Table of Contents

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| þ |    | ANNUAL      REPORT PURSUANT TO SECTION 13 OR 15(d)OF      THE SECURITIES EXCHANGE ACT OF 1934 |
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| o |    | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d)OF      THE SECURITIES EXCHANGE ACT OF 1934 |
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| Kansas                                                              |    | 48-0290000                                |
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| (State      or other jurisdiction of incorporation or organization) |    | (I.R.S.      Employer Identification No.) |

| 500      Dallas Street, Suite 1000, Houston, Texas 77002           |
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| (Address      of principal executive offices, including zip  code) |

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KNIGHT INC. AND SUBSIDIARIES

|            |                                                                                                  | PageNumber                                                                                             |
|-----------------|-------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------|
|            | PART I                                                                                                |                                                                                                   |   |
| Items 1. and 2. | Business and Properties                                                                               | 4-36                                                                                                   |   |
|            |                                                                                                  | Recent Developments                                                                                    | 4 |   |
|            |                                                                                                  | Business Strategy                                                                                      | 10 |   |
|            |                                                                                             | Business Segments                                                                                      | 10 |   |
|            |                                                                                             | Natural Gas Pipeline Company of America                                                                | 11 |   |
|            |                                                                                             | Power                                                                                                  | 11 |   |
|            |                                                                                             | Products Pipelines–KMP                                                                           | 11 |   |
|            |                                                                                             | Natural Gas      Pipelines–KMP                                                                   | 15 |   |
|            |                                                                                             | CO2–KMP                                                                                          | 22 |   |
|            |                                                                                             | Terminals–KMP                                                                                    | 26 |   |
|            |                                                                                             | Kinder Morgan Canada–KMP                                                                         | 28 |   |
|            |                                                                                                  | Major Customers                                                                                        | 30 |   |
|            |                                                                                             | Regulatory and Compliance    Matters                                                                   | 30 |   |
|            |                                                                                             | Environmental Matters                                                                                  | 33 |   |
|            |                                                                                             | Other                                                                                                  | 35 |   |
| Item 1A.        | Risk Factors                                                                                          | 36-44                                                                                                  |   |
| Item 1B.        | Unresolved Staff Comments                                                                             | 44                                                                                                     |   |
| Item 3.         | Legal Proceedings                                                                                     | 44                                                                                                     |   |
| Item 4.         | Submission of Matters to a Vote of Security      Holders                                              | 44                                                                                                     |   |
|       |                                                                                                  |                                                                                                   |   |
|            | PART II                                                                                               |                                                                                                   |   |
| Item 5.         | Market for Registrant’s Common Equity, Related      Stockholder                                 |                                                                                                   |   |
|            | Matters and Issuer Purchases of Equity      Securities                                                | 45                                                                                                     |   |
| Item 6.         | Selected Financial Data                                                                               | 45-46                                                                                                  |   |
| Item 7.         | Management’s Discussion and Analysis of Financial Condition      and Results of Operations | 47-83                                                                                                  |   |
|       |                                                                                             | General                                                                                                | 47 |   |
|       |                                                                                             | Critical Accounting Policies, Estimates and Annual      Goodwill Impairment Test                       | 49 |   |
|            |                                                                                                  | New Basis of Accounting                                                                                | 52 |   |
|       |                                                                                             | Consolidated FinancialResults                                                                          | 53 |   |
|       |                                                                                             | Results of Operations                                                                                  | 55 |   |
|       |                                                                                             | Natural Gas Pipeline Company of    America                                                             | 55 |   |
|       |                                                                                             | Power                                                                                                  | 56 |   |
|       |                                                                                             | Products Pipelines–KMP                                                                           | 57 |   |
|       |                                                                                             | Natural Gas Pipelines–KMP                                                                        | 60 |   |
|       |                                                                                             | CO2–KMP                                                                                          | 62 |   |
|       |                                                                                             | Terminals–KMP                                                                                    | 65 |   |
|       |                                                                                             | Kinder Morgan Canada–KMP                                                                         | 67 |   |
|            |                                                                                                  | General and Administrative    Expense                                                                  | 68 |   |
|       |                                                                                             | Interest and Other, Net                                                                                | 69 |   |
|       |                                                                                             | Income Taxes–Continuing      Operations                                                          | 70 |   |
|       |                                                                                             | Income Taxes–Realization of Deferred Tax      Assets                                             | 70 |   |
|       |                                                                                             | Liquidity and CapitalResources                                                                         | 71 |   |
|       |                                                                                             | Investment in Kinder Morgan Energy      Partners                                                       | 76 |   |
|       |                                                                                             | Cash Flows                                                                                             | 77 |   |
|            |                                                                                                  | Minority Interests Distributions to Kinder Morgan      Energy Partners’ Common Unit Holders | 79 |   |
|            |                                                                                                  | Fair Value Measurement                                                                                 | 80 |   |
|       |                                                                                             | Litigation and Environmental      Matters                                                              | 81 |   |
|       |                                                                                             | Regulation                                                                                             | 82 |   |
|       |                                                                                             | Recent AccountingPronouncements                                                                        | 82 |   |
|            |                                                                                                  | Information Regarding Forward-looking      Statements                                                  | 82 |   |
| Item 7A.        | Quantitative and Qualitative Disclosures About Market      Risk                                       | 83-86                                                                                                  |   |
| Item 8.    | Financial Statements and Supplementary    Data                                                        | 87-182                                                                                                 |   |
| Item 9.         | Changes in and Disagreements With Accountants on Accounting      and Financial Disclosure             | 182                                                                                                    |   |
| Item 9A.        | Controls and Procedures                                                                               | 182                                                                                                    |   |
|            | Conclusion Regarding the Effectiveness of Disclosure      Controls and Procedures                     | 182                                                                                                    |   |
|            | Management’s Report on Internal Control over      Financial Reporting                           | 182                                                                                                    |   |
|            | Changes in Internal Control over Financial      Reporting                                             | 183                                                                                                    |   |
| Item 9B.        | Other Information                                                                                     | 183                                                                                                    |   |

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|    | PART III                                                                                                 |    |   |
|--------------|----------------------------------------------------------------------------------------------------------|---------|--------|
| Item 10.     | Directors, Executive Officers and Corporate      Governance                                              | 184-185 |   |
| Item 11.     | Executive Compensation                                                                                   | 186-194 |   |
| Item 12.     | Security Ownership of Certain Beneficial Owners and      Management and Related Stockholder Matters | 195-197 |   |
| Item 13.     | Certain Relationships and Related Transactions, and      Director Independence                           | 197     |   |
| Item 14.     | Principal Accounting Fees and Services                                                                   | 197-198 |   |
|    |                                                                                                     |    |   |
|    | PART IV                                                                                                  |    |   |
| Item 15.     | Exhibits, Financial Statement Schedules                                                                  | 199-201 |   |
|    |                                                                                                     |    |   |
| Signatures   | 202                                                                                                      |    |

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|   | Knight      Form 10-K |
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PART I

Items 1. and 2.  Business andProperties.

Recent Developments

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
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|   | · | On      February 15, 2008, we sold an 80% ownership interest in our NGPL business      segment to Myria Acquisition Inc. (“Myria”) for approximately $5.9      billion. The $5.9 billion of proceeds from this sale, along with cash on      hand, were used to: (i) payoff the outstanding $4.2 billion balance on our      senior secured credit facility’s Tranche A and Tranche B term loans that      had been incurred to help finance the Going Private transaction discussed      above, (ii) repurchase $1.67 billion of outstanding debt securities and      (iii) reduce the outstanding debt under our $1.0 billion revolving credit      facility. We continue to operate NGPL’s assets pursuant to a 15-year      operating agreement. Myria is owned by a syndicate of investors led by      Babcock & Brown, an international investment and specialized fund and      asset management group. |
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|   | · | Effective      January 1, 2008, we sold our interests in three natural gas-fired power      plants in Colorado to Bear Stearns and we received net proceeds of $63.1      million. |
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|   | · | In      October 2008, Kinder Morgan Energy Partners successfully completed a      series of tests demonstrating the commercial feasibility of transporting      batched denatured ethanol on our 16-inch diameter gasoline pipeline that      extends between Tampa and Orlando, Florida. After making certain      mechanical modifications to the pipeline in late-November, Kinder Morgan      Energy Partners began batching denatured ethanol shipments along with      gasoline shipments for its customers, making our Central Florida Pipeline      the first gasoline pipeline in the U.S. capable of also handling ethanol      in commercial movements. |
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|   | · | In      October 2008, Plantation Pipe Line Company successfully shipped a 20,000      barrel batch of blended biodiesel (a 5% blend commonly referred to as B5).      The shipment originated at Collins, Mississippi and was delivered to a      customer terminal located in Spartanburg, South Carolina. Plantation is      currently developing plans to expand its capability to deliver biodiesel      to at least ten markets served by its pipeline system in the Southeast.      Assuming sufficient commercial support, Plantation Pipe Line Company      expects to be moving forward with investments to provide this service      during the second quarter of 2009. |
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|   | · | In      November 2008, Kinder Morgan Energy Partners’ West Coast Products      Pipelines completed an approximate $25 million expansion project that      included the construction of four 80,000 barrel tanks and ancillary      facilities that provide military jet fuel and marine diesel fuel service      to the U.S. Marine Corps Naval Air Station in Miramar, California and the      Naval Air Station in Point Loma,California. |
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|   | · | On      December 10, 2008, Kinder Morgan Energy Partners’ West Coast Products      Pipelines operations purchased a 200,000 barrel refined petroleum products      terminal located in Phoenix, Arizona from ConocoPhillips for approximately      $27.5 million in cash. |
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|   | · | Effective      April 1, 2008, Kinder Morgan Energy Partners sold its 25% equity ownership      interest in Thunder Creek Gas Services, LLC to PVR Midstream LLC, a      subsidiary of Penn Virginia Corporation, for approximately $50.7 million      in cash. |
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|   | · | On      May 20, 2008, transportation service on the final 210 miles of the Rockies      Express-West pipeline segment commenced. Interim service for up to 1.4      billion cubic feet per day of natural gas on the segment’s first 503 miles      of pipe began on January 12, 2008. The Rockies Express-West pipeline      segment is the second phase of the Rockies Express Pipeline and consists      of a 713-mile, 42-inch diameter pipeline that extends from the Cheyenne      Hub in Weld County, Colorado to an interconnect with Panhandle Eastern      Pipeline Company in Audrain County, Missouri. Now fully operational,      Rockies Express-West has the capacity to transport up to 1.5 billion cubic      feet of natural gas per day and can make deliveries to interconnects with      Kinder Morgan Interstate Gas Transmission Pipeline  LLC, |
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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
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|   |   | Northern      Natural Gas Company, Natural Gas Pipeline Company of America LLC, ANR      Pipeline Company and Panhandle Eastern Pipeline  Company. |
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|   | · | On      May 30, 2008, the Federal Energy Regulatory Commission (“FERC”) issued an      order authorizing construction of the Rockies Express-East pipeline      segment, the third phase of the Rockies Express Pipeline. Rockies      Express-East is a 639-mile, 42-inch diameter pipeline that will extend      from Audrain County, Missouri to Clarington, Ohio. When fully completed,      the 1,679-mile Rockies Express Pipeline will have the capability to      transport 1.8 billion cubic feet per day of natural gas and binding firm      commitments from creditworthy shippers have been secured for all of the      pipeline capacity. Kinder Morgan Energy Partners is a 51% owner in the      Rockies Express Pipeline, which is estimated to cost approximately $6.3      billion including expansion when completed (consistent with Kinder Morgan      Energy Partners’ January 21, 2009 fourth quarter earnings      release). |
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|   | · | Rockies      Express Pipeline LLC is requesting authorization to construct and operate      certain facilities that upon completion will comprise its Meeker, Colorado      to Cheyenne, Wyoming expansion project. The proposed expansion will      consist of additional natural gas compression at its Big Hole compressor      station located in Moffat County, Colorado and its Arlington compressor      station located in Carbon County, Wyoming. Upon completion, the additional      compression will permit the transportation of an additional 200 million      cubic feet per day of natural gas from (i) the Meeker Hub located in Rio      Blanco County, Colorado northward to the Wamsutter Hub located in      Sweetwater County, Wyoming; and (ii) from the Wamsutter Hub eastward to      the Cheyenne Hub located in Weld County, Colorado. The expansion is fully      supported by long-term contracts and is expected to be operational in      April 2010. The total estimated cost for the proposed project is      approximately $78 million. Rockies Express Pipeline LLC submitted an      application to the FERC seeking approval to construct and operate this      expansion on February 3, 2009. |
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|   | · | In      June 2008, Kinder Morgan Energy Partners’ Texas intrastate group began gas      injections into a fifth cavern at its salt dome storage facility located      near Markham, Texas as part of an $84 million expansion. After final      developments were completed in January 2009, the project added 7.5 billion      cubic feet of natural gas working storage capacity, and gas injection      capacity will increase by approximately 110 million cubic feet per day      upon completion of compression installation in spring 2009. In addition,      the Texas intrastate pipeline group’s approximately $13 million Texas Hill      Country natural gas compression project was completed in January 2009,      resulting in 45 million cubic feet of incremental pipeline capacity out of      West Texas, primarily serving the Austin, Texas  market. |
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|   | · | On      July 25, 2008, the FERC approved the application made by Midcontinent      Express Pipeline LLC to construct and operate the approximately 500-mile      Midcontinent Express Pipeline natural gas transmission system and to lease      272 million cubic feet of capacity on the Oklahoma intrastate system of      Enogex Inc. Kinder Morgan Energy Partners and Energy Transfer Partners,      L.P. each own a 50% interest in Midcontinent Express Pipeline LLC, the      sole owner of the Midcontinent ExpressPipeline. |
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|   | · | Construction      continues on the fully-owned Kinder Morgan Louisiana Pipeline and the      current cost estimate for this natural gas transmission system is      approximately $950 million. The project is supported by fully subscribed      capacity and long-term customer      commitments with Chevron and Total and it is anticipated that the pipeline      will become fully operational during the second quarter of      2009. |
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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
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|   | · | In      September 2008, Kinder Morgan Energy Partners completed construction of an      approximately $75 million natural gas pipeline that transports additional      East Texas natural gas supplies to markets in the Houston and Beaumont,      Texas areas. The new pipeline connects the Kinder Morgan Tejas system in      Houston County, Texas to the Kinder Morgan Texas Pipeline system in Polk      County near Goodrich, Texas. Kinder Morgan Energy Partners entered into a      long-term binding agreement with CenterPoint Energy Services, Inc. to      provide firm transportation for a significant portion of the initial      project capacity, which consists of approximately 225 million cubic feet      per day of natural gas. |
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|   | · | On      October 1, 2008, Kinder Morgan Energy Partners and Energy Transfer      Partners, L.P. announced a joint venture to build and develop the      Fayetteville Express Pipeline, a new $1.2 billion natural gas pipeline      that will provide shippers in the Arkansas Fayetteville Shale area with      takeaway natural gas capacity and further access to growing markets. The      project is expected to be in service in 2010 or early 2011 and has secured      binding 10-year commitments totaling 1.85 billion cubic feet per      day. |
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|   | · | In      October 2008, Kinder Morgan Energy Partners completed construction of an      approximately $22 million expansion project on the Kinder Morgan      Interstate Gas Transmission LLC pipeline system that provides for the      delivery of natural gas to five separate industrial plants (four of which      produce ethanol) located near Grand Island, Nebraska. The project is fully      subscribed with long-term customercontracts. |
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|   | · | On      November 24, 2008, Kinder Morgan Interstate Gas Transmission LLC completed      construction and placed into service its previously announced Colorado      Lateral Pipeline. The approximately $39 million expansion project extends      from the Cheyenne Hub to interconnects with Atmos Energy’s pipeline near      Greeley, Colorado. The pipeline provides firm natural gas transportation      of up to 74 million cubic feet per day to local distribution companies and      to industrial end users. |
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|   | · | As      of February 1, 2009, the CO2–KMP      business segment was nearing completion of its previously announced      southwest Colorado carbon dioxide expansion project. Combined, the      expansion will cost its owners approximately $290 million and includes      developing a new carbon dioxide source field (named the Doe Canyon Deep      Unit), drilling new wells and expanding infrastructure at both the McElmo      Dome Unit and the Cortez pipeline. The entire expansion increases carbon      dioxide supplies by approximately 300 million cubic feet per day to its      customers. |
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|   | · | On      January 16, 2008, Kinder Morgan Energy Partners announced plans to invest      approximately $56 million to construct a petroleum coke terminal at the BP      refinery located in Whiting, Indiana. Kinder Morgan Energy Partners has      entered into a long-term contract to build and operate the facility, which      will handle approximately 2.2 million tons of petroleum coke per year from      a coker unit BP plans to construct to process heavy crude oil from Canada.      The facility is expected to be in service in mid-year  2011. |
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|   | · | On      March 20, 2008, Kinder Morgan Energy Partners announced the completion of      several expansion projects representing total investment of more than $500      million at various bulk and liquids terminal facilities. The primary      investment projects included (i) an approximately $195 million expansion      for additional tankage at the combined Galena Park/Pasadena, Texas liquids      terminal facilities located on the Houston, Texas Ship Channel; (ii) an      approximately $170 million investment to construct the Kinder Morgan North      40 terminal, a crude oil tank farm situated on approximately 24 acres near      Edmonton, Alberta, Canada; (iii) an approximately $70 million capital      improvement project at the Pier IX bulk terminal located in Newport News,      Virginia; and (iv) an approximately $68 million for the construction of      nine new liquid storage tanks at the Perth Amboy, New Jersey liquids      terminal located on the New YorkHarbor. |
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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

|   |   | The      storage expansion at the Galena Park/Pasadena terminals brings total      capacity of the combined complex to approximately 25 million barrels. As      previously announced, the building of the Kinder Morgan North 40 terminal      included the construction of nine storage tanks with a combined capacity      of approximately 2.15 million barrels for crude oil, all of which is      subscribed by shippers under long-term contracts. The Pier IX project      involved the construction of a new ship dock and the installation of a new      import coal facility that is expected to increase terminal throughput by      30% to about nine million tons a year. The expansion at Perth Amboy      included the building of nine new liquid storage tanks, which increased      capacity for refined petroleum products and chemicals by 1.4 million      barrels, bringing total terminal capacity to approximately 3.7 million      barrels. |
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|   | · | Effective      August 5, 2008, Kinder Morgan Energy Partners acquired certain terminal      assets from Chemserv, Inc. for an aggregate consideration of approximately      $12.7 million, consisting of $11.8 million in cash and $0.9 million in      assumed liabilities. The acquired assets are primarily involved in the      storage of petroleum products andchemicals. |
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|   | · | In      December 2008, Kinder Morgan Energy Partners began operations at its      approximately $47 million terminal, which offers liquids, storage,      transfer and packaging facilities at the Rubicon Plant site located in      Geismar, Louisiana. The newly constructed terminal has liquids storage      capacity of approximately 123,500 barrels and has approximately 144,000      square feet of warehouse space. |
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|   | · | Construction      continues on an approximately $13 million expansion at Kinder Morgan      Energy Partners’ Cora coal terminal, located in Rockwood, Illinois along      the upper Mississippi River. The project will increase terminal storage      capacity by approximately 250,000 tons (to 1.25 million tons) and will      expand maximum throughput at the terminal to approximately 13 million tons      annually. It is expected that the Cora expansion project will be completed      in the second quarter of 2009. |
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|   | · | Effective      August 28, 2008, we sold our one-third equity ownership interest in the      Express crude oil pipeline system, as well as full ownership of the Jet      Fuel pipeline system that serves the Vancouver (Canada) International      Airport to Kinder Morgan Energy Partners. As consideration for these      assets, Kinder Morgan Energy Partners issued approximately two million of      its common units to us, valued at $116.0 million. For additional      information regarding this transaction, see Note 10 of the accompanying      Notes to Consolidated FinancialStatements. |
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|   | · | On      October 30, 2008, Kinder Morgan Energy Partners completed the construction      and commissioning of its approximately $544 million Anchor Loop project,      the second and final phase of a Trans Mountain pipeline system expansion      that in total, increased pipeline capacity from approximately 225,000 to      300,000 barrels of crude oil perday. |
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|   | · | On      February 12, 2008, Kinder Morgan Energy Partners completed a public      offering of senior notes. A total of $900 million in principal amount of      senior notes was issued, consisting of $600 million of 5.95% notes due      February 15, 2018 and $300 million of 6.95% notes due January 15, 2038.      Kinder Morgan Energy Partners used the net proceeds of $894.1 million to      reduce the borrowings under its commercial paper  program. |
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|   | · | Also      on this date, Kinder Morgan Energy Partners completed an offering of      1,080,000 of its common units at a price of $55.65 per unit in a privately      negotiated transaction and used the net proceeds of $60.1 million to      reduce the borrowings under its commercial paper  program. |
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|   | · | In March 2008, Kinder      Morgan Energy Partners completed a public offering of 5,750,000 of its      common units at a price of $57.70 per unit and used the net proceeds of      $324.2 million to reduce the borrowings under its commercial paper      program. |
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|   | · | On      June 6, 2008, Kinder Morgan Energy Partners completed a $700 million      public offering of senior notes and used the net proceeds of $687.7      million to reduce the borrowings under its commercial paper      program. |
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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

|   | · | On      November 24, 2008, Kinder Morgan Energy Partners announced that it      expected to declare cash distributions of $4.20 per unit for 2009, a 4.5%      increase over its cash distributions of $4.02 per unit for 2008. Kinder      Morgan Energy Partners’ expected growth in distributions in 2009 assumes      an average West Texas Intermediate (“WTI”) crude oil price of $68 per      barrel in 2009 with some minor adjustments for timing, quality and      location differences. Based on actual prices received through the first      seven weeks of 2009 and the forward curve, adjusted for the same factors      as the budget, our average realized price for 2009 is currently projected      to be $49 per barrel. Although the majority of the cash generated by      Kinder Morgan Energy Partners’ assets is fee based and is not sensitive to      commodity prices, the CO2–KMP      business segment is exposed to commodity price risk related to the price      volatility of crude oil and natural gas liquids. Kinder Morgan Energy      Partners hedges the majority of its crude oil production, but does have      exposure to unhedged volumes, the majority of which are natural gas      liquids volumes. For 2009, Kinder Morgan Energy Partners expects that      every $1 change in the average WTI crude oil price per barrel will impact      the CO2–KMP      segment’s cash flows by approximately $6 million (or approximately 0.2% of      Kinder Morgan Energy Partners’ combined business segments’ anticipated      distributable cash flow). This sensitivity to the average WTI crude oil      price is very similar to what was experienced in 2008. The 2009 Kinder      Morgan Energy Partners cash distribution expectations do not take into      account any capital costs associated with financing any payment Kinder      Morgan Energy Partners may make of reparations sought by shippers on its      West Coast Products Pipelines operations’ interstate      pipelines. |
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|   | · | On      December 19, 2008, Kinder Morgan Energy Partners closed a public offering      of $500 million in principal amount of senior notes and used the net      proceeds of $498.4 million to reduce the borrowings under its five-year      unsecured revolving bank creditfacility. |
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|   | · | On December 22, 2008,      Kinder Morgan Energy Partners completed a public offering of 3,900,000 of      its common units at a price of $46.75 per unit, less commissions and      underwriting expenses and used the net proceeds of $176.6 million to      reduce the borrowings under its five-year unsecured revolving bank credit      facility. |
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|   | · | In      December 2008 and January 2009, Kinder Morgan Energy Partners terminated      three existing fixed-to-variable interest rate swap agreements in three      separate transactions. These swap agreements had a combined notional      principal amount of $1.0 billion and Kinder Morgan Energy Partners      received combined proceeds of $338.7 million from the early termination of      these swap agreements. |
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|   | · | On      February 2, 2009, Kinder Morgan Energy Partners paid $250 million to      retire the principal amount of its 6.3% senior notes that matured on that      date. |
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|   | · | In      February and March 2009, Kinder Morgan Energy Partners      sold 5,666,000 of its common units in a public offering at a price of      $46.95 per unit. Kinder Morgan Energy Partners received net proceeds,      after commissions and underwriting expenses, of approximately $260 million      for the issuance of these 5,666,000 common units and used the      proceeds to reduce the borrowings under its bank credit facility.·On February      25, 2009, Kinder Morgan Energy Partners entered      into four additional fixed-to-floating interest rate swap      agreements having a combined notional principal amount of $1.0 billion      related to (i) $200 million 6% senior notes due 2017, (ii)      $300 million of 5.125% senior notes due 2014, (iii) $25 million 5% senior      notes due 2013 and (iv) $475 million of 5.95% senior notes due      2018. |
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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

Business Strategy

|   | · | focusing      on stable, fee-based energy transportation and storage assets that are      core to the energy infrastructure of growing markets within North      America; |
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|   | · | increasing      utilization of our existing assets while controlling costs, operating      safely and employing environmentally sound operating      practices; |
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|   | · | leveraging      economies of scale from incremental acquisitions and expansions of assets      that fit within our strategy and are accretive to cash flow and earnings;      and |
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|   | · | maximizing      the benefits of our financial structure to create and return value to our      stockholders. |
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Business Segments

|   | · | Natural Gas Pipeline Company      of America—which consists of our 20% interest in NGPL PipeCo LLC,      the owner of Natural Gas Pipeline Company of America LLC and certain      affiliates, collectively referred to as Natural Gas Pipeline Company of      America or NGPL, a major interstate natural gas pipeline and storage      system which we operate; |
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|   | · | Power—which consists of      two natural gas-fired electric generation  facilities; |
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|   | · | Products      Pipelines–KMP—which consists of approximately 8,300 miles of      refined petroleum products pipelines that deliver gasoline, diesel fuel,      jet fuel and natural gas liquids to various markets; plus approximately 60      associated product terminals and petroleum pipeline transmix processing      facilities serving customers across the United  States; |
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|   | · | Natural Gas      Pipelines–KMP—which consists of over 14,300 miles of natural gas      transmission pipelines and gathering lines, plus natural gas storage,      treating and processing facilities, through which natural gas is gathered,      transported, stored, treated, processed and  sold; |
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|   | · | CO2–KMP—which produces,      markets and transports, through approximately 1,300 miles of pipelines,      carbon dioxide to oil fields that use carbon dioxide to increase      production of oil; owns interests in and/or operates ten oil fields in      West Texas; and owns and operates a 450-mile crude oil pipeline system in      West Texas; |
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|   | · | Terminals–KMP—which      consists of approximately 110 owned or operated liquids and bulk terminal      facilities and more than 45 rail transloading and materials handling      facilities located throughout the United States and portions of Canada,      which together transload, store and deliver a wide variety of bulk,      petroleum, petrochemical and other liquids products for customers across      the United States and Canada; and |
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|   | · | Kinder Morgan      Canada–KMP—which consists of over 700 miles of common carrier      pipelines, originating at Edmonton, Alberta, for the transportation of      crude oil and refined petroleum to the interior of British Columbia and to      marketing terminals and refineries located in the greater Vancouver,      British Columbia area and Puget Sound in Washington State; plus five      associated product terminals. This segment also includes a one-third      interest in an approximately 1,700-mile integrated crude oil pipeline and      a 25-mile aviation turbine fuel pipeline serving the Vancouver      International Airport. |
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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

Natural Gas Pipeline Company of America

In February 2008, we completed the sale of an 80% ownershipinterest in NGPL for approximately $5.9 billion. We account for our 20%ownership interest as an equity method investment. We continue to operate NGPL’sassets pursuant to a 15-year operating agreement. NGPL owns and operatesapproximately 9,700 miles of interstate natural gas pipelines, storage fields,field system lines and related facilities, consisting primarily of two majorinterconnected natural gas transmission pipelines terminating in the Chicago,Illinois metropolitan area. NGPL’s Amarillo Line originates in the West Texasand New Mexico producing areas and is comprised of approximately 4,400 miles ofmainline and various small-diameter pipelines. Its other major pipeline, theGulf Coast Line, originates in the Gulf Coast areas of Texas and Louisiana andconsists of approximately 4,100 miles of mainline and various small-diameterpipelines. These two main pipelines are connected at points in Texas andOklahoma by NGPL’s approximately 800-mile Amarillo/Gulf Coast pipeline. NGPL’ssystem has 813 points of interconnection with 34 interstate pipelines, 34intrastate pipelines, 38 local distribution companies, 32 end users includingpower plants and a number of gas producers, thereby providing significantflexibility in the receipt and delivery of natural gas.

Power

Products Pipelines–KMP

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

Natural Gas Pipelines–KMP

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

|   | · | Kinder      Morgan Texas Pipeline; |
|--------|--------|------------------------------------|

|   | · | Kinder      Morgan Tejas Pipeline; |
|--------|--------|------------------------------------|

|   | · | Mier-Monterrey      Mexico Pipeline; and |
|--------|--------|------------------------------------------|

|   | · | Kinder      Morgan North Texas Pipeline. |
|--------|--------|------------------------------------------|

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

|   | · | Kinder      Morgan Interstate Gas Transmission (“KMIGT”)  Pipeline; |
|--------|--------|---------------------------------------------------------------------------------|

|   | · | Trailblazer      Pipeline Company LLC(“Trailblazer”); |
|--------|--------|-------------------------------------------------------------------|

|   | · | TransColorado      Gas Transmission Company LLC (“TransColorado”) Pipeline;    and |
|--------|--------|------------------------------------------------------------------------------------------------|

|   | · | 51%      ownership interest in the Rockies Express Pipeline  LLC. |
|--------|--------|-------------------------------------------------------------------|

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

|   | · | a      132-mile, 42-inch diameter pipeline with firm capacity of approximately      2.0 billion cubic feet per day of natural gas that will extend from the      Sabine Pass terminal to a point of interconnection with an existing      Columbia Gulf Transmission line in Evangeline Parish, Louisiana (an      offshoot will consist of approximately 2.3 miles of 24-inch diameter      pipeline with firm peak day capacity of approximately 300 million cubic      feet per day extending away from the 42-inch diameter line to the existing      Florida Gas Transmission Company compressor station in Acadia Parish,      Louisiana); and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a      1-mile, 36-inch diameter pipeline with firm capacity of approximately 1.2      billion cubic feet per day that will extend from the Sabine Pass terminal      and connect to NGPL’s natural gas pipeline. Kinder Morgan Louisiana      Pipeline is expected to be operational during the third quarter of      2009. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

CO2–KMP

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

|                                                                                                                                                                               | Productive Wells1 |   | Service Wells2 |   | Drilling Wells3 |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------|--------|----------------|--------|-----------------|
|                                                                                                                                                                               | Gross             |   | Net            |   | Gross           |   | Net |   | Gross |   | Net |
| Crude      Oil                              | 2,906             |   | 2,029          |   | 895             |   | 700 |   | 4 |   | 4 |
| Natural      Gas                            | 6                 |   | 3              |   | 36              |   | 18 |   | ─ |   | ─ |
| Total      Wells                                                                                                                                                                   | 2,912             |   | 2,032          |   | 931             |   | 718 |   | 4 |   | 4 |

| 1 | Includes      active wells and wells temporarily shut-in. As of December 31, 2007,      Kinder Morgan Energy Partners did not operate any productive wells with      multiple completions. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Consists      of injection, water supply, disposal wells and service wells temporarily      shut-in. A disposal well is used for disposal of saltwater into an      underground formation; a service well is a well drilled in a known oil      field in order to inject liquids that enhance recovery or dispose of salt      water. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | Consists      of development wells in the process of being drilled as of December 31,      2008. A development well is a well drilled in an already discovered oil      field. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

|                                                                                                                                                                                                                               | 2008   |   | 2007   |   | 2006   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|
| Productive                                                                                                                                                                                                                         |   |   |   |   |   |
| Development                                              | 47     |   | 31     |   | 37     |
| Exploratory                                              | -      |   | -      |   | -      |
| Dry                                                                                                                                                                                                                                |   |   |   |   |   |
| Development                                              | -      |   | -      |   | -      |
| Exploratory                                              | -      |   | -      |   | -      |
| Total      Wells                                    | 47     |   | 31     |   | 37     |

| Notes: | The      above table includes wells that were completed during each year regardless      of the year in which drilling was initiated and does not include any wells      where drilling operations were not completed as of the end of the      applicable year. Development wells include wells drilled in the proved      area of an oil or gas reservoir. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                              | Gross  |   | Net    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
| Developed       Acres                                                                                                                                                                              | 72,435 |   | 67,731 |
| Undeveloped      Acres                                                                                                                                                                                       | 9,555  |   | 8,896  |
| Total                                   | 81,990 |   | 76,627 |

|                                                          | Successor      Company           |   |                                     | Predecessor      Company |
|---------------------------------------------------------------|----------------------------------|--------|------------------------------------------|--------------------------|
|                                                          | Year      EndedDecember      31, |   | Seven      Months EndedDecember      31, |                     |   | Five      Months EndedMay      31, |   | Year      Ended December 31, |
|                                                          | 2008                             |   | 2007                                     |                     |   | 2007 |   | 2006 |
| Consolidated      Companies1                                  |                             |   |                                     |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Production      Costs per Barrel of Oil Equivalent2,3,4       | $                                | 20.44  |                                     |                     |   | $ | 17.00 |   |   | $ | 15.15 |   |   | $ | 13.30 |   |
| Crude      Oil Production (MBbl/d)                            |                             | 36.2   |                                     |                     |   |   | 34.9 |   |   |   | 36.6 |   |   |   | 37.8 |   |
| Natural      Gas Liquids Production (MBbl/d)4                 |                             | 4.8    |                                     |                     |   |   | 5.4 |   |   |   | 5.6 |   |   |   | 5.0 |   |
| Natural      Gas Liquids Production from Gas Plants (MBbl/d)5 |                             | 3.5    |                                     |                     |   |   | 4.2 |   |   |   | 4.1 |   |   |   | 3.9 |   |
| Total      Natural Gas Liquids Production (MBbl/d)            |                             | 8.3    |                                     |                     |   |   | 9.6 |   |   |   | 9.7 |   |   |   | 8.9 |   |
| Natural      Gas Production (MMcf/d)4,6                       |                             | 1.4    |                                     |                     |   |   | 0.8 |   |   |   | 0.8 |   |   |   | 1.3 |   |
| Natural      Gas Production from Gas Plants (MMcf/d)5,6       |                             | 0.2    |                                     |                     |   |   | 0.3 |   |   |   | 0.2 |   |   |   | 0.3 |   |
| Total      Natural Gas Production (MMcf/d)6                   |                             | 1.6    |                                     |                     |   |   | 1.1 |   |   |   | 1.0 |   |   |   | 1.6 |   |
| Average      Sales Prices Including Hedge Gains/Losses:       |                             |   |                                     |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Crude      Oil Price per Bbl7                                 | $                                | 49.42  |                                     |                     |   | $ | 36.80 |   |   | $ | 35.03 |   |   | $ | 31.42 |   |
| Natural      Gas Liquids Price per Bbl7                       | $                                | 63.48  |                                     |                     |   | $ | 57.78 |   |   | $ | 44.55 |   |   | $ | 43.52 |   |
| Natural      Gas Price per Mcf8                               | $                                | 7.73   |                                     |                     |   | $ | 5.86 |   |   | $ | 6.41 |   |   | $ | 6.36 |   |
| Total      Natural Gas Liquids Price per Bbl5                 | $                                | 63.00  |                                     |                     |   | $ | 58.55 |   |   | $ | 45.04 |   |   | $ | 43.90 |   |
| Total      Natural Gas Price per Mcf5                         | $                                | 7.63   |                                     |                     |   | $ | 5.65 |   |   | $ | 6.27 |   |   | $ | 7.02 |   |
| Average      Sales Prices Excluding Hedge Gains/Losses:       |                             |   |                                     |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Crude      Oil Price per Bbl7                                 | $                                | 97.70  |                                     |                     |   | $ | 78.65 |   |   | $ | 57.43 |   |   | $ | 63.27 |   |
| Natural      Gas Liquids Price per Bbl7                       | $                                | 63.48  |                                     |                     |   | $ | 57.78 |   |   | $ | 44.55 |   |   | $ | 43.52 |   |
| Natural      Gas Price per Mcf8                               | $                                | 7.73   |                                     |                     |   | $ | 5.86 |   |   | $ | 6.41 |   |   | $ | 6.36 |   |

| 1 | Amounts      relate to Kinder Morgan CO2      Company, L.P. and its consolidated  subsidaries. |
|---|------------------------------------------------------------------------------------------------|

| 2 | Computed      using production costs, excluding transportation costs, as defined by the      Securities and Exchange Commisson. Natural gas volumes were converted to      barrels of oil equivalent (BOE) using a conversion factor of six mcf of      natural gas to one barrel of oil. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

| 3 | Production      costs include labor, repairs and maintenance, materials, supplies, fuel      and power, property taxes, severance taxes and general and administrative      expenses directly related to oil and gas producing    activities. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | Includes      only production attributable to leasehold  ownership. |
|---|---------------------------------------------------------------------|

| 5 | Includes      production attributable to Kinder Morgan Energy Partners’ ownership in      processing plants and third-party processing  agreements. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6 | Excludes      natural gas production used asfuel. |
|---|---------------------------------------------------|

| 7 | Hedge      gains/losses for crude oil and natural gas liquids are included with crude      oil. |
|---|-------------------------------------------------------------------------------------------------|

| 8 | Natural      gas sales were not hedged. |
|---|-----------------------------------------|

Terminals–KMP

The Terminals–KMP segment includes the operations of itspetroleum, chemical and other liquids terminal facilities (other than thoseincluded in the Products Pipelines–KMP segment) and all of its coal, petroleumcoke, fertilizer, steel, ores and dry-bulk material services, including alltransload, engineering, conveying and other in-plant services. Combined, thesegment is composed of approximately 117 owned or operatedliquids and bulk terminal facilities and more than 32 rail transloading andmaterials handling facilities located throughout the United States, Canada andthe Netherlands.

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

Kinder Morgan Canada–KMP

The Kinder Morgan Canada-KMP business segment includes ourTrans Mountain pipeline system, a one-third ownership interest in the Expresspipeline system and the 25-mile Jet Fuel pipeline system.

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

Major Customers

Regulatory and Compliance Matters

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

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

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

|   | · | Order      No. 636 (1992), which required interstate natural gas pipelines that      perform open-access transportation under blanket certificates to      ‘‘unbundle’’ or separate their traditional merchant sales services from      their transportation and storage services and to provide comparable      transportation and storage services with respect to all natural gas      supplies; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Natural      gas pipelines must now separately state the applicable rates for each      unbundled service they provide (i.e., for natural gas commodity,      transportation and storage). Order No. 636 contains a number of procedures      designed to increase competition in the interstate natural gas industry,      including: |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | requiring      the unbundling of sales services from other  services; |
|--------|--------|-----------------------------------------------------------------------|

|   | · | permitting      holders of firm capacity on interstate natural gas pipelines to release      all or a part of their capacity for resale by the pipeline; and the      issuance of blanket sales certificates to interstate pipelines for      unbundled services. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

|   | · | Order      No. 717 (2008), which prohibits transmission providers from disclosing to      a marketing function employee non-public information about the      transmission system or a transmission customer. The final rule also      retains the long-standing no-conduit rule, which prohibits a transmission      function provider from disclosing non-public information to marketing      function employees by using a third party conduit. Additionally, the final      rule requires that a transmission provider provide annual training on the      Standards of Conduct to all transmission function employees, marketing      function employees, officers, directors, supervisory employees and any      other employees likely to become privy to transmission function      information. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

Environmental Matters

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

Other

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| Items 1. and      2.  Business and Properties.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------|-----------------------|

Item 1A.  RiskFactors.

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| Item      1A.  Risk Factors.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------|-----------------------|

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| Item      1A.  Risk Factors.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------|-----------------------|

|   | · | demands      on management related to the increase in our size after an acquisition, an      expansion, or a completed constructionproject; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      diversion of our management’s attention from the management of daily      operations; |
|--------|--------|------------------------------------------------------------------------------------------------------|

|   | · | difficulties      in implementing or unanticipated costs of accounting, estimating,      reporting and other systems; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------|

|   | · | goodwill      and intangible assets that are subject to impairment testing and potential      periodic impairment charges; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------|

|   | · | difficulties      in the assimilation and retention of necessary employees;    and |
|--------|--------|------------------------------------------------------------------------------------|

|   | · | potential      adverse effects on operatingresults. |
|--------|--------|-----------------------------------------------------|

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| Item      1A.  Risk Factors.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------|-----------------------|

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| Item      1A.  Risk Factors.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------|-----------------------|

|   | · | limiting      our ability to obtain additional financing to fund our working capital,      capital expenditures, debt service requirements or potential growth or for      other purposes; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | limiting      our ability to use operating cash flow in other areas of our business      because we must dedicate a substantial portion of these funds to make      payments on our debt; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | placing      us at a competitive disadvantage compared to competitors with less debt;      and |
|--------|--------|------------------------------------------------------------------------------------------------|

|   | · | increasing      our vulnerability to adverse economic and industry    conditions. |
|--------|--------|-----------------------------------------------------------------------------------|

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| Item      1A.  Risk Factors.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------|-----------------------|

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| Item      1A.  Risk Factors.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------|-----------------------|

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| Item      1A.  Risk Factors.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------|-----------------------|

Hurricanes and other natural disasters could have a material adverseeffect on our business, financial condition and results ofoperations.

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| Item      1A.  Risk Factors.      (continued) | Knight      Form 10-K |
|---------------------------------------------------------|-----------------------|

Item 1B.  Unresolved StaffComments.

Item 3.    LegalProceedings.

Item 4.    Submission of Matters to a Vote ofSecurity Holders.

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|   | Knight      Form 10-K |
|--------|-----------------------|

PART II

| Item 5. | Market      for Registrant’s Common Equity, Related Stockholder Matters and Issuer      Purchases of EquitySecurities.   |
|---------|------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                                        | Market Price Per      Share1 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------|
|                                                                                                                                                                                                                                                                                                                                        | 2008                         |   | 2007 |
|                                                                                                                                                                                                                                                                                                                                        | Low                          |   | High |   | Low |   | High |
| Quarter      Ended                                                                                                                                                                                                                                                                                                                          |                         |   |   |   |   |   |   |
| March      31                                                      | n/a                          |   | n/a |   | $104.97 |   | $107.02 |
| June      30                                                       | n/a                          |   | n/a |   | $105.32 |   | $108.14 |
| September      30                                                                                                                                                                                                                                                                         | n/a                          |   | n/a |   | n/a |   | n/a |
| December      31                                                                                                                                                                                                                                                      | n/a                          |   | n/a |   | n/a |   | n/a |

|                                                                                                                                                                                                                                                                                                                                        | Dividends      Paid Per Share |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------|
|                                                                                                                                                                                                                                                                                                                                        | 2008                          |   | 2007 |
| Quarter      Ended                                                                                                                                                                                                                                                                                                                          |                          |   |   |
| March      31                                                      | n/a                           |   | $0.8750 |
| June      30                                                       | n/a                           |   | $0.8750 |
| September      30                                                                                                                                                                                                                                                                                                                 | n/a                           |   | n/a |
| December      31                                                                                                                                                                                                                                                                                                                       | n/a                           |   | n/a |

| 1 | As      a result of the Going Private transaction, our common stock ceased trading      on May 30, 2007. |
|---|----------------------------------------------------------------------------------------------------------|

| Item 6. | Selected      Financial Data. |
|---------|-------------------------------|

|                                                              | Successor      Company           |     |                                    | Predecessor      Company |
|-------------------------------------------------------------------|----------------------------------|----------|-----------------------------------------|--------------------------|
|                                                              | Year      EndedDecember      31, |     | Seven      MonthsEndedDecember      31, |                     |   | Five      MonthsEndedMay 31, |   | Year      Ended December 31, |
|                                                              | 20081,2                          |     | 20071,2                                 |                     |   | 20072,3 |   | 20062,3 |   | 20053 |   | 2004 |
|                                                              | (In      millions)               |     |                                    | (In      millions)       |
| Operating      Revenues                                           | $                                | 12,094.8 |                                    |                     | $ | 6,394.7 |   |   |   | $ | 4,165.1 |   |   | $ | 10,208.6 |   |   | $ | 1,025.6 |   |   | $ | 877.7 |   |
| Gas      Purchases and Other Costs of Sales                       |                             | 7,744.0  |                                    |                     |   | 3,656.6 |   |   |   |   | 2,490.4 |   |   |   | 6,339.4 |   |   |   | 302.6 |   |   |   | 194.2 |   |
| Other      Operating Expenses4,5,6,7                              |                             | 6,822.9  |                                    |                     |   | 1,695.3 |   |   |   |   | 1,469.9 |   |   |   | 2,124.0 |   |   |   | 341.7 |   |   |   | 342.5 |   |
| Operating      Income (Loss)                                      |                             | (2,472.1 | )                                       |                     |   | 1,042.8 |   |   |   |   | 204.8 |   |   |   | 1,745.2 |   |   |   | 381.3 |   |   |   | 341.0 |   |
| Other      Income and (Expenses)                                  |                             | (822.0   | )                                       |                     |   | (566.9 | ) |   |   |   | (302.0 | ) |   |   | (858.9 | ) |   |   | 470.0 |   |   |   | 365.2 |   |
| Income      (Loss) from Continuing Operations Before Income Taxes |                             | (3,294.1 | )                                       |                     |   | 475.9 |   |   |   |   | (97.2 | ) |   |   | 886.3 |   |   |   | 851.3 |   |   |   | 706.2 |   |
| Income      Taxes                                                 |                             | 304.3    |                                    |                     |   | 227.4 |   |   |   |   | 135.5 |   |   |   | 285.9 |   |   |   | 337.1 |   |   |   | 208.0 |   |
| Income      (Loss) from Continuing Operations                     |                             | (3,598.4 | )                                       |                     |   | 248.5 |   |   |   |   | (232.7 | ) |   |   | 600.4 |   |   |   | 514.2 |   |   |   | 498.2 |   |
| Income      (Loss) from Discontinued Operations, Net of Tax8      |                             | (0.9     | )                                       |                     |   | (1.5 | ) |   |   |   | 298.6 |   |   |   | (528.5 | ) |   |   | 40.4 |   |   |   | 23.9 |   |
| Net      Income (Loss)                                            | $                                | (3,599.3 | )                                       |                     | $ | 247.0 |   |   |   | $ | 65.9 |   |   | $ | 71.9 |   |   | $ | 554.6 |   |   | $ | 522.1 |   |
|                                                         |                             |     |                                    |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital      Expenditures9                                        | $                                | 2,545.3  |                                    |                     | $ | 1,287.0 |   |   |   | $ | 652.8 |   |   | $ | 1,375.6 |   |   | $ | 134.1 |   |   | $ | 103.2 |   |

| 1 | Includes      significant impacts resulting from the Going Private transaction. See Note      1 of the accompanying Notes to Consolidated Financial Statements for      additional information. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Due      to our adoption of EITF No. 04-5, effective January 1, 2006 the accounts,      balances and results of operations of Kinder Morgan Energy Partners are      included in our financial statements and we no longer apply the equity      method of accounting to our investments in Kinder Morgan Energy Partners.      See Note 1 of the accompanying Notes to Consolidated Financial      Statements. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | Includes      the results of Terasen Inc. subsequent to its November 30, 2005      acquisition by us. See Notes 10 and 11 of the accompanying Notes to      Consolidated Financial Statements for information regarding      Terasen. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 6.  Selected Financial      Data (continued) | Knight      Form 10-K |
|------------------------------------------------------------------|-----------------------|

| 4 | Includes      non-cash goodwill charges of $4,033.3 million in the year ended December      31, 2008. |
|---|-------------------------------------------------------------------------------------------------------|

| 5 | Includes      charges of $1.2 million, $6.5 million and $33.5 million in 2006, 2005 and      2004, respectively, to reduce the carrying value of certain power      assets. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6 | Includes      an impairment charge of $377.1 million in the five months ended May 31,      2007 relating to Kinder Morgan Energy Partners’ acquisition of Trans      Mountain pipeline from us on April 30, 2007. See Note 3 of the      accompanying Notes to Consolidated Financial  Statements. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8 | Includes      a charge of $650.5 million in 2006 to reduce the carrying value of Terasen      Inc.; see Note 3 of the accompanying Notes to Consolidated Financial      Statements. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9 | Capital      expenditures shown are for continuing operations  only. |
|---|----------------------------------------------------------------------|

|                                   | As      of December 31,                |
|----------------------------------------|----------------------------------------|
|                                   | Successor      Company                 |   |   | Predecessor      Company |
|                                   | 2008                                   |   | 20071 |   |   | 20062 |   | 20053 |   | 2004 |
|                                   | (In      millions, except percentages) |   |   | (In      millions, except percentages) |
| Total      Assets                      | $                                      | 25,444.9 |   |   |   |   | $ | 36,101.0 |   |   |   |   |   | $ | 26,795.6 |   |   |   |   | $ | 17,451.6 |   |   |   |   | $ | 10,116.9 |   |   |   |
|                              |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capitalization:                        |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common      Equity4                    | $                                      | 4,457.7 |   | 23 | % |   | $ | 8,069.2 |   | 30 | % |   |   | $ | 3,657.5 |   | 20 | % |   | $ | 4,051.4 |   | 34 | % |   | $ | 2,919.5 |   | 45 | % |
| Deferrable      Interest Debentures    |                                   | 35.7 |   | - |   |   |   | 283.1 |   | 1 | % |   |   |   | 283.6 |   | 2 | % |   |   | 283.6 |   | 2 | % |   |   | 283.6 |   | 4 | % |
| Capital      Securities                |                                   | - |   | - |   |   |   | - |   | - |   |   |   |   | 106.9 |   | 1 | % |   |   | 107.2 |   | 1 | % |   |   | - |   | - |   |
| Minority      Interests                |                                   | 4,072.6 |   | 21 | % |   |   | 3,314.0 |   | 13 | % |   |   |   | 3,095.5 |   | 17 | % |   |   | 1,247.3 |   | 10 | % |   |   | 1,105.4 |   | 17 | % |
| Outstanding      Notes and Debentures5 |                                   | 11,120.1 |   | 56 | % |   |   | 14,814.6 |   | 56 | % |   |   |   | 10,623.9 |   | 60 | % |   |   | 6,286.8 |   | 53 | % |   |   | 2,258.0 |   | 34 | % |
| Total      Capitalization              | $                                      | 19,686.1 |   | 100 | % |   | $ | 26,480.9 |   | 100 | % |   |   | $ | 17,767.4 |   | 100 | % |   | $ | 11,976.3 |   | 100 | % |   | $ | 6,566.5 |   | 100 | % |

| 1 | Includes      significant impacts resulting from the Going Private transaction. See Note      1 of the accompanying Notes to Consolidated Financial Statements for      additional information. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Due      to our adoption of EITF No. 04-5, effective January 1, 2006 the accounts,      balances and results of operations of Kinder Morgan Energy Partners are      included in our financial statements and we no longer apply the equity      method of accounting to our investments in Kinder Morgan Energy      Partners. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | Reflects      the acquisition of Terasen Inc. on November 30, 2005. See Notes 10 and 11      of the accompanying Notes to Consolidated Financial Statements for      information regarding thisacquisition. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | Excluding      Accumulated Other Comprehensive Loss balances of $53.4 million, $247.7      million, $135.9 million, $127.0 million, and $54.7 million as of December      31, 2008, 2007, 2006, 2005, and 2004,  respectively. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5 | Excluding      the value of interest rate swaps and short-term debt. See Note 14 of the      accompanying Notes to Consolidated Financial  Statements. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Knight      Form 10-K |
|-----------------------|

| Item 7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations. |
|---------|--------------------------------------------------------------------------------------------------------|

General

|   | · | Natural Gas Pipeline Company      of America LLC—which consists of our 20% interest in NGPL PipeCo      LLC, the owner of Natural Gas Pipeline Company of America and certain      affiliates, collectively referred to as Natural Gas Pipeline Company of      America or NGPL, a major interstate natural gas pipeline and storage      system which we operate; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Power—which consists of      two natural gas-fired electric generation  facilities; |
|--------|--------|-------------------------------------------------------------------------------------------|

|   | · | Products      Pipelines–KMP—which consists of approximately 8,300 miles of      refined petroleum products pipelines that deliver gasoline, diesel fuel,      jet fuel and natural gas liquids to various markets; plus approximately 60      associated product terminals and petroleum pipeline transmix processing      facilities serving customers across the United  States; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Natural Gas      Pipelines–KMP—which consists of over 14,300 miles of natural gas      transmission pipelines and gathering lines, plus natural gas storage,      treating and processing facilities, through which natural gas is gathered,      transported, stored, treated, processed and  sold; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | CO2–KMP—which produces,      markets and transports, through approximately 1,300 miles of pipelines,      carbon dioxide to oil fields that use carbon dioxide to increase      production of oil; owns interests in and/or operates ten oil fields in      West Texas; and owns and operates a 450-mile crude oil pipeline system in      West Texas; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Terminals–KMP—which      consists of approximately 110 owned or operated liquids and bulk terminal      facilities and more than 45 rail transloading and materials handling      facilities located throughout the United States and portions of Canada,      which together transload, store and deliver a wide variety of bulk,      petroleum, petrochemical and other liquids products for customers across      the United States and Canada; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Kinder Morgan      Canada–KMP—which consists of over 700 miles of common carrier      pipelines, originating at Edmonton, Alberta, for the transportation of      crude oil and refined petroleum to the interior of British Columbia and to      marketing terminals and refineries located in the greater Vancouver,      British Columbia area and Puget Sound in Washington state; plus five      associated product terminals. This segment also includes a one-third      interest in an approximately 1,700-mile integrated crude oil pipeline and      a 25-mile aviation turbine fuel pipeline serving the Vancouver      International Airport. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

Critical Accounting Policies, Estimates and Annual GoodwillImpairment Test

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

New Basis of Accounting

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

Consolidated Financial Results

|                                                                                                                    | Successor      Company               |     |                                        | Predecessor      Company |
|-------------------------------------------------------------------------------------------------------------------------|--------------------------------------|----------|---------------------------------------------|--------------------------|
|                                                                                                                    | Year      EndedDecember      31,2008 |     | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEnded      May 31,2007 |   | Year      EndedDecember      31,2006 |
|                                                                                                                    | (In      millions)                   |     |                                        | (In      millions)       |
| Segment      Earnings (Loss) before Depreciation, Depletion and Amortization of Excess      Cost of Equity Investments1 |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| NGPL2                                                                                                                   | $                                    | 129.8    |                                        |                     | $ | 422.8 |   |   |   | $ | 267.4 |   |   | $ | 603.5 |   |
| Power                                                                                                                   |                                 | 5.7      |                                        |                     |   | 13.4 |   |   |   |   | 8.9 |   |   |   | 23.2 |   |
| Products      Pipelines–KMP3,8                                                                                    |                                 | (722.0   | )                                           |                     |   | 162.5 |   |   |   |   | 224.4 |   |   |   | 467.9 |   |
| Natural      Gas Pipelines–KMP4,8                                                                                 |                                 | (1,344.3 | )                                           |                     |   | 373.3 |   |   |   |   | 228.5 |   |   |   | 574.8 |   |
| CO2–KMP8                                                                                                          |                                 | 896.1    |                                        |                     |   | 433.0 |   |   |   |   | 210.0 |   |   |   | 488.2 |   |
| Terminals–KMP5,8                                                                                                  |                                 | (156.5   | )                                           |                     |   | 243.7 |   |   |   |   | 172.3 |   |   |   | 408.1 |   |
| Kinder      Morgan Canada–KMP6                                                                                    |                                 | 152.0    |                                        |                     |   | 58.8 |   |   |   |   | (332.0 | ) |   |   | 95.1 |   |
| Segment      Earnings (Loss) before Depreciation, Depletion and Amortization of Excess      Cost of Equity Investments  |                                 | (1,039.2 | )                                           |                     |   | 1,707.5 |   |   |   |   | 779.5 |   |   |   | 2,660.8 |   |
| Depreciation,      Depletion and Amortization Expense                                                                   |                                 | (918.4   | )                                           |                     |   | (472.3 | ) |   |   |   | (261.0 | ) |   |   | (531.4 | ) |
| Amortization      of Excess Cost of Equity Investments                                                                  |                                 | (5.7     | )                                           |                     |   | (3.4 | ) |   |   |   | (2.4 | ) |   |   | (5.6 | ) |
| Other      Operating Income (Loss)                                                                                      |                                 | 39.0     |                                        |                     |   | (0.3 | ) |   |   |   | 2.9 |   |   |   | 6.8 |   |
| General      and Administrative Expenses                                                                                |                                 | (352.5   | )                                           |                     |   | (175.6 | ) |   |   |   | (283.6 | ) |   |   | (305.1 | ) |
| Interest      and Other, Net                                                                                            |                                 | (1,019.7 | )                                           |                     |   | (624.0 | ) |   |   |   | (348.2 | ) |   |   | (968.2 | ) |
| Income      (Loss) From Continuing Operations Before Income Taxes1                                                 |                                 | (3,296.5 | )                                           |                     |   | 431.9 |   |   |   |   | (112.8 | ) |   |   | 857.3 |   |
| Income      Taxes1                                                                                                      |                                 | (301.9   | )                                           |                     |   | (183.4 | ) |   |   |   | (119.9 | ) |   |   | (256.9 | ) |
| Income      (Loss) From Continuing Operations                                                                           |                                 | (3,598.4 | )                                           |                     |   | 248.5 |   |   |   |   | (232.7 | ) |   |   | 600.4 |   |
| Income      (Loss) From Discontinued Operations, Net of Tax7                                                            |                                 | (0.9     | )                                           |                     |   | (1.5 | ) |   |   |   | 298.6 |   |   |   | (528.5 | ) |
| Net      Income (Loss)                                                                                                  | $                                    | (3,599.3 | )                                           |                     | $ | 247.0 |   |   |   | $ | 65.9 |   |   | $ | 71.9 |   |

| 1 | Kinder      Morgan Energy Partners’ income taxes expenses for the year ended December      31, 2008, seven months ended September 30, 2007, five months ended May 31,      2007 and year ended December 31, 2006 were $2.4 million, $44.0 million,      $15.6 million and $29.0 million, respectively, and are included in segment      earnings. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Effective      February 15, 2008, we sold an 80% ownership interest in NGPL PipeCo LLC.      As a result of the sale, beginning February 15, 2008, we account for our      20% ownership interest in NGPL PipeCo LLC as an equity method      investment. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | 2008      amount includes a non-cash goodwill impairment charge of $1,266.5      million. |
|---|-------------------------------------------------------------------------------------------|

| 4 | 2008      amount includes a non-cash goodwill impairment charge of $2,090.2      million. |
|---|-------------------------------------------------------------------------------------------|

| 5 | 2008      amount includes a non-cash goodwill impairment charge of $676.6      million. |
|---|-----------------------------------------------------------------------------------------|

| 6 | Includes      earnings of the Trans Mountain pipeline system, Kinder Morgan Energy      Partners’ interest in the Express pipeline system and the Jet Fuel      pipeline system and a non-cash goodwill impairment charge of $377.1      million for the five months ended May 31,2007. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7 | 2006      includes a $650.5 million goodwill impairment associated with Terasen (see      Note 3 of the accompanying Notes to Consolidated Financial      Statements). |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8 | 2008      amounts include a total of $18.3 million of expense associated with      hurricanes Hanna, Gustav and Ike and three terminal fires among the      Terminals–KMP, Products Pipelines–KMP, Natural Gas Pipelines–KMP and      CO2–KMP      business segments. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

Results of Operations

We account for thetransfer of net assets between entities under common control by carrying forwardthe net assets recognized in the balance sheets of each combining entity to thebalance sheet of the combined entity, and no other assets or liabilities arerecognized as a result of the combination. Transfers of net assets betweenentities under common control do not affect the income statement of the combinedentity.

|                                  | Successor      Company               |   |                                        | Predecessor      Company |
|---------------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------------|
|                                  | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31, 2007 |   | Year      EndedDecember      31,2006 |
|                                  | (In      millions)                   |   |                                        | (In      millions)       |
| Segment      Earnings Before DD&A | $                                    | 129.8  |                                        |                     | $ | 422.8 |   |   |   | $ | 267.4 |   |   | $ | 603.5 |   |

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

Power

|                                                        | Successor      Company               |   |                                        | Predecessor      Company |
|-------------------------------------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------------|
|                                                        | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31, 2007 |   | Year      EndedDecember      31,2006 |
|                                                        | (In      millions)                   |   |                                        | (In      millions)       |
| Operating      Revenues                                     | $                                    | 44.0   |                                        |                     | $ | 40.2 |   |   |   | $ | 19.9 |   |   | $ | 60.0 |   |
| Operating      Expenses and Minority Interests              |                                 | (38.3  | )                                           |                     |   | (34.8 | ) |   |   |   | (16.1 | ) |   |   | (49.6 | ) |
| Other      Income (Expense)1                                |                                 | -      |                                        |                     |   | - |   |   |   |   | - |   |   |   | (1.2 | ) |
| Equity      in Earnings of Thermo Cogeneration Partnership2 |                                 | -      |                                        |                     |   | 8.0 |   |   |   |   | 5.1 |   |   |   | 11.3 |   |
| Gain      on Asset Sales                                    |                                 | -      |                                        |                     |   | - |   |   |   |   | - |   |   |   | 2.7 |   |
| Segment      Earnings Before DD&A                       | $                                    | 5.7    |                                        |                     | $ | 13.4 |   |   |   | $ | 8.9 |   |   | $ | 23.2 |   |

| 1 | To      record the impairment of certain surplus equipment held for      sale. |
|---|--------------------------------------------------------------------------------|

| 2 | This      interest was part of the sale effective January 1, 2008 as discussed      above. |
|---|--------------------------------------------------------------------------------------------|

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

Products Pipelines–KMP

|                                         | Successor      Company                          |     |                                        | Predecessor      Company                        |
|----------------------------------------------|-------------------------------------------------|----------|---------------------------------------------|-------------------------------------------------|
|                                         | Year      EndedDecember      31,2008            |     | Seven      MonthsEndedDecember      31,2007 |                                            |   | Five      MonthsEndedMay      31, 2007 |   | Year      EndedDecember      31,2006 |
|                                         | (In      millions, except operating statistics) |     |                                        | (In      millions, except operating statistics) |
| Operating      Revenues                      | $                                               | 815.9    |                                        |                                            | $ | 471.5 |   |   |   | $ | 331.8 |   |   | $ | 732.5 |   |
| Operating      Expenses                      |                                            | (291.0   | )                                           |                                            |   | (320.6 | ) |   |   |   | (116.4 | ) |   |   | (285.5 | ) |
| Other      Income (Expense)                  |                                            | (3.0     | )                                           |                                            |   | 0.8 |   |   |   |   | (0.6 | ) |   |   | - |   |
| Goodwill      Impairment Charge1             |                                            | (1,266.5 | )                                           |                                            |   | - |   |   |   |   | - |   |   |   | - |   |
| Earnings      from Equity Investments        |                                            | 15.7     |                                        |                                            |   | 11.5 |   |   |   |   | 12.4 |   |   |   | 14.2 |   |
| Interest      Income and Other Income, Net   |                                            | 2.0      |                                        |                                            |   | 4.7 |   |   |   |   | 4.7 |   |   |   | 11.9 |   |
| Income      Taxes Benefit (Expense)          |                                            | 4.9      |                                        |                                            |   | (5.4 | ) |   |   |   | (7.5 | ) |   |   | (5.2 | ) |
| Segment      Earnings (Loss) Before DD&A | $                                               | (722.0   | )                                           |                                            | $ | 162.5 |   |   |   | $ | 224.4 |   |   | $ | 467.9 |   |
|                                         |                                            |     |                                        |                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      Statistics                    |                                            |     |                                        |                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Gasoline      (MMBbl)                        |                                            | 398.4    |                                        |                                            |   | 252.7 |   |   |   |   | 182.8 |   |   |   | 449.8 |   |
| Diesel      Fuel (MMBbl)                     |                                            | 157.9    |                                        |                                            |   | 97.5 |   |   |   |   | 66.6 |   |   |   | 158.2 |   |
| Jet      Fuel (MMBbl)                        |                                            | 117.3    |                                        |                                            |   | 73.8 |   |   |   |   | 51.3 |   |   |   | 119.5 |   |
| Total      Refined Products Volumes (MMBbl)  |                                            | 673.6    |                                        |                                            |   | 424.0 |   |   |   |   | 300.7 |   |   |   | 727.5 |   |
| Natural      Gas Liquids (MMBbl)             |                                            | 27.3     |                                        |                                            |   | 16.7 |   |   |   |   | 13.7 |   |   |   | 34.0 |   |
| Total      Delivery Volumes (MMBbl)2         |                                            | 700.9    |                                        |                                            |   | 440.7 |   |   |   |   | 314.4 |   |   |   | 761.5 |   |

| 1 | 2008      amount represents a non-cash goodwill impairment charge; see Note 3 of the      accompanying Notes to Consolidated Financial  Statements. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Includes      Pacific operations, Plantation, Calnev, Central Florida, Cochin and      Cypress pipeline volumes. |
|---|------------------------------------------------------------------------------------------------------------------|

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

|                                         | Successor      Company               |     |                                        | Predecessor      Company |
|----------------------------------------------|--------------------------------------|----------|---------------------------------------------|--------------------------|
|                                         | Year      EndedDecember      31,2008 |     | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31, 2007 |   | Year      EndedDecember      31,2006 |
|                                         | (In      millions)                   |     |                                        | (In      millions)       |
| Pacific      Operations                      | $                                    | 233.6    |                                        |                     | $ | (10.3 | ) |   |   | $ | 105.1 |   |   | $ | 245.0 |   |
| Calnev      Pipeline                         |                                 | 49.2     |                                        |                     |   | 27.5 |   |   |   |   | 20.1 |   |   |   | 42.2 |   |
| West      Coast Terminals                    |                                 | 50.7     |                                        |                     |   | 24.3 |   |   |   |   | 19.3 |   |   |   | 36.3 |   |
| Plantation      Pipeline                     |                                 | 37.1     |                                        |                     |   | 22.2 |   |   |   |   | 18.2 |   |   |   | 28.4 |   |
| Central      Florida Pipeline                |                                 | 41.1     |                                        |                     |   | 21.9 |   |   |   |   | 15.3 |   |   |   | 31.4 |   |
| Cochin      Pipeline System                  |                                 | 46.7     |                                        |                     |   | 30.6 |   |   |   |   | 15.3 |   |   |   | 14.1 |   |
| Southeast      Terminals                     |                                 | 51.6     |                                        |                     |   | 24.8 |   |   |   |   | 16.6 |   |   |   | 37.5 |   |
| Transmix      Operations                     |                                 | 29.8     |                                        |                     |   | 18.3 |   |   |   |   | 12.4 |   |   |   | 28.4 |   |
| Goodwill      Impairment Charge              |                                 | (1,266.5 | )                                           |                     |   | - |   |   |   |   | - |   |   |   | - |   |
| All      Other                               |                                 | 4.7      |                                        |                     |   | 3.2 |   |   |   |   | 2.1 |   |   |   | 4.6 |   |
| Segment      Earnings (Loss) Before DD&A | $                                    | (722.0   | )                                           |                     | $ | 162.5 |   |   |   | $ | 224.4 |   |   | $ | 467.9 |   |

|                                    | Successor      Company               |   |                                        | Predecessor      Company |
|-----------------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------------|
|                                    | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31, 2007 |   | Year      EndedDecember      31,2006 |
|                                    | (In      millions)                   |   |                                        | (In      millions)       |
| Pacific      Operations                 | $                                    | 374.6  |                                        |                     | $ | 224.4 |   |   |   | $ | 156.0 |   |   | $ | 362.0 |   |
| Calnev      Pipeline                    |                                 | 71.4   |                                        |                     |   | 41.9 |   |   |   |   | 27.7 |   |   |   | 66.2 |   |
| West      Coast Terminals               |                                 | 79.5   |                                        |                     |   | 42.9 |   |   |   |   | 29.1 |   |   |   | 64.5 |   |
| Plantation      Pipeline                |                                 | 44.0   |                                        |                     |   | 24.6 |   |   |   |   | 17.6 |   |   |   | 41.2 |   |
| Central      Florida Pipeline           |                                 | 52.4   |                                        |                     |   | 27.1 |   |   |   |   | 19.3 |   |   |   | 43.1 |   |
| Cochin      Pipeline System             |                                 | 63.3   |                                        |                     |   | 42.6 |   |   |   |   | 32.3 |   |   |   | 35.7 |   |
| Southeast      Terminals                |                                 | 81.9   |                                        |                     |   | 38.4 |   |   |   |   | 29.9 |   |   |   | 81.1 |   |
| Transmix      Operations                |                                 | 42.4   |                                        |                     |   | 25.8 |   |   |   |   | 17.5 |   |   |   | 32.8 |   |
| All      Other (Including Eliminations) |                                 | 6.4    |                                        |                     |   | 3.8 |   |   |   |   | 2.4 |   |   |   | 5.9 |   |
| Total      Segment Operating Revenues   | $                                    | 815.9  |                                        |                     | $ | 471.5 |   |   |   | $ | 331.8 |   |   | $ | 732.5 |   |

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

Natural Gas Pipelines–KMP

|                                                | Successor      Company                          |     |                                        | Predecessor      Company                        |
|-----------------------------------------------------|-------------------------------------------------|----------|---------------------------------------------|-------------------------------------------------|
|                                                | Year      EndedDecember      31,2008            |     | Seven      MonthsEndedDecember      31,2007 |                                            |   | Five      MonthsEndedMay      31, 2007 |   | Year      EndedDecember      31,2006 |
|                                                | (In      millions, except operating statistics) |     |                                        | (In      millions, except operating statistics) |
| Operating      Revenues                             | $                                               | 8,422.0  |                                        |                                            | $ | 3,825.9 |   |   |   | $ | 2,640.6 |   |   | $ | 6,577.7 |   |
| Operating      Expenses                             |                                            | (7,803.3 | )                                           |                                            |   | (3,461.4 | ) |   |   |   | (2,418.5 | ) |   |   | (6,057.8 | ) |
| Other      Income (Expense)                         |                                            | 0.2      |                                        |                                            |   | 1.9 |   |   |   |   | (0.1 | ) |   |   | 15.1 |   |
| Goodwill      Impairment Charge1                    |                                            | (2,090.2 | )                                           |                                            |   | - |   |   |   |   | - |   |   |   |   |   |
| Earnings      from Equity Investments               |                                            | 113.4    |                                        |                                            |   | 10.3 |   |   |   |   | 8.9 |   |   |   | 40.5 |   |
| Interest      Income and Other Income, Net          |                                            | 16.3     |                                        |                                            |   | - |   |   |   |   | 0.2 |   |   |   | 0.7 |   |
| Income      Taxes                                   |                                            | (2.7     | )                                           |                                            |   | (3.4 | ) |   |   |   | (2.6 | ) |   |   | (1.4 | ) |
| Segment      Earnings (Loss) Before DD&A        | $                                               | (1,344.3 | )                                           |                                            | $ | 373.3 |   |   |   | $ | 228.5 |   |   | $ | 574.8 |   |
|                                           |                                            |     |                                        |                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      Statistics                           |                                            |     |                                        |                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Natural      Gas Transport Volumes (Trillion Btus)2 |                                            | 2,156.3  |                                        |                                            |   | 1,067.0 |   |   |   |   | 645.6 |   |   |   | 1,440.9 |   |
| Natural      Gas Sales Volumes (Trillion Btus)3     |                                            | 866.9    |                                        |                                            |   | 519.7 |   |   |   |   | 345.8 |   |   |   | 909.3 |   |

| 1 | 2008      amount represents a non-cash goodwill impairment charge; see Note 3 of the      accompanying Notes to Consolidated Financial  Statements. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Includes      Kinder Morgan Interstate Gas Transmission LLC, Trailblazer Pipeline      Company LLC, TransColorado Gas Transmission Company LLC, Rockies Express      Pipeline LLC and Texas Intrastate Natural Gas Pipeline Group pipeline      volumes. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | Represents      Texas Intrastate Natural Gas Pipeline Group  volumes. |
|---|-----------------------------------------------------------------------|

|                                             | Successor      Company               |     |                                        | Predecessor      Company |
|--------------------------------------------------|--------------------------------------|----------|---------------------------------------------|--------------------------|
|                                             | Year      EndedDecember      31,2008 |     | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31, 2007 |   | Year      EndedDecember      31,2006 |
|                                             | (In      millions)                   |     |                                        | (In      millions)       |
| Texas      Intrastate Natural Gas Pipeline Group | $                                    | 385.6    |                                        |                     | $ | 221.1 |   |   |   | $ | 133.0 |   |   | $ | 305.5 |   |
| Kinder      Morgan Interstate Gas Transmission   |                                 | 114.4    |                                        |                     |   | 65.7 |   |   |   |   | 43.1 |   |   |   | 107.4 |   |
| Trailblazer      Pipeline                        |                                 | 44.4     |                                        |                     |   | 31.9 |   |   |   |   | 18.1 |   |   |   | 50.8 |   |
| TransColorado      Pipeline                      |                                 | 55.0     |                                        |                     |   | 25.7 |   |   |   |   | 17.9 |   |   |   | 43.1 |   |
| Rockies      Express Pipeline                    |                                 | 84.4     |                                        |                     |   | (8.3 | ) |   |   |   | (4.3 | ) |   |   | - |   |
| Kinder      Morgan Louisiana Pipeline            |                                 | 11.3     |                                        |                     |   | - |   |   |   |   | - |   |   |   | - |   |
| Casper      and Douglas Gas Processing           |                                 | 20.0     |                                        |                     |   | 18.0 |   |   |   |   | 7.3 |   |   |   | 29.3 |   |
| Goodwill      Impairment Charge                  |                                 | (2,090.2 | )                                           |                     |   | - |   |   |   |   | - |   |   |   | - |   |
| All      Others                                  |                                 | 30.8     |                                        |                     |   | 19.2 |   |   |   |   | 13.4 |   |   |   | 38.7 |   |
| Segment      Earnings (Loss) Before DD&A     | $                                    | (1,344.3 | )                                           |                     | $ | 373.3 |   |   |   | $ | 228.5 |   |   | $ | 574.8 |   |

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

|                                             | Successor      Company               |    |                                        | Predecessor      Company |
|--------------------------------------------------|--------------------------------------|---------|---------------------------------------------|--------------------------|
|                                             | Year      EndedDecember      31,2008 |    | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31, 2007 |   | Year      EndedDecember      31,2006 |
|                                             | (In      millions)                   |    |                                        | (In      millions)       |
| Texas      Intrastate Natural Gas Pipeline Group | $                                    | 7,979.4 |                                        |                     | $ | 3,562.0 |   |   |   | $ | 2,492.4 |   |   | $ | 6,196.6 |   |
| Kinder      Morgan Interstate Gas Transmission   |                                 | 199.5   |                                        |                     |   | 130.7 |   |   |   |   | 70.7 |   |   |   | 183.6 |   |
| Trailblazer      Pipeline                        |                                 | 53.9    |                                        |                     |   | 36.4 |   |   |   |   | 22.6 |   |   |   | 50.1 |   |
| TransColorado      Pipeline                      |                                 | 63.5    |                                        |                     |   | 30.3 |   |   |   |   | 20.7 |   |   |   | 47.9 |   |
| Rockies      Express Pipeline                    |                                 | -       |                                        |                     |   | - |   |   |   |   | - |   |   |   | 0.7 |   |
| Casper      and Douglas Gas Processing           |                                 | 126.3   |                                        |                     |   | 67.1 |   |   |   |   | 34.7 |   |   |   | 96.2 |   |
| All      Others                                  |                                 | 3.0     |                                        |                     |   | 0.2 |   |   |   |   | - |   |   |   | 4.1 |   |
| Eliminations                                     |                                 | (3.6    | )                                           |                     |   | (0.8 | ) |   |   |   | (0.5 | ) |   |   | (1.5 | ) |
| Segment      Revenues                            | $                                    | 8,422.0 |                                        |                     | $ | 3,825.9 |   |   |   | $ | 2,640.6 |   |   | $ | 6,577.7 |   |

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

CO2–KMP

|                                                                     | Successor      Company                          |    |                                        | Predecessor      Company                        |
|--------------------------------------------------------------------------|-------------------------------------------------|---------|---------------------------------------------|-------------------------------------------------|
|                                                                     | Year      EndedDecember      31,2008            |    | Seven      MonthsEndedDecember      31,2007 |                                            |   | Five      MonthsEndedMay      31, 2007 |   | Year      EndedDecember      31,2006 |
|                                                                     | (In      millions, except operating statistics) |    |                                        | (In      millions, except operating statistics) |
| Operating      Revenues                                                  | $                                               | 1,269.2 |                                        |                                            | $ | 605.9 |   |   |   | $ | 324.2 |   |   | $ | 736.5 |   |
| Operating      Expenses                                                  |                                            | (391.8  | )                                           |                                            |   | (182.7 | ) |   |   |   | (121.5 | ) |   |   | (268.1 | ) |
| Earnings      from Equity Investments                                    |                                            | 20.7    |                                        |                                            |   | 10.5 |   |   |   |   | 8.7 |   |   |   | 19.2 |   |
| Other      Income (Expense), Net                                         |                                            | 1.9     |                                        |                                            |   | 0.1 |   |   |   |   | (0.1 | ) |   |   | 0.8 |   |
| Income      Taxes                                                        |                                            | (3.9    | )                                           |                                            |   | (0.8 | ) |   |   |   | (1.3 | ) |   |   | (0.2 | ) |
| Segment      Earnings Before DD&A                                    | $                                               | 896.1   |                                        |                                            | $ | 433.0 |   |   |   | $ | 210.0 |   |   | $ | 488.2 |   |
|                                                                |                                            |    |                                        |                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      Statistics                                                |                                            |    |                                        |                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Carbon      Dioxide Delivery Volumes (Bcf)1                              |                                            | 732.1   |                                        |                                            |   | 365.0 |   |   |   |   | 272.3 |   |   |   | 669.2 |   |
| SACROC      Oil Production (Gross)(MBbl/d)2                              |                                            | 28.0    |                                        |                                            |   | 26.5 |   |   |   |   | 29.1 |   |   |   | 30.8 |   |
| SACROC      Oil Production (Net)(MBbl/d)3                                |                                            | 23.3    |                                        |                                            |   | 22.1 |   |   |   |   | 24.2 |   |   |   | 25.7 |   |
| Yates      Oil Production (Gross)(MBbl/d)2                               |                                            | 27.6    |                                        |                                            |   | 27.4 |   |   |   |   | 26.4 |   |   |   | 26.1 |   |
| Yates      Oil Production (Net)(MBbl/d)3                                 |                                            | 12.3    |                                        |                                            |   | 12.2 |   |   |   |   | 11.7 |   |   |   | 11.6 |   |
| Natural      Gas Liquids Sales Volumes (Net)(MBbl/d)3                    |                                            | 8.4     |                                        |                                            |   | 9.5 |   |   |   |   | 9.7 |   |   |   | 8.9 |   |
| Realized      Weighted-average Oil Price per Bbl4,5                      | $                                               | 49.42   |                                        |                                            | $ | 36.80 |   |   |   | $ | 35.03 |   |   | $ | 31.42 |   |
| Realized      Weighted-average Natural Gas Liquids Price per Bbl5,6 | $                                               | 63.00   |                                        |                                            | $ | 58.55 |   |   |   | $ | 45.04 |   |   | $ | 43.90 |   |

| 1 | Includes      Cortez, Central Basin, Canyon Reef Carriers, Centerline and Pecos pipeline      volumes. |
|---|--------------------------------------------------------------------------------------------------------|

| 2 | Represents      100% of the production from the field. Kinder Morgan Energy Partners owns      an approximate 97% working interest in the SACROC unit and an approximate      50% working interest in the Yatesunit. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | Net      to Kinder Morgan Energy Partners, after royalties and outside working      interests. |
|---|------------------------------------------------------------------------------------------------|

| 4 | Includes      all Kinder Morgan Energy Partners crude oil production      properties. |
|---|---------------------------------------------------------------------------------------|

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

| 5 | Hedge      gains/losses for crude oil and natural gas liquids are included with crude      oil. |
|---|-------------------------------------------------------------------------------------------------|

| 6 | Includes      production attributable to leasehold ownership and production attributable      to Kinder Morgan Energy Partners’ ownership in processing plants and      third-party processing agreements. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                  | Successor      Company               |   |                                        | Predecessor      Company |
|---------------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------------|
|                                  | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31, 2007 |   | Year      EndedDecember      31,2006 |
|                                  | (In      millions)                   |   |                                        | (In      millions)       |
| Sales      and Transportation         | $                                    | 301.0  |                                        |                     | $ | 110.4 |   |   |   | $ | 67.2 |   |   | $ | 186.8 |   |
| Oil      and Gas Production           |                                 | 595.1  |                                        |                     |   | 322.6 |   |   |   |   | 142.8 |   |   |   | 301.4 |   |
| Segment      Earnings Before DD&A | $                                    | 896.1  |                                        |                     | $ | 433.0 |   |   |   | $ | 210.0 |   |   | $ | 488.2 |   |

|                                  | Successor      Company               |    |                                        | Predecessor      Company |
|---------------------------------------|--------------------------------------|---------|---------------------------------------------|--------------------------|
|                                  | Year      EndedDecember      31,2008 |    | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31, 2007 |   | Year      EndedDecember      31,2006 |
|                                  | (In      millions)                   |    |                                        | (In      millions)       |
| Sales      and Transportation         | $                                    | 334.7   |                                        |                     | $ | 116.1 |   |   |   | $ | 71.3 |   |   | $ | 196.3 |   |
| Oil      and Gas Production           |                                 | 1,019.2 |                                        |                     |   | 518.7 |   |   |   |   | 271.7 |   |   |   | 601.0 |   |
| Eliminations                          |                                 | (84.7   | )                                           |                     |   | (28.9 | ) |   |   |   | (18.8 | ) |   |   | (60.8 | ) |
| Total      Segment Operating Revenues | $                                    | 1,269.2 |                                        |                     | $ | 605.9 |   |   |   | $ | 324.2 |   |   | $ | 736.5 |   |

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

Terminals–KMP

|                                         | Successor      Company                          |    |                                        | Predecessor      Company                        |
|----------------------------------------------|-------------------------------------------------|---------|---------------------------------------------|-------------------------------------------------|
|                                         | Year      EndedDecember      31,2008            |    | Seven      MonthsEndedDecember      31,2007 |                                            |   | Five      MonthsEndedMay      31, 2007 |   | Year      EndedDecember      31,2006 |
|                                         | (In      millions, except operating statistics) |    |                                        | (In      millions, except operating statistics) |
| Operating      Revenues                      | $                                               | 1,173.6 |                                        |                                            | $ | 599.2 |   |   |   | $ | 364.5 |   |   | $ | 864.8 |   |
| Operating      Expenses                      |                                            | (631.8  | )                                           |                                            |   | (344.2 | ) |   |   |   | (192.2 | ) |   |   | (461.9 | ) |
| Other      Income (Expense)                  |                                            | (6.4    | )                                           |                                            |   | 3.3 |   |   |   |   | 3.0 |   |   |   | 15.2 |   |
| Goodwill      Impairment Charge1             |                                            | (676.6  | )                                           |                                            |   | - |   |   |   |   | - |   |   |   | - |   |
| Earnings      from Equity Investments        |                                            | 2.7     |                                        |                                            |   | 0.6 |   |   |   |   | - |   |   |   | 0.2 |   |
| Interest      Income and Other Income, Net   |                                            | 1.7     |                                        |                                            |   | 0.7 |   |   |   |   | 0.3 |   |   |   | 2.1 |   |
| Income      Taxes                            |                                            | (19.7   | )                                           |                                            |   | (15.9 | ) |   |   |   | (3.3 | ) |   |   | (12.3 | ) |
| Segment      Earnings (Loss) Before DD&A | $                                               | (156.5  | )                                           |                                            | $ | 243.7 |   |   |   | $ | 172.3 |   |   | $ | 408.1 |   |
|                                    |                                            |    |                                        |                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      Statistics                    |                                            |    |                                        |                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Bulk      Transload Tonnage (MMtons)2        |                                            | 99.1    |                                        |                                            |   | 62.5 |   |   |   |   | 33.7 |   |   |   | 95.1 |   |
| Liquids      Leaseable Capacity (MMBbl)      |                                            | 54.2    |                                        |                                            |   | 47.5 |   |   |   |   | 43.6 |   |   |   | 43.5 |   |
| Liquids      Utilization %3                  |                                            | 97.5    | %                                           |                                            |   | 95.9 | % |   |   |   | 97.5 | % |   |   | 96.3 | % |

| 1 | 2008      amounts include a non-cash goodwill impairment charge; see Note 3 of the      accompanying Notes to Consolidated Financial  Statements. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Volumes      for acquired terminals are included for all  periods. |
|---|--------------------------------------------------------------------|

| 3 | Represents      percentage of utilized available terminal storage  capacity. |
|---|------------------------------------------------------------------------------|

|   | · | the      Texas Petcoke terminals acquisition on April 29,  2005; |
|--------|--------|------------------------------------------------------------------|

|   | · | three      separate terminals located in New York, Kentucky and Arkansas, which were      acquired in July 2005; |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | the      purchase of all of the ownership interests in General Stevedores, L.P. on      July 31, 2005; |
|--------|--------|--------------------------------------------------------------------------------------------------------|

|   | · | the      acquisition of the Kinder Morgan Blackhawk terminal located in Black Hawk      County, Iowa, in August 2005; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------|

|   | · | the      September 2005 purchase of a terminal-related repair shop located in      Jefferson County, Texas; |
|--------|--------|-------------------------------------------------------------------------------------------------------------|

|   | · | three      terminal operations, which were acquired separately in April 2006:      terminal equipment and infrastructure located on the Houston Ship Channel,      a rail terminal located at the Port of Houston and a rail ethanol terminal      located in Carson, California; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | all      of the membership interests of Transload Services, LLC, which were      acquired on November 20, 2006; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

|   | · | all      of the membership interests of Devco USA L.L.C., which were purchased on      December 1, 2006; |
|--------|--------|----------------------------------------------------------------------------------------------------------|

|   | · | the      Vancouver Wharves bulk marine terminals, acquired on May 30,      2007; |
|--------|--------|----------------------------------------------------------------------------------|

|   | · | the      terminal assets from Marine Terminals, Inc., purchased on September 1,      2007; |
|--------|--------|--------------------------------------------------------------------------------------------|

|   | · | Phase      III expansions completed and put into service at the Pasadena and Galena      Park, Texas liquids terminal facilities in the first quarter of      2008; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | nine      new storage tanks at the Perth Amboy, New Jersey liquids terminal, which      were completed and put into service in the first quarter of      2008; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a      barge unloading terminal located on 30 acres in Columbus, Mississippi,      completed and put into service in the first quarter of    2008; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our      Pier X expansion at our bulk handling facility located in Newport News,      Virginia, completed and put into service in the first quarter of      2008; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      approximately 2.15 million barrels of new crude oil capacity at the Kinder      Morgan North 40 terminal located near Edmonton, Alberta, Canada, which was      completed and put into service in the second quarter of    2008; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      approximately 320,000 barrels of additional gasoline capacity at the      Shipyard River Terminal located in Charleston, South Carolina, which was      completed and put into service in the third quarter of    2008; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      Kinder Morgan Wilmington terminal, purchased on August 15, 2008;      and |
|--------|--------|------------------------------------------------------------------------------------|

|   | · | the      acquisition of certain terminal assets from LPC Packaging on October 2,      2008. |
|--------|--------|---------------------------------------------------------------------------------------------|

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

Kinder Morgan Canada–KMP

|                                                  | Successor      Company                          |   |                                        | Predecessor      Company                        |
|-------------------------------------------------------|-------------------------------------------------|--------|---------------------------------------------|-------------------------------------------------|
|                                                  | Year      EndedDecember      31,2008            |   | Seven      MonthsEndedDecember      31,2007 |                                            |   | Five      MonthsEndedMay      31, 2007 |   | Year      EndedDecember      31,2006 |
|                                                  | (In      millions, except operating statistics) |   |                                        | (In      millions, except operating statistics) |
| Operating      Revenues                               | $                                               | 198.9  |                                        |                                            | $ | 100.9 |   |   |   | $ | 62.0 |   |   | $ | 140.8 |   |
| Operating      Expenses                               |                                            | (68.0  | )                                           |                                            |   | (44.3 | ) |   |   |   | (23.1 | ) |   |   | (54.9 | ) |
| Earnings      from Equity Investment                  |                                            | 8.3    |                                        |                                            |   | 14.4 |   |   |   |   | 5.4 |   |   |   | 17.2 |   |
| Other      Income (Expense)1                          |                                            | -      |                                        |                                            |   | - |   |   |   |   | (377.1 | ) |   |   | 0.9 |   |
| Interest      Income and Other Income (Expense), Net2 |                                            | (6.2   | )                                           |                                            |   | 6.3 |   |   |   |   | 1.7 |   |   |   | 1.0 |   |
| Income      Tax Benefit (Expense)3                    |                                            | 19.0   |                                        |                                            |   | (18.5 | ) |   |   |   | (0.9 | ) |   |   | (9.9 | ) |
| Segment      Earnings (Loss) Before DD&A          | $                                               | 152.0  |                                        |                                            | $ | 58.8 |   |   |   | $ | (332.0 | ) |   | $ | 95.1 |   |
|                                             |                                            |   |                                        |                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      Statistics                             |                                            |   |                                        |                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Transport      Volumes (MMBbl)                        |                                            | 86.7   |                                        |                                            |   | 58.0 |   |   |   |   | 36.4 |   |   |   | 83.7 |   |

| 1 | Amount      for the five months ended May 31, 2007 represents a non-cash goodwill      impairment charge; see Note 3 of the accompanying Notes to Consolidated      Financial Statements. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | 2008      amount includes a $12.3 million expense due to certain non-cash Trans      Mountain regulatory accountingadjustments. |
|---|---------------------------------------------------------------------------------------------------------------------------------|

| 3 | 2008      amount includes a $19.3 million decrease in expense associated with      favorable changes in Canadian income tax rates and a $6.6 million increase      in expense due to certain non-cash Trans Mountain regulatory accounting      adjustments. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Trans Mountain, the one-third interest in Express and the fullinterest in the net assets of Jet Fuel were acquired on November 30, 2005 aspart of the Terasen acquisition. 2006 was the first full year that these assetswere included in the Consolidated Statements of Operations.

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

General and Administrative Expense

|                                                                  | Successor      Company               |   |                                        | Predecessor      Company |
|-----------------------------------------------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------------|
|                                                                  | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31, 2007 |   | Year      EndedDecember      31,2006 |
|                                                                  | (In      millions)                   |   |                                        | (In      millions)       |
| Knight      Inc. General and Administrative Expense                   | $                                    | (54.6  | )                                           |                     | $ | (33.2 | ) |   |   | $ | (138.6 | ) |   | $ | (36.9 | ) |
| Kinder      Morgan Energy Partners General and Administrative Expense |                                 | (297.9 | )                                           |                     |   | (142.4 | ) |   |   |   | (136.2 | ) |   |   | (238.4 | ) |
| Terasen      General and Administrative Expenses                      |                                 | -      |                                        |                     |   | - |   |   |   |   | (8.8 | ) |   |   | (29.8 | ) |
| Consolidated      General and Administrative Expense                  | $                                    | (352.5 | )                                           |                     | $ | (175.6 | ) |   |   | $ | (283.6 | ) |   | $ | (305.1 | ) |

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

Interest and Other, Net

|                                                                   | Successor      Company               |     |                                        | Predecessor      Company |
|------------------------------------------------------------------------|--------------------------------------|----------|---------------------------------------------|--------------------------|
|                                                                   | Year      EndedDecember      31,2008 |     | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31, 2007 |   | Year      EndedDecember      31,2006 |
|                                                                   | (In      millions)                   |     |                                        | (In      millions)       |
| Interest      Expense, Net                                             | $                                    | (633.4   | )                                           |                     | $ | (581.5 | ) |   |   | $ | (241.1 | ) |   | $ | (552.8 | ) |
| Interest      Income (Expense) – Deferrable Interest Debentures2 |                                 | 5.1      |                                        |                     |   | (12.8 | ) |   |   |   | (9.1 | ) |   |   | (21.9 | ) |
| Consolidated      Interest Expense                                     |                                 | (628.3   | )                                           |                     |   | (594.3 | ) |   |   |   | (250.2 | ) |   |   | (574.7 | ) |
|                                                                   |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Minority      Interests                                                |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Kinder      Morgan Management                                          |                                 | (80.5    | )                                           |                     |   | (35.8 | ) |   |   |   | (17.1 | ) |   |   | (65.9 | ) |
| Kinder      Morgan Energy Partners                                     |                                 | (302.4   | )                                           |                     |   | 7.3 |   |   |   |   | (75.1 | ) |   |   | (300.8 | ) |
| Triton                                                                 |                                 | (13.0    | )                                           |                     |   | (9.0 | ) |   |   |   | 2.3 |   |   |   | (7.3 | ) |
| Other                                                                  |                                 | (0.2     | )                                           |                     |   | (0.1 | ) |   |   |   | (0.8 | ) |   |   | (0.2 | ) |
| Consolidated      Minority Interests Expense                           |                                 | (396.1   | )                                           |                     |   | (37.6 | ) |   |   |   | (90.7 | ) |   |   | (374.2 | ) |
|                                                                   |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss      on Mark-to-market Interest Rate Swaps                        |                                 | -        |                                        |                     |   | - |   |   |   |   | - |   |   |   | (22.3 | ) |
| Other1                                                                 |                                 | 4.7      |                                        |                     |   | 7.9 |   |   |   |   | (7.3 | ) |   |   | 3.0 |   |
|                                                                   | $                                    | (1,019.7 | )                                           |                     | $ | (624.0 | ) |   |   | $ | (348.2 | ) |   | $ | (968.2 | ) |

| 1 | “Other”      represents offset to minority interest and interest income shown above and      included in segment earnings. |
|---|----------------------------------------------------------------------------------------------------------------------------------------|

| 2 | 2008      amount includes $11.3 million gain on retirement, offset by $5.751 million      interest expense and $0.5 million of accounting  expense. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

Income Taxes—Continuing Operations

Income Taxes—Realization of Deferred TaxAssets

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

Liquidity and Capital Resources

|   | · | Cash flow from      operations |
|--------|--------|--------------------------------|

|   | · | Credit facility      availability |
|--------|--------|-----------------------------------|

|   | · | Long-term debt and equity      markets |
|--------|--------|----------------------------------------|

|   | · | Kinder Morgan Energy Partners      equity infusion |
|--------|--------|----------------------------------------------------|

|   | · | Credit      Ratings |
|--------|--------|---------------------|

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

|                                                              | At      December 31, 2008 |   | At      February 23, 2009  |
|-------------------------------------------------------------------|---------------------------|--------|----------------------------|
|                                                              | Short-termDebtOutstanding |   | AvailableBorrowingCapacity |   | Short-termDebtOutstanding |   | AvailableBorrowingCapacity |
|                                                              | (In      millions)        |
| Credit      Facilities                                            |                      |   |                       |   |   |   |   |   |   |   |   |
| Knight      Inc.                                                  |                      |   |                       |   |   |   |   |   |   |   |   |
| $1.0      billion, six-year secured revolver, due May 2013        | $                         | 8.8    |                       | $ | 929.2 |   | $ | 23.0 |   | $ | 914.1 |
| Kinder      Morgan Energy Partners                                |                      |   |                       |   |   |   |   |   |   |   |   |
| $1.85      billion, five-year unsecured revolver, due August 2010 | $                         | -      |                       | $ | 1,473.7 |   | $ | 527.6 |   | $ | 1,022.4 |

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

| Entity                                                        |   | InvestmentType   |   | OurOwnershipInterest |   | Remaining      Interest(s)Ownership                                      |   | Total      EntityAssets |    | Total      EntityDebt |   | OurContingentShare      ofEntity      Debt |
|---------------------------------------------------------------|--------|------------------|--------|----------------------|--------|--------------------------------------------------------------------------|--------|-------------------------|---------|-----------------------|--------|--------------------------------------------|
| Cortez      Pipeline Company                                  |   | GeneralPartner   |   | 50%                  |   | 1                                                                        |   | $                       | 95.7    | 2                     |   | $                                          | 169.6 |   |   | $ | 84.8 | 3 |
|                                                          |   |             |   |                 |   |                                                                     |   |                    |    |                  |   |                                       |   |   |   |   |   |   |
| West2East      Pipeline LLC4                                  |   | LimitedLiability |   | 51%                  |   | ConocoPhillips      andSempra      Energy                                |   | $                       | 4,787.0 | 2                     |   | $                                          | 3,458.9 | 5 |   | $ | 1,102.1 | 6 |
|                                                     |   |             |   |                 |   |                                                                     |   |                    |    |                  |   |                                       |   |   |   |   |   |   |
| Midcontinent      Express Pipeline LLC7                       |   | LimitedLiability |   | 50%                  |   | Energy      TransferPartners,      L.P.                                  |   | $                       | 998.5   | 2                     |   | $                                          | 837.5 |   |   | $ | 418.8 | 8 |
|                                                     |   |             |   |                 |   |                                                                     |   |                    |    |                  |   |                                       |   |   |   |   |   |   |
| Nassau      County, Florida Ocean Highway And Port Authority9 |   | N/A              |   | N/A                  |   | Nassau      County,Florida      OceanHighway      andPort      Authority |   |                    | N/A     |                  |   |                                       | N/A |   |   | $ | 10.2 |   |
|                                                     |   |             |   |                 |   |                                                                     |   |                    |    |                  |   |                                       |   |   |   |   |   |   |
| NGPL      PipeCo LLC                                          |   | Equity           |   | 20%                  |   | Myria      Acquisition Inc.                                              |   | $                       | 7,064.5 |                  |   | $                                          | 3,000.0 |   |   | $ | - | 10 |

| 1 | The      remaining general partner interests are owned by ExxonMobil Cortez      Pipeline, Inc., an indirect wholly owned subsidiary of Exxon Mobil      Corporation and Cortez Vickers Pipeline Company, an indirect subsidiary of      M.E. Zuckerman Energy InvestorsIncorporated. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Principally      property, plant and equipment. |
|---|-------------------------------------------------|

| 3 | We      are severally liable for our percentage ownership share (50%) of the      Cortez Pipeline Company debt. As of December 31, 2008, Shell Oil Company      shares Kinder Morgan Energy Partners’ several guaranty obligations jointly      and severally for $53.6 million of Cortez Pipeline Company’s debt balance;      however, Kinder Morgan Energy Partners is obligated to indemnify Shell Oil      Company for the liabilities Shell Oil Company incurs in connection with      such guaranty. Accordingly, as of December 31, 2008 Kinder Morgan Energy      Partners has a letter of credit in the amount of $26.8 million issued by      JP Morgan Chase, in order to secure its indemnification obligations to      Shell Oil Company for 50% of the Cortez Pipeline Company debt balance of      $53.6 million. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | West2East      Pipeline LLC is a limited liability company and is the sole owner of      Rockies Express Pipeline LLC. As of December 31, 2008, the remaining      limited liability member interests in West2East Pipeline LLC are owned by      ConocoPhillips (24%) and Sempra Energy (25%). Kinder Morgan Energy      Partners owned a 66 2/3% ownership interest in West2East Pipeline LLC from      October 21, 2005 until June 30, 2006, and included West2East Pipeline      LLC’s results in its consolidated financial statements until June 30,      2006. On June 30, 2006, Kinder Morgan Energy Partners’ ownership interest      was reduced to 51%, West2East Pipeline LLC was deconsolidated, and Kinder      Morgan Energy Partners subsequently accounted for its investment under the      equity method of accounting. Upon completion of the    pipeline, |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

|   | Kinder      Morgan Energy Partners’ ownership percentage is expected to be reduced to      50%. |
|--------|-------------------------------------------------------------------------------------------------------|

| 5 | Amount      includes an aggregate of $1.3 billion in principal amount of fixed rate      senior notes issued by Rockies Express Pipeline LLC in a private offering      in June 2008. All payments of principal and interest in respect of these      senior notes are the sole obligation of Rockies Express Pipeline LLC.      Noteholders have no recourse against Kinder Morgan Energy Partners or the      other member owners of West2East Pipeline LLC for any failure by Rockies      Express Pipeline LLC to perform or comply with its obligations pursuant to      the notes or the indenture. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6 | In      addition, there is a letter of credit outstanding to support the      construction of the Rockies Express Pipeline. As of December 31, 2008,      this letter of credit, issued by JPMorgan Chase, had a face amount of      $31.4 million. Kinder Morgan Energy Partners’ contingent responsibility      with regard to this outstanding letter of credit was $16.0 million (51% of      the total face amount). |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7 | Midcontinent      Express Pipeline LLC is a limited liability company and the owner of the      Midcontinent Express Pipeline. In January 2008, in conjunction with the      signing of additional binding pipeline transportation commitments,      Midcontinent Express Pipeline LLC and MarkWest Pioneer, L.L.C. (a      subsidiary of MarkWest Energy Partners, L.P.) entered into an option      agreement that provides MarkWest Pioneer, L.L.C.  a one-time      right to purchase a 10% ownership interest in Midcontinent Express      Pipeline LLC after the pipeline is fully constructed and placed into      service. If the option is exercised, Kinder Morgan Energy Partners and      Energy Transfer Partners, L.P. will each own 45% of Midcontinent Express      Pipeline LLC, while MarkWest Pioneer, L.L.C. will own the remaining      10%. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8 | In      addition, there is a letter of credit outstanding to support the      construction of the Midcontinent Express Pipeline. As of December 31,      2008, this letter of credit, issued by the Royal Bank of Scotland plc, had      a face amount of $33.3 million. Kinder Morgan Energy Partners’ contingent      responsibility with regard to this outstanding letter of credit was $16.7      million (50% of the total faceamount). |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9 | This      arrangement rose from Kinder Morgan Energy Partners’ Vopak terminal      acquisition in July 2001. Nassau County, Florida Ocean Highway and Port      Authority is a political subdivision of the state of Florida. During 1990,      Ocean Highway and Port Authority issued its Adjustable Demand Revenue      Bonds in the aggregate principal amount of $38.5 million for the purpose      of constructing certain port improvements located in Fernandino Beach,      Nassau County, Florida. A letter of credit was issued as security for the      Adjustable Demand Revenue Bonds and was guaranteed by the parent company      of Nassau Terminals LLC, the operator of the port facilities. In July      2002, Kinder Morgan Energy Partners acquired Nassau Terminals LLC and      became guarantor under the letter of credit agreement. In December 2002,      Kinder Morgan Energy Partners issued a $28 million letter of credit under      its credit facilities and the former letter of credit guarantee was      terminated. As of December 31, 2008, the face amount of this letter of      credit outstanding under Kinder Morgan Energy Partners’ credit facility      was $10.2 million. Principal payments on the bonds are made on the first      of December each year at which time reductions are made to the letter of      credit. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10 | Debtors      have recourse only to the assets of the entity, not the      owners. |
|----|-----------------------------------------------------------------------------------|

|   | Aggregate      Contractual Obligations |
|--------|----------------------------------------|

|   | Aggregate      Contractual Obligations |
|--------|----------------------------------------|

|                                               | Total              |     | Less      than1      year |   | 2-3      years |   | 4-5      years |    | After      5 years |
|----------------------------------------------------|--------------------|----------|---------------------------|--------|----------------|--------|----------------|---------|--------------------|
|                                               | (In      millions) |
| Contractual      Obligations                       |               |     |                      |   |           |   |           |    |               |   |   |   |   |   |
| Short-term      Borrowings                         | $                  | 8.8      |                      | $      | 8.8            |   | $              | -       |               | $ | - |   | $ | - |
| Long-term      Debt, Including Current Maturities: |               |     |                      |   |           |   |           |    |               |   |   |   |   |   |
| Principal      Payments                            |               | 11,514.5 |                      |   | 293.7          |   |           | 1,743.8 |               |   | 2,814.8 |   |   | 6,662.2 |
| Interest      Payments1                            |               | 9,252.5  |                      |   | 717.5          |   |           | 1,349.4 |               |   | 1,062.4 |   |   | 6,123.2 |
| Lease      Obligations2,3                          |               | 664.7    |                      |   | 57.5           |   |           | 103.4   |               |   | 85.4 |   |   | 418.4 |
| Pension      and Postretirement Benefit Plans      |               | 90.5     |                      |   | 25.1           |   |           | 10.7    |               |   | 12.2 |   |   | 42.5 |
| Other      Obligations6                            |               | 15.1     |                      |   | 8.3            |   |           | 6.8     |               |   | - |   |   | - |
| Total      Contractual Cash Obligations4           | $                  | 21,546.1 |                      | $      | 1,110.9        |   | $              | 3,214.1 |               | $ | 3,974.8 |   | $ | 13,246.3 |
|                                          |               |     |                      |   |           |   |           |    |               |   |   |   |   |   |
| Other      Commercial Commitments                  |               |     |                      |   |           |   |           |    |               |   |   |   |   |   |
| Standby      Letters of Credit5                    | $                  | 405.8    |                      | $      | 335.3          |   | $              | 25.7    |               | $ | 26.8 |   | $ | 18.0 |
| Capital      Expenditures7                         | $                  | 581.0    |                      | $      | 581.0          |   | $              | -       |               | $ | - |   | $ | - |

| 1 | Interest      payments have not been adjusted for any amounts receivable related to our      interest rate swaps outstanding. See Item 7A, “Quantitative and      Qualitative Disclosures About MarketRisk.” |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Represents      commitments for operating leases. |
|---|---------------------------------------------------|

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

| 3 | Approximately      $437.6 million, $20.6 million, $41.4 million, $40.7 million and $334.9      million in each respective column is attributable to the lease obligation      associated with the Jackson, Michigan power generation      facility. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | As      of December 31, 2008, the liability for uncertain income tax positions,      excluding associated interest and penalties, was $26.2 million pursuant to      FASB Interpretation No. 48. This liability represents an estimate of tax      positions that we have taken in our tax returns, which may ultimately not      be sustained upon examination by the tax authorities. Since the ultimate      amount and timing of any future cash settlements cannot be predicted with      reasonable certainty, this estimated liability has been excluded from the      Aggregate Contractual Obligations. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5 | See      Note 18 of the accompanying Notes to Consolidated Financial Statements for      a listing of letters of credit outstanding as of December 31,      2008. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6 | Consists      of payments due under carbon dioxide take-or-pay contracts and, for the 1      Year or Less column only, Kinder Morgan Energy Partners’ purchase and sale      agreement with LPC Packaging (a California corporation) for the      acquisition of certain bulk terminalassets. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7 | Represents      commitments for the purchase of property, plant and equipment at December      31, 2008. |
|---|----------------------------------------------------------------------------------------------------------|

| Contingent      Liabilities:                                        |   | Contingency                  |   | Amount      of Contingent Liabilityat      December 31, 2008                       |
|---------------------------------------------------------------------|--------|------------------------------|--------|------------------------------------------------------------------------------------|
| Guarantor      of the Bushton Gas Processing Plant Lease1 |   | Default      by ONEOK, Inc.  |   | Total      $78.8 million; Averages $26.3 million per year through 2011   |
|                                                                |   |                         |   |                                                                               |
| Jackson,      Michigan Power Plant Incremental Investment      |   | Operational      Performance |   | $3      to $8 million per year for 10 years                                        |
|                                                                |   |                         |   |                                                                               |
| Jackson,      Michigan Power Plant Incremental Investment      |   | Cash      Flow Performance   |   | Up      to a total of $25 million beginning in2018                                 |

| 1 | In      conjunction with our sale of the Bushton gas processing facility to ONEOK,      Inc., at December 31, 1999, ONEOK, Inc. became primarily liable under the      associated operating lease and we became secondarily liable. Should ONEOK,      Inc. fail to make payments as required under the lease, we would be      required to make such payments, with recourse only to ONEOK,      Inc. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Investment in Kinder Morgan Energy Partners

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

Cash Flows

|                                                      | Successor      Company               |     |                                        | Predecessor      Company |
|-----------------------------------------------------------|--------------------------------------|----------|---------------------------------------------|--------------------------|
|                                                      | Year      EndedDecember      31,2008 |     | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31, 2007 |   | Year      EndedDecember      31,2006 |
|                                                      | (In      millions)                   |     |                                        | (In      millions)       |
| Net      Cash Provided by (Used in)                       |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      Activities                                 | $                                    | 1,396.8  |                                        |                     | $ | 1,044.5 |   |   |   | $ | 603.0 |   |   | $ | 1,707.3 |   |
| Investing      Activities                                 |                                 | 3,210.0  |                                        |                     |   | (15,751.1 | ) |   |   |   | 723.7 |   |   |   | (1,795.9 | ) |
| Financing      Activities                                 |                                 | (4,628.1 | )                                           |                     |   | 12,956.8 |   |   |   |   | 440.9 |   |   |   | 88.7 |   |
|                                                      |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect      of Exchange Rate Changes on Cash              |                                 | (8.7     | )                                           |                     |   | (2.8 | ) |   |   |   | 7.6 |   |   |   | 6.6 |   |
|                                                 |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect      of Accounting Change on Cash                  |                                 | -        |                                        |                     |   | - |   |   |   |   | - |   |   |   | 12.1 |   |
|                                                 |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      Balance Included in Assets Held for Sale        |                                 | -        |                                        |                     |   | (1.1 | ) |   |   |   | (2.7 | ) |   |   | (5.6 | ) |
|                                                 |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      (Decrease) Increase in Cash and Cash Equivalents | $                                    | (30.0    | )                                           |                     | $ | (1,753.7 | ) |   |   | $ | 1,772.5 |   |   | $ | 13.2 |   |

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

Minority Interests Distributions to Kinder Morgan EnergyPartners’ Common Unit Holders

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

|   | · | first,      98% to the owners of all classes of units pro rata and 2% to Kinder Morgan      G.P., Inc. as general partner of Kinder Morgan Energy Partners until the      owners of all classes of units have received a total of $0.15125 per unit      in cash or equivalent i-units for suchquarter; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | second,      85% of any available cash then remaining to the owners of all classes of      units pro rata and 15% to Kinder Morgan G.P., Inc. as general partner of      Kinder Morgan Energy Partners until the owners of all classes of units      have received a total of $0.17875 per unit in cash or equivalent i-units      for such quarter; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | third,      75% of any available cash then remaining to the owners of all classes of      units pro rata and 25% to Kinder Morgan G.P., Inc. as general partner of      Kinder Morgan Energy Partners until the owners of all classes of units      have received a total of $0.23375 per unit in cash or equivalent i-units      for such quarter; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | fourth,      50% of any available cash then remaining to the owners of all classes of      units pro rata, to owners of common units in cash and to Kinder Morgan      Management as owners of i-units in the equivalent number of i-units, and      50% to Kinder Morgan G.P., Inc. as general partner of Kinder Morgan Energy      Partners. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Fair Value Measurement

|                         | Significant      Unobservable Inputs (Level 3) |
|------------------------------|------------------------------------------------|
|                         | Assets                                         |   | Liabilities |
|                         | December      31,2008                          |   | December      31,2007 |   | Change |   | December      31,2008 |   | December      31,2007 |   | Change |
|                         |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| WTI      Options             | $                                              | 34.3 |   |   | $ | — |   |   | $ | 34.3 |   |   | $ | (2.2 | ) |   | $ | — |   |   | $ | (2.2 | ) |
| WTS      Oil Swaps           |                                           | 17.1 |   |   |   | — |   |   |   | 17.1 |   |   |   | (0.2 | ) |   |   | (94.5 | ) |   |   | 94.3 |   |
| Natural      Gas Basis Swaps |                                           | 3.3 |   |   |   | 2.8 |   |   |   | 0.5 |   |   |   | (5.2 | ) |   |   | (4.7 | ) |   |   | (0.5 | ) |
| Natural      Gas Options     |                                           | — |   |   |   | — |   |   |   | — |   |   |   | (2.7 | ) |   |   | — |   |   |   | (2.7 | ) |
| Other                        |                                           | 0.5 |   |   |   | 1.0 |   |   |   | (0.5 | ) |   |   | (0.8 | ) |   |   | (4.9 | ) |   |   | 4.1 |   |
| Total                        | $                                              | 55.2 |   |   | $ | 3.8 |   |   | $ | 51.4 |   |   | $ | (11.1 | ) |   | $ | (104.1 | ) |   | $ | 93.0 |   |

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

|   | · | Option      contracts—valued using internal model. Internal models incorporate the use      of options pricing and estimates of the present value of cash flows based      upon underlying contractual terms. The models reflect management’s      estimates, taking into account observable market prices, estimated market      prices in the absence of quoted market prices, the risk-free market      discount rate, volatility factors, estimated correlations of commodity      prices and contractual volumes; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | WTS      oil swaps—prices obtained from a broker using their proprietary model for      similar assets and liabilities (quotes are non-binding);    and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Natural      gas basis swaps—values obtained through a pricing service, derived by      combining raw inputs from the New York Mercantile Exchange (referred to in      this report as NYMEX) with proprietary quantitative models and processes.      Although the prices are originating from a liquid market (NYMEX), we      believe the incremental effort to further validate these prices would take      undue effort and would not materially alter the assumptions. As a result,      we have classified the valuation of these derivatives as Level      3. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Litigation and EnvironmentalMatters

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

Regulation

Recent Accounting Pronouncements

Information Regarding Forward-lookingStatements

|   | · | 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 NorthAmerica; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | · | changes      in tariff rates charged by our or those of Kinder Morgan Energy Partners’      pipeline subsidiaries implemented by the Federal Energy Regulatory      Commission, or other regulatory agencies 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 the ability to expand      our facilities; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | difficulties      or delays experienced by railroads, barges, trucks, ships or pipelines in      delivering products to or from Kinder Morgan Energy Partners’ 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 |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations (continued) | Knight      Form 10-K |
|--------------|-------------------------------------------------------------------------------------------------------------------|-----------------------|

|   | businesses      that use our services or provide services or products to    us; |
|--------|---------------------------------------------------------------------------------|

|   | · | crude      oil and natural gas production from exploration and production areas that      we or Kinder Morgan Energy Partners 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 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 Kinder Morgan Energy      Partners’ ability to offer and sell equity securities and its ability to      sell debt securities or obtain debt financing in sufficient amounts to      implement that portion of our or Kinder Morgan Energy Partners’ business      plans that contemplates growth through acquisitions of operating      businesses and assets and expansions of  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 coveragelimits; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------|

|   | · | capital      and credit markets conditions, including availability of credit generally,      as well as inflation and interestrates; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 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 agriculturalproducts; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      extent of Kinder Morgan Energy Partners’ 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 Kinder Morgan Energy      Partners may experience with operational equipment, in well completions      and workovers, and in drilling newwells; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      uncertainty inherent in estimating future oil and natural gas production      or reserves that Kinder Morgan Energy Partners may    experience; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      ability to complete expansion projects on time and on    budget; |
|--------|--------|---------------------------------------------------------------------------|

|   | · | the      timing and success of Kinder Morgan Energy Partners’ and our business      development efforts; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

|   | · | unfavorable      results of litigation and the fruition of contingencies referred to in the      accompanying Notes to Consolidated Financial  Statements. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

Item 7A.  Quantitative and QualitativeDisclosures About Market Risk.

----

| Item 7A.  Quantitative      and Qualitative Disclosures About Market Risk.      (continued) | Knight      Form 10-K |
|-------------------------------------------------------------------------------------------------------|-----------------------|

|                                       | Credit      Rating |
|--------------------------------------------|--------------------|
| Citigroup                                  | A                  |
| J.      Aron & Company / Goldman Sachs | A                  |
| Morgan      Stanley                        | A                  |

----

| Item 7A.  Quantitative      and Qualitative Disclosures About Market Risk.      (continued) | Knight      Form 10-K |
|-------------------------------------------------------------------------------------------------------|-----------------------|

----

| Item 7A.  Quantitative      and Qualitative Disclosures About Market Risk.      (continued) | Knight      Form 10-K |
|-------------------------------------------------------------------------------------------------------|-----------------------|

----

| Knight      Form 10-K |
|-----------------------|

Item 8.    Financial Statements andSupplementary Data.

|                                                                               | Page    |
|------------------------------------------------------------------------------------|---------|
|                                                                          |    |
| Report of Independent Registered Public      Accounting Firm                       | 88-89   |
| Consolidated Statements of      Operations                                         | 90      |
| Consolidated Statements of Comprehensive      Income                               | 91      |
| Consolidated Balance Sheets                                                        | 92-93   |
| Consolidated Statements of Stockholder’s      Equity                         | 94-95   |
| Consolidated Statements of Cash      Flows                                         | 96-97   |
| Notes to Consolidated Financial    Statements                                      | 98-178  |
| Selected Quarterly Financial Data      (Unaudited)                                 | 178     |
| Supplementary Information on Oil and Gas      ProducingActivities      (Unaudited) | 179-182 |
|                                                                          |    |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

Report of Independent Registered Public AccountingFirm

|   | · | The      bulk terminal assets acquired from Chemserve, Inc., effective August 15,      2008; and |
|--------|--------|--------------------------------------------------------------------------------------------------|

|   | · | The      refined petroleum products storage terminal acquired from ConocoPhillips,      effective December 10, 2008, |
|--------|--------|----------------------------------------------------------------------------------------------------------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

KNIGHT INC. AND SUBSIDIARIES

|                                                                | Successor      Company               |     |                                        | Predecessor      Company |
|---------------------------------------------------------------------|--------------------------------------|----------|---------------------------------------------|--------------------------|
|                                                                | Year      EndedDecember      31,2008 |     | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31, 2007 |   | Year      EndedDecember      31,2006 |
| Operating      Revenues                                             |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Natural      Gas Sales                                              | $                                    | 7,705.8  |                                        |                     | $ | 3,623.1 |   |   |   | $ | 2,430.6 |   |   | $ | 6,225.6 |   |
| Services                                                            |                                 | 2,904.0  |                                        |                     |   | 2,049.8 |   |   |   |   | 1,350.5 |   |   |   | 3,082.3 |   |
| Product      Sales and Other                                        |                                 | 1,485.0  |                                        |                     |   | 721.8 |   |   |   |   | 384.0 |   |   |   | 900.7 |   |
| Total      Operating Revenues                                       |                                 | 12,094.8 |                                        |                     |   | 6,394.7 |   |   |   |   | 4,165.1 |   |   |   | 10,208.6 |   |
|                                                           |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      Costs and Expenses                                   |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Gas      Purchases and Other Costs of Sales                         |                                 | 7,744.0  |                                        |                     |   | 3,656.6 |   |   |   |   | 2,490.4 |   |   |   | 6,339.4 |   |
| Operations      and Maintenance                                     |                                 | 1,318.0  |                                        |                     |   | 943.3 |   |   |   |   | 476.1 |   |   |   | 1,155.4 |   |
| General      and Administrative                                     |                                 | 352.5    |                                        |                     |   | 175.6 |   |   |   |   | 283.6 |   |   |   | 305.1 |   |
| Depreciation,      Depletion and Amortization                       |                                 | 918.4    |                                        |                     |   | 472.3 |   |   |   |   | 261.0 |   |   |   | 531.4 |   |
| Taxes,      Other Than Income Taxes                                 |                                 | 191.4    |                                        |                     |   | 110.1 |   |   |   |   | 74.4 |   |   |   | 165.0 |   |
| Other      Expenses (Income)                                        |                                 | 9.3      |                                        |                     |   | (6.0 | ) |   |   |   | (2.3 | ) |   |   | (34.1 | ) |
| Impairment      of Assets                                           |                                 | 4,033.3  |                                        |                     |   | - |   |   |   |   | 377.1 |   |   |   | 1.2 |   |
| Total      Operating Costs and Expenses                             |                                 | 14,566.9 |                                        |                     |   | 5,351.9 |   |   |   |   | 3,960.3 |   |   |   | 8,463.4 |   |
|                                                                |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      Income (Loss)                                        |                                 | (2,472.1 | )                                           |                     |   | 1,042.8 |   |   |   |   | 204.8 |   |   |   | 1,745.2 |   |
|                                                           |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      Income and (Expenses)                                    |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      of Equity Investees                                   |                                 | 195.4    |                                        |                     |   | 53.4 |   |   |   |   | 38.3 |   |   |   | 98.6 |   |
| Interest      Expense, Net                                          |                                 | (633.4   | )                                           |                     |   | (581.5 | ) |   |   |   | (241.1 | ) |   |   | (552.8 | ) |
| Interest      Income (Expense)—Deferrable Interest Debentures |                                 | 5.1      |                                        |                     |   | (12.8 | ) |   |   |   | (9.1 | ) |   |   | (21.9 | ) |
| Minority      Interests                                             |                                 | (396.1   | )                                           |                     |   | (37.6 | ) |   |   |   | (90.7 | ) |   |   | (374.2 | ) |
| Other,      Net                                                     |                                 | 7.0      |                                        |                     |   | 11.6 |   |   |   |   | 0.6 |   |   |   | (8.6 | ) |
| Total      Other Income and (Expenses)                              |                                 | (822.0   | )                                           |                     |   | (566.9 | ) |   |   |   | (302.0 | ) |   |   | (858.9 | ) |
|                                                                |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      (Loss) from Continuing Operations Before Income Taxes   |                                 | (3,294.1 | )                                           |                     |   | 475.9 |   |   |   |   | (97.2 | ) |   |   | 886.3 |   |
| Income      Taxes                                                   |                                 | 304.3    |                                        |                     |   | 227.4 |   |   |   |   | 135.5 |   |   |   | 285.9 |   |
| Income      (Loss) from Continuing Operations                       |                                 | (3,598.4 | )                                           |                     |   | 248.5 |   |   |   |   | (232.7 | ) |   |   | 600.4 |   |
| Income      (Loss) from Discontinued Operations, Net of Tax         |                                 | (0.9     | )                                           |                     |   | (1.5 | ) |   |   |   | 298.6 |   |   |   | (528.5 | ) |
| Net      Income (Loss)                                              | $                                    | (3,599.3 | )                                           |                     | $ | 247.0 |   |   |   | $ | 65.9 |   |   | $ | 71.9 |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

KNIGHT INC. AND SUBSIDIARIES

|                                                                                                                                                                     | Successor      Company               |     |                                        | Predecessor      Company |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------|----------|---------------------------------------------|--------------------------|
|                                                                                                                                                                     | Year      EndedDecember      31,2008 |     | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31, 2007 |   | Year      EndedDecember      31,2006 |
|                                                                                                                                                                     |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      Income (Loss)                                                                                                                                                   | $                                    | (3,599.3 | )                                           |                     | $ | 247.0 |   |   |   | $ | 65.9 |   |   | $ | 71.9 |   |
| Other      Comprehensive Income (Loss), Net of Tax:                                                                                                                      |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Change      in Fair Value of Derivatives Utilized for Hedging Purposes (Net of Tax of      $121.3, Tax Benefit of $140.8, $19.1, and Tax of $26.8,      Respectively)    |                                 | 212.0    |                                        |                     |   | (249.6 | ) |   |   |   | (21.3 | ) |   |   | 44.6 |   |
| Reclassification      of Change in Fair Value of Derivatives to Net Income (Net of Tax of $69.4,      Tax Benefit of $0.6, Tax of $12.8 and $11.9, Respectively)         |                                 | 117.1    |                                        |                     |   | - |   |   |   |   | 10.3 |   |   |   | 21.7 |   |
| Employee      Benefit Plans:                                                                                                                                             |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Prior      Service Cost Arising During Period (Net of Tax Benefit of $0.2 and $1.0,      Respectively)                                                                   |                                 | (0.3     | )                                           |                     |   | - |   |   |   |   | (1.7 | ) |   |   | - |   |
| Net      (Loss) Gain Arising During Period (Net of Tax Benefit of $37.5, $15.3, and      Tax of $6.7, Respectively)                                                      |                                 | (66.2    | )                                           |                     |   | (28.4 | ) |   |   |   | 11.4 |   |   |   | - |   |
| Amortization      of Prior Service Cost Included in Net Periodic Benefit Costs (Net of Tax      Benefit of $0.2)                                                         |                                 | -        |                                        |                     |   | - |   |   |   |   | (0.4 | ) |   |   | - |   |
| Amortization      of Net Loss (Gain) Included in Net Periodic Benefit Costs (Net of Tax of      $0.2, Tax Benefit of Less than $0.1, and Tax of $0.8,      Respectively) |                                 | 0.4      |                                        |                     |   | (0.2 | ) |   |   |   | 1.4 |   |   |   | - |   |
| Change      in Foreign Currency Translation Adjustment (Net of Tax Benefit of $31.0,      Tax of $8.3, $3.9 and Tax Benefit of $11.5, Respectively)                      |                                 | (68.7    | )                                           |                     |   | 27.6 |   |   |   |   | 40.1 |   |   |   | (31.9 | ) |
| Adjustment      to Recognize Minimum Pension Liability (Net of Tax of$1.7)                                                                                               |                                 | -        |                                        |                     |   | - |   |   |   |   | - |   |   |   | 3.5 |   |
| Total      Other Comprehensive Income (Loss)                                                                                                                             |                                 | 194.3    |                                        |                     |   | (250.6 | ) |   |   |   | 39.8 |   |   |   | 37.9 |   |
|                                                                                                                                                                |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive      Income (Loss)                                                                                                                                         | $                                    | (3,405.0 | )                                           |                     | $ | (3.6 | ) |   |   | $ | 105.7 |   |   | $ | 109.8 |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

KNIGHT INC. AND SUBSIDIARIES

|                                                   | December      31,2008 |     | December      31,2007 |
|--------------------------------------------------------|-----------------------|----------|-----------------------|
| ASSETS                                                 |                  |     |                  |   |   |   |   |
| Current      Assets                                    |                  |     |                  |   |   |   |   |
| Cash      and Cash Equivalents                         | $                     | 118.6    |                  |   | $ | 148.6 |   |
| Restricted      Deposits                               |                  | -        |                  |   |   | 67.9 |   |
| Accounts,      Notes and Interest Receivable, Net      |                  | 992.5    |                  |   |   | 975.2 |   |
| Inventories                                            |                  | 44.2     |                  |   |   | 37.8 |   |
| Gas      Imbalances                                    |                  | 14.1     |                  |   |   | 26.9 |   |
| Assets      Held for Sale                              |                  | -        |                  |   |   | 3,353.3 |   |
| Fair      Value of Derivative Instruments              |                  | 115.2    |                  |   |   | 37.1 |   |
| Other                                                  |                  | 32.6     |                  |   |   | 36.8 |   |
|                                                   |                  | 1,317.2  |                  |   |   | 4,683.6 |   |
|                                         |                  |     |                  |   |   |   |   |
| Property,      Plant and Equipment, Net                |                  | 16,109.8 |                  |   |   | 14,803.9 |   |
| Notes      Receivable—Related Parties            |                  | 178.1    |                  |   |   | 87.9 |   |
| Investments                                            |                  | 1,827.4  |                  |   |   | 1,996.2 |   |
| Goodwill                                               |                  | 4,698.7  |                  |   |   | 8,174.0 |   |
| Other      Intangibles, Net                            |                  | 251.5    |                  |   |   | 321.1 |   |
| Assets      Held for Sale, Non-current                 |                  | -        |                  |   |   | 5,634.6 |   |
| Fair      Value of Derivative Instruments, Non-current |                  | 828.0    |                  |   |   | 143.5 |   |
| Deferred      Charges and Other Assets                 |                  | 234.2    |                  |   |   | 256.2 |   |
| Total      Assets                                      | $                     | 25,444.9 |                  |   | $ | 36,101.0 |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                                                                                    | December      31,2008 |     | December      31,2007 |
|---------------------------------------------------------------------------------------------------------|-----------------------|----------|-----------------------|
| LIABILITIES      AND STOCKHOLDER’S EQUITY                                                         |                  |     |                  |   |   |   |   |
| Current      Liabilities                                                                                |                  |     |                  |   |   |   |   |
| Current      Maturities of Long-term Debt                                                               | $                     | 293.7    |                  |   | $ | 79.8 |   |
| Notes      Payable                                                                                      |                  | 8.8      |                  |   |   | 888.1 |   |
| Cash      Book Overdrafts                                                                               |                  | 45.2     |                  |   |   | 30.7 |   |
| Accounts      Payable                                                                                   |                  | 849.8    |                  |   |   | 943.7 |   |
| Accrued      Interest                                                                                   |                  | 241.9    |                  |   |   | 242.7 |   |
| Accrued      Taxes                                                                                      |                  | 152.1    |                  |   |   | 728.2 |   |
| Gas      Imbalances                                                                                     |                  | 12.4     |                  |   |   | 23.7 |   |
| Liabilities      Held for Sale                                                                          |                  | -        |                  |   |   | 168.2 |   |
| Fair      Value of Derivative Instruments                                                               |                  | 129.5    |                  |   |   | 594.7 |   |
| Other                                                                                                   |                  | 281.3    |                  |   |   | 240.0 |   |
|                                                                                                    |                  | 2,014.7  |                  |   |   | 3,939.8 |   |
|                                                                                               |                  |     |                  |   |   |   |   |
| Long-term      Debt                                                                                     |                  |     |                  |   |   |   |   |
| Outstanding      Notes and Debentures                                                                   |                  | 11,020.1 |                  |   |   | 14,714.6 |   |
| Deferrable      Interest Debentures Issued to Subsidiary Trusts                                         |                  | 35.7     |                  |   |   | 283.1 |   |
| Preferred      Interest in General Partner of Kinder Morgan Energy    Partners                          |                  | 100.0    |                  |   |   | 100.0 |   |
| Value      of Interest Rate Swaps                                                                       |                  | 971.0    |                  |   |   | 199.7 |   |
|                                                                                               |                  | 12,126.8 |                  |   |   | 15,297.4 |   |
|                                                                                               |                  |     |                  |   |   |   |   |
| Deferred      Income Taxes, Non-current                                                                 |                  | 2,081.3  |                  |   |   | 1,849.4 |   |
| Liabilities      Held for Sale, Non-current                                                             |                  | -        |                  |   |   | 2,424.1 |   |
| Fair      Value of Derivative Instruments, Non-current                                                  |                  | 92.2     |                  |   |   | 888.0 |   |
| Other      Long-term Liabilities and Deferred Credits                                                   |                  | 653.0    |                  |   |   | 566.8 |   |
|                                                                                                    |                  | 14,953.3 |                  |   |   | 21,025.7 |   |
|                                                                                                    |                  |     |                  |   |   |   |   |
| Minority      Interests in Equity of Subsidiaries                                                       |                  | 4,072.6  |                  |   |   | 3,314.0 |   |
|                                                                                                    |                  |     |                  |   |   |   |   |
| Commitments      and Contingencies (Notes 18 and 21)                                                    |                  |     |                  |   |   |   |   |
|                                                                                               |                  |     |                  |   |   |   |   |
| Stockholder’s      Equity                                                                         |                  |     |                  |   |   |   |   |
| Common      Stock – Authorized and Outstanding – 100 Shares, Par Value $0.01 Per      Share |                  | -        |                  |   |   | - |   |
| Additional      Paid-in Capital                                                                         |                  | 7,810.0  |                  |   |   | 7,822.2 |   |
| Retained      Earnings (Deficit)                                                                        |                  | (3,352.3 | )                     |   |   | 247.0 |   |
| Accumulated      Other Comprehensive Loss                                                               |                  | (53.4    | )                     |   |   | (247.7 | ) |
|                                                                                                    |                  | 4,404.3  |                  |   |   | 7,821.5 |   |
| Total      Liabilities and Stockholder’s Equity                                                   | $                     | 25,444.9 |                  |   | $ | 36,101.0 |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

KNIGHT INC. AND SUBSIDIARIES

|                                                                                          | Successor      Company                |
|-----------------------------------------------------------------------------------------------|---------------------------------------|
|                                                                                          | Year      EndedDecember      31, 2008 |   | Seven      Months EndedDecember      31, 2007 |
|                                                                                          |
|                                                                                          | Shares                                |   | Amount |   | Shares |   | Amount |
|                                                                                          |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common      Stock                                                                             |                                  | 100 |   |   | $ | - |   |   |   | 100 |   |   | $ | - |   |
|                                                                                     |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Additional      Paid-in Capital                                                               |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning      Balance                                                                        |                                  |   |   |   |   | 7,822.2 |   |   |   |   |   |   |   | - |   |
| MBO      Purchase Price                                                                       |                                  |   |   |   |   | - |   |   |   |   |   |   |   | 7,831.2 |   |
| Revaluation      of Kinder Morgan Energy Partners (“KMP”) Investment (Note    14) |                                  |   |   |   |   | (19.8 | ) |   |   |   |   |   |   | (13.4 | ) |
| A-1      Unit Amortization                                                                    |                                  |   |   |   |   | 7.6 |   |   |   |   |   |   |   | 4.4 |   |
| Ending      Balance                                                                           |                                  |   |   |   |   | 7,810.0 |   |   |   |   |   |   |   | 7,822.2 |   |
|                                                                                     |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retained      Earnings (Deficit)                                                              |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning      Balance                                                                        |                                  |   |   |   |   | 247.0 |   |   |   |   |   |   |   | - |   |
| Net      (Loss) Income                                                                        |                                  |   |   |   |   | (3,599.3 | ) |   |   |   |   |   |   | 247.0 |   |
| Ending      Balance                                                                           |                                  |   |   |   |   | (3,352.3 | ) |   |   |   |   |   |   | 247.0 |   |
|                                                                                          |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accumulated      Other Comprehensive  Loss (Net of Tax)                             |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives                                                                                   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning Balance                                                                        |                                  |   |   |   |   | (246.7 | ) |   |   |   |   |   |   | 2.9 |   |
| Change      in Fair Value of Derivatives Utilized for      Hedging Purposes              |                                  |   |   |   |   | 212.0 |   |   |   |   |   |   |   | (249.6 | ) |
| Reclassification      of Change in Fair Value of Derivatives to Net Income                    |                                  |   |   |   |   | 117.1 |   |   |   |   |   |   |   | - |   |
| Ending      Balance                                                                           |                                  |   |   |   |   | 82.4 |   |   |   |   |   |   |   | (246.7 | ) |
| Foreign      Currency Translation                                                             |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning      Balance                                                                        |                                  |   |   |   |   | 27.6 |   |   |   |   |   |   |   | - |   |
| Currency      Translation Adjustment                                                          |                                  |   |   |   |   | (68.7 | ) |   |   |   |   |   |   | 27.6 |   |
| Ending      Balance                                                                           |                                  |   |   |   |   | (41.1 | ) |   |   |   |   |   |   | 27.6 |   |
| Employee      Benefit Plans                                                                   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning      Balance                                                                        |                                  |   |   |   |   | (28.6 | ) |   |   |   |   |   |   | - |   |
| Benefit      Plan Adjustments                                                                 |                                  |   |   |   |   | (66.5 | ) |   |   |   |   |   |   | (28.4 | ) |
| Benefit      Plan Amortization                                                                |                                  |   |   |   |   | 0.4 |   |   |   |   |   |   |   | (0.2 | ) |
| Ending      Balance                                                                           |                                  |   |   |   |   | (94.7 | ) |   |   |   |   |   |   | (28.6 | ) |
| Total      Accumulated Other Comprehensive Loss                                               |                                  |   |   |   |   | (53.4 | ) |   |   |   |   |   |   | (247.7 | ) |
|                                                                                     |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Stockholder’s Equity                                                         |                                  | 100 |   |   | $ | 4,404.3 |   |   |   | 100 |   |   | $ | 7,821.5 |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                                                                                           | Predecessor      Company                |
|----------------------------------------------------------------------------------------------------------------|-----------------------------------------|
|                                                                                                           | Five      Months EndedMay      31, 2007 |   | Year      EndedDecember      31, 2006 |
|                                                                                                           |
|                                                                                                           | Shares                                  |   | Amount |   | Shares |   | Amount |
| Common      Stock                                                                                              |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning      Balance                                                                                         |                                    | 149,166,709 |   |   | $ | 745.8 |   |   |   | 148,479,863 |   |   | $ | 742.4 |   |
| Employee      Benefit Plans                                                                                    |                                    | 149,894 |   |   |   | 0.8 |   |   |   | 686,846 |   |   |   | 3.4 |   |
| Ending      Balance                                                                                            |                                    | 149,316,603 |   |   |   | 746.6 |   |   |   | 149,166,709 |   |   |   | 745.8 |   |
| Additional      Paid-in Capital                                                                                |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning      Balance                                                                                         |                                    |   |   |   |   | 3,048.9 |   |   |   |   |   |   |   | 3,056.3 |   |
| Revaluation      of Kinder Morgan Energy Partners (“KMP”)      Investment (Note 14) |                                    |   |   |   |   | 3.4 |   |   |   |   |   |   |   | (40.3 | ) |
| Employee      Benefit Plans                                                                                    |                                    |   |   |   |   | 7.7 |   |   |   |   |   |   |   | 33.2 |   |
| Tax      Benefits from Employee Benefit Plans                                                                  |                                    |   |   |   |   | 56.7 |   |   |   |   |   |   |   | 18.6 |   |
| Implementation      of SFAS No. 123(R) Deferred Compensation Balance                                      |                                    |   |   |   |   | - |   |   |   |   |   |   |   | (36.9 | ) |
| Deferred      Compensation (Note 17)                                                                           |                                    |   |   |   |   | 21.9 |   |   |   |   |   |   |   | 18.0 |   |
| Ending      Balance                                                                                            |                                    |   |   |   |   | 3,138.6 |   |   |   |   |   |   |   | 3,048.9 |   |
| Retained      Earnings                                                                                         |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning      Balance                                                                                         |                                    |   |   |   |   | 778.7 |   |   |   |   |   |   |   | 1,175.3 |   |
| Net      Income                                                                                                |                                    |   |   |   |   | 65.9 |   |   |   |   |   |   |   | 71.9 |   |
| Cash      Dividends, Common Stock                                                                              |                                    |   |   |   |   | (234.9 | ) |   |   |   |   |   |   | (468.5 | ) |
| Implementation      of FIN No. 48 (Note 13)                                                                    |                                    |   |   |   |   | (4.8 | ) |   |   |   |   |   |   | - |   |
| Ending      Balance                                                                                            |                                    |   |   |   |   | 604.9 |   |   |   |   |   |   |   | 778.7 |   |
| Treasury      Stock at Cost                                                                                    |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning      Balance                                                                                         |                                    | (15,022,751 | ) |   |   | (915.9 | ) |   |   | (14,712,901 | ) |   |   | (885.7 | ) |
| Treasury      Stock Acquired                                                                                   |                                    | - |   |   |   | - |   |   |   | (339,800 | ) |   |   | (31.5 | ) |
| Employee      Benefit Plans                                                                                    |                                    | (7,384 | ) |   |   | (0.5 | ) |   |   | 29,950 |   |   |   | 1.3 |   |
| Ending      Balance                                                                                            |                                    | (15,030,135 | ) |   |   | (916.4 | ) |   |   | (15,022,751 | ) |   |   | (915.9 | ) |
| Deferred      Compensation Plans                                                                               |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning      Balance                                                                                         |                                    |   |   |   |   | - |   |   |   |   |   |   |   | (36.9 | ) |
| Implementation      of SFAS No. 123(R) Balance Transfer to Additional Paid-in      Capital                |                                    |   |   |   |   | - |   |   |   |   |   |   |   | 36.9 |   |
| Ending      Balance                                                                                            |                                    |   |   |   |   | - |   |   |   |   |   |   |   | - |   |
| Accumulated      Other Comprehensive Loss (Net of Tax)                                               |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives                                                                                                    |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning Balance                                                                                         |                                    |   |   |   |   | (60.8 | ) |   |   |   |   |   |   | (127.1 | ) |
| Change      in Fair Value of Derivatives Utilized for Hedging Purposes                                         |                                    |   |   |   |   | (21.3 | ) |   |   |   |   |   |   | 44.6 |   |
| Reclassification      of Change in Fair Value of Derivatives to Net Income                                     |                                    |   |   |   |   | 10.3 |   |   |   |   |   |   |   | 21.7 |   |
| Ending      Balance                                                                                            |                                    |   |   |   |   | (71.8 | ) |   |   |   |   |   |   | (60.8 | ) |
| Foreign      Currency Translation                                                                              |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning      Balance                                                                                         |                                    |   |   |   |   | (24.5 | ) |   |   |   |   |   |   | 7.4 |   |
| Currency      Translation Adjustment                                                                           |                                    |   |   |   |   | 40.1 |   |   |   |   |   |   |   | (31.9 | ) |
| Ending      Balance                                                                                            |                                    |   |   |   |   | 15.6 |   |   |   |   |   |   |   | (24.5 | ) |
| Minimum      Pension Liability                                                                                 |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning      Balance                                                                                         |                                    |   |   |   |   | - |   |   |   |   |   |   |   | (7.3 | ) |
| Minimum      Pension Liability Adjustments                                                                     |                                    |   |   |   |   | - |   |   |   |   |   |   |   | 7.3 |   |
| Ending      Balance                                                                                            |                                    |   |   |   |   | - |   |   |   |   |   |   |   | - |   |
| Employee      Retirement Benefits                                                                              |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning      Balance                                                                                         |                                    |   |   |   |   | (50.6 | ) |   |   |   |   |   |   | - |   |
| Benefit      Plan Adjustments                                                                                  |                                    |   |   |   |   | - |   |   |   |   |   |   |   | (50.6 | ) |
| Benefit      Plan Amortization                                                                                 |                                    |   |   |   |   | 10.7 |   |   |   |   |   |   |   | - |   |
| Ending      Balance                                                                                            |                                    |   |   |   |   | (39.9 | ) |   |   |   |   |   |   | (50.6 | ) |
|                                                                                                           |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Accumulated Other Comprehensive Loss                                                                |                                    |   |   |   |   | (96.1 | ) |   |   |   |   |   |   | (135.9 | ) |
|                                                                                                      |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Stockholder’s Equity                                                                          |                                    | 134,286,468 |   |   | $ | 3,477.6 |   |   |   | 134,143,958 |   |   | $ | 3,521.6 |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

KNIGHT INC. AND SUBSIDIARIES

|                                                                                                  | Successor      Company               |     |                                        | Predecessor      Company |
|-------------------------------------------------------------------------------------------------------|--------------------------------------|----------|---------------------------------------------|--------------------------|
|                                                                                                  | Year      EndedDecember      31,2008 |     | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31,2007 |   | Year      EndedDecember      31,2006 |
| Cash      Flows from Operating Activities                                                             |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      (Loss) Income                                                                                | $                                    | (3,599.3 | )                                           |                     | $ | 247.0 |   |   |   | $ | 65.9 |   |   | $ | 71.9 |   |
| Adjustments      to Reconcile Net (Loss) Income to Net Cash Flows from Operating      Activities      |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss      (Income) from Discontinued Operations, Net of Tax                                           |                                 | 0.9      |                                        |                     |   | 1.5 |   |   |   |   | (287.9 | ) |   |   | 542.8 |   |
| Loss      from Impairment of Assets                                                                   |                                 | 4,033.3  |                                        |                     |   | - |   |   |   |   | 377.1 |   |   |   | 1.2 |   |
| Loss      on Early Extinguishment of Debt                                                             |                                 | 23.6     |                                        |                     |   | - |   |   |   |   | 4.4 |   |   |   | - |   |
| Depreciation,      Depletion and Amortization                                                         |                                 | 918.4    |                                        |                     |   | 476.2 |   |   |   |   | 264.9 |   |   |   | 540.3 |   |
| Deferred      Income Taxes                                                                            |                                 | (496.4   | )                                           |                     |   | (89.8 | ) |   |   |   | 138.7 |   |   |   | 10.8 |   |
| Income      from the Allowance for Equity Funds Used During Construction                              |                                 | (10.9    | )                                           |                     |   | - |   |   |   |   | - |   |   |   | - |   |
| Equity      in Earnings of Equity Investees                                                           |                                 | (195.4   | )                                           |                     |   | (54.3 | ) |   |   |   | (39.1 | ) |   |   | (100.6 | ) |
| Distributions      from Equity Investees                                                              |                                 | 241.6    |                                        |                     |   | 86.5 |   |   |   |   | 48.2 |   |   |   | 74.8 |   |
| Minority      Interests in Income of Consolidated Subsidiaries                                        |                                 | 396.1    |                                        |                     |   | 48.0 |   |   |   |   | 90.7 |   |   |   | 374.2 |   |
| Gains      from Property Casualty Indemnifications                                                    |                                 | -        |                                        |                     |   | - |   |   |   |   | (1.8 | ) |   |   | (15.2 | ) |
| Net      Losses (Gains) on Sales of Assets                                                            |                                 | 9.2      |                                        |                     |   | (6.3 | ) |   |   |   | (2.6 | ) |   |   | (22.0 | ) |
| Mark-to-Market      Interest Rate Swap (Gain) Loss                                                    |                                 | (19.8    | )                                           |                     |   | - |   |   |   |   | - |   |   |   | 22.3 |   |
| Foreign      Currency Loss                                                                            |                                 | 0.2      |                                        |                     |   | - |   |   |   |   | 15.5 |   |   |   | - |   |
| Changes      in Gas in Underground Storage                                                            |                                 | (28.0    | )                                           |                     |   | 51.3 |   |   |   |   | (84.2 | ) |   |   | (35.3 | ) |
| Changes      in Working Capital Items (Note 6)                                                        |                                 | (44.9    | )                                           |                     |   | 104.0 |   |   |   |   | (202.9 | ) |   |   | 80.0 |   |
| Proceeds      from (Payment for) Termination of Interest Rate Swaps                                   |                                 | 192.0    |                                        |                     |   | (2.2 | ) |   |   |   | 51.9 |   |   |   | - |   |
| Kinder      Morgan Energy Partners’ Rate Reparations, Refunds and      Reserve Adjustments |                                 | (13.7    | )                                           |                     |   | 140.0 |   |   |   |   | - |   |   |   | (19.1 | ) |
| Other,      Net                                                                                       |                                 | (9.3     | )                                           |                     |   | 45.8 |   |   |   |   | 54.4 |   |   |   | (31.4 | ) |
| Net      Cash Flows Provided by Continuing Operations                                                 |                                 | 1,397.6  |                                        |                     |   | 1,047.7 |   |   |   |   | 493.2 |   |   |   | 1,494.7 |   |
| Net      Cash Flows (Used in) Provided by Discontinued Operations                                     |                                 | (0.8     | )                                           |                     |   | (3.2 | ) |   |   |   | 109.8 |   |   |   | 212.6 |   |
| Net      Cash Flows Provided by Operating Activities                                                  |                                 | 1,396.8  |                                        |                     |   | 1,044.5 |   |   |   |   | 603.0 |   |   |   | 1,707.3 |   |
|                                                                                             |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      Flows from Investing Activities                                                             |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchase      of Predecessor Stock                                                                    |                                 | -        |                                        |                     |   | (11,534.3 | ) |   |   |   | - |   |   |   | - |   |
| Capital      Expenditures                                                                             |                                 | (2,545.3 | )                                           |                     |   | (1,287.0 | ) |   |   |   | (652.8 | ) |   |   | (1,375.6 | ) |
| Proceeds      from Sale of 80% Interest in NGPL PipeCo LLC, Net of $1.1      Cash Sold           |                                 | 2,899.3  |                                        |                     |   | - |   |   |   |   | - |   |   |   | - |   |
| Terasen      Acquisition                                                                              |                                 | -        |                                        |                     |   | - |   |   |   |   | - |   |   |   | (10.6 | ) |
| Other      Acquisitions                                                                               |                                 | (47.6    | )                                           |                     |   | (122.0 | ) |   |   |   | (42.1 | ) |   |   | (396.5 | ) |
| Loans      to Customers                                                                               |                                 | (109.6   | )                                           |                     |   | - |   |   |   |   | - |   |   |   | - |   |
| Proceeds      from (Investments in) NGPL PipeCo LLC Restricted Cash                                   |                                 | 3,106.4  |                                        |                     |   | (3,030.0 | ) |   |   |   | - |   |   |   | - |   |
| Net      Proceeds from (Investment in) Margin Deposits                                                |                                 | 71.0     |                                        |                     |   | (39.3 | ) |   |   |   | (54.8 | ) |   |   | 38.6 |   |
| Distributions      from Equity Investees                                                              |                                 | 98.1     |                                        |                     |   | - |   |   |   |   | - |   |   |   | - |   |
| Contributions      to Investments                                                                     |                                 | (366.2   | )                                           |                     |   | (246.4 | ) |   |   |   | (29.7 | ) |   |   | (6.1 | ) |
| Change      in Natural Gas Storage and Natural Gas Liquids Line Fill      Inventory                   |                                 | (7.2     | )                                           |                     |   | 10.0 |   |   |   |   | 8.4 |   |   |   | (12.9 | ) |
| Property      Casualty Indemnifications                                                               |                                 | -        |                                        |                     |   | - |   |   |   |   | 8.0 |   |   |   | 13.1 |   |
| Net      Proceeds (Costs of Removal) from Sales of Assets                                             |                                 | 111.1    |                                        |                     |   | 301.3 |   |   |   |   | (1.5 | ) |   |   | 92.2 |   |
| Net      Cash Flows Provided by (Used in) Continuing Investing      Activities                        |                                 | 3,210.0  |                                        |                     |   | (15,947.7 | ) |   |   |   | (764.5 | ) |   |   | (1,657.8 | ) |
| Net      Cash Flows Provided by (Used in) Discontinued Investing      Activities                      |                                 | -        |                                        |                     |   | 196.6 |   |   |   |   | 1,488.2 |   |   |   | (138.1 | ) |
| Net      Cash Flows Provided by (Used in) Investing Activities                                        | $                                    | 3,210.0  |                                        |                     | $ | (15,751.1 | ) |   |   | $ | 723.7 |   |   | $ | (1,795.9 | ) |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                                                                     | Successor      Company               |     |                                        | Predecessor      Company |
|------------------------------------------------------------------------------------------|--------------------------------------|----------|---------------------------------------------|--------------------------|
|                                                                                     | Year      EndedDecember      31,2008 |     | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31,2007 |   | Year      EndedDecember      31,2006 |
| Cash      Flows from Financing Activities                                                |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Short-term      Debt, Net                                                                | $                                    | (879.3   | )                                           |                     | $ | (52.6 | ) |   |   | $ | (247.5 | ) |   | $ | 1,009.5 |   |
| Long-term      Debt Issued                                                               |                                 | 2,113.2  |                                        |                     |   | 8,805.0 |   |   |   |   | 1,000.0 |   |   |   | - |   |
| Long-term      Debt Retired                                                              |                                 | (5,874.6 | )                                           |                     |   | (829.2 | ) |   |   |   | (302.4 | ) |   |   | (140.7 | ) |
| Issuance of Kinder Morgan, G.P., Inc. Preferred Stock |                                 | -        |                                        |                     |   | 100.0 |   |   |   |   | - |   |   |   | - |   |
| Discount      (Premium) on Early Extinguishment of Debt                                  |                                 | 69.2     |                                        |                     |   | - |   |   |   |   | (4.2 | ) |   |   | - |   |
| Cash      Book Overdraft                                                                 |                                 | 14.5     |                                        |                     |   | (14.0 | ) |   |   |   | (14.9 | ) |   |   | 17.9 |   |
| Issuance      of Shares by Kinder Morgan Management, LLC                                 |                                 | -        |                                        |                     |   | - |   |   |   |   | 297.9 |   |   |   | - |   |
| Other      Common Stock Issued                                                           |                                 | -        |                                        |                     |   | - |   |   |   |   | 9.9 |   |   |   | 38.7 |   |
| Excess      Tax Benefits from Share-based Payments                                       |                                 | -        |                                        |                     |   | - |   |   |   |   | 56.7 |   |   |   | 18.6 |   |
| Cash      Paid to Share-based Award Holders Due to Going Private Transaction             |                                 | -        |                                        |                     |   | (181.1 | ) |   |   |   | - |   |   |   | - |   |
| Contributions      from Successor Investors                                              |                                 | -        |                                        |                     |   | 5,112.0 |   |   |   |   | - |   |   |   | - |   |
| Short-term      Advances from (to) Unconsolidated Affiliates                             |                                 | 2.7      |                                        |                     |   | 10.9 |   |   |   |   | 2.3 |   |   |   | (4.9 | ) |
| Treasury      Stock Acquired                                                             |                                 | -        |                                        |                     |   | - |   |   |   |   | - |   |   |   | (34.3 | ) |
| Cash      Dividends, Common Stock                                                        |                                 | -        |                                        |                     |   | - |   |   |   |   | (234.9 | ) |   |   | (468.5 | ) |
| Distributions      to Minority Interests                                                 |                                 | (630.3   | )                                           |                     |   | (259.6 | ) |   |   |   | (248.9 | ) |   |   | (575.0 | ) |
| Contributions      from Minority Interests                                               |                                 | 561.5    |                                        |                     |   | 342.9 |   |   |   |   | - |   |   |   | 353.8 |   |
| Debt      Issuance Costs                                                                 |                                 | (15.9    | )                                           |                     |   | (81.5 | ) |   |   |   | (13.1 | ) |   |   | (4.8 | ) |
| Other,      Net                                                                          |                                 | 10.9     |                                        |                     |   | 4.0 |   |   |   |   | (0.1 | ) |   |   | (3.5 | ) |
| Net      Cash Flows (Used In) Provided by Continuing Financing      Activities           |                                 | (4,628.1 | )                                           |                     |   | 12,956.8 |   |   |   |   | 300.8 |   |   |   | 206.8 |   |
| Net      Cash Flows Provided by (Used in) Discontinued Financing      Activities         |                                 | -        |                                        |                     |   | - |   |   |   |   | 140.1 |   |   |   | (118.1 | ) |
| Net      Cash Flows (Used In) Provided by Financing Activities                           |                                 | (4,628.1 | )                                           |                     |   | 12,956.8 |   |   |   |   | 440.9 |   |   |   | 88.7 |   |
|                                                                                     |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect      of Exchange Rate Changes on Cash                                             |                                 | (8.7     | )                                           |                     |   | (2.8 | ) |   |   |   | 7.6 |   |   |   | 6.6 |   |
|                                                                                |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect      of Accounting Change on Cash                                                 |                                 | -        |                                        |                     |   | - |   |   |   |   | - |   |   |   | 12.1 |   |
|                                                                                |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      Balance Included in Assets Held for Sale                                       |                                 | -        |                                        |                     |   | (1.1 | ) |   |   |   | (2.7 | ) |   |   | (5.6 | ) |
|                                                                                |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      (Decrease) Increase in Cash and Cash Equivalents                                |                                 | (30.0    | )                                           |                     |   | (1,753.7 | ) |   |   |   | 1,772.5 |   |   |   | 13.2 |   |
| Cash      and Cash Equivalents at Beginning of Period                                    |                                 | 148.6    |                                        |                     |   | 1,902.3 |   |   |   |   | 129.8 |   |   |   | 116.6 |   |
| Cash      and Cash Equivalents at End of Period                                          | $                                    | 118.6    |                                        |                     | $ | 148.6 |   |   |   | $ | 1,902.3 |   |   | $ | 129.8 |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                                     | (In      millions) |
|----------------------------------------------------------|--------------------|
| The      Total Purchase Price Consisted of the Following |               |   |   |
| Cash      Paid                                           | $                  | 5,112.0 |   |
| Kinder      Morgan, Inc. Shares Contributed              |               | 2,719.2 |   |
| Equity      Contributed                                  |               | 7,831.2 |   |
| Cash      from Issuances of Long-term Debt               |               | 4,696.2 |   |
| Total      Purchase Price                                | $                  | 12,527.4 |   |
|                                                |               |   |   |
| The      Allocation of the Purchase Price is as Follows  |               |   |   |
| Current      Assets                                      | $                  | 1,551.2 |   |
| Investments                                              |               | 897.8 |   |
| Goodwill                                                 |               | 13,786.1 |   |
| Property,      Plant and Equipment, Net                  |               | 15,281.6 |   |
| Deferred      Charges and Other Assets                   |               | 1,639.8 |   |
| Current      Liabilities                                 |               | (3,279.5 | ) |
| Deferred      Income Taxes, Non-current                  |               | (2,392.8 | ) |
| Other      Long-term Liabilities and Deferred Credits    |               | (1,786.3 | ) |
| Long-term      Debt                                      |               | (9,855.9 | ) |
| Minority      Interests in Equity of Subsidiaries        |               | (3,314.6 | ) |
|                                                     | $                  | 12,527.4 |   |

|                                                                 | Number      ofShares |   | Price      perShare |   | Total      Value |
|----------------------------------------------------------------------|----------------------|--------|---------------------|--------|------------------|
| Shares      Purchased with Cash                                      |                 | 107.6  |                |   | $                | 107.50 |   |   | $ | 11,561.3 |   |
|                                                                 |                 |   |                |   |             |   |   |   |   |   |   |
| Shares      Contributed                                              |                 |   |                |   |             |   |   |   |   |   |   |
| Richard      D. Kinder                                               |                 | 24.0   |                |   | $                | 101.00 |   |   |   | 2,424.0 |   |
| Other      Kinder Morgan, Inc. Management and Board Members          |                 | 2.7    |                |   | $                | 107.50 |   |   |   | 295.2 |   |
| Total      Shares Contributed                                        |                 | 26.7   |                |   |             |   |   |   |   | 2,719.2 |   |
|                                                                 |                 |   |                |   |             |   |   |   |   |   |   |
| Total      Shares Outstanding as of May 31, 2007                     |                 | 134.3  |                |   |             |   |   |   |   | 14,280.5 |   |
|                                                                 |                 |   |                |   |             |   |   |   |   |   |   |
| Less:      Portion of Shares Acquired using Knight Inc. Cash on Hand |                 |   |                |   |             |   |   |   |   | (1,756.8 | ) |
| Add:      Cash Contributions by Management At or After May 30, 2007  |                 |   |                |   |             |   |   |   |   | 3.7 |   |
| Purchase      Price                                                  |                 |   |                |   |             |   |   |   | $ | 12,527.4 |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                                  | December      31,2007 |
|-------------------------------------------------------|-----------------------|
| Current      Assets: Assets Held for Sale             |                  |   |   |
| Restricted      Deposits                              | $                     | 3,030.0 |   |
| Other                                                 |                  | 323.3 |   |
|                                                  | $                     | 3,353.3 |   |
|                                                  |                  |   |   |
| Assets      Held for Sale, Non-current                |                  |   |   |
| Goodwill                                              | $                     | 5,216.4 |   |
| Plant,      Property and Equipment, Net               |                  | 1,699.3 |   |
| Deferred      Charges and Other Assets                |                  | 38.9 |   |
| Less:      Investment in Net Assets of NGPL           |                  | (1,320.0 | ) |
|                                                  | $                     | 5,634.6 |   |
|                                                  |                  |   |   |
| Current      Liabilities: Liabilities Held for Sale   | $                     | 168.2 |   |
|                                                  |                  |   |   |
| Liabilities      Held for Sale, Non-current           |                  |   |   |
| Long-term      Debt: Outstanding Notes and Debentures | $                     | 3,000.0 |   |
| Other      Liabilities and Minority Interests         |                  | 24.1 |   |
| Less:      Investment in Long-term Debt of NGPL       |                  | (600.0 | ) |
|                                                  | $                     | 2,424.1 |   |

| Investments                                        |   |    |   |
|----------------------------------------------------|--------|---------|--------|
| 20%      Investment of NGPL’s Net Assets     | $      | 1,320.0 |   |
| 20%      Investment of NGPL’s Long-term Debt |   | (600.0  | )      |
|                                               | $      | 720.0   |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                 | December      31,2007 |    | AcquisitionsandPurchase      PriceAdjustments1 |   | Impairmentof      Assets |   | Other2 |   | December      31,2008 |
|--------------------------------------|-----------------------|---------|------------------------------------------------|--------|--------------------------|--------|--------|--------|-----------------------|
|                                 | (In      millions)    |
| Products      Pipelines–KMP    | $                     | 2,179.4 |                                           |   |                     | $      | (54.8  | )      |                  |   | $ | (1,266.5 | ) |   | $ | (8.1 | ) |   | $ | 850.0 |   |
| Natural      Gas Pipelines–KMP |                  | 3,201.0 |                                           |   |                     |   | 251.2  |   |                  |   |   | (2,090.2 | ) |   |   | (12.8 | ) |   |   | 1,349.2 |   |
| CO2–KMP                        |                  | 1,077.6 |                                           |   |                     |   | 450.9  |   |                  |   |   | - |   |   |   | (6.8 | ) |   |   | 1,521.7 |   |
| Terminals–KMP                  |                  | 1,465.9 |                                           |   |                     |   | (9.5   | )      |                  |   |   | (676.6 | ) |   |   | (5.6 | ) |   |   | 774.2 |   |
| Kinder      Morgan Canada–KMP  |                  | 250.1   |                                           |   |                     |   | -      |   |                  |   |   | - |   |   |   | (46.5 | ) |   |   | 203.6 |   |
| Consolidated      Total              | $                     | 8,174.0 |                                           |   |                     | $      | 637.8  |   |                  |   | $ | (4,033.3 | ) |   | $ | (79.8 | ) |   | $ | 4,698.7 |   |

| 1 | Adjustments      relate primarily to a reallocation between goodwill and property, plant,      and equipment in our final purchase price  allocation. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Adjustments      include (i) the translation of goodwill denominated in foreign currencies      and (ii) reductions in goodwill due to reductions in our ownership      percentage of Kinder Morgan EnergyPartners. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                                  | December      31,  |
|-------------------------------------------------------|--------------------|
|                                                  | 2008               |   | 2007 |
|                                                  | (In      millions) |
| Customer      Relationships, Contracts and Agreements |               |   |   |   |   |   |   |
| Gross      Carrying Amount                            | $                  | 270.9 |   |   | $ | 321.3 |   |
| Accumulated      Amortization                         |               | (30.3 | ) |   |   | (11.6 | ) |
| Net      Carrying Amount                              |               | 240.6 |   |   |   | 309.7 |   |
|                                                  |               |   |   |   |   |   |   |
| Technology-based      Assets, Lease Value and Other   |               |   |   |   |   |   |   |
| Gross      Carrying Amount                            |               | 11.7 |   |   |   | 11.7 |   |
| Accumulated      Amortization                         |               | (0.8 | ) |   |   | (0.3 | ) |
| Net      Carrying Amount                              |               | 10.9 |   |   |   | 11.4 |   |
|                                                  |               |   |   |   |   |   |   |
| Total      Other Intangibles, Net                     | $                  | 251.5 |   |   | $ | 321.1 |   |

|                                                  | Successor      Company               |   |                                        | Predecessor      Company |
|-------------------------------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------------|
|                                                  | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31,2007 |   | Year      EndedDecember      31,2006 |
|                                                  | (In      millions)                   |   |                                        | (In      millions)       |
| Customer      Relationships, Contracts and Agreements | $                                    | 18.7   |                                        |                     | $ | 11.6 |   |   |   | $ | 6.1 |   |   | $ | 15.0 |   |
| Technology-based      Assets, Lease Value and Other   |                                 | 0.5    |                                        |                     |   | 0.3 |   |   |   |   | 0.2 |   |   |   | 0.2 |   |
| Total      Amortizations                              | $                                    | 19.2   |                                        |                     | $ | 11.9 |   |   |   | $ | 6.3 |   |   | $ | 15.2 |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|   | · | NGPL      PipeCo LLC (20%); |
|--------|--------|-----------------------------|

|   | · | West2East      Pipeline LLC (51%); |
|--------|--------|------------------------------------|

|   | · | Plantation      Pipe Line Company (51%); |
|--------|--------|------------------------------------------|

|   | · | Red      Cedar Gathering Company (49%); |
|--------|--------|-----------------------------------------|

|   | · | Express      Pipeline System (33⅓%); |
|--------|--------|--------------------------------------------|

|   | · | Cortez      Pipeline Company (50%); |
|--------|--------|-------------------------------------|

|   | · | Fayetteville      Express Pipeline LLC (50%); and |
|--------|--------|---------------------------------------------------|

|   | · | Midcontinent      Express Pipeline LLC (50%); |
|--------|--------|-----------------------------------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                                              | December      31,  |
|-------------------------------------------------------------------|--------------------|
|                                                              | 2008               |   | 2007 |
|                                                              | (In      millions) |
| Equity      Method Investments:                                   |               |   |   |   |   |
| NGPL      PipeCo LLC                                              | $                  | 717.3 |   | $ | 720.0 |
| Express      Pipeline System                                      |               | 64.9 |   |   | 402.1 |
| Plantation      Pipe Line Company                                 |               | 343.6 |   |   | 351.4 |
| Thermo      Companies                                             |               | - |   |   | 53.5 |
| West2East      Pipeline LLC                                       |               | 501.1 |   |   | 191.9 |
| Red      Cedar Gathering Company                                  |               | 138.9 |   |   | 135.6 |
| Midcontinent      Express Pipeline LLC                            |               | - |   |   | 63.0 |
| Thunder      Creek Gas Services, LLC                              |               | - |   |   | 37.0 |
| Cortez      Pipeline Company                                      |               | 13.6 |   |   | 14.2 |
| Fayetteville      Express Pipeline LLC                            |               | 9.0 |   |   | - |
| Horizon      Pipeline Company1                                    |               | - |   |   | - |
| Subsidiary      Trusts Holding Solely Debentures of Kinder Morgan |               | 8.6 |   |   | 8.6 |
| All      Others                                                   |               | 17.2 |   |   | 18.9 |
| Total      Equity Investments                                     |               | 1,814.2 |   |   | 1,996.2 |
| Gulf      Opportunity Zone Bonds                                  |               | 13.2 |   |   | - |
| Total      Long-term Investments                                  | $                  | 1,827.4 |   | $ | 1,996.2 |

| 1 | Balance      at December 31, 2007 is included in the caption “Assets Held for Sale,      Non-current” in the accompanying Consolidated Balance    Sheet. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                   | Successor      Company               |   |                                        | Predecessor      Company |
|----------------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------------|
|                                   | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31,2007 |   | Year      EndedDecember      31,2006 |
|                                   | (In      millions)                   |   |                                        | (In      millions)       |
| NGPL      PipeCo LLC                   | $                                    | 40.1   |                                        |                     | $ | n/a |   |   |   | $ | n/a |   |   | $ | n/a |   |
| Cortez      Pipeline Company           |                                 | 20.8   |                                        |                     |   | 10.5 |   |   |   |   | 8.7 |   |   |   | 19.2 |   |
| Express      Pipeline System           |                                 | 8.2    |                                        |                     |   | 14.9 |   |   |   |   | 5.0 |   |   |   | 17.1 |   |
| Plantation      Pipe Line Company      |                                 | 13.6   |                                        |                     |   | 10.8 |   |   |   |   | 11.9 |   |   |   | 12.8 |   |
| Thermo      Companies                  |                                 | -      |                                        |                     |   | 8.0 |   |   |   |   | 5.1 |   |   |   | 11.3 |   |
| Red      Cedar Gathering Company       |                                 | 26.7   |                                        |                     |   | 16.1 |   |   |   |   | 11.9 |   |   |   | 36.3 |   |
| Customer      Works LP1                |                                 | n/a    |                                        |                     |   | n/a |   |   |   |   | - |   |   |   | - |   |
| Thunder      Creek Gas Services, LLC   |                                 | 1.3    |                                        |                     |   | 1.2 |   |   |   |   | 1.0 |   |   |   | 2.5 |   |
| Midcontinent      Express Pipeline LLC |                                 | 0.5    |                                        |                     |   | 1.2 |   |   |   |   | 0.2 |   |   |   | - |   |
| West2East      Pipeline LLC            |                                 | 84.9   |                                        |                     |   | (8.2 | ) |   |   |   | (4.2 | ) |   |   | - |   |
| Horizon      Pipeline Company          |                                 | 0.2    |                                        |                     |   | 1.0 |   |   |   |   | 0.6 |   |   |   | 1.8 |   |
| Heartland      Pipeline Company2       |                                 | n/a    |                                        |                     |   | - |   |   |   |   | - |   |   |   | - |   |
| All      Others                        |                                 | 4.8    |                                        |                     |   | 1.3 |   |   |   |   | 0.5 |   |   |   | 3.2 |   |
| Total                                  | $                                    | 201.1  |                                        |                     | $ | 56.8 |   |   |   | $ | 40.7 |   |   | $ | 104.2 |   |
| Amortization      of Excess Costs      | $                                    | (5.7   | )                                           |                     | $ | (3.4 | ) |   |   | $ | (2.4 | ) |   | $ | (5.6 | ) |

|   | ____________ |
|--------|--------------|

| 1 | This      investment was part of the Terasen Inc. sale, therefore our earnings from      it are included in “(Loss) Income from Discontinued Operations, Net of      Tax” in the accompanying Consolidated Statements of Operations; see Note      11. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | This      investment was part of the North System sale, therefore our earnings from      it are included in “(Loss) Income from Discontinued Operations, Net of      Tax” in the accompanying Consolidated Statements of Operations; see Note      11. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                    | Year      Ended December 31, |
|-------------------------|------------------------------|
|                    | 2008                         |   | 2007 |   | 2006 |
|                    | (In      millions)           |
| Revenues                | $                            | 2,170.4 |   |   | $ | 738.4 |   |   | $ | 692.1 |   |
| Costs      and Expenses |                         | 1,649.6 |   |   |   | 534.4 |   |   |   | 483.2 |   |
| Net      Income         | $                            | 520.8 |   |   | $ | 204.0 |   |   | $ | 208.9 |   |

|                                             | December      31,  |
|--------------------------------------------------|--------------------|
|                                             | 2008               |   | 20071 |
|                                             | (In      millions) |
| Current      Assets                              | $                  | 501.7 |   | $ | 3,566.2 |
| Non-current      Assets                          |               | 13,582.1 |   |   | 11,469.5 |
| Current      Liabilities                         |               | 3,876.4 |   |   | 572.3 |
| Non-current      Liabilities                     |               | 5,306.0 |   |   | 6,078.4 |
| Minority      Interest in Equity of Subsidiaries |               | 0.6 |   |   | 1.7 |
| Partners’/Owners’      Equity        |               | 4,900.8 |   |   | 8,383.2 |

| 1 | Includes      amounts associated with our NGPL business segment. In December 2007, we      entered into a definitive agreement to sell an 80% ownership interest in      our NGPL business segment. The closing of the sale occurred on February      15, 2008 (see Note 10). |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                | Successor      Company               |   |                                        | PredecessorCompany |
|-------------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------|
|                                | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |               |   | Five      MonthsEndedMay      31, 2007 |
|                                | (In      millions)                   |   |                                        | (In      millions) |
| Balance      at Beginning of Period | $                                    | 55.0   |                                        |               | $ | 53.1 |   |   |   | $ | 52.5 |   |
| Additions                           |                                 | 26.2   |                                        |               |   | 1.2 |   |   |   |   | 0.2 |   |
| Liabilities      Settled            |                                 | (8.2   | )1                                          |               |   | (0.8 | ) |   |   |   | (0.7 | ) |
| Accretion      Expense              |                                 | 3.5    |                                        |               |   | 1.5 |   |   |   |   | 1.1 |   |
| Balance      at End of Period       | $                                    | 76.5   |                                        |               | $ | 55.0 |   |   |   | $ | 53.1 |   |

| 1 | Amount      includes $2.8 million settled through our 80% sale of NGPL in      2008. |
|---|--------------------------------------------------------------------------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                  | Successor      Company               |   |                                        | Predecessor      Company |
|---------------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------------|
|                                  | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31,2007 |   | Year      EndedDecember      31,2006 |
|                                  | (In      millions)                   |   |                                        | (In      millions)       |
| Accounts      Receivable              | $                                    | 60.6   |                                        |                     | $ | (64.3 | ) |   |   | $ | (31.9 | ) |   | $ | 192.5 |   |
| Materials      and Supplies Inventory |                                 | (7.9   | )                                           |                     |   | (8.1 | ) |   |   |   | (1.7 | ) |   |   | (0.5 | ) |
| Other      Current Assets             |                                 | 11.1   |                                        |                     |   | (65.2 | ) |   |   |   | 0.5 |   |   |   | 103.2 |   |
| Accounts      Payable                 |                                 | (99.3  | )                                           |                     |   | 68.7 |   |   |   |   | 26.3 |   |   |   | (243.4 | ) |
| Accrued      Interest                 |                                 | 0.7    |                                        |                     |   | 65.9 |   |   |   |   | (22.5 | ) |   |   | 56.7 |   |
| Accrued      Taxes                    |                                 | 109.0  |                                        |                     |   | 142.5 |   |   |   |   | (114.0 | ) |   |   | (4.3 | ) |
| Other      Current Liabilities        |                                 | (119.1 | )                                           |                     |   | (35.5 | ) |   |   |   | (59.6 | ) |   |   | (24.2 | ) |
|                                  | $                                    | (44.9  | )                                           |                     | $ | 104.0 |   |   |   | $ | (202.9 | ) |   | $ | 80.0 |   |

|                                      | Successor      Company               |   |                                        | Predecessor      Company |
|-------------------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------------|
|                                      | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31,2007 |   | Year      EndedDecember      31,2006 |
|                                      | (In      millions)                   |   |                                        | (In      millions)       |
| Cash      Paid for                        |                                 |   |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      (Net of Amount Capitalized) | $                                    | 649.9  |                                        |                     | $ | 586.5 |   |   |   | $ | 381.8 |   |   | $ | 731.6 |   |
| Income      Taxes Paid (Net of Refunds)1  | $                                    | 657.3  |                                        |                     | $ | 146.4 |   |   |   | $ | 133.3 |   |   | $ | 314.9 |   |

| 1 | Income      taxes paid during 2008 includes taxes paid related to prior      periods. |
|---|---------------------------------------------------------------------------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                                                                                    | December      31,2008 |   | December      31,2007 |
|---------------------------------------------------------------------------------------------------------|-----------------------|--------|-----------------------|
|                                                                                                    | (In      millions)    |
| Derivative      Assets (Liabilities)                                                                    |                  |   |                  |   |   |   |   |
| Current      Assets: Fair Value of Derivative Instruments                                               | $                     | 60.4   |                  |   | $ | - |   |
| Assets:      Fair Value of Derivative Instruments, Non-current                                          | $                     | 20.1   |                  |   | $ | - |   |
| Current      Liabilities: Fair Value of Derivative Instruments                                          | $                     | (13.2  | )                     |   | $ | (239.8 | ) |
| Liabilities      and Stockholder’s Equity: Fair Value of Derivative Instruments,      Non-current | $                     | (24.1  | )                     |   | $ | (386.5 | ) |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                               | December      31,  |
|------------------------------------|--------------------|
|                               | 2008               |   | 2007 |
|                               | (In      millions) |
| Kinder      Morgan Energy Partners | $                  | 2,198.2 |   |   | $ | 1,616.0 |   |
| Kinder      Morgan Management      |               | 1,826.5 |   |   |   | 1,657.7 |   |
| Triton      Power Company LLC      |               | 39.0 |   |   |   | 29.2 |   |
| Other                              |               | 8.9 |   |   |   | 11.1 |   |
|                               | $                  | 4,072.6 |   |   | $ | 3,314.0 |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

| Purchase      Price                         |   |   |
|---------------------------------------------|--------|--------|
| Cash      Paid, Including Transaction Costs | $      | 244.6  |
| Total      Purchase Price                   | $      | 244.6  |
|                                        |   |   |
| Allocation      of Purchase Price           |   |   |
| Property,      Plant and Equipment          | $      | 244.6  |
|                                        | $      | 244.6  |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

| Purchase      Price                         |   |   |
|---------------------------------------------|--------|--------|
| Cash      Paid, Including Transaction Costs | $      | 60.0   |
| Liabilities      Assumed                    |   | 3.6    |
| Total      Purchase Price                   | $      | 63.6   |
|                                        |   |   |
| Allocation      of Purchase Price           |   |   |
| Current      Assets                         | $      | 0.1    |
| Property,      Plant and Equipment          |   | 63.5   |
|                                        | $      | 63.6   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

| Purchase      Price                         |   |   |
|---------------------------------------------|--------|--------|
| Cash      Paid, Including Transaction Costs | $      | 61.6   |
| Liabilities      Assumed                    |   | 0.3    |
| Total      Purchase Price                   | $      | 61.9   |
|                                        |   |   |
| Allocation      of Purchase Price           |   |   |
| Current      Assets                         | $      | 0.5    |
| Property,      Plant and Equipment          |   | 43.6   |
| Goodwill                                    |   | 17.8   |
|                                        | $      | 61.9   |

| Purchase      Price                         |   |   |
|---------------------------------------------|--------|--------|
| Cash      Paid, Including Transaction Costs | $      | 15.8   |
| Liabilities      Assumed                    |   | 0.8    |
| Total      Purchase Price                   | $      | 16.6   |
|                                        |   |   |
| Allocation      of Purchase Price           |   |   |
| Current      Assets                         | $      | 1.6    |
| Property,      Plant and Equipment          |   | 6.6    |
| Goodwill                                    |   | 8.4    |
|                                        | $      | 16.6   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

| Purchase      Price                         |   |   |
|---------------------------------------------|--------|--------|
| Cash      Paid, Including Transaction Costs | $      | 4.8    |
| Issuance      of Common Units               |   | 1.6    |
| Liabilities      Assumed                    |   | 0.9    |
| Total      Purchase Price                   | $      | 7.3    |
|                                        |   |   |
| Allocation      of Purchase Price           |   |   |
| Current      Assets                         | $      | 0.8    |
| Deferred      Charges and Other Assets      |   | 6.5    |
|                                        | $      | 7.3    |

| Purchase      Price                         |   |   |
|---------------------------------------------|--------|--------|
| Cash      Paid, Including Transaction Costs | $      | 6.4    |
| Total      Purchase Price                   | $      | 6.4    |
|                                        |   |   |
| Allocation      of Purchase Price           |   |   |
| Property,      Plant and Equipment          | $      | 6.4    |
|                                        | $      | 6.4    |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

| Purchase      Price                         |   |   |
|---------------------------------------------|--------|--------|
| Cash      Paid, Including Transaction Costs | $      | 5.5    |
| Notes      Payable (Fair Value)             |   | 42.3   |
| Total      Purchase Price                   | $      | 47.8   |
|                                        |   |   |
| Allocation      of Purchase Price           |   |   |
| Property,      Plant and Equipment          | $      | 47.8   |
|                                        | $      | 47.8   |

| Purchase      Price                         |   |   |
|---------------------------------------------|--------|--------|
| Cash      Paid, Including Transaction Costs | $      | 38.8   |
| Assumed      Liabilities                    |   | 20.7   |
| Total      Purchase Price                   | $      | 59.5   |
|                                   |   |   |
| Allocation      of Purchase Price           |   |   |
| Current      Assets                         | $      | 6.1    |
| Property,      Plant and Equipment          |   | 53.4   |
|                                        | $      | 59.5   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

| Purchase      Price                         |   |   |
|---------------------------------------------|--------|--------|
| Cash      Paid, Including Transaction Costs | $      | 100.8  |
| Assumed      Liabilities                    |   | 1.3    |
| Total      Purchase Price                   | $      | 102.1  |
|                                        |   |   |
| Allocation      of Purchase Price           |   |   |
| Current      Assets                         | $      | 0.2    |
| Property,      Plant and Equipment          |   | 60.8   |
| Deferred      Charges and Other             |   | 22.5   |
| Goodwill                                    |   | 18.6   |
|                                        | $      | 102.1  |

| Purchase      Price                         |   |   |
|---------------------------------------------|--------|--------|
| Cash      Paid, Including Transaction Costs | $      | 11.8   |
| Assumed      Liabilities                    |   | 0.9    |
| Total      Purchase Price                   | $      | 12.7   |
|                                        |   |   |
| Allocation      of Purchase Price           |   |   |
| Property,      Plant and Equipment          | $      | 5.9    |
| Goodwill                                    |   | 6.8    |
|                                        | $      | 12.7   |

| Purchase      Price                         |   |   |
|---------------------------------------------|--------|--------|
| Cash      Paid, Including Transaction Costs | $      | 27.5   |
| Total      Purchase Price                   | $      | 27.5   |
|                                        |   |   |
| Allocation      of Purchase Price           |   |   |
| Property,      Plant and Equipment          | $      | 27.5   |
|                                        | $      | 27.5   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                                                  | Successor      Company               |   |                                        | Predecessor      Company |
|-----------------------------------------------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------------|
|                                                                  | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31, 2007 |   | Year      EndedDecember      31,2006 |
|                                                                  | (In      millions)                   |   |                                        | (In      millions)       |
| Operating      Revenues                                               | $                                    | -      |                                        |                     | $ | 24.1 |   |   |   | $ | 921.8 |   |   | $ | 1,999.3 |   |
|                                                                  |                                 |   |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      (Loss) from Discontinued Operations Before Income Taxes | $                                    | (0.9   | )                                           |                     | $ | (10.2 | ) |   |   | $ | 393.2 |   |   | $ | (530.6 | ) |
| Income      Taxes                                                     |                                 | -      |                                        |                     |   | 8.7 |   |   |   |   | (94.6 | ) |   |   | 2.1 |   |
| Earnings      (Loss) from Discontinued Operations                     | $                                    | (0.9   | )                                           |                     | $ | (1.5 | ) |   |   | $ | 298.6 |   |   | $ | (528.5 | ) |

|                                                                    | December      31, |
|-------------------------------------------------------------------------|-------------------|
|                                                                    | 2008              |   | 2007 |
| Knight      Inc.                                                        |              |   |   |   |   |   |   |
| Natural      Gas and Liquids Pipelines                                  | $                 | - |   |   | $ | 16.1 |   |
| Electric      Generation                                                |              | - |   |   |   | 10.3 |   |
| General      and Other                                                  |              | 44.4 |   |   |   | 43.9 |   |
| Kinder      Morgan Energy Partners1                                     |              |   |   |   |   |   |   |
| Natural      Gas, Liquids and Carbon Dioxide Pipelines                  |              | 5,641.5 |   |   |   | 6,572.6 |   |
| Pipeline      and Terminals Station Equipment                           |              | 7,577.0 |   |   |   | 5,596.0 |   |
| General      and Other                                                  |              | 2,084.5 |   |   |   | 1,095.9 |   |
|                                                               |              |   |   |   |   |   |   |
| Accumulated      Amortization, Depreciation and Depletion               |              | (979.0 | ) |   |   | (277.0 | ) |
|                                                                    |              | 14,368.4 |   |   |   | 13,057.8 |   |
| Land                                                                    |              | 201.7 |   |   |   | 297.3 |   |
| Natural      Gas, Liquids (including Line Fill) and Transmix Processing |              | 210.3 |   |   |   | 168.2 |   |
| Construction      Work in Process                                       |              | 1,329.4 |   |   |   | 1,280.6 |   |
| Property,      Plant and Equipment, Net                                 | $                 | 16,109.8 |   |   | $ | 14,803.9 |   |

|   | ____________ |
|--------|--------------|

| 1 | Includes      the allocation of purchase accounting adjustments associated with the      Going Private transaction (see Note1). |
|---|---------------------------------------------------------------------------------------------------------------------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|               | Successor      Company               |     |                                        | Predecessor      Company |
|--------------------|--------------------------------------|----------|---------------------------------------------|--------------------------|
|               | Year      EndedDecember      31,2008 |     | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31,2007 |   | Year      EndedDecember      31,2006 |
|               | (In      millions)                   |     |                                        | (In      millions)       |
| United      States | $                                    | (3,374.8 | )                                           |                     | $ | 474.2 |   |   |   | $ | 279.2 |   |   | $ | 903.6 |   |
| Foreign            |                                 | 80.7     |                                        |                     |   | 1.7 |   |   |   |   | (376.4 | ) |   |   | (17.3 | ) |
| Total              | $                                    | (3,294.1 | )                                           |                     | $ | 475.9 |   |   |   | $ | (97.2 | ) |   | $ | 886.3 |   |

|                        | Successor      Company               |   |                                        | Predecessor      Company |
|-----------------------------|--------------------------------------|--------|---------------------------------------------|--------------------------|
|                        | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31,2007 |   | Year      EndedDecember      31,2006 |
|                        | (In      millions)                   |   |                                        | (In      millions)       |
| Current      Tax Provision  |                                 |   |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S.                        |                                 |   |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal                     | $                                    | 786.6  |                                        |                     | $ | 268.6 |   |   |   | $ | (7.0 | ) |   | $ | 246.6 |   |
| State                       |                                 | 18.6   |                                        |                     |   | 25.1 |   |   |   |   | 3.2 |   |   |   | 10.2 |   |
| Foreign                     |                                 | (4.5   | )                                           |                     |   | 23.5 |   |   |   |   | 0.6 |   |   |   | 18.3 |   |
|                        |                                 | 800.7  |                                        |                     |   | 317.2 |   |   |   |   | (3.2 | ) |   |   | 275.1 |   |
|                   |                                 |   |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Deferred      Tax Provision |                                 |   |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S.                        |                                 |   |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal                     |                                 | (439.5 | )                                           |                     |   | (95.2 | ) |   |   |   | 134.0 |   |   |   | 46.9 |   |
| State                       |                                 | 11.5   |                                        |                     |   | 0.5 |   |   |   |   | 6.4 |   |   |   | (36.3 | ) |
| Foreign                     |                                 | (68.4  | )                                           |                     |   | 4.9 |   |   |   |   | (1.7 | ) |   |   | 0.2 |   |
|                        |                                 | (496.4 | )                                           |                     |   | (89.8 | ) |   |   |   | 138.7 |   |   |   | 10.8 |   |
| Total      Tax Provision    | $                                    | 304.3  |                                        |                     | $ | 227.4 |   |   |   | $ | 135.5 |   |   | $ | 285.9 |   |
|                        |                                 |   |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Effective      Tax Rate     |                                 | 9.2    | %                                           |                     |   | 47.8 | % |   |   |   | 139.3 | % |   |   | 32.3 | % |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                                                                                           | Successor      Company               |   |                                        | Predecessor      Company |
|----------------------------------------------------------------------------------------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------------|
|                                                                                                           | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31,2007 |   | Year      EndedDecember      31,2006 |
|                                                                                                           | (In      millions)                   |   |                                        | (In      millions)       |
| Federal      Income Tax Rate                                                                                   |                                 | (35.0  | %)                                          |                     |   | 35.0 | % |   |   |   | (35.0 | %) |   |   | 35.0 | % |
| Increase      (Decrease) as a Result of:                                                                       |                                 |   |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Nondeductible      Goodwill Impairment                                                                         |                                 | 42.9   | %                                           |                     |   | - |   |   |   |   | 135.8 | % |   |   | - |   |
| Terasen      Acquisition Financing Structure                                                                   |                                 | -      |                                        |                     |   | - |   |   |   |   | (17.1 | %) |   |   | (5.1 | %) |
| Nondeductible      Going Private Costs                                                                         |                                 | -      |                                        |                     |   | - |   |   |   |   | 31.6 | % |   |   | - |   |
| Deferred      Tax Rate Change                                                                                  |                                 | 0.5    | %                                           |                     |   | - |   |   |   |   | - |   |   |   | (4.3 | %) |
| Kinder      Morgan Management Minority Interest                                                                |                                 | 0.9    | %                                           |                     |   | 2.7 | % |   |   |   | 6.4 | % |   |   | 2.7 | % |
| Foreign      Earnings Subject to Different Tax Rates                                                           |                                 | (2.1   | %)                                          |                     |   | 5.8 | % |   |   |   | 8.6 | % |   |   | 2.6 | % |
| Net      Effects of Consolidating Kinder Morgan Energy Partners’ United States      Income Tax Provision |                                 | 0.9    | %                                           |                     |   | 2.5 | % |   |   |   | 4.1 | % |   |   | 1.4 | % |
| State      Income Tax, Net of Federal Benefit                                                                  |                                 | 0.5    | %                                           |                     |   | 2.3 | % |   |   |   | 6.9 | % |   |   | 1.7 | % |
| Other                                                                                                          |                                 | 0.6    | %                                           |                     |   | (0.5 | %) |   |   |   | (2.0 | %) |   |   | (1.7 | %) |
| Effective      Tax Rate                                                                                        |                                 | 9.2    | %                                           |                     |   | 47.8 | % |   |   |   | 139.3 | % |   |   | 32.3 | % |

|                         | Successor      Company               |   |                                        | Predecessor      Company |
|------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------------|
|                         | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31,2007 |   | Year      EndedDecember      31,2006 |
|                         | (In      millions)                   |   |                                        | (In      millions)       |
| Continuing      Operations   | $                                    | 304.3  |                                        |                     | $ | 227.4 |   |   |   | $ | 135.5 |   |   | $ | 285.9 |   |
| Discontinued      Operations |                                 | (0.4   | )                                           |                     |   | (8.7 | ) |   |   |   | 94.6 |   |   |   | (2.1 | ) |
| Equity      Items            |                                 | 122.2  |                                        |                     |   | (219.4 | ) |   |   |   | (51.7 | ) |   |   | (22.2 | ) |
| Total                        | $                                    | 426.1  |                                        |                     | $ | (0.7 | ) |   |   | $ | 178.4 |   |   | $ | 261.6 |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                    | December      31,2008 |    |   | December      31,2007 |
|-----------------------------------------|-----------------------|---------|--------|-----------------------|
|                                    | (In      millions)    |    |   | (In      millions)    |
| Deferred      Tax Assets                |                  |    |   |                  |   |   |   |   |
| Postretirement      Benefits            | $                     | 79.8    |   |                  |   | $ | 12.1 |   |
| Book      Accruals                      |                  | 14.3    |   |                  |   |   | - |   |
| Derivatives                             |                  | -       |   |                  |   |   | 270.9 |   |
| Capital      Loss Carryforwards         |                  | -       |   |                  |   |   | 279.5 |   |
| Interest      Rate Swaps                |                  | 7.0     |   |                  |   |   | - |   |
| Other                                   |                  | 7.9     |   |                  |   |   | - |   |
| Total      Deferred Tax Assets          |                  | 109.0   |   |                  |   |   | 562.5 |   |
| Deferred      Tax Liabilities           |                  |    |   |                  |   |   |   |   |
| Property,      Plant and Equipment      |                  | 160.0   |   |                  |   |   | 125.2 |   |
| Investments                             |                  | 1,937.2 |   |                  |   |   | 1,909.0 |   |
| Book      Accruals                      |                  | -       |   |                  |   |   | 62.1 |   |
| Derivative      Instruments             |                  | 5.7     |   |                  |   |   | - |   |
| Rate      Matters                       |                  | -       |   |                  |   |   | 0.4 |   |
| Prepaid      Pension Costs              |                  | 16.6    |   |                  |   |   | 17.9 |   |
| Assets/Liabilities      Held for Sale   |                  | -       |   |                  |   |   | 897.5 |   |
| Debt      Adjustment                    |                  | 23.0    |   |                  |   |   | - |   |
| Other                                   |                  | 47.8    |   |                  |   |   | 66.2 |   |
| Total      Deferred Tax Liabilities     |                  | 2,190.3 |   |                  |   |   | 3,078.3 |   |
| Net      Deferred Tax Liabilities       | $                     | 2,081.3 |   |                  |   | $ | 2,515.8 |   |
|                               |                  |    |   |                  |   |   |   |   |
| Current      Deferred Tax Asset         | $                     | -       |   |                  |   | $ | - |   |
| Current      Deferred Tax Liability     |                  | -       |   |                  |   |   | 666.4 |   |
| Non-current      Deferred Tax Liability |                  | 2,081.3 |   |                  |   |   | 1,849.4 |   |
| Net      Deferred Tax Liabilities       | $                     | 2,081.3 |   |                  |   | $ | 2,515.8 |   |

|                                                       | 2008   |   |   | 2007   |
|------------------------------------------------------------|--------|--------|--------|--------|
| Balance      at beginning of period                        | $      | 41.5   |   |   |   | $ | 63.1 |   |
| Additions      based on current year tax positions         |   | 2.1    |   |   |   |   | 9.8 |   |
| Additions      based on prior year tax positions           |   | 15.9   |   |   |   |   | 0.5 |   |
| Reductions      based on settlements with taxing authority |   | (10.2  | )      |   |   |   | (21.4 | ) |
| Reductions      due to lapse in statue of limitations      |   | (3.7   | )      |   |   |   | (2.7 | ) |
| Reductions      for tax positions related to prior year    |   | (19.4  | )      |   |   |   | (7.8 | ) |
| Balance      at end of period                              | $      | 26.2   |   |   |   | $ | 41.5 |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

| Knight      Inc.—$1.0 billion, six-year secured revolver, due May  2013                              |
|------------------------------------------------------------------------------------------------------------|
| Kinder      Morgan Energy Partners—$1.85 billion, five-year unsecured revolver, due      August 2010 |

|                               | December      31, 2008                                            |
|------------------------------------|-------------------------------------------------------------------|
|                               | Short-termBorrowingsOutstandingUnderRevolvingCredit      Facility |   | Commercial      PaperOutstanding |   | Weighted-averageInterest      Rate ofShort-term      DebtOutstanding |
|                               | (In      millions)                                                |
| Knight      Inc.                   |                                                              |   |   |   |   |   |   |   |   |   |   |   |
| $1.0      billion                  | $                                                                 | 8.8 |   |   |   | - |   |   |   | 3.38 | % |   |
| Kinder      Morgan Energy Partners |                                                              |   |   |   |   |   |   |   |   |   |   |   |
| $1.85      billion                 | $                                                                 | - |   |   |   | - |   |   |   | - | % |   |

|                               | December      31, 2007                                            |
|------------------------------------|-------------------------------------------------------------------|
|                               | Short-termBorrowingsOutstandingUnderRevolvingCredit      Facility |   | Commercial      PaperOutstanding |   | Weighted-averageInterest      Rate ofShort-term      DebtOutstanding |
|                               | (In      millions)                                                |
| Knight      Inc.                   |                                                              |   |   |   |   |   |   |   |   |   |   |   |
| $1.0      billion                  | $                                                                 | 299.0 |   |   | $ | - |   |   |   | 6.42 | % |   |
| Kinder      Morgan Energy Partners |                                                              |   |   |   |   |   |   |   |   |   |   |   |
| $1.85      billion                 | $                                                                 | - |   |   | $ | 589.1 |   |   |   | 5.58 | % |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|   | · | a      rate equal to LIBOR (London Interbank Offered Rate) plus an applicable      margin, or |
|--------|--------|-----------------------------------------------------------------------------------------------|

|   | · | a      rate equal to the higher of (a) U.S. prime rate and (b) the federal funds      effective rate plus 0.50%, in each case, plus an applicable      margin. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a      rate equal to the higher of (a) U.S. prime rate and (b) the federal funds      effective rate plus 0.50%, in each case, plus an applicable      margin. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | total      debt divided by earnings before interest, income taxes, depreciation and      amortization for (i) the test period ending December 31, 2007 may not      exceed 8.75:1.00, (ii) January 1, 2008 to December 31, 2008 may not exceed      8.00:1.00, (iii) January 1, 2009 to December 31, 2009 may not exceed      7.00:1.00 and (iv) thereafter may not exceed  6.00:1.00; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | certain      limitations on indebtedness, including payments and      amendments; |
|--------|--------|-----------------------------------------------------------------------------------|

|   | · | certain      limitations on entering into mergers, consolidations, sales of assets and      investments; |
|--------|--------|----------------------------------------------------------------------------------------------------------|

|   | · | limitations      on granting liens; and |
|--------|--------|-----------------------------------------|

|   | · | prohibitions      on making any dividend to shareholders if an event of default exists or      would exist upon making suchdividend. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|   | · | total      debt divided by earnings before interest, income taxes, depreciation and      amortization for the preceding four quarters may not    exceed: |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 5.5,      in the case of any such period ended on the last day of (i) a fiscal      quarter in which Kinder Morgan Energy Partners makes any Specified      Acquisition, or (ii) the first or second fiscal quarter next succeeding      such a fiscal quarter; or |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 5.0,      in the case of any such period ended on the last day of any other fiscal      quarter; |
|--------|--------|--------------------------------------------------------------------------------------------------|

|   | · | certain      limitations on entering into mergers, consolidations and sales of      assets; |
|--------|--------|---------------------------------------------------------------------------------------------|

|   | · | limitations      on granting liens; and |
|--------|--------|-----------------------------------------|

|   | · | prohibitions      on making any distribution to holders of units if an event of default      exists or would exist upon making such  distribution. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                                                                                                                                                                                                                                                                                          | December      31,  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------|
|                                                                                                                                                                                                                                                                                                          | 2008               |   | 2007 |
|                                                                                                                                                                                                                                                                                                     | (In      millions) |
| Knight      Inc.                                                                                                                                                                                                                                                                                              |               |   |   |   |   |   |   |
| Debentures                                                                                                                                                                                                                                                                                                    |               |   |   |   |   |   |   |
| 6.50%      Series, Due 2013                                                                                                                                                                                                                                                                                   | $                  | 6.1 |   |   | $ | 30.1 |   |
| 6.67%      Series, Due 2027                                                                                                                                                                                                                                                                                   |               | 7.0 |   |   |   | 148.3 |   |
| 7.25%      Series, Due 2028                                                                                                                                                                                                                                                                                   |               | 32.0 |   |   |   | 494.3 |   |
| 7.45%      Series, Due 2098                                                                                                                                                                                                                                                                                   |               | 25.9 |   |   |   | 146.3 |   |
| Senior      Notes                                                                                                                                                                                                                                                                                             |               |   |   |   |   |   |   |
| 6.50%      Series, Due 2012                                                                                                                                                                                                                                                                                   |               | 846.2 |   |   |   | 1,010.5 |   |
| 5.15%      Series, Due 2015                                                                                                                                                                                                                                                                                   |               | 233.3 |   |   |   | 231.2 |   |
| Senior      Secured Credit Term Loan Facilities                                                                                                                                                                                                                                                               |               |   |   |   |   |   |   |
| Tranche      A Term Loan, Due 2013                                                                                                                                                                                                                                                                            |               | - |   |   |   | 997.5 |   |
| Tranche      B Term Loan, Due 2014                                                                                                                                                                                                                                                                            |               | - |   |   |   | 3,191.7 |   |
| Deferrable      Interest Debentures Issued to Subsidiary Trusts                                                                                                                                                                                                                                               |               |   |   |   |   |   |   |
| 8.56%      Junior Subordinated Deferrable Interest Debentures Due2027                                                                                                                                                                                                                                         |               | 15.8 |   |   |   | 106.9 |   |
| 7.63%      Junior Subordinated Deferrable Interest Debentures Due2028                                                                                                                                                                                                                                         |               | 19.9 |   |   |   | 176.2 |   |
| Unamortized      Gain on Termination of Interest Rate Swap                                                                                                                                                                                                                                                    |               | 6.4 |   |   |   | 11.5 |   |
|                                                                                                                                                                                                                                                                                                     |               |   |   |   |   |   |   |
| Kinder      Morgan Finance Company, LLC                                                                                                                                                                                                                                                                       |               |   |   |   |   |   |   |
| 5.35%      Series, Due 2011                                                                                                                                                                                                                                                                                   |               | 742.0 |   |   |   | 738.5 |   |
| 5.70%      Series, Due 2016                                                                                                                                                                                                                                                                                   |               | 806.6 |   |   |   | 801.9 |   |
| 6.40%      Series, Due 2036                                                                                                                                                                                                                                                                                   |               | 33.8 |   |   |   | 503.8 |   |
| Carrying      Value Adjustment for Interest Rate Swap1                                                                                                                                                                                                                                                        |               | - |   |   |   | 23.2 |   |
| Unamortized      Gain on Termination of Interest Rate Swap                                                                                                                                                                                                                                                    |               | 12.8 |   |   |   | 11.6 |   |
|                                                                                                                                                                                                                                                                                                     |               |   |   |   |   |   |   |
| Kinder      Morgan G.P., Inc.                                                                                                                                                                                                                                                                                 |               |   |   |   |   |   |   |
| $1,000      Liquidation Value Series A Fixed-to-Floating Rate Term Cumulative      Preferred Stock                                                                                                                                                                                                            |               | 100.0 |   |   |   | 100.0 |   |
|                                                                                                                                                                                                                                                                                                     |               |   |   |   |   |   |   |
| Kinder      Morgan Energy Partners                                                                                                                                                                                                                                                                            |               |   |   |   |   |   |   |
| Senior      Notes                                                                                                                                                                                                                                                                                             |               |   |   |   |   |   |   |
| 6.30%      Series, Due 2009                                                                                                                                                                                                                                                                                   |               | 250.1 |   |   |   | 250.9 |   |
| 7.50%      Series, Due 2010                                                                                                                                                                                                                                                                                   |               | 253.8 |   |   |   | 255.7 |   |
| 6.75%      Series, Due 2011                                                                                                                                                                                                                                                                                   |               | 707.6 |   |   |   | 710.6 |   |
| 7.125%      Series, Due 2012                                                                                                                                                                                                                                                                                  |               | 458.7 |   |   |   | 461.1 |   |
| 5.85%      Series, Due 2012                                                                                                                                                                                                                                                                                   |               | 500.0 |   |   |   | 500.0 |   |
| 5.00%      Series, Due 2013                                                                                                                                                                                                                                                                                   |               | 491.3 |   |   |   | 489.8 |   |
| 5.125%      Series, Due 2014                                                                                                                                                                                                                                                                                  |               | 490.2 |   |   |   | 488.9 |   |
| 6.00%      Series, Due 2017                                                                                                                                                                                                                                                                                   |               | 597.8 |   |   |   | 597.5 |   |
| 5.95%      Series Due 2018                                                                                                                                                                                                                                                                                    |               | 975.0 |   |   |   | - |   |
| 9.00%      Series Due 2019                                                                                                                                                                                                                                                                                    |               | 500.0 |   |   |   | - |   |
| 7.40%      Series, Due 2031                                                                                                                                                                                                                                                                                   |               | 310.3 |   |   |   | 310.5 |   |
| 7.75%      Series, Due 2032                                                                                                                                                                                                                                                                                   |               | 316.4 |   |   |   | 316.7 |   |
| 7.30%      Series, Due 2033                                                                                                                                                                                                                                                                                   |               | 513.9 |   |   |   | 514.1 |   |
| 5.80%      Series, Due 2035                                                                                                                                                                                                                                                                                   |               | 477.4 |   |   |   | 477.1 |   |
| 6.50%      Series, Due 2037                                                                                                                                                                                                                                                                                   |               | 395.8 |   |   |   | 395.7 |   |
| 6.95%      Series, Due 2038                                                                                                                                                                                                                                                                                   |               | 1,175.0 |   |   |   | 550.0 |   |
| Other                                                                                                                                                                                                                                                                                                         |               | 1.1 |   |   |   | 1.1 |   |
| Carrying      Value Adjustment for Interest Rate Swaps1                                                                                                                                                                                                                                                       |               | 754.2 |   |   |   | 146.2 |   |
| Unamortized      Gain on Termination of Interest Rate Swap                                                                                                                                                                                                                                                    |               | 197.6 |   |   |   | 7.2 |   |
|                                                                                                                                                                                                                                                                                                          |               |   |   |   |   |   |   |
| Central      Florida Pipe Line LLC                                                                                                                                                                                                                                                                            |               |   |   |   |   |   |   |
| 7.84%      Series, Due 2008                                                                                                                                                                                                                                                                                   |               | - |   |   |   | 5.0 |   |
|                                                                                                                                                                                                                                                                                                     |               |   |   |   |   |   |   |
| Arrow      Terminals L.P.                                                                                                                                                                                                                                                                                     |               |   |   |   |   |   |   |
| Illinois      Development Finance Authority Adjustable Rate Industrial Development      Revenue Bonds, Due 2010, weighted-average interest rate of 2.52% for the      year ended December 31, 2008 (3.77% for the seven months ended December      31, 2007 and 3.87% for the five months ended May 31, 2007) |               | 5.3 |   |   |   | 5.3 |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                                                                                                                                                                                                                                                                                                                                    |   |     |   |   |   |     |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|--------|--------|--------|----------|--------|
| Kinder      Morgan Operating, L.P. “A” and Kinder Morgan Canada                                                                                                                                                                                                                                                                                  |   |     |   |   |   |     |   |
| 5.40%      Note, Due 2012                                                                                                                                                                                                                                                                                                                                    |   | 36.6     |   |   |   | 44.6     |   |
|                                                                                                                                                                                                                                                                                                                                                    |   |     |   |   |   |     |   |
| Kinder      Morgan Texas Pipeline, L.P.                                                                                                                                                                                                                                                                                                                 |   |     |   |   |   |     |   |
| 8.85%      Series, Due 2014                                                                                                                                                                                                                                                                                                                                  |   | 37.0     |   |   |   | 43.2     |   |
|                                                                                                                                                                                                                                                                                                                                                    |   |     |   |   |   |     |   |
| Kinder      Morgan Liquids Terminals LLC                                                                                                                                                                                                                                                                                                                     |   |     |   |   |   |     |   |
| New      Jersey Economic Development Revenue Refunding Bonds, Due 2018,      weighted-average interest rate of 1.63% for the year ended December 31,      2008(3.48 % for the seven months ended December 31, 2007 and 3.63%      for the five months ended May 31, 2007)                                                                               |   | 25.0     |   |   |   | 25.0     |   |
|                                                                                                                                                                                                                                                                                                                                                    |   |     |   |   |   |     |   |
| Kinder      Morgan Operating, L.P. “B”                                                                                                                                                                                                                                                                                                           |   |     |   |   |   |     |   |
| Jackson-Union      Counties, Illinois Regional Port District Tax-exempt Floating Rate Bonds,      Due 2024, weighted-average interest rate of 2.96% for the year ended      December 31, 2008 (3.68% for the seven months ended December 31, 2007 and      3.59% for the five months ended May 31, 2007)                                                     |   | 23.7     |   |   |   | 23.7     |   |
| Other                                                                                                                                                                                                                                                                                                                                                        |   | 0.2      |   |   |   | 0.2      |   |
|                                                                                                                                                                                                                                                                                                                                                    |   |     |   |   |   |     |   |
| International      Marine Terminals                                                                                                                                                                                                                                                                                                                          |   |     |   |   |   |     |   |
| Plaquemines      Port, Harbor and Terminal District (Louisiana) Adjustable Rate Annual      Tender Port Facilities Revenue Refunding Bonds, Due 2025, weighted-average      interest rate of 2.50% for the year ended December 31, 2008 (3.65% for the      seven months ended December 31, 2007 and 3.59% for the five months      ended May 31, 2007) |   | 40.0     |   |   |   | 40.0     |   |
|                                                                                                                                                                                                                                                                                                                                          |   |     |   |   |   |     |   |
| Gulf      Opportunity Zone Bonds                                                                                                                                                                                                                                                                                                                             |   |     |   |   |   |     |   |
| Kinder      Morgan Louisiana Pipeline LLC                                                                                                                                                                                                                                                                                                                    |   |     |   |   |   |     |   |
| 6.00%      Louisiana Community Development Authority Revenue Bonds Due      2011                                                                                                                                                                                                                                                                             |   | 5.0      |   |   |   | -        |   |
|                                                                                                                                                                                                                                                                                                                                                         |   |     |   |   |   |     |   |
| Kinder      Morgan Columbus LLC                                                                                                                                                                                                                                                                                                                              |   |     |   |   |   |     |   |
| 5.50%      Mississippi Business Finance Corporation Revenue Bonds Due      2022                                                                                                                                                                                                                                                                              |   | 8.2      |   |   |   | -        |   |
|                                                                                                                                                                                                                                                                                                                                                    |   |     |   |   |   |     |   |
| Unamortized      Debt Discount on Long-term Debt                                                                                                                                                                                                                                                                                                             |   | (14.5    | )      |   |   | (6.4     | )      |
| Current      Maturities of Long-term Debt                                                                                                                                                                                                                                                                                                                    |   | (293.7   | )      |   |   | (79.8    | )      |
| Total      Long-term Debt                                                                                                                                                                                                                                                                                                                                    | $      | 12,126.8 |   |   | $      | 15,297.4 |   |

|                                             | Debt      Paid Downand/or      Retired |
|--------------------------------------------------|----------------------------------------|
|                                             | (In      millions)                     |
| Knight      Inc.                                 |                                   |   |   |   |   |
| Senior      Secured Credit Term Loan Facilities  |                                   |   |   |   |   |
| Tranche      A Term Loan, Due 2013               |                                   | $ | 995.0 |   |   |
| Tranche      B Term Loan, Due 2014               |                                   |   | 3,183.5 |   |   |
| Credit      Facility                             |                                   |   |   |   |   |
| $1.0      billion Secured Revolver, Due May 2013 |                                   |   | 375.0 |   |   |
| Total      Paid Down and/or Retired              |                                   | $ | 4,553.5 |   |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                                                             | Par      Value ofDebt      Repurchased |
|----------------------------------------------------------------------------------|----------------------------------------|
|                                                                             | (In      millions)                     |
| Knight      Inc.                                                                 |                                   |   |   |   |   |
| Debentures                                                                       |                                   |   |   |   |   |
| 6.50%      Series, Due 2013                                                      |                                   | $ | 18.9 |   |   |
| 6.67%      Series, Due 2027                                                      |                                   |   | 143.0 |   |   |
| 7.25%      Series, Due 2028                                                      |                                   |   | 461.0 |   |   |
| 7.45%      Series, Due 2098                                                      |                                   |   | 124.1 |   |   |
| Senior      Notes                                                                |                                   |   |   |   |   |
| 6.50%      Series, Due 2012                                                      |                                   |   | 160.7 |   |   |
| Kinder      Morgan Finance Company, LLC                                          |                                   |   |   |   |   |
| 6.40%      Series, Due 2036                                                      |                                   |   | 513.6 |   |   |
| Deferrable      Interest Debentures Issued to Subsidiary Trusts                  |                                   |   |   |   |   |
| 8.56%      Junior Subordinated Deferrable Interest Debentures      Due 2027 |                                   |   | 87.3 |   |   |
| 7.63%      Junior Subordinated Deferrable Interest Debentures      Due 2028 |                                   |   | 160.6 |   |   |
| Repurchase      of Outstanding Debt Securities                                   |                                   | $ | 1,669.2 |   |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                                              | Standard&      Poor’s |   | Moody’s |   | Fitch  |
|-------------------------------------------------------------------|---------------------------------|--------|---------------|--------|--------|
| Knight      Inc.                                                  |                            |   |          |   |   |
| $1.0      billion, six-year secured revolver, due May 2013        | BB                              |   | Ba1           |   | BB+    |
| Kinder      Morgan Energy Partners                                |                            |   |          |   |   |
| $1.85      billion, five-year unsecured revolver, due August 2010 | BBB                             |   | Baa2          |   | BBB    |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|            | December      31, 2008 |     | December      31, 2007   |
|-----------------|------------------------|----------|--------------------------|
|            | CarryingValue          |     | EstimatedFair      Value |   | CarryingValue |   | EstimatedFair      Value |
| Total      Debt | $                      | 12,420.5 |                     |   | $ | 10,776.1 |   |   | $ | 15,377.2 |   |   | $ | 15,093.7 |   |

|                                                                           | Successor      Company               |   |                                        | Predecessor      Company |
|--------------------------------------------------------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------------|
|                                                                           | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31,2007 |   | Year      EndedDecember      31,2006 |
|                                                                           | (In      millions)                   |   |                                        | (In      millions)       |
| Interest      Expense, Net                                                     | $                                    | 674.3  |                                        |                     | $ | 603.4 |   |   |   | $ | 253.3 |   |   | $ | 576.1 |   |
| Capitalized      Interest1                                                     |                                 | (49.3  | )                                           |                     |   | (25.5 | ) |   |   |   | (12.2 | ) |   |   | (23.3 | ) |
| Interest      Expense – Preferred Interest in General Partner ofKMP |                                 | 8.4    |                                        |                     |   | 3.6 |   |   |   |   | - |   |   |   | - |   |
| Total      Interest Expense, Net                                               | $                                    | 633.4  |                                        |                     | $ | 581.5 |   |   |   | $ | 241.1 |   |   | $ | 552.8 |   |

| 1 | Includes      the debt component of the allowance for funds used during construction for      our regulated utility operations, which are accounted for in accordance      with the provisions of SFAS No. 71, Accounting for the Effects of      Certain Types of Regulation. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                                                                                    | December      31,2008 |   | December      31,2007 |
|---------------------------------------------------------------------------------------------------------|-----------------------|--------|-----------------------|
|                                                                                                    | (In      millions)    |
| Derivatives      Asset (Liability)                                                                      |                  |   |                  |   |   |   |   |
| Current      Assets: Fair Value of Derivative Instruments                                               | $                     | 115.3  |                  |   | $ | 37.1 |   |
| Current      Assets: Assets Held for Sale                                                               | $                     | -      |                  |   | $ | 8.4 |   |
| Assets:      Fair Value of Derivative Instruments, Non-current                                          | $                     | 48.9   |                  |   | $ | 4.4 |   |
| Current      Liabilities: Fair Value of Derivative Instruments                                          | $                     | (129.5 | )                     |   | $ | (594.7 | ) |
| Current      Liabilities: Liabilities Held for Sale                                                     | $                     | -      |                  |   | $ | (0.4 | ) |
| Liabilities      and Stockholder’s Equity: Fair Value of Derivative Instruments,      Non-current | $                     | (92.2  | )                     |   | $ | (836.8 | ) |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|   | · | 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). |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                        | Asset      Fair Value Measurements as of December 31, 2008 Using |
|---------------------------------------------|------------------------------------------------------------------|
|                                        | Total                                                            |   | Quoted      Prices in Active Marketsfor      IdenticalAssets      (Level 1) |   | Significant      OtherObservableInputs      (Level 2) |   | SignificantUnobservableInputs      (Level 3) |
|                                        | (In      millions)                                               |
| Energy      Commodity Derivative Contracts1 | $                                                                | 164.2 |   |   | $ | 0.1 |   |   | $ | 108.9 |   |   | $ | 55.2 |   |   |
|                                        |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      Rate Swap Agreements          | $                                                                | 747.1 |   |   | $ | - |   |   | $ | 747.1 |   |   | $ | - |   |   |
|                                        |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cross-currency      Interest Rate Swaps     | $                                                                | 32.0 |   |   | $ | - |   |   | $ | 32.0 |   |   | $ | - |   |   |

|                                        | Liability      Fair Value Measurements as of December 31, 2008 Using |
|---------------------------------------------|----------------------------------------------------------------------|
|                                        | Total                                                                |   | Quoted      Prices in Active Marketsfor      IdenticalAssets      (Level 1) |   | Significant      OtherObservableInputs      (Level 2) |   | SignificantUnobservableInputs      (Level 3) |
|                                        | (In      millions)                                                   |
| Energy      Commodity Derivative Contracts2 | $                                                                    | (221.7 | ) |   | $ | - |   |   | $ | (210.6 | ) |   | $ | (11.1 | ) |   |
|                                        |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      Rate Swap Agreements          | $                                                                    | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   |

| 1 | Level      2 consists primarily of OTC West Texas Intermediate hedges and OTC natural      gas hedges that are settled on the New York Mercantile Exchange (“NYMEX”).      Level 3 consists primarily of West Texas Intermediate options and West      Texas Sour hedges. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | 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. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                               | Year      EndedDecember      31,2008 |
|----------------------------------------------------------------------------------------------------|--------------------------------------|
|                                                                                               | (In      millions)                   |
| Net      Asset (Liability)                                                                         |                                 |   |   |
| Beginning      Balance                                                                             | $                                    | (100.3 | ) |
| Realized      and Unrealized Net Losses                                                            |                                 | 69.6 |   |
| Purchases      and Settlements                                                                     |                                 | 74.8 |   |
| Balance      as of December 31, 2008                                                               | $                                    | 44.1 |   |
| Change      in Unrealized Net Losses Relating to Contracts Still Held as of December      31, 2008 | $                                    | 88.8 |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                    | Successor      Company               |   |                                        | Predecessor      Company |
|-----------------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------------|
|                                    | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31,2007 |   | Year      Ended December 31,2006 |
|                                    | (In      millions)                   |   |                                        | (In      millions)       |
| Net      Periodic Pension Benefit Cost  |                                 |   |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Service      Cost                       | $                                    | 10.8   |                                        |                     | $ | 5.6 |   |   |   | $ | 4.5 |   |   | $ | 10.6 |   |
| Interest      Cost                      |                                 | 14.5   |                                        |                     |   | 8.1 |   |   |   |   | 5.6 |   |   |   | 12.7 |   |
| Expected      Return on Assets          |                                 | (23.2  | )                                           |                     |   | (14.0 | ) |   |   |   | (9.6 | ) |   |   | (21.3 | ) |
| Amortization      of Prior Service Cost |                                 | 0.1    |                                        |                     |   | - |   |   |   |   | 0.1 |   |   |   | 0.2 |   |
| Amortization      of Loss               |                                 | 0.3    |                                        |                     |   | - |   |   |   |   | 0.2 |   |   |   | 0.9 |   |
| Net      Periodic Pension Benefit Cost  | $                                    | 2.5    |                                        |                     | $ | (0.3 | ) |   |   | $ | 0.8 |   |   | $ | 3.1 |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                           | Successor      Company               |   |                                        | PredecessorCompany |
|------------------------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------|
|                                           | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |               |   | Five      MonthsEndedMay      31, 2007 |
|                                           | (In      millions)                   |   |                                        | (In      millions) |
| Benefit      Obligation at Beginning of Period | $                                    | 258.0  |                                        |               | $ | 236.5 |   |   |   | $ | 232.0 |   |
| Service      Cost                              |                                 | 10.8   |                                        |               |   | 5.6 |   |   |   |   | 4.5 |   |
| Interest      Cost                             |                                 | 14.5   |                                        |               |   | 8.1 |   |   |   |   | 5.6 |   |
| Actuarial      Loss (Gain)                     |                                 | (14.2  | )                                           |               |   | 18.5 |   |   |   |   | (2.5 | ) |
| Plan      Amendments                           |                                 | 0.8    |                                        |               |   | - |   |   |   |   | 2.7 |   |
| Benefits      Paid                             |                                 | (14.9  | )                                           |               |   | (10.7 | ) |   |   |   | (5.8 | ) |
| Benefit      Obligation at End of Period       | $                                    | 255.0  |                                        |               | $ | 258.0 |   |   |   | $ | 236.5 |   |

|                                                  | Successor      Company               |   |                                        | PredecessorCompany |
|-------------------------------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------|
|                                                  | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |               |   | Five      MonthsEndedMay      31, 2007 |
|                                                  | (In      millions)                   |   |                                        | (In      millions) |
| Fair      Value of Plan Assets at Beginning of Period | $                                    | 264.7  |                                        |               | $ | 273.4 |   |   |   | $ | 261.6 |   |
| Actual      Return on Plan Assets During the Period   |                                 | (70.1  | )                                           |               |   | 1.9 |   |   |   |   | 17.6 |   |
| Benefits      Paid During the Period                  |                                 | (14.9  | )                                           |               |   | (10.7 | ) |   |   |   | (5.8 | ) |
| Fair      Value of Plan Assets at End of Period       |                                 | 179.7  |                                        |               |   | 264.6 |   |   |   |   | 273.4 |   |
| Benefit      Obligation at End of Period              |                                 | (255.0 | )                                           |               |   | (258.0 | ) |   |   |   | (236.5 | ) |
| Funded      Status at End of Period                   | $                                    | (75.3  | )                                           |               | $ | 6.6 |   |   |   | $ | 36.9 |   |

|                                          | Successor      Company               |   |                                        | PredecessorCompany |
|-----------------------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------|
|                                          | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |               |   | Five      MonthsEndedMay      31, 2007 |
|                                          | (In      millions)                   |   |                                        | (In      millions) |
| Beginning      Balance                        | $                                    | 30.6   |                                        |               | $ | - |   |   |   | $ | 19.3 |   |
| Net      (Gain)/Loss Arising During Period    |                                 | 79.1   |                                        |               |   | 30.6 |   |   |   |   | (10.5 | ) |
| Prior      Service Cost Arising During Period |                                 | 0.7    |                                        |               |   | - |   |   |   |   | 2.7 |   |
| Amortization      of (Gain)/Loss              |                                 | (0.4   | )                                           |               |   | - |   |   |   |   | (0.2 | ) |
| Amortization      of Prior Service Cost       |                                 | (0.1   | )                                           |               |   | - |   |   |   |   | (0.1 | ) |
| Ending      Balance                           | $                                    | 109.9  |                                        |               | $ | 30.6 |   |   |   | $ | 11.2 |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

| Fiscal      Year |   | Expected      Net Benefit Payments |
|------------------|--------|------------------------------------|
|             |   | (In      millions)                 |
| 2009             |   | $                                  | 14.4 |   |
| 2010             |   | $                                  | 15.3 |   |
| 2011             |   | $                                  | 16.3 |   |
| 2012             |   | $                                  | 17.1 |   |
| 2013             |   | $                                  | 17.6 |   |
| 2014-2017        |   | $                                  | 108.5 |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                          | Successor      Company               |   |                                        | Predecessor      Company |
|-----------------------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------------|
|                                          | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31,2007 |   | Year      Ended December 31,2006 |
|                                          | (In      millions)                   |   |                                        | (In      millions)       |
| Net      Periodic Postretirement Benefit Cost |                                 |   |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Service      Cost                             | $                                    | 0.3    |                                        |                     | $ | 0.2 |   |   |   | $ | 0.2 |   |   | $ | 0.4 |   |
| Interest      Cost                            |                                 | 4.6    |                                        |                     |   | 2.7 |   |   |   |   | 1.9 |   |   |   | 4.9 |   |
| Expected      Return on Assets                |                                 | (6.5   | )                                           |                     |   | (3.9 | ) |   |   |   | (2.7 | ) |   |   | (5.8 | ) |
| Amortization      of Prior Service Credit     |                                 | -      |                                        |                     |   | - |   |   |   |   | (0.7 | ) |   |   | (1.6 | ) |
| Amortization      of Loss                     |                                 | 0.5    |                                        |                     |   | - |   |   |   |   | 2.0 |   |   |   | 5.2 |   |
| Net      Periodic Postretirement Benefit Cost | $                                    | (1.1   | )                                           |                     | $ | (1.0 | ) |   |   | $ | 0.7 |   |   | $ | 3.1 |   |

|                                           | Successor      Company            |   |                                         | PredecessorCompany |
|------------------------------------------------|-----------------------------------|--------|----------------------------------------------|--------------------|
|                                           | Year      Ended December 31, 2008 |   | Seven      MonthsEndedDecember      31, 2007 |               |   | Five      MonthsEndedMay      31, 2007 |
|                                           | (In      millions)                |   |                                         | (In      millions) |
| Benefit      Obligation at Beginning of Period | $                                 | 82.0   |                                         |               | $ | 78.7 |   |   |   | $ | 84.0 |   |
| Service      Cost                              |                              | 0.3    |                                         |               |   | 0.2 |   |   |   |   | 0.2 |   |
| Interest      Cost                             |                              | 4.6    |                                         |               |   | 2.7 |   |   |   |   | 1.9 |   |
| Actuarial      Loss (Gain)                     |                              | 2.0    |                                         |               |   | 7.5 |   |   |   |   | (3.5 | ) |
| Benefits      Paid                             |                              | (13.8  | )                                            |               |   | (8.5 | ) |   |   |   | (5.3 | ) |
| Retiree      Contributions                     |                              | 2.9    |                                         |               |   | 1.4 |   |   |   |   | 1.4 |   |
| Benefit      Obligation at End of Period       | $                                 | 78.0   |                                         |               | $ | 82.0 |   |   |   | $ | 78.7 |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                                  | Successor      Company               |   |                                        | PredecessorCompany |
|-------------------------------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------|
|                                                  | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |               |   | Five      MonthsEndedMay      31, 2007 |
|                                                  | (In      millions)                   |   |                                        | (In      millions) |
| Fair      Value of Plan Assets at Beginning of Period | $                                    | 69.2   |                                        |               | $ | 76.9 |   |   |   | $ | 67.5 |   |
| Actual      Return on Plan Assets                     |                                 | (17.5  | )                                           |               |   | 0.1 |   |   |   |   | 4.5 |   |
| Contributions                                         |                                 | 8.7    |                                        |               |   | - |   |   |   |   | 8.7 |   |
| Retiree      Contributions                            |                                 | 2.9    |                                        |               |   | 1.6 |   |   |   |   | 1.2 |   |
| Transfers      In                                     |                                 | -      |                                        |               |   | 0.1 |   |   |   |   | - |   |
| Benefits      Paid                                    |                                 | (14.2  | )                                           |               |   | (9.5 | ) |   |   |   | (5.0 | ) |
| Fair      Value of Plan Assets at End of Period       |                                 | 49.1   |                                        |               |   | 69.2 |   |   |   |   | 76.9 |   |
| Benefit      Obligation at End of Period              |                                 | (78.0  | )                                           |               |   | (82.0 | ) |   |   |   | (78.7 | ) |
| Funded      Status at End of Period                   | $                                    | (28.9  | )                                           |               | $ | (12.8 | ) |   |   | $ | (1.8 | ) |

|                                       | Successor      Company               |   |                                        | PredecessorCompany |
|--------------------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------|
|                                       | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |               |   | Five      MonthsEndedMay      31, 2007 |
|                                       | (In      millions)                   |   |                                        | (In      millions) |
| Beginning      Balance                     | $                                    | 12.0   |                                        |               | $ | - |   |   |   | $ | 44.0 |   |
| Net      (Gain)/Loss Arising During Period |                                 | 26.4   |                                        |               |   | 12.0 |   |   |   |   | (5.4 | ) |
| Amortization      of (Gain)/Loss           |                                 | (0.5   | )                                           |               |   | - |   |   |   |   | (2.0 | ) |
| Amortization      of Prior Service Cost    |                                 | -      |                                        |               |   | - |   |   |   |   | 0.7 |   |
| Ending      Balance                        | $                                    | 37.9   |                                        |               | $ | 12.0 |   |   |   | $ | 37.3 |   |

| Fiscal      Year |   | Expected      Net Benefit Payments |
|------------------|--------|------------------------------------|
|             |   | (In      millions)                 |
| 2009             |   | $                                  | 7.6 |   |
| 2010             |   | $                                  | 7.3 |   |
| 2011             |   | $                                  | 7.2 |   |
| 2012             |   | $                                  | 6.9 |   |
| 2013             |   | $                                  | 6.8 |   |
| 2014-2017        |   | $                                  | 31.2 |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                                   | Successor      Company           |   |                                        | Predecessor      Company |
|--------------------------------------------------------|----------------------------------|--------|---------------------------------------------|--------------------------|
|                                                   | Year      Ended December 31,2008 |   | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31,2007 |   | Year      EndedDecember      31,2006 |
| Discount      Rate                                     |                             |   | 6.25                                        | %                        |   |   |   |   | 5.75 | % |   |   |   |   |   | 6.00 | % |   |   |   |   | 6.00 | % |   |
| Expected      Long-term Return on Assets               |                             |   | 8.75                                        | %                        |   |   |   |   | 9.00 | % |   |   |   |   |   | 9.00 | % |   |   |   |   | 9.00 | % |   |
| Rate      of Compensation Increase (Pension Plan Only) |                             |   | 3.50                                        | %                        |   |   |   |   | 3.50 | % |   |   |   |   |   | 3.50 | % |   |   |   |   | 3.50 | % |   |

|                                                   | Successor      Company           |   |                                        | Predecessor      Company |
|--------------------------------------------------------|----------------------------------|--------|---------------------------------------------|--------------------------|
|                                                   | Year      Ended December 31,2008 |   | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31,2007 |   | Year      EndedDecember      31,2006 |
| Discount      Rate                                     |                             |   | 5.75                                        | %                        |   |   |   |   | 6.00 | % |   |   |   |   |   | 6.00 | % |   |   |   |   | 5.75 | % |   |
| Expected      Long-term Return on Assets               |                             |   | 9.00                                        | %                        |   |   |   |   | 9.00 | % |   |   |   |   |   | 9.00 | % |   |   |   |   | 9.00 | % |   |
| Rate      of Compensation Increase (Pension Plan Only) |                             |   | 3.50                                        | %                        |   |   |   |   | 3.50 | % |   |   |   |   |   | 3.50 | % |   |   |   |   | 3.50 | % |   |

|                                                                                    | Successor      Company           |   |                                        | Predecessor      Company |
|-----------------------------------------------------------------------------------------|----------------------------------|--------|---------------------------------------------|--------------------------|
|                                                                                    | Year      Ended December 31,2008 |   | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31,2007 |   | Year      EndedDecember      31,2006 |
| Healthcare      Cost Trend Rate Assumed for Next Year                                   |                             |   | 3.0%                                        |                     |   |   |   |   | 3.0% |   |   |   |   |   |   | 3.0% |   |   |   |   |   | 3.0% |   |   |
| Rate      to which the Cost Trend Rate is Assumed to Decline (Ultimate Trend      Rate) |                             |   | 3.0%                                        |                     |   |   |   |   | 3.0% |   |   |   |   |   |   | 3.0% |   |   |   |   |   | 3.0% |   |   |
| Year      the Rate Reaches the Ultimate Trend Rate                                      |                             |   | 2008                                        |                     |   |   |   |   | 2007 |   |   |   |   |   |   | 2007 |   |   |   |   |   | 2006 |   |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                                                           | Predecessor      Company            |
|--------------------------------------------------------------------------------|-------------------------------------|
|                                                                           | Five      Months EndedMay 31, 20071 |   | Year      EndedDecember      31, 2006 |
|                                                                           | Shares                              |   | WeightedAverageGrant      DateFair      Value |   | Shares |   | WeightedAverageGrant      DateFair      Value |
|                                                                           | (Dollars      in millions)          |
| Outstanding      at Beginning of Period                                        | 812,240                             |   |   | $ | 55.6 |   |   | 880,310 |   |   | $ | 56.6 |   |
| Granted                                                                        | -                                   |   |   |   | - |   |   | 89,400 |   |   |   | 8.7 |   |
| Reinstated                                                                     | -                                   |   |   |   | - |   |   | 50,000 |   |   |   | 2.7 |   |
| Vested                                                                         | (59,117                             | ) |   |   | (4.8 | ) |   | (193,620 | ) |   |   | (11.3 | ) |
| Forfeited                                                                      | (12,016                             | ) |   |   | (1.0 | ) |   | (13,850 | ) |   |   | (1.1 | ) |
| Outstanding      at End of Period                                              | 741,107                             |   |   | $ | 49.8 |   |   | 812,240 |   |   | $ | 55.6 |   |
|                                                                           |                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Intrinsic      Value of Restricted Stock Vested    During the Period |                                |   |   | $ | 3.6 |   |   |   |   |   | $ | 19.2 |   |

| 1 | As      discussed above, all remaining restricted stock at the end of the period      became fully vested and was exercised upon the closing of the Going      Private transaction. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                      | Predecessor      Company            |
|-------------------------------------------------------------------------------------------|-------------------------------------|
|                                                                                      | Five      Months EndedMay 31, 20071 |   | Year      EndedDecember      31, 2006 |
|                                                                                      | Shares                              |   | WeightedAverageExercise      Price |   | Shares |   | WeightedAverageExercise      Price |
| Outstanding      at Beginning of Period                                                   | 2,604,217                           |   |   | $ | 46.02 |   |   | 3,421,849 |   |   | $ | 45.21 |   |
| Granted                                                                                   | -                                   |   |   | $ | - |   |   | - |   |   | $ | - |   |
| Exercised                                                                                 | (160,838                            | ) |   | $ | 44.67 |   |   | (618,746 | ) |   | $ | 44.82 |   |
| Forfeited                                                                                 | (35,975                             | ) |   | $ | 50.10 |   |   | (198,886 | ) |   | $ | 41.95 |   |
| Outstanding      at End of Period                                                         | 2,407,404                           |   |   | $ | 46.06 |   |   | 2,604,217 |   |   | $ | 46.02 |   |
|                                                                                      |                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercisable      at End of Period                                                         | 2,183,379                           |   |   | $ | 44.55 |   |   | 2,310,392 |   |   | $ | 44.49 |   |
| Weighted-Average      Fair Value of Options Granted                                       |                                |   |   | $ | - |   |   |   |   |   | $ | - |   |
| Aggregate      Intrinsic Value of Options Exercisable at End of Period (in      millions) |                                |   |   | $ | 142.0 |   |   |   |   |   | $ | 147.9 |   |
| Intrinsic      Value of Options Exercised During the Period (In millions)                 |                                |   |   | $ | 9.9 |   |   |   |   |   | $ | 34.1 |   |
| Cash      Received from Exercise of Options During the Period (In      millions)          |                                |   |   | $ | 7.2 |   |   |   |   |   | $ | 27.7 |   |

| 1 | As      discussed above, all remaining stock options became fully vested and were      exercised upon the closing of the Going Private transaction on May 31,      2007. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

| Year       |               | Operating      Leases |
|------------|--------------------|-----------------------|
|       | (In      millions) |
| 2009       | $                  | 57.5                  |   |
| 2010       |               | 54.5                  |   |
| 2011       |               | 48.9                  |   |
| 2012       |               | 44.8                  |   |
| 2013       |               | 40.6                  |   |
| Thereafter |               | 418.4                 |   |
| Total      | $                  | 664.7                 |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

| 19.      Business Segment Information |
|---------------------------------------|

|   | · | Natural Gas Pipeline Company      of America—after February 15, 2008, this segment consists of our      20% interest in NGPL PipeCo LLC, the owner of Natural Gas Pipeline Company      of America and certain affiliates, collectively referred to as Natural Gas      Pipeline Company of America or NGPL, a major interstate natural gas      pipeline and storage system which weoperate; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Power—which consists of      two natural gas-fired electric generation  facilities; |
|--------|--------|-------------------------------------------------------------------------------------------|

|   | · | Products      Pipelines–KMP—which consists of approximately 8,300 miles of      refined petroleum products pipelines that deliver gasoline, diesel fuel,      jet fuel and natural gas liquids to various markets; plus approximately 60      associated product terminals and petroleum pipeline transmix processing      facilities serving customers across the United  States; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Natural Gas      Pipelines–KMP—which consists of over 14,300 miles of natural gas      transmission pipelines and gathering lines, plus natural gas storage,      treating and processing facilities, through which natural gas is gathered,      transported, stored, treated, processed and  sold; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | CO2–KMP—which produces,      markets and transports, through approximately 1,300 miles of pipelines,      carbon dioxide to oil fields that use carbon dioxide to increase      production of oil; owns interests in and/or operates ten oil fields in      West Texas; and owns and operates a 450-mile crude oil pipeline system in      West Texas; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Terminals–KMP—which      consists of approximately 110 owned or operated liquids and bulk terminal      facilities and more than 45 rail transloading and materials handling      facilities located throughout the United States and portions of Canada,      which together transload, store and deliver a wide variety of bulk,      petroleum, petrochemical and other liquids products for customers across      the United States and Canada; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Kinder Morgan      Canada–KMP—which consists of over 700 miles of common carrier      pipelines, originating at Edmonton, Alberta, for the transportation of      crude oil and refined petroleum to the interior of British Columbia and to      marketing terminals and refineries located in the greater Vancouver,      British Columbia area and Puget Sound in Washington State; plus five      associated product terminals. This segment also includes a one-third      interest in an approximately 1,700-mile integrated crude oil pipeline and      a 25-mile aviation turbine fuel pipeline serving the Vancouver      International Airport. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                                                                                                                 | Successor      Company               |     |                                         | Predecessor      Company |
|--------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------|----------|----------------------------------------------|--------------------------|
|                                                                                                                                 | Year      EndedDecember      31,2008 |     | Seven      Months EndedDecember      31,2007 |                     |   | Five      Months EndedMay      31,2007 |   | Year      EndedDecember      31,2006 |
| Segment      Earnings (Loss) before Depreciation, Depletion, Amortization and      Amortization of Excess Cost of Equity Investments |                                 |     |                                         |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| NGPL1                                                                                                                                | $                                    | 129.8    |                                         |                     | $ | 422.8 |   |   |   | $ | 267.4 |   |   | $ | 603.5 |   |
| Power                                                                                                                                |                                 | 5.7      |                                         |                     |   | 13.4 |   |   |   |   | 8.9 |   |   |   | 23.2 |   |
| Products      Pipelines–KMP2,3                                                                                                 |                                 | (722.0   | )                                            |                     |   | 162.5 |   |   |   |   | 224.4 |   |   |   | 467.9 |   |
| Natural      Gas Pipelines–KMP2,3                                                                                              |                                 | (1,344.3 | )                                            |                     |   | 373.3 |   |   |   |   | 228.5 |   |   |   | 574.8 |   |
| CO2–KMP2                                                                                                                       |                                 | 896.1    |                                         |                     |   | 433.0 |   |   |   |   | 210.0 |   |   |   | 488.2 |   |
| Terminals–KMP2,3                                                                                                               |                                 | (156.5   | )                                            |                     |   | 243.7 |   |   |   |   | 172.3 |   |   |   | 408.1 |   |
| Kinder      Morgan Canada–KMP2,4                                                                                               |                                 | 152.0    |                                         |                     |   | 58.8 |   |   |   |   | (332.0 | ) |   |   | 95.1 |   |
| Total      Segment Earnings (Loss) Before DD&A                                                                                   |                                 | (1,039.2 | )                                            |                     |   | 1,707.5 |   |   |   |   | 779.5 |   |   |   | 2,660.8 |   |
| Depreciation,      Depletion and Amortization                                                                                        |                                 | (918.4   | )                                            |                     |   | (472.3 | ) |   |   |   | (261.0 | ) |   |   | (531.4 | ) |
| Amortization      of Excess Cost of Equity Investments                                                                               |                                 | (5.7     | )                                            |                     |   | (3.4 | ) |   |   |   | (2.4 | ) |   |   | (5.6 | ) |
| Other      Operating Income (Loss)                                                                                                   |                                 | 39.0     |                                         |                     |   | (0.3 | ) |   |   |   | 2.9 |   |   |   | 6.8 |   |
| General      and Administrative Expenses                                                                                             |                                 | (352.5   | )                                            |                     |   | (175.6 | ) |   |   |   | (283.6 | ) |   |   | (305.1 | ) |
| Interest      and Other, Net5,6                                                                                                      |                                 | (1,019.7 | )                                            |                     |   | (624.0 | ) |   |   |   | (348.2 | ) |   |   | (968.2 | ) |
| Add      Back Income Tax Expense Included in Segments Above2                                                                         |                                 | 2.4      |                                         |                     |   | 44.0 |   |   |   |   | 15.6 |   |   |   | 29.0 |   |
| Income      (Loss) from Continuing Operations Before Income Taxes                                                                    | $                                    | (3,294.1 | )                                            |                     | $ | 475.9 |   |   |   | $ | (97.2 | ) |   | $ | 886.3 |   |

|                                  | Successor      Company               |     |                                        | Predecessor      Company |
|---------------------------------------|--------------------------------------|----------|---------------------------------------------|--------------------------|
|                                  | Year      EndedDecember      31,2008 |     | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31,2007 |   | Year      EndedDecember      31,2006 |
| Revenues      from External Customers |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| NGPL1                                 | $                                    | 132.1    |                                        |                     | $ | 752.4 |   |   |   | $ | 424.5 |   |   | $ | 1,114.4 |   |
| Power                                 |                                 | 44.0     |                                        |                     |   | 40.2 |   |   |   |   | 19.9 |   |   |   | 60.0 |   |
| Products      Pipelines–KMP     |                                 | 815.9    |                                        |                     |   | 471.5 |   |   |   |   | 331.8 |   |   |   | 732.5 |   |
| Natural      Gas Pipelines–KMP  |                                 | 8,422.0  |                                        |                     |   | 3,825.9 |   |   |   |   | 2,637.6 |   |   |   | 6,558.4 |   |
| CO2–KMP                         |                                 | 1,269.2  |                                        |                     |   | 605.9 |   |   |   |   | 324.2 |   |   |   | 736.5 |   |
| Terminals–KMP                   |                                 | 1,172.7  |                                        |                     |   | 598.8 |   |   |   |   | 364.2 |   |   |   | 864.1 |   |
| Kinder      Morgan Canada–KMP   |                                 | 198.9    |                                        |                     |   | 100.0 |   |   |   |   | 62.9 |   |   |   | 140.8 |   |
| Other                                 |                                 | 40.0     |                                        |                     |   | - |   |   |   |   | - |   |   |   | 1.9 |   |
| Total      Revenues                   | $                                    | 12,094.8 |                                        |                     | $ | 6,394.7 |   |   |   | $ | 4,165.1 |   |   | $ | 10,208.6 |   |

|                                 | Successor      Company               |   |                                        | Predecessor      Company |
|--------------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------------|
|                                 | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31,2007 |   | Year      EndedDecember      31,2006 |
| Intersegment      Revenues           |                                 |   |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| NGPL1                                | $                                    | 0.9    |                                        |                     | $ | 4.8 |   |   |   | $ | 2.0 |   |   | $ | 3.6 |   |
| Natural      Gas Pipelines–KMP |                                 | -      |                                        |                     |   | - |   |   |   |   | 3.0 |   |   |   | 19.3 |   |
| Terminals–KMP                  |                                 | 0.9    |                                        |                     |   | 0.4 |   |   |   |   | 0.3 |   |   |   | 0.7 |   |
| Other                                |                                 | (0.9   | )                                           |                     |   | - |   |   |   |   | - |   |   |   | - |   |
| Total      Intersegment Revenues     | $                                    | 0.9    |                                        |                     | $ | 5.2 |   |   |   | $ | 5.3 |   |   | $ | 23.6 |   |

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                                             | Successor      Company               |   |                                        | Predecessor      Company |
|------------------------------------------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------------|
|                                                             | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31,2007 |   | Year      EndedDecember      31,2006 |
| Depreciation,      Depletion and Amortization                    |                                 |   |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| NGPL1                                                            | $                                    | 9.3    |                                        |                     | $ | 42.3 |   |   |   | $ | 45.3 |   |   | $ | 104.5 |   |
| Power                                                            |                                 | -      |                                        |                     |   | 0.2 |   |   |   |   | (4.2 | ) |   |   | 2.1 |   |
| Products      Pipelines–KMP                                |                                 | 116.9  |                                        |                     |   | 58.1 |   |   |   |   | 33.6 |   |   |   | 74.0 |   |
| Natural      Gas Pipelines–KMP                             |                                 | 99.9   |                                        |                     |   | 52.3 |   |   |   |   | 26.8 |   |   |   | 65.4 |   |
| CO2–KMP                                                    |                                 | 498.1  |                                        |                     |   | 243.5 |   |   |   |   | 116.3 |   |   |   | 190.9 |   |
| Terminals–KMP                                              |                                 | 157.4  |                                        |                     |   | 62.1 |   |   |   |   | 34.4 |   |   |   | 74.6 |   |
| Kinder      Morgan Canada–KMP                              |                                 | 36.7   |                                        |                     |   | 13.5 |   |   |   |   | 8.2 |   |   |   | 19.4 |   |
| Other                                                            |                                 | 0.1    |                                        |                     |   | 0.3 |   |   |   |   | 0.6 |   |   |   | 0.5 |   |
| Total      Consolidated Depreciation, Depletion and Amortization | $                                    | 918.4  |                                        |                     | $ | 472.3 |   |   |   | $ | 261.0 |   |   | $ | 531.4 |   |

|                                         | Successor      Company               |    |                                        | Predecessor      Company |
|----------------------------------------------|--------------------------------------|---------|---------------------------------------------|--------------------------|
|                                         | Year      EndedDecember      31,2008 |    | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31,2007 |   | Year      EndedDecember      31,2006 |
| Capital      Expenditures                    |                                 |    |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| NGPL1                                        | $                                    | 10.3    |                                        |                     | $ | 152.0 |   |   |   | $ | 77.3 |   |   | $ | 193.4 |   |
| Power                                        |                                 | -       |                                        |                     |   | - |   |   |   |   | - |   |   |   | - |   |
| Products      Pipelines–KMP            |                                 | 221.7   |                                        |                     |   | 179.9 |   |   |   |   | 79.5 |   |   |   | 196.0 |   |
| Natural      Gas Pipelines–KMP         |                                 | 946.5   |                                        |                     |   | 197.4 |   |   |   |   | 66.6 |   |   |   | 271.6 |   |
| CO2–KMP                                |                                 | 542.6   |                                        |                     |   | 249.2 |   |   |   |   | 133.3 |   |   |   | 283.0 |   |
| Terminals–KMP                          |                                 | 454.1   |                                        |                     |   | 310.1 |   |   |   |   | 169.9 |   |   |   | 307.7 |   |
| Kinder      Morgan Canada–KMP          |                                 | 368.1   |                                        |                     |   | 196.7 |   |   |   |   | 109.0 |   |   |   | 123.8 |   |
| Other                                        |                                 | 2.0     |                                        |                     |   | 1.7 |   |   |   |   | 17.2 |   |   |   | 0.1 |   |
| Total      Consolidated Capital Expenditures | $                                    | 2,545.3 |                                        |                     | $ | 1,287.0 |   |   |   | $ | 652.8 |   |   | $ | 1,375.6 |   |

|                                 | Successor      Company |     |   | PredecessorCompany |
|--------------------------------------|------------------------|----------|--------|--------------------|
|                                 | 2008                   |     | 2007   |               |   | 2006 |
| Assets      at December 31           |                   |     |   |               |   |   |   |   |   |   |   |   |
| NGPL1                                | $                      | 717.3    |   |               | $ | 720.0 |   |   |   | $ | 5,728.9 |   |
| Power                                |                   | 58.9     |   |               |   | 120.6 |   |   |   |   | 387.4 |   |
| Products      Pipelines–KMP    |                   | 5,526.4  |   |               |   | 6,941.4 |   |   |   |   | 4,812.9 |   |
| Natural      Gas Pipelines–KMP |                   | 7,748.1  |   |               |   | 8,439.8 |   |   |   |   | 3,796.6 |   |
| CO2–KMP                        |                   | 4,478.7  |   |               |   | 3,919.2 |   |   |   |   | 1,875.6 |   |
| Terminals–KMP                  |                   | 4,327.8  |   |               |   | 4,643.3 |   |   |   |   | 2,564.1 |   |
| Kinder      Morgan Canada–KMP  |                   | 1,583.9  |   |               |   | 1,888.3 |   |   |   |   | 2,555.1 |   |
| Total      segment assets            |                   | 24,441.1 |   |               |   | 26,672.6 |   |   |   |   | 21,720.6 |   |
| Assets      Held for Sale            |                   | -        |   |               |   | 8,987.9 |   |   |   |   | 510.2 |   |
| Other7                               |                   | 1,003.8  |   |               |   | 440.5 |   |   |   |   | 4,564.8 |   |
| Total      Consolidated Assets       | $                      | 25,444.9 |   |               | $ | 36,101.0 |   |   |   | $ | 26,795.6 |   |

| 1 | Effective      February 15, 2008, we sold an 80% ownership interest in NGPL PipeCo LLC to      Myria. As a result of the sale, beginning February 15, 2008, we account      for our 20% ownership interest in NGPL PipeCo LLC as an equity method      investment and 100% of NGPL revenues, earnings and assets prior to the      sale, are included in the abovetables. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Kinder      Morgan Energy Partners’ income taxes expenses for the year ended December      31, 2008, seven months ended December 31, 2007, five months ended May 31,      2007 and year ended December 31, 2006 were $2.4 million, $44.0 million,      $15.6 million and $29.0 million, respectively, and are included in segment      earnings. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | 2008      includes non-cash goodwill impairment charges (see Note  3). |
|---|------------------------------------------------------------------------|

| 4 | Five      months ended May 31, 2007 includes a non-cash goodwill impairment charge      (see Note 3). |
|---|-------------------------------------------------------------------------------------------------------|

| 5 | Includes      (i) interest expense, (ii) minority interests and (iii) miscellaneous      other income and expenses not allocated to business    segments. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6 | Results      for 2006 include a reduction in pre-tax income of $22.3 million ($14.1      million after tax) resulting from non-cash charges to mark to market      certain interest rate swaps |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7 | Includes      assets of discontinued operations, cash, restricted deposits, market value      of derivative instruments (including interest rate swaps) and      miscellaneous corporate assets (such as information technology and      telecommunications equipment) not allocated to individual      segments. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

| Geographic      Information |
|-----------------------------|

|                                                     | Successor      Company               |     |                                        | Predecessor      Company |
|----------------------------------------------------------|--------------------------------------|----------|---------------------------------------------|--------------------------|
|                                                     | Year      EndedDecember      31,2008 |     | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31,2007 |   | Year      EndedDecember      31,2006 |
| Revenues      from External Customers                    |                                 |     |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| United      States                                       | $                                    | 11,804.2 |                                        |                     | $ | 6,239.7 |   |   |   | $ | 4,086.6 |   |   | $ | 10,045.9 |   |
| Canada                                                   |                                 | 269.3    |                                        |                     |   | 143.5 |   |   |   |   | 70.5 |   |   |   | 143.2 |   |
| Mexico      and the Netherlands                          |                                 | 21.3     |                                        |                     |   | 11.5 |   |   |   |   | 8.0 |   |   |   | 19.5 |   |
| Total      Consolidated Revenues from External Customers | $                                    | 12,094.8 |                                        |                     | $ | 6,394.7 |   |   |   | $ | 4,165.1 |   |   | $ | 10,208.6 |   |

|                                      | Successor      Company |     |   | PredecessorCompany |
|-------------------------------------------|------------------------|----------|--------|--------------------|
|                                      | 2008                   |     | 2007   |               |   | 2006 |
| Long-lived      Assets at December 311    |                   |     |   |               |   |   |   |   |   |   |   |   |
| United      States                        | $                      | 17,511.1 |   |               | $ | 16,051.9 |   |   |   | $ | 16,779.7 |   |
| Canada                                    |                   | 1,568.7  |   |               |   | 1,565.8 |   |   |   |   | 4,605.8 |   |
| Mexico      and the Netherlands           |                   | 97.7     |   |               |   | 88.2 |   |   |   |   | 117.0 |   |
| Total      Consolidated Long-lived Assets | $                      | 19,177.5 |   |               | $ | 17,705.9 |   |   |   | $ | 21,502.5 |   |

| 1 | Long-lived      assets exclude goodwill and other intangibles,  net. |
|---|----------------------------------------------------------------------|

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| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

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| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

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| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

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| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

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| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

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| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

| Proceedings                                             | Complainants/Protestants                                                                                             | Defendants                                             |
|---------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------|
| FERC      Docket No. OR92-8, et      al.                | Chevron;      Navajo; ARCO; BP WCP; Western Refining; ExxonMobil; Tosco; and Texaco      (Ultramar is an intervenor) | SFPP                                                   |
| FERC      Docket No. OR92-8-025                    | BP      WCP; ExxonMobil ; Chevron; ConocoPhillips; and Ultramar                                                      | SFPP                                                   |
| FERC      Docket No. OR96-2, et      al.                | All      Shippers except Chevron (which is an intervenor)                                                            | SFPP                                                   |
| FERC      Docket Nos. OR02-4 and OR03-5                 | Chevron                                                                                                              | SFPP                                                   |
| FERC      Docket No. OR04-3                             | America      West Airlines; Southwest Airlines; Northwest Airlines; and Continental      Airlines                    | SFPP                                                   |
| FERC      Docket Nos. OR03-5, OR05-4 and OR05-5         | BP      WCP; ExxonMobil; and ConocoPhillips (other shippers      intervened)                                         | SFPP                                                   |
| FERC      Docket No. OR03-5-001                         | BP      WCP; ExxonMobil; and ConocoPhillips (other shippers      intervened)                                         | SFPP                                                   |
| FERC      Docket No. OR07-1                             | Tesoro                                                                                                               | SFPP                                                   |
| FERC      Docket No. OR07-2                             | Tesoro                                                                                                               | SFPP                                                   |
| FERC      Docket No. OR07-3                             | BP      WCP; Chevron; ExxonMobil; Tesoro; and Valero Marketing                                                       | SFPP                                                   |
| FERC      Docket No. OR07-4                             | BP      WCP; Chevron; and ExxonMobil                                                                                 | SFPP;      Kinder Morgan G.P., Inc.; and Knight Inc.   |
| FERC      Docket Nos. OR07-5 and OR07-7 (consolidated)  | ExxonMobil      and Tesoro                                                                                           | Calnev;      Kinder Morgan G.P., Inc.; and Knight Inc. |
| FERC      Docket No. OR07-6                             | ConocoPhillips                                                                                                       | SFPP                                                   |
| FERC      Docket Nos. OR07-8 and OR07-11 (consolidated) | BP      WCP and ExxonMobil                                                                                           | SFPP                                                   |
| FERC      Docket No. OR07-9                             | BP      WCP                                                                                                          | SFPP                                                   |
| FERC      Docket No. OR07-14                            | BP      WCP and Chevron                                                                                              | SFPP;      Calnev; and several affiliates              |
| FERC      Docket No. OR07-16                            | Tesoro                                                                                                               | Calnev                                                 |
| FERC      Docket No. OR07-18                            | Airline      Complainants; Chevron; and Valero Marketing                                                             | Calnev                                                 |
| FERC      Docket No. OR07-19                            | ConocoPhillips                                                                                                       | Calnev                                                 |
| FERC      Docket No. OR07-20                            | BP      WCP                                                                                                          | SFPP                                                   |
| FERC      Docket No. OR07-22                            | BP      WCP                                                                                                          | Calnev                                                 |
| FERC      Docket No. OR08-13                            | BP      WCP and ExxonMobil                                                                                           | SFPP                                                   |
| FERC      Docket No. OR08-15                            | BP      WCP and ExxonMobil                                                                                           | SFPP                                                   |
| FERC      Docket No. IS05-230 (North Line rate case)    | Shippers                                                                                                             | SFPP                                                   |
| FERC      Docket No. IS05-327                           | Shippers                                                                                                             | SFPP                                                   |

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| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

| FERC      Docket No. IS06-283 (East Line rate case)                         | Shippers                                                                                        | SFPP                                                 |
|-----------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------|------------------------------------------------------|
| FERC      Docket No. IS06-296                                               | ExxonMobil                                                                                      | Calnev                                               |
| FERC      Docket No. IS06-356                                               | Shippers                                                                                        | SFPP                                                 |
| FERC      Docket No. IS07-137 (Ultra Low Sulfur Diesel (ULSD)    surcharge) | Shippers                                                                                        | SFPP                                                 |
| FERC      Docket No. IS07-229                                               | BP      WCP and ExxonMobil                                                                      | SFPP                                                 |
| FERC      Docket No. IS07-234                                               | BP      WCP and ExxonMobil                                                                      | Calnev                                               |
| FERC      Docket No. IS08-28                                                | ConocoPhillips;      Chevron; BP WCP; ExxonMobil ; Southwest Airlines; Western; and      Valero | SFPP                                                 |
| FERC      Docket No. IS08-302                                               | Chevron;      BP WCP; ExxonMobil; and Tesoro                                                    | SFPP                                                 |
| FERC      Docket No. IS08-389                                               | ConocoPhillips;      Valero; Southwest Airlines Co.; Navajo; and Western                        | SFPP                                                 |
| FERC      Docket No. IS08-390                                               | BP      WCP; ExxonMobil; ConocoPhillips; Valero; Chevron; and the      Airlines                 | SFPP                                                 |
| Motions      to compel payment of interim damages (various dockets)         | Shippers                                                                                        | SFPP;      Kinder Morgan G.P., Inc.; and Knight Inc. |
| Motion      for resolution on the merits (various dockets)                  | BP      WCP and ExxonMobil                                                                      | SFPP      and Calnev.                                |

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| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

Protests to the amended rate increase application have beenfiled by various shippers and, as a consequence, the related rate increase isbeing collected subject to refund. The CPUC has issued a ruling suspendingfurther activity with respect to the SFPP and Calnev Pipe Line Company generalrate case applications, pending CPUC resolution of the 1997 CPUC complaint andPower Surcharge proceedings. Consequently, no action has been taken by the CPUCwith respect to either the SFPP amended general rate case filing or the Calnevgeneral rate case filing.

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| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

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| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

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| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

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| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

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| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

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| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

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| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

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| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

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| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

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| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

SFAS No.142
, Goodwill and Other IntangibleAssets. This FSP is effective for financial statements issued for fiscalyears beginning after December 15, 2008 (January 1, 2009 for us), and interimperiods within those fiscal years. The adoption of this FSP did not have amaterial impact on our consolidated financial statements.

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| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

Selected Quarterly Financial Data (Unaudited)

|                                                                   | Successor      Company   |
|------------------------------------------------------------------------|--------------------------|
|                                                                   | Three      Months Ended  |
|                                                                   | March      31,2008       |   | June      30,2008 |   | September      30,2008 |   | December      31,2008 |
|                                                                   | (In      millions)  |
| Operating      Revenues                                                | $                        | 2,895.0 |   | $ | 3,560.5 |   | $ | 3,296.6 |   | $ | 2,342.7 |   |
| Gas      Purchases and Other Costs of Sales                            |                     | 1,760.6 |   |   | 2,494.1 |   |   | 2,179.2 |   |   | 1,310.1 |   |
| Other      Operating Expenses                                          |                     | 658.2 |   |   | 4,704.5 |   |   | 719.1 |   |   | 741.1 |   |
| Operating      Income (Loss)                                           |                     | 476.2 |   |   | (3,638.1 | ) |   | 398.3 |   |   | 291.5 |   |
| Other      Income and (Expenses)                                       |                     | (283.3 | ) |   | (202.8 | ) |   | (201.5 | ) |   | (134.4 | ) |
| Income      (Loss) from Continuing Operations Before Income Taxes |                     | 192.9 |   |   | (3,840.9 | ) |   | 196.8 |   |   | 157.1 |   |
| Income      Taxes                                                      |                     | 87.1 |   |   | 19.4 |   |   | 87.9 |   |   | 109.9 |   |
| Income      (Loss) from Continuing Operations                          |                     | 105.8 |   |   | (3,860.3 | ) |   | 108.9 |   |   | 47.2 |   |
| Income      (Loss) from Discontinued Operations, Net of Tax  |                     | (0.1 | ) |   | (0.3 | ) |   | (0.2 | ) |   | (0.3 | ) |
| Net      Income (Loss)                                                 | $                        | 105.7 |   | $ | (3,860.6 | ) | $ | 108.7 |   | $ | 46.9 |   |

|                                                              | Predecessor      Company |    |                 | Successor      Company   |
|-------------------------------------------------------------------|--------------------------|---------|----------------------|--------------------------|
|                                                              | Three      MonthsEnded   |    | Two      MonthsEnded |                     |   | One      MonthEnded |   | Three      Months Ended |
|                                                              | March      31,2007       |    | May      31,2007     |                     |   | June      30,2007 |   | September      30,2007 |   | December      31,2007 |
|                                                              | (In      millions)  |    |                 | (In      millions)  |
| Operating      Revenues                                           | $                        | 2,444.4 |                 | $                        | 1,720.7 |   |   |   | $ | 936.9 |   | $ | 2,609.0 |   | $ | 2,848.8 |   |
| Gas      Purchases and Other Costs of Sales                       |                     | 1,452.5 |                 |                     | 1,037.9 |   |   |   |   | 557.2 |   |   | 1,482.8 |   |   | 1,616.6 |   |
| Other      Operating Expenses                                     |                     | 968.0   |                 |                     | 501.9 |   |   |   |   | 220.5 |   |   | 683.2 |   |   | 791.6 |   |
| Operating      Income                                             |                     | 23.9    |                 |                     | 180.9 |   |   |   |   | 159.2 |   |   | 443.0 |   |   | 440.6 |   |
| Other      Income and (Expenses)                                  |                     | (181.8  | )                    |                     | (120.2 | ) |   |   |   | (110.0 | ) |   | (278.3 | ) |   | (178.6 | ) |
| Income      (Loss) from Continuing Operations Before Income Taxes |                     | (157.9  | )                    |                     | 60.7 |   |   |   |   | 49.2 |   |   | 164.7 |   |   | 262.0 |   |
| Income      Taxes                                                 |                     | 87.7    |                 |                     | 47.8 |   |   |   |   | 21.3 |   |   | 74.6 |   |   | 131.5 |   |
| Income      (Loss) from Continuing Operations                     |                     | (245.6  | )                    |                     | 12.9 |   |   |   |   | 27.9 |   |   | 90.1 |   |   | 130.5 |   |
| Income      (Loss) from Discontinued Operations, Net of Tax       |                     | 233.2   |                 |                     | 65.4 |   |   |   |   | 2.3 |   |   | (4.4 | ) |   | 0.6 |   |
| Net      Income (Loss)                                            | $                        | (12.4   | )                    | $                        | 78.3 |   |   |   | $ | 30.2 |   | $ | 85.7 |   | $ | 131.1 |   |

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| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

Supplemental Information on Oil and Gas ProducingActivities (Unaudited)

|                                           | Successor      Company |     |   | PredecessorCompany |
|------------------------------------------------|------------------------|----------|--------|--------------------|
|                                           | December      31,      |     |   | December      31,  |
|                                           | 2008                   |     | 2007   |               |   | 2006 |
|                                           | (In      millions)     |     |   | (In      millions) |
| Consolidated      Companies1                   |                   |     |   |               |   |   |   |   |   |   |   |   |
| Wells      and equipment, facilities and other | $                      | 2,595.4  |   |               | $ | 2,081.3 |   |   |   | $ | 1,369.5 |   |
| Leasehold                                      |                   | 429.8    |   |               |   | 449.3 |   |   |   |   | 347.4 |   |
| Total      proved oil and gas properties       |                   | 3,025.2  |   |               |   | 2,530.6 |   |   |   |   | 1,716.9 |   |
| Accumulated      depreciation and depletion    |                   | (1,155.6 | )      |               |   | (787.6 | ) |   |   |   | (470.2 | ) |
| Net      capitalized costs                     | $                      | 1,869.6  |   |               | $ | 1,743.0 |   |   |   | $ | 1,246.7 |   |

| 1 | Amounts      relate to Kinder Morgan CO2      Company, L.P. and its consolidated subsidiaries. |
|---|------------------------------------------------------------------------------------------------|

|                               | Successor      Company               |   |                                        | Predecessor      Company |
|------------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------------|
|                               | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31,2007 |   | Year      EndedDecember      31,2006 |
|                               | (In      millions)                   |   |                                        | (In      millions)       |
| Consolidated      Companies1       |                                 |   |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Property      Acquisition          |                                 |   |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Proved      oil and gas properties | $                                    | -      |                                        |                     | $ | - |   |   |   | $ | - |   |   | $ | 36.6 |   |
| Development                        |                                 | 495.2  |                                        |                     |   | 156.9 |   |   |   |   | 87.5 |   |   |   | 261.8 |   |

| 1 | Amounts      relate to Kinder Morgan CO2      Company, L.P. and its consolidatedsubsidaries. |
|---|----------------------------------------------------------------------------------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                                            | Successor      Company               |   |                                        | Predecessor      Company |
|-----------------------------------------------------------------|--------------------------------------|--------|---------------------------------------------|--------------------------|
|                                                            | Year      EndedDecember      31,2008 |   | Seven      MonthsEndedDecember      31,2007 |                     |   | Five      MonthsEndedMay      31, 2007 |   | Year      EndedDecember      31,2006 |
|                                                            | (In      millions)                   |   |                                        | (In      millions)       |
| Consolidated      Companies1                                    |                                 |   |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues2                                                       | $                                    | 785.5  |                                        |                     | $ | 352.0 |   |   |   | $ | 237.7 |   |   |   | 524.7 |   |
| Expenses:                                                       |                                 |   |                                        |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Production      costs                                           |                                 | 308.4  |                                        |                     |   | 147.2 |   |   |   |   | 96.7 |   |   |   | 208.9 |   |
| Other      operating expenses3                                  |                                 | 99.0   |                                        |                     |   | 34.9 |   |   |   |   | 22.0 |   |   |   | 66.4 |   |
| Depreciation,      depletion and amortization expenses          |                                 | 342.2  |                                        |                     |   | 151.9 |   |   |   |   | 106.6 |   |   |   | 169.4 |   |
| Total      expenses                                             |                                 | 749.6  |                                        |                     |   | 334.0 |   |   |   |   | 225.3 |   |   |   | 444.7 |   |
| Results      of operations for oil and gas producing activities | $                                    | 35.9   |                                        |                     | $ | 18.0 |   |   |   | $ | 12.4 |   |   | $ | 80.0 |   |

| 1 | Amounts      relate to Kinder Morgan CO2      Company, L.P. and its consolidatedsubsidaries. |
|---|----------------------------------------------------------------------------------------------|

| 2 | Revenues      include losses attributable to our hedging contracts of $693.3 million,      $311.5 million, $122.7 million and $441.7 million for the year ended      December 31, 2008, seven months ended December 31, 2007, five months ended      May 31, 2007 and year ended December 31, 2006,    respectively. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | Consists      primarily of carbon dioxideexpense. |
|---|---------------------------------------------------|

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| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                                 | Consolidated      Companies |
|------------------------------------------------------|-----------------------------|
|                                                 | Crude      Oil(MBbls)       |   | NGLs(MBbls) |   | Nat.      Gas(MMcf)1 |
| Proved      developed and undeveloped reserves as of |                        |   |   |   |   |   |   |   |
| December      31, 20052                              | 21,567                      |   |   | 2,884 |   |   | 327 |   |
| December      31, 20063                              | 123,978                     |   |   | 10,333 |   |   | 291 |   |
| Revisions      of Previous Estimates3,4              | 10,361                      |   |   | 2,784 |   |   | 1,077 |   |
| Production3                                          | (12,984                     | ) |   | (2,005 | ) |   | (290 | ) |
| December      31, 20073                              | 121,355                     |   |   | 11,112 |   |   | 1,078 |   |
| Revisions      of Previous Estimates3,5              | (29,536                     | ) |   | (2,490 | ) |   | 695 |   |
| Production3                                          | (13,240                     | ) |   | (1,762 | ) |   | (499 | ) |
| December      31, 20083                              | 78,579                      |   |   | 6,860 |   |   | 1,274 |   |
|                                            |                        |   |   |   |   |   |   |   |
| Proved      developed reserves as of                 |                        |   |   |   |   |   |   |   |
| December      31, 20052                              | 11,965                      |   |   | 1,507 |   |   | 251 |   |
| December      31, 20063                              | 69,073                      |   |   | 5,877 |   |   | 291 |   |
| December      31, 20073                              | 70,868                      |   |   | 5,517 |   |   | 1,078 |   |
| December      31, 20083                              | 53,346                      |   |   | 4,308 |   |   | 1,274 |   |

| 1 | Natural      gas reserves are computed at 14.65 pounds per square inch absolute and 60      degrees Fahrenheit. |
|---|-----------------------------------------------------------------------------------------------------------------|

| 2 | For      the period presented, we accounted for Kinder Morgan Energy Partners under      the equity method, therefore, amounts reflect our proportionate share of      Kinder Morgan Energy Partners’ provedreserves. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | Amounts      relate to Kinder Morgan CO2      Company, L.P. and its consolidatedsubsidaries. |
|---|----------------------------------------------------------------------------------------------|

| 4 | Associated      with an expansion of the carbon dioxide flood project area of the SACROC      unit. |
|---|-----------------------------------------------------------------------------------------------------|

| 5 | Predominately      due to lower product prices used to determine reserve    volumes. |
|---|--------------------------------------------------------------------------------------|

|   | · | the      standardized measure includes our estimate of proved crude oil, natural      gas liquids and natural gas reserves and projected future production      volumes based upon year-end economicconditions; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | pricing      is applied based upon year-end market prices adjusted for fixed or      determinable contracts that are in existence at  year-end; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | future      development and production costs are determined based upon actual cost at      year-end; |
|--------|--------|------------------------------------------------------------------------------------------------------|

|   | · | the      standardized measure includes projections of future abandonment costs      based upon actual costs at year-end;and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------|

|   | · | a      discount factor of 10% per year is applied annually to the future net cash      flows. |
|--------|--------|-----------------------------------------------------------------------------------------------|

|                                                          | December      31,  |     |   | December      31,  |
|---------------------------------------------------------------|--------------------|----------|--------|--------------------|
|                                                          | 2008               |     | 2007   |               |   | 2006 |
|                                                          | (In      millions) |     |   | (In      millions) |
| Consolidated      Companies1                                  |               |     |   |               |   |   |   |   |   |   |   |   |
| Future      Cash Inflows from Production                      | $                  | 3,498.0  |   |               | $ | 12,099.5 |   |   |   | $ | 7,534.7 |   |
| Future      Production Costs                                  |               | (1,671.6 | )      |               |   | (3,536.2 | ) |   |   |   | (2,617.9 | ) |
| Future      Development Costs2                                |               | (910.3   | )      |               |   | (1,919.2 | ) |   |   |   | (1,256.8 | ) |
| Undiscounted      Future Net Cash Flows                       |               | 916.1    |   |               |   | 6,644.1 |   |   |   |   | 3,660.0 |   |
| 10%      Annual Discount                                      |               | (257.7   | )      |               |   | (2,565.7 | ) |   |   |   | (1,452.2 | ) |
| Standardized      Measure of Discounted Future Net Cash Flows | $                  | 658.4    |   |               | $ | 4,078.4 |   |   |   | $ | 2,207.8 |   |

| 1 | Amounts      relate to Kinder Morgan CO2      Company, L.P. and its consolidatedsubsidaries. |
|---|----------------------------------------------------------------------------------------------|

| 2 | Includes      abandonment costs. |
|---|----------------------------------|

----

| Item 8:  Financial      Statements and Supplementary Data. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------------------------------|-----------------------|

|                                                    | Year      Ended December 31, |
|---------------------------------------------------------|------------------------------|
|                                                    | 2008                         |   | 2007 |   | 2006 |
|                                                    | (In      millions)           |
| Consolidated      Companies1                            |                         |   |   |   |   |   |   |   |   |   |   |
| Present      Value as of January                        | $                            | 4,078.4 |   |   | $ | 2,207.8 |   |   |   | 3,075.0 |   |
| Changes      During the Year                            |                         |   |   |   |   |   |   |   |   |   |   |
| Revenues      Less Production and Other Costs2          |                         | (1,012.4 | ) |   |   | (722.1 | ) |   |   | (690.0 | ) |
| Net      Changes in Prices, Production and Other Costs2 |                         | (3,076.9 | ) |   |   | 2,153.2 |   |   |   | (123.0 | ) |
| Development      Costs Incurred                         |                         | 495.2 |   |   |   | 244.5 |   |   |   | 261.8 |   |
| Net      Changes in Future Development Costs            |                         | 231.1 |   |   |   | (547.8 | ) |   |   | (446.0 | ) |
| Purchases      of Reserves in Place                     |                         | — |   |   |   | - |   |   |   | 3.2 |   |
| Revisions      of Previous Quantity Estimates3          |                         | (417.1 | ) |   |   | 510.8 |   |   |   | (179.5 | ) |
| Accretion      of Discount                              |                         | 392.9 |   |   |   | 198.1 |   |   |   | 307.4 |   |
| Timing      Differences and Other                       |                         | (32.8 | ) |   |   | 33.9 |   |   |   | (1.1 | ) |
| Net      Change For the Year                            |                         | (3,420.0 | ) |   |   | 1,870.6 |   |   |   | (867.2 | ) |
| Present      Value as of December 31                    | $                            | 658.4 |   |   | $ | 4,078.4 |   |   | $ | 2,207.8 |   |

| 1 | Amounts      relate to Kinder Morgan CO2      Company, L.P. and its consolidatedsubsidaries. |
|---|----------------------------------------------------------------------------------------------|

| 2 | Excludes      the effect of losses attributable to our hedging contracts of $639.3      million, $434.2 million and $441.7 million for the years ended December      31, 2008, 2007 and 2006,respectively. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | 2008      revisions are predominantly due to lower product prices used to determine      reserve volumes. 2007 revisions are associated with an expansion of the      carbon dioxide flood project area for the SACROC unit. 2006 revisions are      based on lower than expected recoveries from a section of the SACROC unit      carbon dioxide flood project. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Item 9.    Changes in and Disagreements withAccountants on Accounting and Financial Disclosure.

Item 9A.  Controls andProcedures.

Conclusion Regarding the Effectiveness of Disclosure Controlsand Procedures

Management’s Report on Internal Control over FinancialReporting

----

| Item 9A.  Controls      and Procedures. (continued) | Knight      Form 10-K |
|---------------------------------------------------------------|-----------------------|

|   | · | the      bulk terminal assets we acquired from Chemserve, Inc., effective August      15, 2008; and |
|--------|--------|-----------------------------------------------------------------------------------------------------|

|   | · | the      refined petroleum products storage terminal we acquired from      ConocoPhillips, effective December 10,2008. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|

Changes in Internal Control over FinancialReporting

Item 9B.  OtherInformation.

----

|   | Knight      Form 10-K |
|--------|-----------------------|

Item 10.  Directors, Executive Officers andCorporate Governance.

| Name                       | Age | Position                                                  |
|----------------------------|-----|-----------------------------------------------------------|
| Richard      D. Kinder     | 64  | Director,      Chairman and Chief Executive Officer       |
| C.      Park Shaper        | 40  | Director      and President                               |
| Steven      J. Kean        | 47  | Executive      Vice President and Chief Operating Officer |
| Kenneth      A. Pontarelli | 45  | Director                                                  |
| Kimberly      A. Dang      | 39  | Vice      President and Chief Financial Officer           |
| David      D. Kinder       | 34  | Vice      President, Corporate Development and Treasurer  |
| Joseph      Listengart     | 40  | Vice      President, General Counsel and Secretary        |
| James      E. Street       | 52  | Vice      President, Human Resources andAdministration    |

----

| Item 10.  Directors,      Executive Officers and Corporate    Governance.(continued) | Knight      Form 10-K |
|------------------------------------------------------------------------------------------------|-----------------------|

----

|   | Knight      Form 10-K |
|--------|-----------------------|

Item 11. ExecutiveCompensation

----

| Item 11. Executive      Compensation (continued) | Knight      Form 10-K |
|-------------------------------------------------------|-----------------------|

----

| Item 11. Executive      Compensation (continued) | Knight      Form 10-K |
|-------------------------------------------------------|-----------------------|

----

| Item 11. Executive      Compensation (continued) | Knight      Form 10-K |
|-------------------------------------------------------|-----------------------|

|   | · | our      EBITDA less capital spending, or the EBITDA less capital spending of one      of our subsidiaries or businessunits; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------|

|   | · | our      net income or the net income of one of our subsidiaries or business      units; |
|--------|--------|------------------------------------------------------------------------------------------|

|   | · | our      revenues or the revenues of one of our subsidiaries or business      units; |
|--------|--------|--------------------------------------------------------------------------------------|

|   | · | our      unit revenues minus unit variable costs or the unit revenues minus unit      variable costs of one of our subsidiaries or business    units; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our      return on capital, return on equity, return on assets, or return on      invested capital, or the return on capital, return on equity, return on      assets, or return on invested capital of one of our subsidiaries or      business units; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our      free cash flow, cash flow return on assets or cash flows from operating      activities, or the cash flow return on assets or cash flows from operating      activities of one of our subsidiaries or business  units; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our      capital expenditures or the capital expenditures of one of our      subsidiaries or business units; |
|--------|--------|--------------------------------------------------------------------------------------------------------------|

|   | · | our      operations and maintenance expense or general and administrative expense,      or the operations and maintenance expense or general and administrative      expense of one of our subsidiaries or business  units; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our      debt-equity ratios and key profitability ratios, or the debt-equity ratios      and key profitability ratios of one of our subsidiaries or business units;      or |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Kinder      Morgan Energy Partners’ distribution perunit |
|--------|--------|----------------------------------------------------------------|

----

| Item 11. Executive      Compensation (continued) | Knight      Form 10-K |
|-------------------------------------------------------|-----------------------|

| Name      and Principal Position                                             |   | Dollar      Value |
|------------------------------------------------------------------------------|--------|-------------------|
| Richard      D. Kinder, Chairman and Chief Executive Officer                 | $      | -                 | 1 |
| Kimberly      A. Dang, Vice President and Chief Financial Officer            |   | 1,000,000         | 2 |
| Steven      J. Kean, Executive Vice President and Chief Operating    Officer |   | 1,500,000         | 3 |
| Joseph      Listengart, Vice President, General Counsel and Secretary        |   | 1,000,000         | 2 |
| C.      Park Shaper, Director and President                                  |   | 1,500,000         | 3 |

| 1 | Declined      to participate. |
|---|-------------------------------|

| 2 | Under      the plan, for 2008, if neither of the targets was met, no bonus      opportunities would have been provided; if one of the targets was met,      $500,000 in bonus opportunities would have been available; if both of the      targets had been exceeded by 10%, $1,500,000 in bonus opportunities would      have been available. Mr. Richard D. Kinder may reduce the award      payable by us to any participant for anyreason. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | Under      the plan, for 2008, if neither of the targets was met, no bonus      opportunities would have been provided; if one of the targets was met,      $750,000 in bonus opportunities would have been available; if both of the      targets had been exceeded by 10%, $2,000,000 in bonus opportunities would      have been available. Mr. Richard D. Kinder may reduce the award      payable by us to any participant for anyreason. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 11. Executive      Compensation (continued) | Knight      Form 10-K |
|-------------------------------------------------------|-----------------------|

| Pension      Benefits  |
|------------------------|
| Name                   |   | Plan      Name |   | CurrentCredited      Yrsof      Service |   | Present      Value ofAccumulatedBenefit1 |   | ContributionsDuring      2008 |
| Richard      D. Kinder |   | Cash      Balance |   | 8 |   |   | $ | -  |   |   |   | $ | -  |   |
| Kimberly      A. Dang  |   | Cash      Balance |   | 7 |   |   |   | 39,693 |   |   |   |   | 8,285 |   |
| Steven      J. Kean    |   | Cash      Balance |   | 7 |   |   |   | 50,479 |   |   |   |   | 8,755 |   |
| Joseph      Listengart |   | Cash      Balance |   | 8 |   |   |   | 60,267 |   |   |   |   | 9,188 |   |
| C.      Park Shaper    |   | Cash      Balance |   | 8 |   |   |   | 60,267 |   |   |   |   | 9,188 |   |

| 1 | The      present values in the Pension Benefits table are based on certain      assumptions, including a 6.25% discount rate, 5.0% cash balance interest      crediting rate, and a lump sum calculated using the IRS 2009 Mortality      Tables. We assumed benefits would commence at normal retirement age, which      is 65. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 11. Executive      Compensation (continued) | Knight      Form 10-K |
|-------------------------------------------------------|-----------------------|

|                                                                                 |   |   |                           |                          |   | (1)                                                        |   | (2)                                             |      | (3)                                       |   | (4)                                                            |   | (5)                        |      | (6)                                           |   |                                                              |
|--------------------------------------------------------------------------------------|--------|--------|--------------------------------|-------------------------------|--------|------------------------------------------------------------|--------|-------------------------------------------------|-----------|-------------------------------------------|--------|----------------------------------------------------------------|--------|----------------------------|-----------|-----------------------------------------------|--------|-------------------------------------------------------------------|
| Name      and    Principal      Position     |   | Year   |   Salary   |   Bonus   |   | StockAwards   by      KMI    |   | OptionAwards  by      KMI   |      | Non-EquityIncentive      PlanCompensation |   | Changein      Pension   Value    |   | All      OtherCompensation |      | Unit      Awardsby      KnightHoldco      LLC |   |      Total      |
| Richard      D. Kinder                                                               |   | 2008   | $                              | 1                             | $      | -                                                          |   | $                                               | -         |                                      | $      | -                                                              |   | $                          | -         |                                          | $      | -                                                                 |   | $ | - |   | $ | 660,388 |   | $ | 660,389 |
| Director,      Chairman and                                                          |   | 2007   |                           | 1                             |   | -                                                          |   |                                            | -         |                                      |   | -                                                              |   |                       | -         |                                          |   | -                                                                 |   |   | - |   |   | 385,200 |   |   | 385,201 |
| Chief      Executive Officer                                                         |   | 2006   |                           | 1                             |   | -                                                          |   |                                            | -         |                                      |   | -                                                              |   |                       | -         |                                          |   | -                                                                 |   |   | - |   |   | - |   |   | 1 |
|                                                                                 |   |   |                           |                          |   |                                                       |   |                                            |      |                                      |   |                                                           |   |                       |      |                                          |   |                                                              |   |   |   |   |   |   |   |   |   |
| Kimberly      A. Dang                                                                |   | 2008   |                           | 223,077                       |   | -                                                          |   |                                            | -         |                                      |   | -                                                              |   |                       | 440,000   |                                          |   | 8,285                                                             |   |   | 11,863 |   |   | 47,963 |   |   | 731,188 |
| Vice      President and                                                              |   | 2007   |                           | 200,000                       |   | -                                                          |   |                                            | 338,095   |                                      |   | -                                                              |   |                       | 400,000   |                                          |   | 7,294                                                             |   |   | 32,253 |   |   | 27,980 |   |   | 1,005,622 |
| Chief      Financial Officer                                                         |   | 2006   |                           | 200,000                       |   | -                                                          |   |                                            | 139,296   |                                      |   | 37,023                                                         |   |                       | 270,000   |                                          |   | 6,968                                                             |   |   | 46,253 |   |   | - |   |   | 699,540 |
|                                                                                 |   |   |                           |                          |   |                                                       |   |                                            |      |                                      |   |                                                           |   |                       |      |                                          |   |                                                              |   |   |   |   |   |   |   |   |   |
| Steven      J. Kean                                                                  |   | 2008   |                           | 223,077                       |   | -                                                          |   |                                            | -         |                                      |   | -                                                              |   |                       | 1,150,000 |                                          |   | 8,755                                                             |   |   | 13,007 |   |   | 191,720 |   |   | 1,586,559 |
| Executive      Vice President                                                        |   | 2007   |                           | 200,000                       |   | -                                                          |   |                                            | 4,397,080 |                                      |   | -                                                              |   |                       | 1,100,000 |                                          |   | 7,767                                                             |   |   | 147,130 |   |   | 111,820 |   |   | 5,963,797 |
| And                                                                                  |   | 2006   |                           | 200,000                       |   | -                                                          |   |                                            | 1,591,192 |                                      |   | 147,943                                                        |   |                       | -         |                                          |   | 7,422                                                             |   |   | 284,919 |   |   | - |   |   | 2,231,476 |
| Chief      Operating Officer                                                         |   |   |                           |                          |   |                                                       |   |                                            |      |                                      |   |                                                           |   |                       |      |                                          |   |                                                              |   |   |   |   |   |   |   |   |   |
|                                                                                 |   |   |                           |                          |   |                                                       |   |                                            |      |                                      |   |                                                           |   |                       |      |                                          |   |                                                              |   |   |   |   |   |   |   |   |   |
| Joseph      Listengart                                                               |   | 2008   |                           | 223,077                       |   | -                                                          |   |                                            | -         |                                      |   | -                                                              |   |                       | 900,000   |                                          |   | 9,188                                                             |   |   | 11,629 |   |   | 120,107 |   |   | 1,264,001 |
| Vice      President, General                                                         |   | 2007   |                           | 200,000                       |   | -                                                          |   |                                            | 847,350   |                                      |   | -                                                              |   |                       | 1,000,000 |                                          |   | 8,194                                                             |   |   | 102,253 |   |   | 70,063 |   |   | 2,227,860 |
| Counsel      and Secretary                                                           |   | 2006   |                           | 200,000                       |   | -                                                          |   |                                            | 721,817   |                                      |   | -                                                              |   |                       | -         |                                          |   | 7,835                                                             |   |   | 224,753 |   |   | - |   |   | 1,154,405 |
|                                                                                 |   |   |                           |                          |   |                                                       |   |                                            |      |                                      |   |                                                           |   |                       |      |                                          |   |                                                              |   |   |   |   |   |   |   |   |   |
| C.      Park Shaper                                                                  |   | 2008   |                           | 223,077                       |   | -                                                          |   |                                            | -         |                                      |   | -                                                              |   |                       | 1,200,000 |                                          |   | 9,188                                                             |   |   | 12,769 |   |   | 302,906 |   |   | 1,747,940 |
| Director      and President                                                          |   | 2007   |                           | 200,000                       |   | -                                                          |   |                                            | 1,950,300 |                                      |   | -                                                              |   |                       | 1,200,000 |                                          |   | 8,194                                                             |   |   | 155,953 |   |   | 176,660 |   |   | 3,691,107 |
|                                                                                 |   | 2006   |                           | 200,000                       |   | -                                                          |   |                                            | 1,134,283 |                                      |   | 24,952                                                         |   |                       | -         |                                          |   | 7,835                                                             |   |   | 348,542 |   |   | - |   |   | 1,715,612 |

| 1 | Consists      of expense calculated in accordance with SFAS No. 123R attributable      to restricted KMI stock awarded in 2003, 2004 and 2005 according to the      provisions of the KMI Stock Plan. No restricted stock was awarded in 2008,      2007 or 2006. For grants of restricted stock, we take the value of the      award at time of grant and accrue the expense over the vesting period      according to SFAS No. 123R. For grants made July 16, 2003—KMI      closing price was $53.80, twenty-five percent of the shares in each grant      vest on the third anniversary after the date of grant and the remaining      seventy-five percent of the shares in each grant vest on the fifth      anniversary after the date of grant. For grants made July 20,      2004—KMI closing price was $60.79, fifty percent of the shares vest on the      third anniversary after the date of grant and the remaining fifty percent      of the shares vest on the fifth anniversary after the date of grant. For      grants made July 20, 2005—KMI closing price was $89.48, twenty-five      percent of the shares in each grant vest on the third anniversary after      the date of grant and the remaining seventy-five percent of the shares in      each grant vest on the fifth anniversary after the date of grant. As a      result of the Going Private transaction, all outstanding restricted shares      vested in 2007 and therefore all remaining compensation expense with      respect to restricted stock was recognized in 2007 in accordance with SFAS      No. 123R. We bore all of the costs associated with this      acceleration. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Consists      of expense calculated in accordance with SFAS No. 123R attributable      to options to purchase KMI shares awarded in 2002 and 2003 according to      the provisions of the KMI Stock Plan. No options were granted in 2008,      2007 or 2006. For options granted in 2002—volatility of 0.3912 using a      6 year term, 4.01% five year risk free interest rate return, and a      0.71% expected annual dividend rate. For options granted in      2003—volatility of 0.3853 using a 6.25 year term, 3.37% treasury      strip quote at time of grant, and a 2.973% expected annual dividend rate.      As a result of the Going Private transaction, all outstanding options      vested in 2007 and therefore all remaining compensation expense with      respect to options was recognized in 2007 in accordance with SFAS      No. 123R. As a condition to their being permitted to participate in      the Going Private transaction, Messrs. Kean and Shaper agreed to the      cancellation of 10,467 and 22,031 options, respectively.    These |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 11. Executive      Compensation (continued) | Knight      Form 10-K |
|-------------------------------------------------------|-----------------------|

|   | cancelled      options had weighted-average exercise prices of $39.12 and $24.75 per      share, respectively. We bore all of the costs associated with this      acceleration. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | Represents      amounts paid according to the provisions of our Annual Incentive Plan.      Amounts were earned in the fiscal year indicated but were paid in the next      fiscal year. Messrs. Kean, Listengart and Shaper refused to accept a      bonus for 2006. The committee agreed that this was not a reflection of      performance on these individuals. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | Represents      the 2008, 2007 and 2006, as applicable, change in the actuarial present      value of accumulated defined pension benefit (including unvested benefits)      according to the provisions of our Cash Balance Retirement      Plan. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5 | Amounts      include value of contributions to the Knight Inc. Savings Plan (a 401(k)      plan), value of group-term life insurance exceeding $50,000, taxable      parking subsidy and, for 2006 and 2007 only, dividends paid on unvested      restricted stock awards. Amounts in 2006 and 2007 include $10,000 and in      2008 include $11,154 representing the value of contributions to the Knight      Inc. Savings Plan. Amounts representing the value of dividends paid on      unvested restricted stock awards are as follows: for 2007—Mrs. Dang      $21,875; Mr. Kean $136,500; Mr. Listengart $91,875; and Mr. Shaper      $144,375; and for 2006—Mrs. Dang $35,875; Mr. Kean $273,000; Mr.      Listengart $214,375; and Mr. Shaper$336,875. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6 | Such      amounts represent the amount of the non-cash compensation expense      calculated in accordance with SFAS No. 123R attributable to the      Class A-1 and Class B units of Knight Holdco LLC and      allocated to us for financial reporting purposes but does not include any      such expense allocated to any of our subsidiaries. None of the named      executive officers has received any payments in connection with such      units, and none of us or our subsidiaries are obligated, nor do we expect,      to pay any amounts in respect of such units. See “Elements of      Compensation—Other Compensation—Knight Holdco LLC Units” above for further      discussion of these units. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   |   |                       |   | Estimated      Future Payouts UnderNon-Equity Incentive Plan      Awards1 |     | All      Other StockAwards |   | Grant      Date Fair Value of |
|------------------------|--------|----------------------------|--------|---------------------------------------------------------------------------|----------|----------------------------|--------|-------------------------------|
| Name                   |   | Grant      Date            |   | Threshold                                                                 |     | Target                     |   | Maximum                       |   | Number      of Units |   | Stock      Awards |
| Richard      D. Kinder |   | —                    |   | $                                                                         | -        |                       | $      | -                             |   | $ | - |   | - |   | $ | - |
| Kimberly      A. Dang  |   | January 16,      2008 |   |                                                                      | $500,000 |                       |   | $1,000,000                    |   |   | $1,500,000 |   | - |   |   | - |
| Steven      J. Kean    |   | January 16,      2008 |   |                                                                      | 750,000  |                       |   | 1,500,000                     |   |   | 2,000,000 |   | - |   |   | - |
| Joseph      Listengart |   | January 16,      2008 |   |                                                                      | 500,000  |                       |   | 1,000,000                     |   |   | 1,500,000 |   | - |   |   | - |
| C.      Park Shaper    |   | January 16,      2008 |   |                                                                      | 750,000  |                       |   | 1,500,000                     |   |   | 2,000,000 |   | - |   |   | - |

| 1 | See      “Elements of Compensation—Possible Annual Cash Bonus (Non-Equity Cash      Incentive)” above for further discussion of these  awards. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   |   | Stock      Awards  |
|------------------------|--------|--------------------|
| Name                   |   | Type      of Units |   | Number      of Unitsthat      Have Not Vested |   | Market      Value ofUnits      of Stock thatHave Not Vested1 |
| Richard      D. Kinder |   | Class      B units |   | 791,405,452 |   | N/A |
| Kimberly      A. Dang  |   | Class      B units |   | 49,462,841 |   | N/A |
| Steven      J. Kean    |   | Class      B units |   | 158,281,090 |   | N/A |
| Joseph      Listengart |   | Class      B units |   | 79,140,545 |   | N/A |
| C.      Park Shaper    |   | Class      B units |   | 217,636,499 |   | N/A |

| 1 | Because      the Class B units are equity interests of Knight Holdco LLC, a      private limited liability company, the market value of such interests is      not readily determinable. None of the named executive officers has      received any payments in connection with such units, and none of us or our      subsidiaries are obligated, nor do we expect, to pay any amounts in      respect of such |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 11. Executive      Compensation (continued) | Knight      Form 10-K |
|-------------------------------------------------------|-----------------------|

|   | units.      See “Elements of Compensation—Other Compensation—Knight Holdco LLC Units”      above for further discussion of theseunits. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Knight      Form 10-K |
|--------|-----------------------|

Item 12.  Security Ownership of CertainBeneficial Owners and Management and Related StockholderMatters.

|                                                          | Kinder      Morgan Energy Partners Common Units |   | Kinder      Morgan Management Shares |
|---------------------------------------------------------------|-------------------------------------------------|--------|--------------------------------------|
|                                                          | Numberof      Units                             |   | Percentof Class2                     |   | Number      of Shares |   | Percentof Class3 |
| Richard      D. Kinder4                                       | 315,979                                         |   | *                                    |   | 111,782 |   | * |
| C.      Park Shaper                                           | 4,000                                           |   | *                                    |   | 25,618 |   | * |
| Kenneth      A. Pontarelli                                    | 1,000                                           |   | *                                    |   | — |   | — |
| Steven      J. Kean                                           | —                                         |   | —                              |   | — |   | — |
| Joseph      Listengart                                        | 4,198                                           |   | *                                    |   | — |   | — |
| Kimberly      A. Dang                                         | 121                                             |   | *                                    |   | 473 |   | * |
| Directors      and Executive Officers as a group (8 persons)5 | 337,484                                         |   | *                                    |   | 158,878 |   | * |

| 1 | Except      as noted otherwise, each individual has sole voting power and sole      disposition power over the units and shares  listed. |
|---|------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | As      of January 31, 2009, Kinder Morgan Energy Partners had 183,169,827 common      units issued and outstanding. |
|---|----------------------------------------------------------------------------------------------------------------------|

| 3 | As      of January 31, 2009, Kinder Morgan Management had 77,997,906 issued and      outstanding shares representing limited liability company interests,      including two voting shares owned by Kinder      Morgan G.P., Inc. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | Includes      7,879 common units owned by Mr. Kinder’s spouse. Mr. Kinder      disclaims any and all beneficial or pecuniary interest in these      units. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5 | Includes      9,090 common units owned by spouses of our executives and 719 Kinder      Morgan Management shares owned by one of our executives for the benefit of      his children. The executives disclaim any beneficial ownership in such      common units andshares. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                              |   | Knight      Holdco LLCClass      A Units |   | % of Class      A Units2 |   | Knight      Holdco LLC Class A-1 Units |   | % of Class      A-1 Units3 |   | Knight      Holdco LLC Class B Units |   | % of Class      B Units4 |
|-------------------------------------------------------------------|--------|------------------------------------------|--------|-------------------------------|--------|----------------------------------------|--------|---------------------------------|--------|--------------------------------------|--------|-------------------------------|
| Current      Directors and Executive Officers                     |   |                                     |   |                          |   |                                   |   |                            |   |                                 |   |                          |
| Richard      D. Kinder5                                           |   | 2,424,000,000                            |   | 30.6                          |   | —                                |   | —                         |   | 791,405,452                          |   | 40.0                          |
| C.      Park Shaper6                                              |   | 13,598,785                               |   | *                             |   | 7,799,775                              |   | 28.3                            |   | 217,636,499                          |   | 11.0                          |
| Steven      J. Kean7                                              |   | 6,684,149                                |   | *                             |   | 3,833,788                              |   | 13.9                            |   | 158,281,090                          |   | 8.0                           |
| Kimberly      A. Dang8                                            |   | 750,032                                  |   | *                             |   | 430,191                                |   | 1.6                             |   | 49,462,841                           |   | 2.5                           |
| Joseph      Listengart9                                           |   | 6,059,449                                |   | *                             |   | 3,475,483                              |   | 12.6                            |   | 79,140,545                           |   | 4.0                           |
| Kenneth      A. Pontarelli10                                      |   | 1,997,795,088                            |   | 25.2                          |   | —                                |   | —                         |   | —                              |   | —                       |
| Directors      and Executive Officers as a group (8 persons) |   | 4,453,776,489                            |   | 56.3                          |   | 18,343,384                             |   | 66.5                            |   | 1,400,787,650                        |   | 70.8                          |

| 1 | Except      as noted otherwise, each individual has sole voting power and sole      disposition power over the units and shares  listed. |
|---|------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | As      of January 31, 2009,      Knight Holdco LLC had 7,914,367,913 Class A Units issued and      outstanding. |
|---|----------------------------------------------------------------------------------------------------------------------------|

| 3 | As      of January 31, 2009,      Knight Holdco LLC had 27,225,694 Class A-1 Units issued and      outstanding and 345,042 phantom Class A-1 Units issued and      outstanding. The phantom Class A-1 Units were issued to Canadian      management employees. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | As      of January 31, 2009,      Knight Holdco LLC had 1,927,566,908 Class B Units issued and      outstanding and 50,946,724 phantom Class B Units issued and      outstanding. The phantom Class B Units were issued to Canadian      management employees. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item      12.Security Ownership of      Certain Beneficial Owners and Management and Related Stockholder      Matters.                (continued) | Knight      Form 10-K |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------|

| 5 | Includes      522,372 Class A units owned by Mr. Kinder’s wife.      Mr. Kinder disclaims any and all beneficial or pecuniary interest in      the Class A units held by his wife. Also includes 263,801,817      Class B Units that Mr. Kinder transferred to a limited      partnership. Mr. Kinder may be deemed to be the beneficial owner of      these transferred Class B Units, because Mr. Kinder controls the      voting and disposition power of these Class B Units, but he disclaims      ninety-nine percent of any beneficial and pecuniary interest in them.      Mr. Kinder contributed 23,994,827 shares of KMI common stock and his      wife contributed 5,173 shares of KMI common stock to Knight      Holdco LLC that were valued for purposes of Knight Holdco LLC’s      limited liability agreement at $2,423,477,628 and $522,372, respectively,      in exchange for their respective Class A units. The Class B      units received by Mr. Kinder had a grant date fair value as      calculated in accordance with SFAS No. 123R of      $9,200,000. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6 | Includes      217,636,499 Class B Units that Mr. Shaper transferred to a      limited partnership. Mr. Shaper may be deemed to be the beneficial      owner of these transferred Class B Units, because Mr. Shaper      controls the voting and disposition power of these Class B Units, but      he disclaims approximately twenty-two percent of any beneficial and      pecuniary interest in them. Mr. Shaper made a cash investment of      $13,598,785 of his after-tax proceeds from the conversion in the Going      Private transaction of 82,500 shares of KMI restricted stock and options      to acquire 197,969 shares of KMI common stock in exchange for his      Class A units. The Class A-1 units and Class B units      received by Mr. Shaper had an aggregate grant date fair value as      calculated in accordance with SFAS No. 123R of      $4,296,125. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7 | Mr. Kean      made a cash investment of $6,684,149 of his after-tax proceeds from the      conversion in the Going Private transaction of 78,000 shares of KMI      restricted stock and options to acquire 25,533 shares of KMI common stock      in exchange for his Class A units. The Class A-1 units and      Class B units received by Mr. Kean had an aggregate grant date      fair value as calculated in accordance with SFAS No. 123R of      $2,708,095. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8 | Includes      49,462,841 Class B Units that Mrs. Dang transferred to a limited      partnership. Mrs. Dang may be deemed to be the beneficial owner of      these transferred Class B Units, because Mrs. Dang has voting      and disposition power of these Class B Units, but she disclaims ten      percent of any beneficial and pecuniary interest in them. Mrs. Dang      made a cash investment of $750,032 of her after-tax proceeds from the      conversion in the Going Private transaction of 8,000 shares of KMI      restricted stock and options to acquire 24,750 shares of KMI common stock      in exchange for her Class A units. The Class A-1 units and      Class B units received by Mrs. Dang had an aggregate grant date      fair value as calculated in accordance with SFAS No. 123R of      $672,409. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9 | Mr. Listengart      made a cash investment of $6,059,449 of his after-tax proceeds from the      conversion in the Going Private transaction of 52,500 shares of KMI      restricted stock and options to acquire 48,459 shares of KMI common stock      in exchange for his Class A units. The Class A-1 units and      Class B units received by Mr. Listengart had an aggregate grant      date fair value as calculated in accordance with SFAS No. 123R of      $1,706,963. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10 | Consists      of 240,454,180 units owned by GS Capital Partners V Fund, L.P.; a      Delaware limited partnership; 124,208,587 units owned by GS Capital      Partners V Offshore Fund, L.P., a Cayman Islands exempted limited      partnership; 82,455,031 units owned by GS Capital Partners V      Institutional, L.P., a Delaware limited partnership; 9,533,193 units      owned by GS Capital Partners V GmbH & Co. KG, a German      limited partnership; 233,596,750 units owned by GS Capital Partners VI      Fund, L.P., a Delaware limited partnership; 194,297,556 units owned      by GS Capital Partners VI Offshore Fund, L.P., a Cayman Islands      exempted limited partnership; 64,235,126 units owned by GS Capital      Partners VI Parallel, L.P., a Delaware limited partnership; 8,302,031      units owned by GS Capital Partners VI GmbH & Co. KG, a      German limited partnership; 250,215,732 units owned by Goldman Sachs KMI      Investors, L.P., a Delaware limited partnership; 344,448,791 units      owned by GSCP KMI Investors, L.P., a Delaware limited partnership;      49,873,203 units owned by GSCP KMI Investors Offshore, L.P., a Cayman      Islands exempted limited partnership; 100,534,014 units owned by GS Global      Infrastructure Partners I, L.P., a Delaware limited partnership;      10,740,192 units owned by GS Institutional Infrastructure Partners      I, L.P., a Delaware limited partnership; and 284,900,702 units owned      by GS Infrastructure Knight Holdings, L.P., a Delaware limited      partnership (collectively the “GS Entities”). The GS Entities, of which      affiliates of The Goldman Sachs Group, Inc. (“GSG”) are the general      partner, managing general partner or investment manager, share voting and      investment power with certain of its respective affiliates.      Mr. Pontarelli is a managing director of Goldman,      Sachs & Co. (“GS”), which is a direct and indirect wholly      owned subsidiary of GSG. Each of GS, GSG and Mr. Pontarelli disclaims      beneficial ownership of the equity interests and the units held directly      or indirectly by the GS Entities except to the extent of their pecuniary      interest therein, if any. GS, a NASD member, is an investment banking firm      that regularly performs services such as acting as a financial advisor and      serving as principal or agent in the purchase and sale of securities. In      the future, GS may be called upon to provide similar or other services for      us or our affiliates. Each of Mr. Pontarelli, GS and GSG has a      mailing address of c/o Goldman, Sachs & Co., 85 Broad      Street, 10th Floor, New York, NY 10004. GSG’s affiliates that are      registered broker-dealers (including specialists and market makers) may      from time to time engage in brokerage and trading activities with respect      to our securities or those of ouraffiliates. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item      12.Security Ownership of      Certain Beneficial Owners and Management and Related Stockholder      Matters.                (continued) | Knight      Form 10-K |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------|

| Plan      category                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | Number      of SecuritiesRemaining      Available forFuture      Issuance Under EquityCompensation      Plans |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|
| Equity      Compensation Plans Approved by Security Holders                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                                                          | ─ |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                                          |   |   |
| Equity      Compensation Plans Not Approved by Security Holders                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                                                                                          | 77,882 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                                          |   |   |
| Total                                                                                   |   |                                                                                                          | 77,882 |   |

Item 13. CertainRelationships and Related Party Transactions, and DirectorIndependence

Item 14. PrincipalAccounting Fees and Services

|             | Year      Ended December 31, |
|------------------|------------------------------|
|             | 2008                         |   | 2007 |
| Audit      fees1 | $                            | 4,875,799 |   | $ | 5,689,710 |
| Tax      fees2   |                         | 2,568,523 |   |   | 2,974,126 |
| Total            | $                            | 7,444,322 |   | $ | 8,663,836 |

| 1 | Includes      fees for integrated audit of annual financial statements and internal      control over financial reporting, reviews of the related quarterly      financial statements, and reviews of documents filed with the Securities      and Exchange Commission. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Includes      fees for professional services rendered for tax return review services and      for federal, state, local and foreign income tax compliance and consulting      services. For 2008 and 2007, amounts include fees of 2,113,318 and      $2,352,533, respectively, billed to Kinder Morgan Energy Partners for      professional services rendered for tax processing and preparation of Forms      K-1 for its unitholders. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Item 14. Principal      Accounting Fees and Services (continued) | Knight      Form 10-K |
|------------------------------------------------------------------|-----------------------|

----

|   | Knight      Form 10-K |
|--------|-----------------------|

PART IV

Item 15. Exhibits,Financial Statement Schedules.

| (a) | (1) | Financial      Statements |
|-----|-----|---------------------------|

|   | (2) | Financial      Statement Schedules |
|--------|-----|------------------------------------|

|   | (3) | Exhibits |
|--------|-----|----------|

|   | · | should      not be treated as categorical statements of fact, but rather as a way of      allocating the risk to one of the parties if those statements prove to be      inaccurate; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | may      have been qualified by disclosures that were made to the other party in      connection with the negotiation of the applicable agreement, which      disclosures are not necessarily reflected in the  agreement; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | may      apply standards of materiality in a way that is different from what may be      viewed as material to you or other readers;and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | · | may      apply only as of the date of the applicable agreement or such other date      or dates as may be specified in the agreement and are subject to more      recent developments. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.1 | — | Agreement      and Plan of Merger dated August 28, 2006, among Kinder Morgan, Inc.,      Knight Holdco LLC and Knight Acquisition Co. (filed as Exhibit 2.1 to      Knight Inc.’s Current Report on Form 8-K filed on August 28, 2006 and      incorporated herein by reference) |
|--------|-----|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.1 | — | Amended      and Restated Articles of Incorporation of Knight Inc. and amendments      thereto (filed as Exhibit 3.1 to Knight Inc.’s Quarterly Report on Form      10-Q for the quarter ended June 30, 2007 and incorporated herein by      reference) |
|--------|-----|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.2 | — | Bylaws      of Kinder Morgan, Inc. (filed as Exhibit 3.2 to Knight Inc.’s Current      Report on Form 8-K filed on June 5, 2007 and incorporated herein by      reference) |
|--------|-----|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.1 | — | Indenture      dated as of September 1, 1988, between K N Energy, Inc. and Continental      Illinois National Bank and Trust Company of Chicago (filed as Exhibit 4(a)      to Knight Inc.’s Annual Report on Form 10-K/A, Amendment No. 1 filed on      May 22, 2000 and incorporated herein by  reference) |
|--------|-----|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.2 | — | First      supplemental indenture dated as of January 15, 1992, between      K N Energy, Inc. and Continental Illinois National Bank and      Trust Company of Chicago (filed as Exhibit 4.2 to the Registration      Statement on Form S-3 (File No. 33-45091) of K N Energy, Inc. filed on      January 17, 1992 and incorporated herein by  reference) |
|--------|-----|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.3 | — | Second      supplemental indenture dated as of December 15, 1992, between      K N Energy, Inc. and Continental Bank, National Association      (filed as Exhibit 4(c) to Knight Inc.’s Annual Report on Form 10-K/A,      Amendment No. 1 filed on May 22, 2000 and incorporated herein by      reference) |
|--------|-----|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 15.Exhibits,      Financial Statement Schedules. (continued) | Knight      Form 10-K |
|-------------------------------------------------------------------|-----------------------|

|   | 4.4 | — | Indenture      dated as of November 20, 1993, between K N Energy, Inc. and Continental      Bank, National Association (filed as Exhibit 4.1 to the Registration      Statement on Form S-3 (File No. 33-51115) of K N Energy, Inc. filed on      November 19, 1993 and incorporated herein by  reference) |
|--------|-----|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.5 | — | Registration      Rights Agreement among Kinder Morgan Management, LLC, Kinder Morgan Energy      Partners, L.P. and Kinder Morgan, Inc. dated May 18, 2001 (filed as      Exhibit 4.7 to Knight Inc.’s Annual Report on Form 10-K for the year ended      December 31, 2002 and incorporated herein by  reference) |
|--------|-----|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.6 | — | Form      of Indenture dated as of August 27, 2002 between Kinder Morgan, Inc. and      Wachovia Bank, National Association, as Trustee (filed as Exhibit 4.1 to      Knight Inc.’s Registration Statement on Form S-4 (File No. 333-100338)      filed on October 4, 2002 and incorporated herein by    reference) |
|--------|-----|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.7 | — | Form      of First Supplemental Indenture dated as of December 6, 2002 between      Kinder Morgan, Inc. and Wachovia Bank, National Association, as Trustee      (filed as Exhibit 4.2 to Knight Inc.’s Registration Statement on Form S-4      (File No. 333-102873) filed on January 31, 2003 and incorporated herein by      reference) |
|--------|-----|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.8 | — | Form      of 6.50% Note (included in the Indenture filed as Exhibit 4.6 hereto and      incorporated herein by reference) |
|--------|-----|---------|---------------------------------------------------------------------------------------------------------------------------|

|   | 4.9 | — | Form      of Senior Indenture between Kinder Morgan, Inc. and Wachovia Bank,      National Association, as Trustee (filed as Exhibit 4.2 to Knight Inc.’s      Registration Statement on Form S-3 (File No. 333-102963) filed on February      4, 2003 and incorporated herein byreference) |
|--------|-----|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.10 | — | Form      of Senior Note of Kinder Morgan, Inc. (included in the Form of Senior      Indenture filed as Exhibit 4.9 hereto and incorporated herein by      reference) |
|--------|------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.11 | — | Form      of Subordinated Indenture between Kinder Morgan, Inc. and Wachovia Bank,      National Association, as Trustee (filed as Exhibit 4.4 to Knight Inc.’s      Registration Statement on Form S-3 (File No. 333-102963) filed on February      4, 2003 and incorporated herein byreference) |
|--------|------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.12 | — | Form      of Subordinated Note of Kinder Morgan, Inc. (included in the Form of      Subordinated Indenture filed as Exhibit 4.11 hereto and incorporated      herein by reference) |
|--------|------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.13 | — | Indenture      dated as of December 9, 2005, among Kinder Morgan Finance Company, LLC,      Kinder Morgan, Inc. and Wachovia Bank, National Association, as Trustee      (filed as Exhibit 4.1 to Knight Inc.’s Current Report on Form 8-K filed on      December 15, 2005 and incorporated herein by  reference) |
|--------|------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.14 | — | Forms      of Kinder Morgan Finance Company, LLC notes (included in the Indenture      filed as Exhibit 4.13 hereto and incorporated herein by      reference) |
|--------|------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.15 | — | Certificate      of the President and the Vice President and Chief Financial Officer 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 6.00%      senior notes due 2017 and 6.50% senior notes due 2037 (filed as Exhibit      1.01 to Kinder Morgan Energy Partners, L.P.’s Quarterly Report on Form      10-Q for the quarter ended March 31, 2007 and incorporated herein by      reference) |
|--------|------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.16 | — | Certificate      of the Vice President and Treasurer and the Vice President and Chief      Financial Officer 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 5.85% senior notes due 2012 (filed as Exhibit 4.2 to Kinder      Morgan Energy Partners, L.P.’s Quarterly Report on Form 10-Q for the      quarter ended September 30, 2007 and incorporated herein by      reference) |
|--------|------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.17 | — | Certificate      of the Vice President and Treasurer and the Vice President and Chief      Financial Officer 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 6.95% Senior Notes due 2038 (filed as Exhibit 4.2 to Kinder      Morgan Energy Partners, L.P.'s Quarterly Report on Form 10-Q for the      quarter ended June 30, 2007 and incorporated herein by      reference) |
|--------|------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.18 | — | Certificate      of the Vice President and Treasurer and the Vice President and Chief      Financial Officer 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 5.95% Senior Notes due 2018 (filed as Exhibit 4.28 to Kinder      Morgan Energy Partners, L.P.'s Annual Report on Form 10-K for 2007 and      incorporated herein by reference) |
|--------|------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.19 | — | Indenture      dated as of December 21, 2007, between NGPL PipeCo LLC and U.S. Bank      National Association, as Trustee (filed as Exhibit 4.1 to Knight Inc.’s      Current Report on Form 8-K filed on December 21, 2007 and incorporated      herein by reference) |
|--------|------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.20 | — | Forms      of notes of NGPL PipeCo LLC (included in the Indenture filed as Exhibit      4.19 hereto and incorporated herein by  reference) |
|--------|------|---------|--------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 15.Exhibits,      Financial Statement Schedules. (continued) | Knight      Form 10-K |
|-------------------------------------------------------------------|-----------------------|

|   | 4.21 | — | Certificate      of the Vice President and Treasurer and the Vice President and Chief      Financial Officer 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 9.00% Senior Notes due 2019 (filed as Exhibit 4.29 to Kinder      Morgan Energy Partners, L.P.'s Annual Report on Form 10-K for 2008 and      incorporated herein by reference) |
|--------|------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.22 | — | Certain      instruments with respect to the long-term debt of Knight Inc. and its      consolidated subsidiaries that relate to debt that does not exceed 10% of      the total assets of Knight Inc. 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. Knight Inc. hereby agrees to furnish supplementally to the      Securities and Exchange Commission a copy of each such instrument upon      request. |
|--------|------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.1 | — | 2005      Annual Incentive Plan of Kinder Morgan, Inc. (filed as Appendix D to      Kinder Morgan, Inc.’s 2006 Proxy Statement on Schedule 14A and      incorporated herein by reference) |
|--------|------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.2 | — | Employment      Agreement dated October 7, 1999, between the Company and Richard D. Kinder      (filed as Exhibit 99.D of the Schedule 13D filed by Mr. Kinder on November      16, 1999 and incorporated herein byreference) |
|--------|------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.3 | — | Form      of Purchase Provisions between Kinder Morgan Management, LLC and Knight      Inc. (included as Annex B to the Second Amended and Restated Limited      Liability Company Agreement of Kinder Morgan Management, LLC filed as      Exhibit 3.1 to Kinder Morgan Management, LLC’s Current Report on Form 8-K      filed on May 30, 2007 and incorporated herein by  reference) |
|--------|------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.4 | — | Credit      Agreement, dated as of May 30, 2007, among Kinder Morgan, Inc. and Knight      Acquisition Co., as the borrower, the several lenders from time to time      parties thereto, and Citibank, N.A., as administrative agent and      collateral agent (filed as Exhibit 4.1 to Kinder Morgan, Inc.’s Current      Report on Form 8-K, filed on June 5, 2007 and incorporated herein by      reference) |
|--------|------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.5 | — | Form      of Indemnification Agreement between Knight Inc. and each member of the      Special Committee of the Board of Directors (filed as Exhibit 10.1 to      Knight Inc.’s Current Report on Form 8-K filed on June 16, 2006 and      incorporated herein by reference) |
|--------|------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.6 | — | Acquisition      Agreement dated as of February 26, 2007, by and among Kinder Morgan, Inc.,      3211953 Nova Scotia Company and Fortis Inc. (filed as Exhibit 1.01 to      Kinder Morgan, Inc.’s Current Report on Form 8-K filed on March 1, 2007      and incorporated herein byreference) |
|--------|------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.7 | — | Retention      and Relocation Agreement, dated as of March 5, 2007, between Kinder      Morgan, Inc. and Scott E. Parker (filed as Exhibit 10.2 to Kinder Morgan,      Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007      and incorporated herein byreference) |
|--------|------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.8 | — | Purchase      Agreement, dated as of December 10, 2007, between Knight Inc. and Myria      Acquisition Inc. (filed as Exhibit 10.1 to Knight Inc.’s Current Report on      Form 8-K filed on December 11, 2007 and incorporated herein by      reference) |
|--------|------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.9 | — | First      Amendment to Retention and Relocation Agreement dated as of July 16, 2008,      between Knight Inc. and Scott E. Parker (filed as Exhibit 10.1 to Knight      Inc.'s Current Report on Form 8-K filed on July 25, 2008 and incorporated      herein by reference) |
|--------|------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 21.1* | — | Subsidiaries      of the Registrant |
|--------|-------|---------|-------------------------------------|

|   | 31.1* | — | Certification      of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the      Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002 |
|--------|-------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 31.2* | — | Certification      of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the      Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002 |
|--------|-------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32.1* | — | Certification      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted      pursuant to Section 906 of the Sarbanes-Oxley Act of  2002 |
|--------|-------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32.2* | — | Certification      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted      pursuant to Section 906 of the Sarbanes-Oxley Act of  2002 |
|--------|-------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 99.1 | — | The      financial statements of Kinder Morgan Energy Partners, L.P. and      subsidiaries (incorporated by reference to pages 123 through 215 of the      Annual Report on Form 10-K of Kinder Morgan Energy Partners, L.P. for the      year ended December 31, 2008) |
|--------|------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

----

| Knight      Form 10-K |
|-----------------------|

SIGNATURES

|                 | KNIGHT      INC.(Registrant) |
|---------------------------|------------------------------|
|                      | By                           | /s/      Kimberly A. Dang |   |
|                      |                    | Kimberly      A. DangVice      President and Chief Financial Officer |
| Date:      March 31, 2009 |                    |

|                      |   |                                                       |
|--------------------------------|--------|------------------------------------------------------------|
| /s/      Kimberly A. Dang      |   | Vice      President and Chief Financial Officer (Principal |
| Kimberly      A. Dang          |   | Financial      Officer and Principal Accounting Officer)   |
|                      |   |                                                       |
| /s/      Richard D. Kinder     |   | Director,      Chairman and Chief Executive Officer        |
| Richard      D. Kinder         |   | (Principal      Executive Officer)                         |
|                      |   |                                                       |
| /s/      Kenneth A. Pontarelli |   | Director                                                   |
| Kenneth      A. Pontarelli     |   |                                                       |
|                      |   |                                                       |
| /s/      C. Park Shaper        |   | Director                                                   |
| C.      Park Shaper            |   |                                                       |
|                      |   |                                                       |

----