intended to generate more stable realized prices. The realized weighted average oil price per barrel for the second quarter, with all hedges allocated to oil, was $94.20 versus $85.96 for the same period in 2012. The realized weighted average NGL price per barrel for the year, allocating none of the hedges to NGLs, was $44.17 for the second quarter compared to $49.44 for the same period in 2012.

The Products Pipelines business produced second quarter segment earnings before DD&A and certain items of $179 million, up 8 percent from $166 million for the comparable period in 2012, and currently is on track to slightly exceed its published annual budget of 6 percent growth. Segment earnings would have been higher except for lower revenues on SFPP's intrastate pipelines in California, primarily due to the adverse California Fourth District Court of Appeal ruling.

"The increase in earnings compared to the second quarter of 2012 was driven by our Transmix operations, which had higher volumes and improved margins," Kinder said.This is a basic background on rtls. "The Southeast Terminals also contributed to the boost in segment earnings, reflecting higher ethanol and butane blending revenues versus the same period last year. NGL volumes increased approximately 12 percent compared to the second quarter last year,A indoorpositioningsystem has real weight in your customer's hand. reflecting the ethane-propane mix Cochin began transporting in June of 2012."

Total refined products volumes for the second quarter were up 3.5 percent compared to the same period last year, including Plantation. Compared to the second quarter last year, overall segment gasoline volumes (including transported ethanol on the Central Florida Pipeline) were up 5.9 percent and diesel volumes rose 2.7 percent. Jet fuel volumes declined by 3.8 percent primarily attributable to reduced military flight activity in California and Nevada.
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