Table of Contents

----

----

| þ |    | ANNUAL      REPORT PURSUANT TO SECTION 13 OR 15(d)OF      THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|--------------|-----------------------------------------------------------------------------------------------|

| o |    | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d)OF      THE SECURITIES EXCHANGE ACT OF 1934 |
|---|--------------|---------------------------------------------------------------------------------------------------|

| Delaware                                                            |    | 76-0669886                                |
|---------------------------------------------------------------------|--------------|-------------------------------------------|
| (State      or other jurisdiction of incorporation or organization) |    | (I.R.S.      Employer Identification No.) |

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

| Title      of each class                                     |    | Name      of each exchangeon      which registered |
|--------------------------------------------------------------|--------------|----------------------------------------------------|
| Shares      Representing Limited Liability Company Interests |    | New      York Stock Exchange                       |

| None                  |
|-----------------------|
| (Title      of class) |

----

| Kinder      Morgan Management, LLC Form 10-K |
|----------------------------------------------|

----

| Kinder      Morgan Management, LLC Form 10-K |
|----------------------------------------------|

CONTENTS

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | PageNumber |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | PART I                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |       |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |       |   |
| Items 1 and 2:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Business and      Properties                                                                                                                                                   | 4-6        |   |
| Item 1A:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Risk      Factors                                                                                                                                                              | 6-8        |   |
| Item 1B:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Unresolved Staff      Comments                                                                                                                                                 | 8          |   |
| Item 3:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Legal      Proceedings                                                                                                                                                         | 8          |   |
| Item 4:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Submission of Matters to a Vote of Security      Holders                                                                                                                       | 8          |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |       |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | PART II                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |       |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |       |   |
| Item 5:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Market for Registrant’s Common Equity, Related Stockholder      Matters and Issuer Purchases                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |       |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | of Equity      Securities                                                                                                                                                                          | 9          |   |
| Item 6:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Selected Financial      Data                                                                                                                                                   | 10         |   |
| Item 7:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Management’s Discussion and Analysis of Financial Condition      and Results of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 11-17      |   |
| Item 7A:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Quantitative and Qualitative Disclosures About Market      Risk                                                                                                                | 17         |   |
| Item 8:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Financial Statements and Supplementary      Data                                                                                                                               | 18-33      |   |
| Item 9:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Changes in and Disagreements with Accountants on Accounting      and Financial Disclosure                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 33         |   |
| Item 9A:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Controls and      Procedures                                                                                                                                                   | 34         |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Conclusion Regarding the Effectiveness of Disclosure      Controls and Procedures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 34         |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Management Report on Internal Control over Financial      Reporting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 34         |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Changes in Internal Control over Financial      Reporting                                                                                                                                          | 34         |   |
| Item 9B:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Other      Information                                                                                                                                                         | 34         |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |       |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | PART III                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |       |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |       |   |
| Item 10:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Directors, Executive Officers and Corporate      Governance                                                                                                                                                                                          | 35-37      |   |
| Item 11:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Executive      Compensation                                                                                                                                                    | 38-50      |   |
| Item 12:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Security Ownership of Certain Beneficial Owners      and Management and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |       |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Related Stockholder      Matters                                                                                                                                                                   | 50-51      |   |
| Item 13:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Certain Relationships and Related Transactions, and      Director Independence                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 51-58      |   |
| Item 14:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Principal Accounting Fees and      Services                                                                                                                                    | 59         |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |       |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | PART IV                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |       |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |       |   |
| Item 15:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Exhibits and Financial Statement      Schedules                                                                                                                                | 60-61      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |       |   |
| Signatures                                                                                                                                   | 62                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |       |

| Kinder Morgan Energy Partners, L.P. Annual Report on Form      10-K for the year ended December 31, 2007 | Annex      A |
|----------------------------------------------------------------------------------------------------------|--------------|
|                                                                                                |         |   |

----

| Kinder      Morgan Management, LLC Form 10-K |
|----------------------------------------------|

PART I

Items 1 and 2.  Business andProperties.

|   | · | Kinder      Morgan G.P., Inc., as general partner of Kinder Morgan Energy Partners,      L.P., delegated to us, to the fullest extent permitted under Delaware law      and the Kinder Morgan Energy Partners, L.P. partnership agreement, and we      assumed, all of Kinder Morgan G.P., Inc.’s power and authority to manage      and control the business and affairs of Kinder Morgan Energy Partners,      L.P. and Kinder Morgan Energy Partners, L.P.’s operating partnerships;      and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We      have agreed that we will not take any of the following actions without the      approval of Kinder Morgan G.P.,Inc.: |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------|

|   | – | amend      or propose an amendment to the Kinder Morgan Energy Partners, L.P.      partnership agreement, |
|--------|---------|-----------------------------------------------------------------------------------------------------------|

|   | – | change      the amount of the distribution made on the Kinder Morgan Energy Partners,      L.P. common units, |
|--------|---------|---------------------------------------------------------------------------------------------------------------|

|   | – | allow      a merger or consolidation involving Kinder Morgan Energy Partners,      L.P., |
|--------|---------|------------------------------------------------------------------------------------------|

|   | – | allow      a sale or exchange of all or substantially all of the assets of Kinder      Morgan Energy Partners, L.P., |
|--------|---------|----------------------------------------------------------------------------------------------------------------------|

|   | – | dissolve      or liquidate Kinder Morgan Energy Partners, L.P., or, after taking into      account the creditors of Kinder Morgan Energy Partners, L.P., SFPP, L.P.      or Calnev Pipe Line, L.L.C., respectively, allow Kinder Morgan Energy      Partners, L.P., SFPP, L.P. or Calnev Pipe Line, L.L.C. to take any of the      following actions: (a) instituting proceedings to be adjudicated      bankrupt or insolvent, or (b) consenting in writing to the institution of      bankruptcy or insolvency proceedings against it, or (c) filing a petition      seeking or consenting to reorganization or relief under any applicable      federal or state law relating to bankruptcy, or (d) consenting in writing      to the appointment of a receiver, liquidator, assignee, trustee,      sequestrator (or other similar official) of Kinder Morgan Energy Partners,      L.P., SFPP, L.P. or Calnev Pipe Line, L.L.C. or a substantial part of      their respective property, or (e) making any assignment for the benefit of      its creditors, or (f) except as required by law, admitting in writing its      inability to pay its respective debts generally as they become      due, |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | – | take      any action requiring unitholderapproval, |
|--------|---------|----------------------------------------------------|

|   | – | call      any meetings of the Kinder Morgan Energy Partners, L.P. common      unitholders, |
|--------|---------|--------------------------------------------------------------------------------------------|

|   | – | take      any action that, under the terms of the partnership agreement of Kinder      Morgan Energy Partners, L.P., must or should receive a special approval of      the conflicts and audit committee of Kinder Morgan G.P.,    Inc., |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | – | take      any action that, under the terms of the partnership agreement of Kinder      Morgan Energy Partners, L.P., cannot be taken by the general partner      without the approval of all outstandingunits, |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | – | settle      or compromise any claim or action directly against or otherwise relating      to indemnification of our or the general partner’s (and respective      affiliates) officers, directors, managers or members or relating to our      structure or securities, |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | – | settle      or compromise any claim or action relating to the i-units, which are a      separate class of Kinder Morgan Energy Partners, L.P.’s limited      partnership interests, our shares or any offering of our      shares, |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | – | settle      or compromise any claim or action involving tax  matters, |
|--------|---------|-----------------------------------------------------------------------|

----

| Items 1 and      2.  Business      and Properties. (continued) | Kinder      Morgan Management, LLC Form 10-K |
|--------------------------------------------------------------------------|----------------------------------------------|

|   | – | allow      Kinder Morgan Energy Partners, L.P. to incur indebtedness if the aggregate      amount of its indebtedness then exceeds 50% of the market value of the      then outstanding units of Kinder Morgan Energy Partners, L.P.,      or |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | – | allow      Kinder Morgan Energy Partners, L.P. to issue units in one transaction, or      in a series of related transactions, having a market value in excess of      20% of the market value of then outstanding units of Kinder Morgan Energy      Partners, L.P. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Kinder      Morgan G.P., Inc.: |
|--------|--------|--------------------------------|

|   | – | is      not relieved of any responsibilities or obligations to Kinder Morgan      Energy Partners, L.P. or its unitholders as a result of such      delegation, |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | – | owns,      or one of its affiliates owns, all of our voting shares,    and |
|--------|---------|----------------------------------------------------------------------------|

|   | – | will      not withdraw as general partner of Kinder Morgan Energy Partners, L.P. or      transfer to a non-affiliate all of its interest as general partner, unless      approved by both the holders of a majority of each of the i-units and the      holders of a majority of all units voting as a single class, excluding      common units and Class B units held by Kinder Morgan G.P., Inc. and its      affiliates and excluding the number of i-units corresponding to the number      of our shares owned by Kinder Morgan G.P., Inc. and its      affiliates. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Kinder      Morgan Energy Partners, L.P. has agreedto: |
|--------|--------|--------------------------------------------------------|

|   | – | recognize      the delegation of rights and powers tous, |
|--------|---------|----------------------------------------------------------|

|   | – | indemnify      and protect us and our officers and directors to the same extent as it      does with respect to Kinder Morgan G.P., Inc. as general partner,      and |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | – | reimburse      our expenses to the same extent as it does with respect to Kinder Morgan      G.P., Inc. as general partner. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------|

----

| Items 1 and      2.  Business      and Properties. (continued) | Kinder      Morgan Management, LLC Form 10-K |
|--------------------------------------------------------------------------|----------------------------------------------|

Item 1A.  Risk Factors

----

| Item 1A.  Risk      Factors. (continued) | Kinder      Morgan Management, LLC Form 10-K |
|----------------------------------------------------|----------------------------------------------|

value of an investment in our shares.

----

| Item 1A.  Risk      Factors. (continued) | Kinder      Morgan Management, LLC Form 10-K |
|----------------------------------------------------|----------------------------------------------|

|   | · | if      we act in bad faith; and |
|--------|--------|----------------------------------|

|   | · | if      we breach laws like the federal securities laws, where indemnification may      not be allowed. |
|--------|--------|---------------------------------------------------------------------------------------------------------|

| Item 1B. | Unresolved      Staff Comments. |
|----------|---------------------------------|

| Item 3. | Legal      Proceedings. |
|---------|-------------------------|

| Item 4. | Submission      of Matters to a Vote of SecurityHolders. |
|---------|----------------------------------------------------------|

----

| Kinder      Morgan Management, LLC Form 10-K |
|----------------------------------------------|

PART II

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

|                | Market Price Per  Share |
|---------------------|-----------------------------------|
|                | 2007                              |   | 2006 |
|                | Low                               |   | High |   | Low |   | High |
| Quarter      Ended: |                              |   |   |   |   |   |   |
| March      31       | $44.42                            |   | $51.78 |   | $41.21 |   | $47.25 |
| June      30        | $49.50                            |   | $54.70 |   | $40.09 |   | $45.06 |
| September      30   | $44.06                            |   | $53.24 |   | $41.35 |   | $43.60 |
| December      31    | $46.21                            |   | $53.19 |   | $41.26 |   | $47.05 |

|                | Share      Distributions                      |
|---------------------|-----------------------------------------------|
|                | Shares      Distributed Per Outstanding Share |   | Equivalent      Distribution Value Per Share1 |   | Total      Number of Additional Shares Distributed |
| Quarter      Ended: | 2007                                          |   | 2006 |   | 2007 |   | 2006 |   | 2007 |   | 2006 |
| March      31       | 0.015378                                      |   | 0.018566 |   | $ | 0.83 |   | $ | 0.81 |   |  974,285 |   | 1,093,826 |
| June      30        | 0.016331                                      |   | 0.018860 |   | $ | 0.85 |   | $ | 0.81 |   | 1,143,661 |   | 1,131,777 |
| September      30   | 0.017686                                      |   | 0.018981 |   | $ | 0.88 |   | $ | 0.81 |   | 1,258,778 |   | 1,160,520 |
| December      31    | 0.017312                                      |   | 0.016919 |   | $ | 0.92 |   | $ | 0.83 |   | 1,253,951 |   | 1,054,082 |

| 1 | This      is the cash distribution paid or payable to each common unit of Kinder      Morgan Energy Partners, L.P. for the quarter indicated and is used to      calculate our distribution of shares as discussed above. Because of this      calculation, the market value of the shares distributed on the date of      distribution may be less or more than the cash distribution per common      unit of Kinder Morgan Energy Partners,L.P. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Kinder      Morgan Management, LLC Form 10-K |
|----------------------------------------------|

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

|                                                                              | Post-                                       |    |   | Pre-Acquisition      Basis1                 |
|-----------------------------------------------------------------------------------|---------------------------------------------|---------|--------|---------------------------------------------|
|                                                                              | AcquisitionBasis1                           |    |   | Restated2                                   |   |   |   |   |   |   |
|                                                                              | Seven      Months Ended December 31,        |    |   | Five      Months EndedMay      31,          |   | Year      Ended December 31, |
|                                                                              | 2007                                        |    |   | 2007                                        |   | 2006 |   | 2005 |   | 2004 |   | 2003 |
|                                                                              | (In      millions except per share amounts) |    |   | (In      millions except per share amounts) |
| Equity      in Earnings (Loss) of Kinder Morgan Energy Partners, L.P.             | $                                           | 65.4    |   |                                        | $ | (64.6 | ) |   | $ | 131.1 |   | $ | 88.4 |   | $ | 113.5 |   | $ | 94.8 |
| Provision      (Benefit) for Income Taxes                                         |                                        | 15.0    |   |                                        |   | (23.3 | ) |   |   | 47.0 |   |   | 32.1 |   |   | 38.4 |   |   | 36.0 |
| Net      Income                                                                   | $                                           | 50.4    |   |                                        | $ | (41.3 | ) |   | $ | 84.1 |   | $ | 56.3 |   | $ | 75.1 |   | $ | 58.8 |
| Earnings      (Loss) Per Share, Basic and Diluted                                 | $                                           | 0.71    |   |                                        | $ | (0.65 | ) |   | $ | 1.40 |   | $ | 1.00 |   | $ | 1.47 |   | $ | 1.24 |
| Number      of Shares Used in Computing Basic and Diluted Earnings Per      Share |                                        | 71.1    |   |                                        |   | 63.7 |   |   |   | 60.1 |   |   | 56.1 |   |   | 51.2 |   |   | 47.4 |
| Equivalent      Distribution Value Per Share3                                     | $                                           | 2.65    |   |                                        | $ | 0.83 |   |   | $ | 3.26 |   | $ | 3.13 |   | $ | 2.87 |   | $ | 2.63 |
| Total      Number of Additional Shares Distributed                                |                                        | 3.6     |   |                                        |   | 1.0 |   |   |   | 4.4 |   |   | 3.8 |   |   | 3.7 |   |   | 3.3 |
| Total      Assets at End of Period                                                | $                                           | 2,213.8 |   |                                        | $ | 1,944.5 |   |   | $ | 1,707.9 |   | $ | 1,583.7 |   | $ | 1,639.3 |   | $ | 1,506.3 |

| 1 | On      May 30, 2007, Knight Inc. (formerly Kinder Morgan, Inc.) completed a      merger transaction under which investors including Richard D. Kinder,      Knight Inc.’s Chairman and Chief Executive Officer, acquired all of the      outstanding shares of that company, referred to as the “Going Private      transaction.” The acquisition was accounted for under the purchase method      of accounting, as required by Statement of Financial Accounting Standards      (SFAS) No. 141, Business      Combinations. The purchase price of Knight Inc. has been      “pushed-down” and allocated to the assets and liabilities of its      subsidiary companies, including us. Accordingly, our post-acquisition      selected financial data shown above for the seven months ended December      31, 2007 reflect a new basis of accounting. The selected financial data      for the periods ended May 31, 2007 and December 31, 2006, 2005, 2004 and      2003 reflect the operations of the Company prior to the acquisition.      Hence, there is a blackline division on the selected financial data shown      above, which is intended to signify that the amounts shown for periods      prior to and subsequent to the acquisition are not comparable. While the      Going Private transaction closed on May 30, 2007, for convenience, the      Pre-Acquisition Basis is assumed to end on May 31, 2007 and the      Post-Acquisition Basis is assumed to begin on June 1, 2007. The results      for the two-day period from May 30, 2007 to May 31, 2007 are not material      to the data for any of the periodspresented. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | See      Note 5 of the accompanying Notes to Consolidated Financial      Statements. |
|---|--------------------------------------------------------------------------------------|

| 3 | This      is the amount of cash distributions payable to each common unit of Kinder      Morgan Energy Partners, L.P. for each period shown. Under the terms of our      limited liability company agreement, except in connection with our      liquidation, we do not pay distributions on our shares in cash but we make      distributions on our shares in additional shares or fractions of shares.      At the same time Kinder Morgan Energy Partners, L.P. makes a distribution      on its common units and i-units, we distribute on each of our shares that      fraction of a share determined by dividing the amount of the cash      distribution to be made by Kinder Morgan Energy Partners, L.P. on each      common unit by the average market price of a share determined for a      ten-trading day period ending on the trading day immediately prior to the      ex-dividend date for our shares. Because of this calculation, the market      value of the shares distributed on the date of distribution may be less or      more than the cash distribution per common unit of Kinder Morgan Energy      Partners, L.P. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Kinder      Morgan Management, LLC Form 10-K |
|----------------------------------------------|

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

----

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

----

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

|                                                   | Year      Ended December 31, |
|--------------------------------------------------------|------------------------------|
|                                                   | 2007                         |   | 2006 |   | 2005 |
|                                                   | (In      millions)           |
| Segment      Earnings Contribution:                    |                         |   |   |   |   |   |   |   |   |   |   |
| Product      Pipelines                                 | $                            | 569.6 |   |   | $ | 491.2 |   |   | $ | 370.1 |   |
| Natural      Gas Pipelines                             |                         | 600.2 |   |   |   | 574.8 |   |   |   | 500.3 |   |
| CO2                                                    |                         | 537.0 |   |   |   | 488.2 |   |   |   | 470.9 |   |
| Terminals                                              |                         | 416.0 |   |   |   | 408.1 |   |   |   | 314.6 |   |
| Trans      Mountain                                    |                         | (293.6 | ) |   |   | 76.5 |   |   |   | - |   |
| Total      Segment Earnings                            |                         | 1,829.2 |   |   |   | 2,038.8 |   |   |   | 1,655.9 |   |
| Depreciation,      Depletion and Amortization Expenses |                         | (547.0 | ) |   |   | (432.8 | ) |   |   | (349.8 | ) |
| Amortization      of Excess Cost of Investments        |                         | (5.8 | ) |   |   | (5.7 | ) |   |   | (5.6 | ) |
| Interest      and Corporate Administrative Expenses1   |                         | (686.1 | ) |   |   | (596.2 | ) |   |   | (488.3 | ) |
| Net      Income                                        | $                            | 590.3 |   |   | $ | 1,004.1 |   |   | $ | 812.2 |   |
|                                              |                         |   |   |   |   |   |   |   |   |   |   |
| General      Partners’ Interest in Net Income    | $                            | 611.6 |   |   | $ | 513.3 |   |   | $ | 477.3 |   |
|                                              |                         |   |   |   |   |   |   |   |   |   |   |
| Limited      Partner’s Interest in Net Income    | $                            | (21.3 | ) |   | $ | 490.8 |   |   | $ | 334.9 |   |

| 1 | Includes      interest and debt expense, general and administrative expenses, minority      interest expense and other insignificantitems. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------|

----

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

|   | · | first,      98% to the owners of all classes of units pro rata and 2% to the general      partner until the owners of all classes of units have received a total of      $0.15125 per unit in cash or equivalent i-units for such      quarter; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | second,      85% of any available cash then remaining to the owners of all classes of      units pro rata and 15% to the general partner until the owners of all      classes of units have received a total of $0.17875 per unit in cash or      equivalent i-units for suchquarter; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | third,      75% of any available cash then remaining to the owners of all classes of      units pro rata and 25% to the general partner 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 and Class B units in cash and to      owners of i-units in the equivalent number of i-units, and 50% to the      general partner. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

|   | · | price      trends and overall demand for natural gas liquids, refined petroleum      products, oil, carbon dioxide, natural gas, coal and other bulk materials      and chemicals in North America; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | · | changes      in Kinder Morgan Energy Partners, L.P.’s tariff rates implemented by the      Federal Energy Regulatory Commission or the California Public Utilities      Commission; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Kinder      Morgan Energy Partners, L.P.’s ability to acquire new businesses and      assets and integrate those operations into its existing operations, as      well as its ability to make expansions to its  facilities; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | · | Kinder      Morgan Energy Partners, L.P.’s ability to successfully identify and close      acquisitions and make cost-saving changes in  operations; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | shut-downs      or cutbacks at major refineries, petrochemical or chemical plants, ports,      utilities, military bases or other businesses that use Kinder Morgan      Energy Partners, L.P.’s services or provide services or products to Kinder      Morgan Energy Partners, L.P.; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | crude      oil and natural gas production from exploration and production areas that      Kinder Morgan Energy Partners, L.P. serves, including, among others, the      Permian Basin area of West Texas; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

|   | · | changes      in laws or regulations, third-party relations and approvals, decisions of      courts, regulators and governmental bodies that may adversely affect      Kinder Morgan Energy Partners, L.P.’s business or its ability to      compete; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | changes      in accounting pronouncements that impact the measurement of Kinder Morgan      Energy Partners, L.P.’s or 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, L.P.’s ability to offer and sell equity securities and debt      securities or obtain debt financing in sufficient amounts to implement      that portion of Kinder Morgan Energy Partners, L.P.’s business plan that      contemplates growth through acquisitions of operating businesses and      assets and expansions of itsfacilities; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Kinder      Morgan Energy Partners, L.P.’s indebtedness could make it vulnerable to      general adverse economic and industry conditions, limit its ability to      borrow additional funds and/or place it at competitive disadvantages      compared to its competitors that have less debt or have other adverse      consequences; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | interruptions      of electric power supply to Kinder Morgan Energy Partners, L.P.’s      facilities due to natural disasters, power shortages, strikes, riots,      terrorism, war or other causes; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our      and Kinder Morgan Energy Partners, L.P.’s 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 Kinder Morgan Energy Partners, L.P.’s insurance coverage      limits; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | capital      markets conditions; |
|--------|--------|----------------------------------|

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

|   | · | the      ability of Kinder Morgan Energy Partners, L.P. to achieve cost savings and      revenue growth; |
|--------|--------|----------------------------------------------------------------------------------------------------------|

|   | · | inflation; |
|--------|--------|------------|

|   | · | interest      rates; |
|--------|--------|----------------------|

|   | · | the      pace of deregulation of retail natural gas and  electricity; |
|--------|--------|-----------------------------------------------------------------------|

|   | · | 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, L.P.’s 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, L.P. may experience with operational equipment, in well      completions and workovers, and in drilling new  wells; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | · | the      ability of Kinder Morgan Energy Partners, L.P. to complete expansion      projects on time and on budget; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

|   | · | the      timing and success of Kinder Morgan Energy Partners, L.P.’s business      development efforts; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------|

|   | · | unfavorable      results of litigation involving Kinder Morgan Energy Partners, L.P. and      the fruition of contingencies referred to in Kinder Morgan Energy      Partners, L.P.’s Annual Report on Form 10-K for the year ended December      31, 2007, attached hereto as AnnexA. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

| Item 7A. | Quantitative      and Qualitative Disclosures About MarketRisk. |
|----------|-----------------------------------------------------------------|

----

| Kinder      Morgan Management, LLC Form 10-K |
|----------------------------------------------|

| Item 8. | Financial      Statements and Supplementary Data. |
|---------|---------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Page  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |       |   |
| Report of Independent Registered Public Accounting      Firm                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 19-20      |   |
| Consolidated Statements of      Income                                                                                   | 21         |   |
| Consolidated Statements of Comprehensive      Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 21         |   |
| Consolidated Balance      Sheets                                                                                         | 22         |   |
| Consolidated Statements of Shareholders’      Equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 23-24      |   |
| Consolidated Statements of Cash      Flows                                                                               | 25         |   |
| Notes to Consolidated Financial      Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 26-31      |   |
| Selected Quarterly Financial Data      (unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                               | 32         |   |
| Supplemental Information on Oil and Gas Producing      Activities (unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                             | 33         |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |       |   |

----

| Item 8.  Financial      Statements and Supplementary Data.      (continued) | Kinder      Morgan Management, LLC Form 10-K |
|---------------------------------------------------------------------------------------|----------------------------------------------|

----

| Item 8.  Financial      Statements and Supplementary Data.      (continued) | Kinder      Morgan Management, LLC Form 10-K |
|---------------------------------------------------------------------------------------|----------------------------------------------|

----

| Item 8.  Financial      Statements and Supplementary Data.      (continued) | Kinder      Morgan Management, LLC Form 10-K |
|---------------------------------------------------------------------------------------|----------------------------------------------|

CONSOLIDATED STATEMENTS OF INCOME

|                                                                              | Post-Acquisition                            |   |   | Pre-Acquisition      Basis                  |
|-----------------------------------------------------------------------------------|---------------------------------------------|--------|--------|---------------------------------------------|
|                                                                              | Basis                                       |   |   | Restated;      See Note 5.                  |   |   |   |   |
|                                                                              | Seven      Months Ended December 31,        |   |   | Five      Months EndedMay      31,          |   | Year      Ended December 31, |
|                                                                              | 2007                                        |   |   | 2007                                        |   | 2006 |   | 2005 |
|                                                                              | (In      millions except per share amounts) |   |   | (In      millions except per share amounts) |
| Equity      in Earnings (Loss) of Kinder Morgan Energy    Partners, L.P.     | $                                           | 65.4   |   |                                        |   | $ | (64.6 | ) |   | $ | 131.1 |   |   | $ | 88.4 |   |
| Provision      (Benefit) for Income Taxes                                         |                                        | 15.0   |   |                                        |   |   | (23.3 | ) |   |   | 47.0 |   |   |   | 32.1 |   |
|                                                                         |                                        |   |   |                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      Income (Loss)                                                            | $                                           | 50.4   |   |                                        |   | $ | (41.3 | ) |   | $ | 84.1 |   |   | $ | 56.3 |   |
|                                                                         |                                        |   |   |                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      (Loss) Per Share, Basic and Diluted                                 | $                                           | 0.71   |   |                                        |   | $ | (0.65 | ) |   | $ | 1.40 |   |   | $ | 1.00 |   |
|                                                                         |                                        |   |   |                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Number      of Shares Used in Computing Basic and Diluted Earnings Per      Share |                                        | 71.1   |   |                                        |   |   | 63.7 |   |   |   | 60.1 |   |   |   | 56.1 |   |

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(LOSS)

|                                                                                                                                                                                        | Post-Acquisition                     |   |   | Pre-Acquisition      Basis         |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------|--------|--------|------------------------------------|
|                                                                                                                                                                                        | Basis                                |   |   | Restated;      See Note 5.         |   |   |   |   |
|                                                                                                                                                                                        | Seven      Months Ended December 31, |   |   | Five      Months EndedMay      31, |   | Year      Ended December 31, |
|                                                                                                                                                                                        | 2007                                 |   |   | 2007                               |   | 2006 |   | 2005 |
|                                                                                                                                                                                        | (In      millions)                   |   |   | (In      millions)                 |
| Net      Income (Loss)                                                                                                                                                                      | $                                    | 50.4   |   |                               |   | $ | (41.3 | ) |   | $ | 84.1 |   |   | $ | 56.3 |   |
| Other      Comprehensive Income (Loss), Net of Tax:                                                                                                                                         |                                 |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Change      in Fair Value of Derivatives Utilized for Hedging Purposes (Net of Tax      Benefit of $45.6, $6.6, $17.3 and $99.0, respectively)                                              |                                 | (80.7  | )      |                               |   |   | (5.8 | ) |   |   | (30.5 | ) |   |   | (173.7 | ) |
| Reclassification      of Change in Fair Value of Derivatives to Net Income (Net of Tax of $13.9,      $7.4, $39.4 and $40.2, respectively)                                                  |                                 | 24.5   |   |                               |   |   | 6.5 |   |   |   | 69.7 |   |   |   | 70.4 |   |
| Change      in Foreign Currency Translation Adjustment                                                                                                                                      |                                 | 4.1    |   |                               |   |   | 2.2 |   |   |   | (3.2 | ) |   |   | (0.1 | ) |
| Minimum      Pension Liability Adjustments, and reclassification of post-retirement      benefit and pension plan actuarial gains/losses and prior service      costs/credits to net income |                                 | (0.3   | )      |                               |   |   | - |   |   |   | - |   |   |   | - |   |
| Total      Other Comprehensive Income (Loss)                                                                                                                                                |                                 | (52.4  | )      |                               |   |   | 2.9 |   |   |   | 36.0 |   |   |   | (103.4 | ) |
|                                                                                                                                                                                   |                                 |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive      Income (Loss)                                                                                                                                                            | $                                    | (2.0   | )      |                               |   | $ | (38.4 | ) |   | $ | 120.1 |   |   | $ | (47.1 | ) |

----

| Item 8.  Financial      Statements and Supplementary Data.      (continued) | Kinder      Morgan Management, LLC Form 10-K |
|---------------------------------------------------------------------------------------|----------------------------------------------|

CONSOLIDATED BALANCE SHEETS

|                                                                                                                                    | Post-Acquisition      Basis |    |   | Pre-Acquisition      BasisRestated;      See Note 5 |
|-----------------------------------------------------------------------------------------------------------------------------------------|-----------------------------|---------|--------|-----------------------------------------------------|
|                                                                                                                                    | December      31,2007       |    |   | December      31,2006                               |
|                                                                                                                                    | (In      millions)          |    |   | (In      millions)                                  |
| ASSETS                                                                                                                                  |                        |    |   |                                                |   |   |   |   |
|                                                                                                                               |                        |    |   |                                                |   |   |   |   |
| Current      Assets:                                                                                                                    |                        |    |   |                                                |   |   |   |   |
| Accounts      Receivable – Related Party                                                                                          | $                           | 28.6    |   |                                                |   | $ | 14.7 |   |
| Prepayments      and Other                                                                                                              |                        | 2.3     |   |                                                |   |   | 4.0 |   |
|                                                                                                                                    |                        | 30.9    |   |                                                |   |   | 18.7 |   |
|                                                                                                                               |                        |    |   |                                                |   |   |   |   |
| Investment      in Kinder Morgan Energy Partners, L.P.                                                                                  |                        | 2,155.0 |   |                                                |   |   | 1,689.2 |   |
|                                                                                                                               |                        |    |   |                                                |   |   |   |   |
| Deferred      Tax Assets                                                                                                                |                        | 27.9    |   |                                                |   |   | - |   |
|                                                                                                                               |                        |    |   |                                                |   |   |   |   |
| Total      Assets                                                                                                                       | $                           | 2,213.8 |   |                                                |   | $ | 1,707.9 |   |
|                                                                                                                               |                        |    |   |                                                |   |   |   |   |
| LIABILITIES      AND SHAREHOLDERS’ EQUITY                                                                                         |                        |    |   |                                                |   |   |   |   |
|                                                                                                                               |                        |    |   |                                                |   |   |   |   |
| Current      Liabilities:                                                                                                               |                        |    |   |                                                |   |   |   |   |
| Accounts      Payable                                                                                                                   | $                           | 1.3     |   |                                                |   | $ | 1.2 |   |
| Accrued      Expenses and Other                                                                                                         |                        | 29.5    |   |                                                |   |   | 17.4 |   |
|                                                                                                                               |                        | 30.8    |   |                                                |   |   | 18.6 |   |
|                                                                                                                               |                        |    |   |                                                |   |   |   |   |
| Deferred      Income Taxes                                                                                                              |                        | -       |   |                                                |   |   | 109.5 |   |
|                                                                                                                               |                        |    |   |                                                |   |   |   |   |
| Shareholders’      Equity:                                                                                                        |                        |    |   |                                                |   |   |   |   |
| Voting      Shares - Unlimited Authorized; 2 Voting Shares Issued and      Outstanding                                                  |                        | 0.1     |   |                                                |   |   | 0.1 |   |
| Listed      Shares - Unlimited Authorized; 72,432,480 and 62,301,674  Listed      Shares Issued and Outstanding, Respectively |                        | 2,374.8 |   |                                                |   |   | 2,109.4 |   |
| Retained      Deficit                                                                                                                   |                        | (66.0   | )      |                                                |   |   | (387.0 | ) |
| Accumulated      Other Comprehensive Loss                                                                                               |                        | (125.9  | )      |                                                |   |   | (142.7 | ) |
| Total      Shareholders’ Equity                                                                                                   |                        | 2,183.0 |   |                                                |   |   | 1,579.8 |   |
|                                                                                                                                    |                        |    |   |                                                |   |   |   |   |
| Total      Liabilities and Shareholders’ Equity                                                                                   | $                           | 2,213.8 |   |                                                |   | $ | 1,707.9 |   |

----

| Item 8.  Financial      Statements and Supplementary Data.      (continued) | Kinder      Morgan Management, LLC Form 10-K |
|---------------------------------------------------------------------------------------|----------------------------------------------|

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’EQUITY

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Post-Acquisition      Basis                   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Seven      Months EndedDecember      31, 2007 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Shares                                        |   | Amount |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | (Dollars      in millions)                    |
| Voting      Shares:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                          |   |   |   |   |
| Beginning      Balance                                                                                                                          | 2                                             |   | $ | 0.1 |   |
| Ending      Balance                                                                                                                             | 2                                             |   |   | 0.1 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                          |   |   |   |   |
| Listed      Shares:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                          |   |   |   |   |
| Beginning      Balance                                                                                                                          | 70,030,041                                    |   |   | 2,258.6 |   |
| Share      Dividends                                                                                                                            | 2,402,439                                     |   |   | 116.4 |   |
| Share      Issuance      Costs                                                                                                                  |                                          |   |   | (0.2 | ) |
| Ending      Balance                                                                                                                             | 72,432,480                                    |   |   | 2,374.8 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                          |   |   |   |   |
| Retained      Deficit:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                          |   |   |   |   |
| Beginning      Balance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                          |   |   | - |   |
| Net      Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                          |   |   | 50.4 |   |
| Share      Dividends                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                          |   |   | (116.4 | ) |
| Ending      Balance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                          |   |   | (66.0 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                          |   |   |   |   |
| Accumulated      Other Comprehensive Loss (Net of Tax Benefits):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                          |   |   |   |   |
| Derivatives:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                          |   |   |   |   |
| Beginning      Balance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                          |   |   | (73.5 | ) |
| Change      in Fair Value of Derivatives Utilized for Hedging Purposes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                          |   |   | (80.7 | ) |
| Reclassification      of Change in Fair Value of Derivatives to Net Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                          |   |   | 24.5 |   |
| Ending      Balance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                          |   |   | (129.7 | ) |
| Foreign      Currency Translation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                          |   |   |   |   |
| Beginning      Balance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                          |   |   | - |   |
| Currency      Translation Adjustment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                          |   |   | 4.1 |   |
| Ending      Balance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                          |   |   | 4.1 |   |
| Employee      Benefit Plans:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                          |   |   |   |   |
| Beginning      Balance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                          |   |   | - |   |
| SFAS      No. 158 Amortization/Adjustments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                          |   |   | (0.3 | ) |
| Ending      Balance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                          |   |   | (0.3 | ) |
| Total      Accumulated Other Comprehensive Loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                          |   |   | (125.9 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                          |   |   |   |   |
| Total      Shareholders’      Equity                                                                                       | 72,432,482                                    |   | $ | 2,183.0 |   |

----

| Item 8.  Financial      Statements and Supplementary Data.      (continued) | Kinder      Morgan Management, LLC Form 10-K |
|---------------------------------------------------------------------------------------|----------------------------------------------|

|                                                                       | Pre-Acquisition      Basis |
|----------------------------------------------------------------------------|----------------------------|
|                                                                       | Restated;      See Note 5  |   |   |   |   |   |   |
|                                                                       | Five      Months Ended     |   | Year      Ended December 31, |
|                                                                       | May      31,2007           |   | 2006 |   | 2005 |
|                                                                       | Shares                     |   | Amount |   | Shares |   | Amount |   | Shares |   | Amount |
|                                                                       | (Dollars      in millions) |
| Voting      Shares:                                                        |                       |   |   |   |   |   |   |   |   |   |   |
| Beginning      Balance                                                     | 2                          |   | $ | 0.1 |   |   | 2 |   | $ | 0.1 |   |   | 2 |   | $ | 0.1 |   |
| Ending      Balance                                                        | 2                          |   |   | 0.1 |   |   | 2 |   |   | 0.1 |   |   | 2 |   |   | 0.1 |   |
|                                                                  |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Listed      Shares:                                                        |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning      Balance                                                     | 62,301,674                 |   |   | 2,109.4 |   |   | 57,918,371 |   |   | 1,958.5 |   |   | 54,157,639 |   |   | 1,778.11 |   |
| Listed      Shares Issued                                                  | 5,700,000                  |   |   | 297.9 |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Share      Dividends                                                       | 2,028,367                  |   |   | 105.2 |   |   | 4,383,303 |   |   | 186.5 |   |   | 3,760,732 |   |   | 168.8 |   |
| Share      Issuance Costs                                                  | -                          |   |   | - |   |   | - |   |   | (0.1 | ) |   | - |   |   | - |   |
| Revaluation      of Kinder Morgan Energy Partners, L.P. Investment         | -                          |   |   | - |   |   | - |   |   | (35.5 |  ) |   | - |   |   | 11.6 |   |
| Ending      Balance                                                        | 70,030,041                 |   |   | 2,512.5 |   |   | 62,301,674 |   |   | 2,109.4 |   |   | 57,918,371 |   |   | 1,958.5 |   |
|                                                                  |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retained      Deficit:                                                     |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning      Balance                                                     |                       |   |   | (387.0 | ) |   |   |   |   | (284.6 | ) |   |   |   |   | (172.1 | ) |
| Net      Income (Loss)                                                     |                       |   |   | (41.3 | ) |   |   |   |   | 84.1 |   |   |   |   |   | 56.3 |   |
| Share      Dividends                                                       |                       |   |   | (105.2 | ) |   |   |   |   | (186.5 | ) |   |   |   |   | (168.8 | ) |
| Ending      Balance                                                        |                       |   |   | (533.5 | ) |   |   |   |   | (387.0 | ) |   |   |   |   | (284.6 | ) |
|                                                                  |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accumulated      Other Comprehensive Loss (Net of Tax Benefits):           |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives:                                                               |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning      Balance                                                     |                       |   |   | (139.1 | ) |   |   |   |   | (178.3 | ) |   |   |   |   | (75.0 | ) |
| Change      in Fair Value of Derivatives Utilized for Hedging Purposes     |                       |   |   | (5.8 | ) |   |   |   |   | (30.5 | ) |   |   |   |   | (173.7 | ) |
| Reclassification      of Change in Fair Value of Derivatives to Net Income |                       |   |   | 6.5 |   |   |   |   |   | 69.7 |   |   |   |   |   | 70.4 |   |
| Ending      Balance                                                        |                       |   |   | (138.4 | ) |   |   |   |   | (139.1 | ) |   |   |   |   | (178.3 | ) |
| Foreign      Currency Translation:                                         |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning      Balance                                                     |                       |   |   | (3.3 | ) |   |   |   |   | (0.1 | ) |   |   |   |   | - |   |
| Currency      Translation Adjustment                                       |                       |   |   | 2.2 |   |   |   |   |   | (3.2 | ) |   |   |   |   | (0.1 | ) |
| Ending      Balance                                                        |                       |   |   | (1.1 | ) |   |   |   |   | (3.3 | ) |   |   |   |   | (0.1 | ) |
| Employee      Retirement Benefits:                                         |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning      Balance                                                     |                       |   |   | (0.3 | ) |   |   |   |   | - |   |   |   |   |   | - |   |
| Adjustment      to Initially Apply SFAS No. 158                            |                       |   |   | - |   |   |   |   |   | (0.3 | ) |   |   |   |   | - |   |
| Ending      Balance                                                        |                       |   |   | (0.3 | ) |   |   |   |   | (0.3 | ) |   |   |   |   | - |   |
| Total      Accumulated Other Comprehensive Loss                            |                       |   |   | (139.8 | ) |   |   |   |   | (142.7 | ) |   |   |   |   | (178.4 | ) |
|                                                                  |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Shareholders’ Equity                                      | 70,030,043                 |   | $ | 1,839.3 |   |   | 62,301,676 |   | $ | 1,579.8 |   |   | 57,918,373 |   | $ | 1,495.6 |   |

----

| Item 8.  Financial      Statements and Supplementary Data.      (continued) | Kinder      Morgan Management, LLC Form 10-K |
|---------------------------------------------------------------------------------------|----------------------------------------------|

|                                                                                       | Post-Acquisition      Basis |   |   | Pre-Acquisition      Basis |
|--------------------------------------------------------------------------------------------|-----------------------------|--------|--------|----------------------------|
|                                                                                       | Seven      Months           |   |   | Restated;      See Note 5  |   |   |
|                                                                                       | Ended                       |   |   | Five      Months           |   |   |   |   |
|                                                                                       | December      31,           |   |   | Ended                      |   | Year      Ended December 31, |
|                                                                                       | 2007                        |   |   | May      31, 2007          |   | 2006 |   | 2005 |
|                                                                                       | (In      millions)          |   |   | (In      millions)         |
| Cash      Flows From Operating Activities:                                                 |                        |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      Income (Loss)                                                                     | $                           | 50.4   |   |                       |   | $ | (41.3 | ) |   | $ | 84.1 |   |   | $ | 56.3 |   |
| Adjustments      to Reconcile Net Income to Net Cash Flows from Operating      Activities: |                        |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Deferred      Income Taxes                                                                 |                        | 15.0   |   |                       |   |   | (23.3 | ) |   |   | 47.0 |   |   |   | 32.1 |   |
| Equity      in Earnings (Loss) of Kinder Morgan Energy    Partners, L.P.              |                        | (65.4  | )      |                       |   |   | 64.6 |   |   |   | (131.1 | ) |   |   | (88.4 | ) |
| (Increase)      Decrease in Accounts Receivable                                            |                        | (16.1  | )      |                       |   |   | 2.2 |   |   |   | 7.6 |   |   |   | 2.6 |   |
| Decrease      (Increase) in Other Current Assets                                           |                        | 1.0    |   |                       |   |   | 0.7 |   |   |   | (0.6 | ) |   |   | (0.8 | ) |
| Increase      (Decrease) in Accounts Payable                                               |                        | -      |   |                       |   |   | 0.1 |   |   |   | (1.4 | ) |   |   | 1.4 |   |
| Increase      (Decrease) in Other Current Liabilities                                      |                        | 15.1   |   |                       |   |   | (3.0 | ) |   |   | (5.6 | ) |   |   | (3.2 | ) |
| Net      Cash Flows Provided by Operating Activities                                       |                        | -      |   |                       |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                  |                        |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      Flows From Investing Activities:                                                 |                        |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchase      of i-units of Kinder Morgan Energy Partners, L.P.                            |                        | -      |   |                       |   |   | (297.9 | ) |   |   | - |   |   |   | - |   |
| Net      Cash Flows Used in Investing Activities                                           |                        | -      |   |                       |   |   | (297.9 | ) |   |   | - |   |   |   | - |   |
|                                                                                  |                        |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      Flows From Financing Activities:                                                 |                        |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares      Issued                                                                         |                        | -      |   |                       |   |   | 297.9 |   |   |   | - |   |   |   | - |   |
| Share      Issuance Costs                                                                  |                        | -      |   |                       |   |   | - |   |   |   | - |   |   |   | - |   |
| Net      Cash Flows Provided by Financing Activities                                       |                        | -      |   |                       |   |   | 297.9 |   |   |   | - |   |   |   | - |   |
|                                                                                  |                        |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      Increase in Cash and Cash Equivalents                                             |                        | -      |   |                       |   |   | - |   |   |   | - |   |   |   | - |   |
| Cash      and Cash Equivalents at Beginning of Period                                      |                        | -      |   |                       |   |   | - |   |   |   | - |   |   |   | - |   |
| Cash      and Cash Equivalents at End of Period                                            | $                           | -      |   |                       |   | $ | - |   |   | $ | - |   |   | $ | - |   |

----

| Item 8.  Financial      Statements and Supplementary Data.      (continued) | Kinder      Morgan Management, LLC Form 10-K |
|---------------------------------------------------------------------------------------|----------------------------------------------|

KINDER MORGAN MANAGEMENT, LLC AND SUBSIDIARY

----

| Item 8.  Financial      Statements and Supplementary Data.      (continued) | Kinder      Morgan Management, LLC Form 10-K |
|---------------------------------------------------------------------------------------|----------------------------------------------|

----

| Item 8.  Financial      Statements and Supplementary Data.      (continued) | Kinder      Morgan Management, LLC Form 10-K |
|---------------------------------------------------------------------------------------|----------------------------------------------|

----

| Item 8.  Financial      Statements and Supplementary Data.      (continued) | Kinder      Morgan Management, LLC Form 10-K |
|---------------------------------------------------------------------------------------|----------------------------------------------|

|                                   | Year      Ended December 31, |
|----------------------------------------|------------------------------|
|                                   | 2007                         |   | 2006 |   | 2005 |
|                                   | (In      millions)           |
| Operating      Revenues                | $                            | 9,217.7 |   | $ | 9,048.7 |   | $ | 9,745.9 |
| Operating      Expenses                |                         | 8,410.0 |   |   | 7,757.1 |   |   | 8,730.1 |
| Operating      Income                  | $                            | 807.7 |   | $ | 1,291.6 |   | $ | 1,015.8 |
|                              |                         |   |   |   |   |   |   |   |
| Income      from Continuing Operations | $                            | 416.4 |   | $ | 989.8 |   | $ | 812.4 |
|                              |                         |   |   |   |   |   |   |   |
| Net      Income                        | $                            | 590.3 |   | $ | 1,004.1 |   | $ | 812.2 |

|                                                                                                                                                                                                                                                                                                                                                                  | As      of December 31, |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------|
|                                                                                                                                                                                                                                                                                                                                                                  | 2007                    |   | 2006 |
|                                                                                                                                                                                                                                                                                                                                                                  | (In      millions)      |
| Current      Assets                                                                | $                       | 1,209.7 |   | $ | 1,036.8 |
| Noncurrent      Assets                                                             | $                       | 13,968.1 |   | $ | 12,505.4 |
|                                                                                                                                                                                                                                                                                                                                                             |                    |   |   |   |   |
| Current      Liabilities                                                           | $                       | 2,558.3 |   | $ | 3,137.3 |
| Noncurrent      Liabilities                                                        | $                       | 8,129.6 |   | $ | 5,396.4 |
| Minority      Interest                                                             | $                       | 54.2 |   | $ | 60.2 |

----

| Item 8.  Financial      Statements and Supplementary Data.      (continued) | Kinder      Morgan Management, LLC Form 10-K |
|---------------------------------------------------------------------------------------|----------------------------------------------|

|   | · | taxes      assessed by a governmental authority that are directly imposed on a      revenue-producing transaction between a seller and a customer may include,      but are not limited to, sales, use, value added, and some excise taxes;      and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | that      the presentation of such taxes on either a gross (included in revenues and      costs) or a net (excluded from revenues) basis is an accounting policy      decision that should be disclosed pursuant to Accounting Principles Board      Opinion No. 22 (as amended), Disclosure of Accounting      Policies. In addition, for any such taxes that are reported on a      gross basis, a company should disclose the amounts of those taxes in      interim and annual financial statements for each period for which an      income statement is presented if those amounts are significant. The      disclosure of those taxes can be done on an aggregate    basis. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 8.  Financial      Statements and Supplementary Data.      (continued) | Kinder      Morgan Management, LLC Form 10-K |
|---------------------------------------------------------------------------------------|----------------------------------------------|

----

| Item 8.  Financial      Statements and Supplementary Data.      (continued) | Kinder      Morgan Management, LLC Form 10-K |
|---------------------------------------------------------------------------------------|----------------------------------------------|

KINDER MORGAN MANAGEMENT, LLC AND SUBSIDIARY

|                                                                              | 2007                                            |
|-----------------------------------------------------------------------------------|-------------------------------------------------|
|                                                                              | Pre-Acquisition      Basis                      |   |   | Post-Acquisition      Basis |
|                                                                              | Restated;      See Note 5                       |   |   |   |
|                                                                              | ThreeMonthsEndedMarch      31                   |   | Two      MonthsEndedMay      31 |   |   | One      MonthEndedJune      30 |   | ThreeMonthsEndedSeptember      30 |   | Three      MonthsEndedDecember      31 |
|                                                                              | (In      millions exceptper      share amounts) |   |   | (In      millions except per share amounts) |
| Equity      in Earnings (Loss) of Kinder Morgan Energy Partners, L.P.             | $                                               | (77.5 | ) |   | $ | 12.9 |   |   | $ | 11.4 |   | $ | 17.4 |   | $ | 36.6 |   |
| Provision      (Benefit) for Income Taxes                                         |                                            | (28.0 | ) |   |   | 4.7 |   |   |   | 4.1 |   |   | 6.3 |   |   | 4.6 |   |
| Net      Income                                                                   | $                                               | (49.5 | ) |   | $ | 8.2 |   |   | $ | 7.3 |   | $ | 11.1 |   | $ | 32.0 |   |
|                                                                         |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      (Loss) Per Share, Basic and Diluted                                 | $                                               | (0.79 | ) |   | $ | 0.13 |   |   | $ | 0.10 |   | $ | 0.16 |   | $ | 0.45 |   |
|                                                                         |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Number      of Shares Used in Computing Basic and Diluted Earnings Per      Share |                                            | 62.8 |   |   |   | 65.0 |   |   |   | 70.0 |   |   | 70.6 |   |   | 71.8 |   |

|                                                                              | 2006-Three      Months Ended                |
|-----------------------------------------------------------------------------------|---------------------------------------------|
|                                                                              | Pre-Acquisition      Basis                  |
|                                                                              | Restated;      See Note 5                   |
|                                                                              | March      31                               |   | June      30 |   | September      30 |   | December      31 |
|                                                                              | (In      millions except per share amounts) |
| Equity      in Earnings of Kinder Morgan Energy Partners, L.P.                    | $                                           | 32.6 |   | $ | 33.2 |   | $ | 25.7 |   | $ | 39.6 |   |
| Provision      for Income Taxes                                                   |                                        | 11.8 |   |   | 11.7 |   |   | 9.2 |   |   | 14.3 |   |
| Net      Income                                                                   | $                                           | 20.8 |   | $ | 21.5 |   | $ | 16.5 |   | $ | 25.3 |   |
|                                                                         |                                        |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      Per Share, Basic and Diluted                                        | $                                           | 0.36 |   | $ | 0.36 |   | $ | 0.27 |   | $ | 0.41 |   |
|                                                                         |                                        |   |   |   |   |   |   |   |   |   |   |   |
| Number      of Shares Used in Computing Basic and Diluted Earnings Per      Share |                                        | 58.4 |   |   | 59.5 |   |   | 60.6 |   |   | 61.7 |   |

----

| Item 8.  Financial      Statements and Supplementary Data.      (continued) | Kinder      Morgan Management, LLC Form 10-K |
|---------------------------------------------------------------------------------------|----------------------------------------------|

Supplemental Information on Oil and Gas Producing Activities(Unaudited)

|                                                                             | SuccessorCompany   |   |   |   | Predecessor      Company |
|----------------------------------------------------------------------------------|--------------------|--------|--------|--------|--------------------------|
|                                                                             | December      31,  |   |   |   |                     |   | December      31, |
|                                                                             | 2007               |   |   |   | May      31, 2007        |   | 2006 |   | 2005 |
|                                                                             | (In      millions) |   |   |   | (In      millions)       |
| Net      Capitalized Costs                                                       | $                  | 353.6  |   |   |                     |   |   |   |   |   | $ | 330.3 |   |   | $ | 287.4 |   |
| Costs      Incurred for the Period Ended                                         |               | 44.7   |   |   |                     |   | $ | 25.1 |   |   |   | 79.1 |   |   |   | 74.3 |   |
| Results      of Operations for the Period Ended                                  |               | 5.1    |   |   |                     |   |   | 3.6 |   |   |   | 21.2 |   |   |   | 30.9 |   |
| Percentage      of Ownership of Kinder Morgan    Energy Partners, L.P. |               | 28.63  | %      |   |                     |   |   | 28.63 | % |   |   | 26.50 | % |   |   | 25.77 | % |

|                                                                               | December      31,          |
|------------------------------------------------------------------------------------|----------------------------|
|                                                                               | 2007                       |   | 2006 |   | 2005 |   | 2004 |
|                                                                               | (Dollars      in millions) |
| Proved      Reserves:                                                              |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Crude      Oil (MBbls)                                                             |                       | 34.7 |   |   |   | 32.9 |   |   |   | 36.6 |   |   |   | 31.7 |   |
| Natural      Gas Liquids (MBbls)                                                   |                       | 3.2 |   |   |   | 2.7 |   |   |   | 4.9 |   |   |   | 5.2 |   |
| Natural      Gas (MMcf)1                                                           |                       | 0.3 |   |   |   | 0.1 |   |   |   | 0.6 |   |   |   | 0.4 |   |
| Standardized      Measure of Discounted Cash Flows for the Year    Ended | $                          | 1,167.5 |   |   | $ | 585.0 |   |   | $ | 792.5 |   |   | $ | 524.3 |   |
| Percentage      Ownership of Kinder Morgan Energy Partners, L.P.                   |                       | 28.63 | % |   |   | 26.50 | % |   |   | 25.77 | % |   |   | 25.64 | % |

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

| Item      9. | Changes in and Disagreements with Accountants on Accounting and      Financial Disclosure. |
|--------------|--------------------------------------------------------------------------------------------|

----

| Kinder      Morgan Management, LLC Form 10-K |
|----------------------------------------------|

| Item      9A. | Controls andProcedures. |
|---------------|-------------------------|

Conclusion Regarding the Effectiveness of Disclosure Controlsand Procedures

Management’s Report on Internal Control over FinancialReporting

Changes in Internal Control over FinancialReporting

| Item      9B. | Other Information. |
|---------------|--------------------|

----

| Kinder      Morgan Management, LLC Form 10-K |
|----------------------------------------------|

PART III

| Item 10. | Directors,      Executive Officers and CorporateGovernance. |
|----------|-------------------------------------------------------------|

| Name                      | Age | Position                                                             |
|---------------------------|-----|----------------------------------------------------------------------|
| Richard      D. Kinder    | 63  | Director,      Chairman and Chief Executive Officer                  |
| C.      Park Shaper       | 39  | Director      and President                                          |
| Steven      J. Kean       | 46  | Executive      Vice President and Chief Operating Officer            |
| Edward      O. Gaylord    | 76  | Director                                                             |
| Gary      L. Hultquist    | 64  | Director                                                             |
| Perry      M. Waughtal    | 72  | Director                                                             |
| Kimberly      A. Dang     | 38  | Vice      President, Investor Relations and Chief Financial  Officer |
| Jeffrey      R. Armstrong | 39  | Vice      President (President, Terminals)                           |
| Thomas      A. Bannigan   | 54  | Vice      President (President, Products Pipelines)                  |
| Richard      T. Bradley   | 52  | Vice      President (President, CO2)                                 |
| David      D. Kinder      | 33  | Vice      President, Corporate Development and Treasurer             |
| Joseph      Listengart    | 39  | Vice      President, General Counsel and Secretary                   |
| Scott      E. Parker      | 47  | Vice      President (President, Natural Gas Pipelines)               |
| James      E. Street      | 51  | Vice      President, Human Resources andAdministration               |

----

| Item 10.  Directors      and Executive Officers of the Registrant.    (continued) | Kinder      Morgan Management, LLC Form 10-K |
|---------------------------------------------------------------------------------------------|----------------------------------------------|

----

| Item 10.  Directors      and Executive Officers of the Registrant.    (continued) | Kinder      Morgan Management, LLC Form 10-K |
|---------------------------------------------------------------------------------------------|----------------------------------------------|

----

|   | Kinder      Morgan Management, LLC Form 10-K |
|--------|----------------------------------------------|

| Item      11. | Executive      Compensation |
|---------------|-----------------------------|

----

| Item 11.  Executive      Compensation. (continued) | Kinder      Morgan Management, LLC Form 10-K |
|--------------------------------------------------------------|----------------------------------------------|

----

| Item 11.  Executive      Compensation. (continued) | Kinder      Morgan Management, LLC Form 10-K |
|--------------------------------------------------------------|----------------------------------------------|

----

| Item 11.  Executive      Compensation. (continued) | Kinder      Morgan Management, LLC Form 10-K |
|--------------------------------------------------------------|----------------------------------------------|

|   | · | Knight      Inc.’s EBITDA less capital spending, or the EBITDA less capital spending      of one of its subsidiaries or businessunits; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Knight      Inc.’s net income or the net income of one of its subsidiaries or business      units; |
|--------|--------|----------------------------------------------------------------------------------------------------------|

|   | · | Knight      Inc.’s revenues or the revenues of one of its subsidiaries or business      units; |
|--------|--------|------------------------------------------------------------------------------------------------------|

|   | · | Knight      Inc.’s unit revenues minus unit variable costs or the unit revenues minus      unit variable costs of one of its subsidiaries or business      units; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Knight      Inc.’s 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 its subsidiaries or      business units; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Knight      Inc.’s 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 its subsidiaries or businessunits; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Knight      Inc.’s capital expenditures or the capital expenditures of one of its      subsidiaries or business units; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------|

|   | · | Knight      Inc.’s operations and maintenance expense or general and administrative      expense, or the operations and maintenance expense or general and      administrative expense of one of its subsidiaries or business units;      or |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Knight      Inc.’s debt-equity ratios and key profitability ratios, or the debt-equity      ratios and key profitability ratios of one of its subsidiaries or business      units. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 11.  Executive      Compensation. (continued) | Kinder      Morgan Management, LLC 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 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |              |   |   |
| Scott      E. Parker, Vice President (President, Natural Gas    Pipelines)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |              | 1,500,000 | 3 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |              |   |   |
| C.      Park Shaper, Director and      President                                                                                            |   |              | 1,500,000 | 3 |

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

| 2 | Under      the plan, for 2007, 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. Our compensation committee may, in its sole      discretion, reduce the award payable by Kinder Morgan Energy Partners,      L.P. to any participant for anyreason. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | Under      the plan, for 2007, 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. Our compensation committee may, in its sole      discretion, reduce the award payable by Kinder Morgan Energy Partners,      L.P. to any participant for anyreason. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 11.  Executive      Compensation. (continued) | Kinder      Morgan Management, LLC Form 10-K |
|--------------------------------------------------------------|----------------------------------------------|

| Pension      Benefits                                                                                                                                                                         |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Name                                                                                                                                                                                          |   | Plan      Name |   | Current      Credited Yrsof      Service |   | Present Value of Accumulated      Benefit1 |   | ContributionsDuring      2007 |
| Richard      D.      Kinder                            |   | Cash      Balance |   | 7 |   |   | $ | - |   |   |   | $ | - |   |
| Kimberly      A. Dang                                                                                                                                 |   | Cash      Balance |   | 6 |   |   |   | 31,408 |   |   |   |   | 7,294 |   |
| Steven      J.      Kean                                                                            |   | Cash      Balance |   | 6 |   |   |   | 41,724 |   |   |   |   | 7,767 |   |
| Scott      E.      Parker                                        |   | Cash      Balance |   | 9 |   |   |   | 71,515 |   |   |   |   | 9,130 |   |
| C.      Park      Shaper                                         |   | Cash      Balance |   | 7 |   |   |   | 51,079 |   |   |   |   | 8,194 |   |

| 1 | The      present values in the Pension Benefits table are based on certain      assumptions-including a 5.75% discount rate, RP 2000 mortality      (post-retirement only), 5% cash balance interest crediting rate, and lump      sums calculated using a 5% interest rate and IRS mortality. We assumed      benefits would commence at normal retirement date or unreduced retirement      date, if earlier. No death or turnover was assumed prior to retirement      date. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 11.  Executive      Compensation. (continued) | Kinder      Morgan Management, LLC Form 10-K |
|--------------------------------------------------------------|----------------------------------------------|

|                                                                               |     |               |              | (1)                                        | (2)                                                                                                |    | (3)                                 | (4)                                                            | (5)                        | (6)                                                                               |                                                  |
|------------------------------------------------------------------------------------|----------|--------------------|-------------------|--------------------------------------------|----------------------------------------------------------------------------------------------------|---------|-------------------------------------|----------------------------------------------------------------|----------------------------|-----------------------------------------------------------------------------------|-------------------------------------------------------|
| Name      andPrincipal      Position                                               | Year     |  Salary  |  Bonus  | StockAwardsby      KinderMorgan,      Inc. | OptionAwardsby      Kinder Morgan,     Inc.      |    | Non-EquityIncentivePlanCompensation | Change      inPension   Value    | All      OtherCompensation | UnitAwards      byKnightHoldco    LLC     |     Total     |
| Richard      D. Kinder Director,Chairman      and Chief Executive Officer          | 20072006 | $             | 11                | $                                     | --                                                                                                 | $  | --                                  | $                                                         | --                         |                                                                              | $                                                | -- |   | $  | -- | $  | -- | $  | 1,016,000- | $  | 1,016,001- |
|                                                                          |     |               |              |                                       |                                                                                               |    |                                |                                                           |                       |                                                                              |                                                  |   |   |   |   |   |   |   |   |   |   |
| Kimberly      A. DangVice      President and Chief Financial Officer          | 20072006 |               | 200,000200,000    |                                       | -                                                                                             |    | 338,095139,296                      |                                                           | -37,023                    |                                                                              |                                                  | 400,000270,000 |   |   | 7,2946,968 |   | 32,25346,253 |   | 73,800- |   | 1,051,442699,540 |
|                                                                          |     |               |              |                                       |                                                                                               |    |                                |                                                           |                       |                                                                              |                                                  |   |   |   |   |   |   |   |   |   |   |
| Steven      J. KeanExecutive      Vice President and Chief Operating  Officer | 20072006 |               | 200,000200,000    |                                       | --                                                                                                 |    | 4,397,0801,591,192                  |                                                           | -147,943                   |                                                                              |                                                  | 1,100,000- |   |   | 7,7677,422 |   | 147,130284,919 |   | 295,010- |   | 6,146,9872,231,476 |
|                                                                          |     |               |              |                                       |                                                                                               |    |                                |                                                           |                       |                                                                              |                                                  |   |   |   |   |   |   |   |   |   |   |
| Scott      E. ParkerVice      President (President, Natural Gas Pipelines)    | 20072006 |               | 200,000200,000    |                                       | -350,000                                                                                           |    | 2,340,080881,317                    |                                                           | -29,490                    |                                                                              |                                                  | 1,100,000500,000 |   |   | 9,1308,735 |   | 307,688164,630 |   | -- |   | 3,956,8982,134,172 |
|                                                                          |     |               |              |                                       |                                                                                               |    |                                |                                                           |                       |                                                                              |                                                  |   |   |   |   |   |   |   |   |   |   |
| C.      Park ShaperDirector      and President                                | 20072006 |               | 200,000200,000    |                                       | --                                                                                                 |    | 1,950,3001,134,283                  |                                                           | -24,952                    |                                                                              |                                                  | 1,200,000- |   |   | 8,1947,835 |   | 155,953348,542 |   | 466,110- |   | 3,980,5571,715,612 |

| 1 | Consists      of expense calculated in accordance with SFAS No. 123R attributable to      restricted Kinder Morgan, Inc. stock awarded in 2003, 2004 and 2005      according to the provisions of the Kinder Morgan, Inc. Stock      Plan.  No restrictedstock |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 11.  Executive      Compensation. (continued) | Kinder      Morgan Management, LLC Form 10-K |
|--------------------------------------------------------------|----------------------------------------------|

|   | was      awarded in 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—Kinder      Morgan, Inc. 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—Kinder Morgan, Inc. 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—Kinder Morgan, Inc.      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. However,      Knight Inc. 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 Kinder Morgan, Inc. shares awarded in 2002 and 2003      according to the provisions of the Kinder Morgan, Inc. Stock Plan. No      options were granted in 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 cancelled options had weighted average exercise prices of $39.12 and      $24.75 per share, respectively. However, Knight Inc. bore all of the costs      associated with this acceleration. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | Represents      amounts paid according to the provisions of the Knight Inc. Annual      Incentive Plan. In the case of Mr. Parker for the year 2006, an additional      $350,000 was paid outside of the plan as reflected in the Bonus column.      Amounts were earned in the fiscal year indicated but were paid in the next      fiscal year. Messrs. Kean and Shaper refused to accept a bonus for 2006.      The committee agreed that this was not a reflection of performance on      either person. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| 5 | Amounts      represent 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 dividends paid on unvested restricted stock awards.      Amounts each year include $10,000 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. Parker $77,000; and Mr.      Shaper $144,375; for 2006—Mrs. Dang $35,875; Mr. Kean $273,000; Mr. Parker      $154,000; and Mr. Shaper $336,875. Mr. Parker’s 2007 amount also includes      amounts for imputed income for company provided cell phone, a $100,000      relocation allowance, and a $130,000 payment to compensate for loss of      dividends associated with the Going Private  Transaction. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 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 Kinder Morgan      Energy Partners, L.P. for financial reporting purposes but does not      include any such expense allocated to Knight Inc. or any of its other      subsidiaries. None of the named executive officers has received any      payments in connection with such units, and neither Kinder Morgan Energy      Partners L.P. nor its subsidiaries are obligated, nor does Kinder Morgan      Energy Partners, L.P. expect, to pay any amounts in respect of such units.      See Item 13. “Certain Relationships and Related Transactions, and Director      Independence—Related Transactions—KMI Going Private Transaction” for      further discussion of these units. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | each      option or other award to purchase shares of Kinder Morgan, Inc. common      stock granted under any Kinder Morgan Inc. employee or director equity      plan, whether vested or unvested, that was outstanding immediately prior      to the effective time of the buyout, vested as of the effective time of      the buyout, and was cancelled and converted into the right to receive a      cash payment equal to the number of shares of Kinder Morgan, Inc. common      stock underlying such options multiplied by the amount (if any) by which      the $107.50 per share merger consideration issued in the Going Private      transaction exceeded the option exercise price, without interest and less      any applicable withholding tax; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | each      share of restricted stock or restricted stock unit under any Kinder Morgan      stock plan or benefit plan vested as of the effective time of the buyout      and was cancelled and converted into the right to receive a cash payment      equal to the number of outstanding shares of restricted stock or      restricted stock units, multiplied by the $107.50 per share merger      consideration, without interest and less any applicable withholding      tax. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 11.  Executive      Compensation. (continued) | Kinder      Morgan Management, LLC Form 10-K |
|--------------------------------------------------------------|----------------------------------------------|

|                                                                                                                                                                                                                                                |   | Option      Awards |   | Stock      Awards |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|--------|-------------------|
| Name                                                                                                                                                                                                                                                |   | StockOptions       |   | ValueRealized1    |   | Shares      ofRestrictedStock |   | ValueRealized2 |
| Richard      D.      Kinder                                     |   | -                  |   |              | - |   |   | - |   |   | - |
| Kimberly      A.      Dang                                      |   | 24,750             |   | $                 | 1,443,178 |   |   | 8,000 |   | $ | 860,000 |
| Steven      J. Kean3                                            |   | 25,533             |   |              | 1,375,772 |   |   | 78,000 |   |   | 8,385,000 |
| Scott      E.      Parker                                       |   | 10,000             |   |              | 537,000 |   |   | 44,000 |   |   | 4,730,000 |
| C.      Park Shaper4                                            |   | 197,969            |   |              | 12,529,810 |   |   | 82,500 |   |   | 8,868,750 |

| 1 | Calculated      based on the actual exercise prices underlying the related options, as      opposed to the weighted average exercise price per share of      options. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Calculated      as $107.50 multiplied by the number of shares of restricted      stock. |
|---|-----------------------------------------------------------------------------------------|

| 3 | Mr.      Kean, as a condition to his being permitted to participate as an investor      in Knight Inc., agreed to the cancellation of 10,467 of his options shown      above, with a weighted average exercise price of $39.12 per share, prior      to the Going Private transaction. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | Mr.      Shaper, as a condition to his being permitted to participate as an      investor in Knight Inc., agreed to the cancellation of 22,031 of his      options shown above, with a weighted average exercise price of $24.75 per      share, prior to the Going Privatetransaction. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   |   |               |   | Estimated      Future Payouts UnderNon-Equity Incentive Plan      Awards1 |      | All Other Stock      Awards2 |   |      | Grant      DateFair      Value |
|------------------------|--------|--------------------|--------|---------------------------------------------------------------------------|-----------|------------------------------|--------|-----------|--------------------------------|
| Name                   |   | Grant      Date    |   |                                                                      | Threshold |                         |   | Target    |                           |   | Maximum |   | Numberof      Units |   |   | of      StockAwards3 |
| Richard      D. Kinder |   | May      30, 2007  |   | $                                                                         | -         |                         | $      | -         |                           | $ | - |   | 791,405,452 |   | $ | 9,200,000 |
| Kimberly      A. Dang  |   | Jan.      17, 2007 |   |                                                                      | 500,000   |                         |   | 1,000,000 |                           |   | 1,500,000 |   | - |   |   | - |
|                   |   | May      30, 2007  |   |                                                                      | -         |                         |   | -         |                           |   | - |   | 49,893,032 |   |   | 674,887 |
| Steven      J. Kean    |   | Jan.      17, 2007 |   |                                                                      | 750,000   |                         |   | 1,500,000 |                           |   | 2,000,000 |   | - |   |   | - |
|                   |   | May      30, 2007  |   |                                                                      | -         |                         |   | -         |                           |   | - |   | 162,114,878 |   |   | 2,720,252 |
| Scott      E. Parker   |   | Jan.      17, 2007 |   |                                                                      | 500,000   |                         |   | 1,500,000 |                           |   | 2,000,000 |   | - |   |   | - |
| C.      Park Shaper    |   | Jan.      17, 2007 |   |                                                                      | 750,000   |                         |   | 1,500,000 |                           |   | 2,000,000 |   | - |   |   | - |
|                   |   | May      30, 2007  |   |                                                                      | -         |                         |   | -         |                           |   | - |   | 225,436,274 |   |   | 4,315,475 |

| 1 | Represents      grants under the Knight Inc. Annual Incentive Plan for performance in      2007. See “Elements of |
|---|-------------------------------------------------------------------------------------------------------------------------|

----

| Item 11.  Executive      Compensation. (continued) | Kinder      Morgan Management, LLC Form 10-K |
|--------------------------------------------------------------|----------------------------------------------|

|   | Compensation—Possible      Annual Cash Bonus (Non-Equity Cash Incentive)” for a discussion of these      awards. |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 2 | Represents      the sum of the number of Class A-1 units and the number of Class B units      of Knight Holdco LLC awarded to the named executive officers in connection      with the Going Private transaction. See Item 13. “Certain Relationships      and Related Transactions, and Director Independence—Related      Transactions—Kinder Morgan, Inc. Going Private transaction” for detail      regarding these awards. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | Amounts      represent the fair value calculated in accordance with SFAS No. 123R      attributable to Class A-1 and Class B units of Knight Holdco LLC awarded      by Knight Holdco LLC to the named executive officers in connection with      the Going Private transaction. None of the named executive officers has      received any payments in connection with such units, and neither Kinder      Morgan Energy Partners, L.P. nor its subsidiaries is obligated to pay any      amounts in respect of such units. See Item 13. “Certain Relationships and      Related Transactions, and Director Independence—Related      Transactions—Kinder Morgan, Inc. Going Private transaction” for further      discussion of these units. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                                          | Stock      awards: |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------|
| Name                                                                                                                                                                                                                                                                                                                                          |               | Type      of units: |   | Number      ofunits      thathave      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 |
| 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 neither Kinder Morgan      Energy Partners, L.P. nor its subsidiaries is obligated, nor does Kinder      Morgan Energy Partners, L.P. expect, to pay any amounts in respect of such      units. See Item 13. “Certain Relationships and Related Transactions, and      Director Independence—Related Transactions—Kinder Morgan, Inc. Going      Private Transaction” for further discussion of these  units. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 11.  Executive      Compensation. (continued) | Kinder      Morgan Management, LLC Form 10-K |
|--------------------------------------------------------------|----------------------------------------------|

----

| Item 11.  Executive      Compensation. (continued) | Kinder      Morgan Management, LLC Form 10-K |
|--------------------------------------------------------------|----------------------------------------------|

| Name                   |   | Fees      Earned orPaid      in Cash |   | Common      UnitAwards1 |   | All      OtherCompensation2 |   | Total  |
|------------------------|--------|--------------------------------------|--------|-------------------------|--------|-----------------------------|--------|--------|
| Edward      O. Gaylord |   |                                 | $      | 64,089                  |   |                        |   | $      | 95,911 |   |   |   | $ | 111,466 |   |   | $ | 271,466 |
| Gary      L. Hultquist |   |                                 |   | 63,120                  |   |                        |   |   | 96,880 |   |   |   |   | 65,840 |   |   |   | 225,840 |
| Perry      M. Waughtal |   |                                 |   | 148                     |   |                        |   |   | 159,852 |   |   |   |   | 114,726 |   |   |   | 274,726 |

| 1 | Represents      the value of cash compensation received in the form of Kinder Morgan      Energy Partners, L.P. common units according to the provisions of Kinder      Morgan Energy Partners, L.P. Common Unit Compensation Plan for      Non-Employee Directors. Value computed as the number of common units      elected to be received in lieu of cash times the closing price on date of      election. For Mr. Gaylord, 1,980 units elected on January 17, 2007 times      the closing price of $48.44; for Mr. Hultquist, 2,000 units elected times      the closing price of $48.44; and for Mr. Waughtal, 3,300 units elected      times the closing price of $48.44. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | For      each, represents (i) the value of common unit appreciation rights earned      according to the provisions of Kinder Morgan Energy Partners, L.P.      Directors’ Unit Appreciation Rights Plan for Non-Employee Directors,      determined according to the provisions of SFAS No.123R—for each common      unit appreciation right, equal to the increase in value of a corresponding      common unit from December 31, 2006 to December 31, 2007; and (ii) for      distributions paid on unvested common units awarded according to the      provisions of Kinder Morgan Energy Partners, L.P. Common Unit Compensation      Plan for Non-Employee Directors. For 2007, for Mr. Gaylord, includes (i)      value of $106,575 computed as the number of common unit appreciation      rights held during 2007 (17,500) times the increase in common unit closing      price from December 31, 2006 to December 31, 2007 ($6.09; equal to $53.99      at December 31, 2007 less $47.90 at December 31, 2006); and (ii) $4,891      for distributions paid on unvested common units awarded according to the      provisions of Kinder Morgan Energy Partners, L.P. Common Unit Compensation      Plan for Non-Employee Directors; for Mr. Hultquist, includes (i) value of      $60,900 computed as the number of common unit appreciation rights held      during 2007 (10,000) times the increase in common unit closing price from      December 31, 2006 to December 31, 2007 ($6.09; equal to $53.99 at December      31, 2007 less $47.90 at December 31, 2006); and (ii) $4,940 for      distributions paid on unvested common units awarded according to the      provisions of Kinder Morgan Energy Partners, L.P. Common Unit Compensation      Plan for Non-Employee Directors; for Mr. Waughtal, includes (i) value of      $106,575 computed as the number of common unit appreciation rights held      during 2007 (17,500) times the increase in common unit closing price from      December 31, 2006 to December 31, 2007 ($6.09; equal to $53.99 at December      31, 2007 less $47.90 at December 31, 2006); and (ii) $8,151 for      distributions paid on unvested common units awarded according to the      provisions of Kinder Morgan Energy Partners, L.P. Common Unit Compensation      Plan for Non-Employee Directors. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 11.  Executive      Compensation. (continued) | Kinder      Morgan Management, LLC Form 10-K |
|--------------------------------------------------------------|----------------------------------------------|

| Item      12. | Security Ownership of Certain Beneficial Owners and      Management and Related StockholderMatters. |
|---------------|-----------------------------------------------------------------------------------------------------|

|                                                                      | Kinder      Morgan Energy Partners, L.P. |   |                 |   |                                          |
|---------------------------------------------------------------------------|------------------------------------------|--------|----------------------|--------|-----------------------------------------------|
|                                                                      | Common      Units                        |   | Class      B Units   |   | Kinder      MorganManagement,      LLC Shares |
|                                                                      | Numberof Units2                          |   | Percentof      Class |   | Numberof Units3                               |   | Percentof      Class |   |   | Numberof Shares4 |   | Percentof      Class |
| Richard      D. Kinder5                                                   | 315,979                                  |   | *                    |   |                                          | - |   | - |   |   | 84,663 |   | * |   |
| C.      Park Shaper                                                       | 4,000                                    |   | *                    |   |                                          | - |   | - |   |   | 23,793 |   | * |   |
| Edward      O. Gaylord6                                                   | 40,000                                   |   | *                    |   |                                          | - |   | - |   |   | - |   | - |   |
| Gary      L. Hultquist                                                    | 11,500                                   |   | *                    |   |                                          | - |   | - |   |   | - |   | - |   |
| Perry      M. Waughtal7                                                   | 46,918                                   |   | *                    |   |                                          | - |   | - |   |   | 46,180 |   | * |   |
| Steven      J. Kean                                                       | -                                        |   | -                    |   |                                          | - |   | - |   |   | - |   | - |   |
| Scott      E. Parker                                                      | -                                        |   | -                    |   |                                          | - |   | - |   |   | - |   | - |   |
| Kimberly      A. Dang                                                     | 121                                      |   | *                    |   |                                          | - |   | - |   |   | 440 |   | * |   |
| Directors      and Executive Officers as a       group (14 persons)8 | 435,955                                  |   | *                    |   |                                          | - |   | - |   |   | 175,027 |   | * |   |
| Knight      Inc.9                                                         | 14,355,735                               |   | 8.43                 | %      |                                          | 5,313,400 |   | 100.00 | % |   | 10,334,746 |   | 14.27 | % |
| Kayne      Anderson Capital Advisors, L.P. and Richard A Kayne10          | -                                        |   | -                    |   |                                          | - |   | - |   |   | 7,869,016 |   | 10.86 | % |
| Tortoise      Capital Advisors, L.L.C.11                             | -                                        |   | -                    |   |                                          | - |   | - |   |   | 4,314,123 |   | 5.96 | % |
| Janus      Capital Management LLC12                                       | -                                        |   | -                    |   |                                          | - |   | - |   |   | 3,647,958 |   | 5.04 | % |

| 1 | Except      as noted otherwise, all units, our shares involve sole voting power and      sole investment power. For Kinder Morgan Management, LLC, see note (4). On      January 18, 2005, Kinder Morgan Management, LLC’s board of directors      initiated a rule requiring each director to own a minimum of 10,000 common      units, Kinder Morgan Management, LLC shares, or a combination      thereof. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | As      of January 31, 2008, Kinder Morgan Energy Partners, L.P. had 170,224,734      common units issued andoutstanding. |
|---|---------------------------------------------------------------------------------------------------------------------------|

| 3 | As      of January 31, 2008, Kinder Morgan Energy Partners, L.P. had 5,313,400      Class B units issued andoutstanding. |
|---|--------------------------------------------------------------------------------------------------------------------------|

----

| Item      12.  Security      Ownership of Certain Beneficial Owners and Managementand Related      Stockholder Matters. (continued) | Kinder      Morgan Management, LLC Form 10-K |
|------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------|

| 4 | Represent      the limited liability company shares of Kinder Morgan Management, LLC. As      of January 31, 2008, there were 72,432,482 issued and outstanding Kinder      Morgan Management, LLC shares, including two voting shares owned by Kinder      Morgan G.P., Inc. In all cases, Kinder Morgan Energy Partners, L.P.’s      i-units will be voted in proportion to the affirmative and negative votes,      abstentions and non-votes of owners of Kinder Morgan Management, LLC      shares. Through the provisions in Kinder Morgan Energy Partners, L.P.’s      partnership agreement and Kinder Morgan Management, LLC’s limited      liability company agreement, the number of outstanding Kinder Morgan      Management, LLC shares, including voting shares owned by Kinder Morgan      G.P., Inc., and the number of Kinder Morgan Energy Partners, L.P.’s      i-units will at all times be equal. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5 | Includes      7,879 common units owned by Mr. Kinder’s spouse. Mr. Kinder disclaims any      and all beneficial or pecuniary interest in these  units. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6 | Includes      1,520 restricted common units. |
|---|----------------------------------------------|

| 7 | Includes      2,818 restricted common units. |
|---|----------------------------------------------|

| 8 | Includes      4,338 restricted common units. Also includes 671 Kinder Morgan Management,      LLC shares purchased by one of our executives for his children. The      executive disclaims any beneficial ownership in such Kinder Morgan      Management, LLC shares. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9 | Includes      common units owned by Knight Inc. and its consolidated subsidiaries,      including 1,724,000 common units owned by Kinder Morgan G.P.,      Inc. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10 | As      reported on the Schedule 13G/A filed February 13, 2008 by Kayne Anderson      Capital Advisors, L.P. and Richard A. Kayne. Kayne Anderson Capital      Advisors, L.P. reported that in regard to Kinder Morgan Management, LLC      shares, it had over 1,133 shares and shared disposition power over      7,867,883 shares. Kayne Anderson Capital Advisors, L.P.’s and Richard A.      Kayne’s address is 1800 Avenue of the Stars, Second Floor, Los Angeles,      California 90067. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 11 | As      reported on the Schedule 13G/A filed February 12, 2008 by Tortoise Capital      Advisors, L.L.C. Tortoise Capital Advisors, L.L.C. reported that in regard      to Kinder Morgan Management, LLC shares, it had sole voting power over 0      shares, shared voting power over 4,202,836 shares, sole disposition power      over 0 shares and shared disposition power over 4,314,123 shares. Tortoise      Capital Advisors, L.L.C.’s address is 10801 Mastin Blvd., Suite 222,      Overland Park, Kansas 66210. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 12 | As      reported on the Schedule 13G filed February 14, 2008 by Janus Capital      Management LLC. Janus Capital Management LLC reported that in regard to      Kinder Morgan Management, LLC shares, it had sole voting power over      3,647,958 shares, shared voting power over 0 shares, sole disposition      power over 3,647,958 shares and shared disposition power over 0 shares.      Janus Capital Management LLC’s address is 151 Detroit Street, Denver,      Colorado 80206. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 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                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                                                                                                          | 141,820 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                          |   |   |
| Total                                                                                     |   |                                                                                                          | 141,820 |   |

| Item 13. | Certain      Relationships and Related Transactions, and Director      Independence. |
|----------|--------------------------------------------------------------------------------------|

----

| Item      13.   Certain      Relationships and Related Transactions. (continued) | Kinder      Morgan Management, LLC Form 10-K |
|-------------------------------------------------------------------------------------------------|----------------------------------------------|

----

| Item      13.  Certain      Relationships and Related Transactions. (continued) | Kinder      Morgan Management, LLC Form 10-K |
|-------------------------------------------------------------------------------------------|----------------------------------------------|

|                                                          | Class      A Units |   | % of Class A Units1 |   | Class      A-1Units |   | %      of ClassA-1 Units2 |   | Class      B Units |   | %      of ClassB Units3 |
|---------------------------------------------------------------|--------------------|--------|---------------------|--------|---------------------|--------|---------------------------|--------|--------------------|--------|-------------------------|
| Richard      D. Kinder4                                       | 2,424,000,000      |   | 30.6                |   | –             |   | –                   |   | 791,405,452        |   | 40.0                    |
| Edward      O. Gaylord                                        | –            |   | –             |   | –             |   | –                   |   | –            |   | –                 |
| Gary      L. Hultquist                                        | –            |   | –             |   | –             |   | –                   |   | –            |   | –                 |
| Perry      M. Waughtal                                        | –            |   | –             |   | –             |   | –                   |   | –            |   | –                 |
| C.      Park Shaper5                                          | 13,598,785         |   | *                   |   | 7,799,775           |   | 28.3                      |   | 217,636,499        |   | 11.0                    |
| Steven      J. Kean6                                          | 6,684,149          |   | *                   |   | 3,833,788           |   | 13.9                      |   | 158,281,090        |   | 8.0                     |
| Kimberly      A. Dang7                                        | 750,032            |   | *                   |   | 430,191             |   | 1.6                       |   | 49,462,841         |   | 2.5                     |
| David      D. Kinder8                                         | 1,075,981          |   | *                   |   | 617,144             |   | 2.3                       |   | 55,398,382         |   | 2.8                     |
| Joseph      Listengart9                                       | 6,059,449          |   | *                   |   | 3,475,483           |   | 12.6                      |   | 79,140,545         |   | 4.0                     |
| Scott      E. Parker                                          | –            |   | –             |   | –             |   | –                   |   | –            |   | –                 |
| James      E. Street10                                        | 3,813,005          |   | *                   |   | 2,187,003           |   | 7.9                       |   | 49,462,841         |   | 2.5                     |
| Executive      officers and directors as a group (14 persons) | 2,460,763,539      |   | 31.1                |   | 21,086,247          |   | 76.5                      |   | 1,626,338,205      |   | 82.2                    |

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

|   | *Less      than 1%. |
|--------|---------------------|

| 1 | As      of January 31, 2008, Knight Holdco LLC had 7,914,367,913 Class A Units      issued and outstanding. |
|---|-------------------------------------------------------------------------------------------------------------|

| 2 | As      of January 31, 2008, 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. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | As      of January 31, 2008, Knight Holdco LLC had 1,922,620,621 Class B Units      issued and outstanding and 55,893,008 phantom Class B Units issued and      outstanding. The phantom Class B Units were issued to Canadian management      employees. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | 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 Kinder Morgan, Inc. common stock      and his wife contributed 5,173 shares of Kinder Morgan, Inc. 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. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5 | 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      Kinder Morgan, Inc. restricted stock and options to acquire 197,969 shares      of Kinder Morgan, Inc. 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      $4,315,475. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6 | 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 Kinder      Morgan, Inc. restricted stock and options to acquire 25,533 shares of      Kinder Morgan, Inc. 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      $2,720,252. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7 | Includes      49,462,841 Class B Units that Ms. Dang transferred to a limited      partnership. Ms. Dang may be deemed to be the beneficial owner of these      transferred Class B Units, because Ms. Dang has voting and disposition      power of these Class B Units, but she disclaims ten percent of any      beneficial and pecuniary interest in them. Ms. 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 Kinder Morgan, Inc. restricted      stock and options to acquire 24,750 shares of Kinder Morgan, Inc. common      stock in exchange for her Class A units. The Class A-1 units and Class B      units received by Ms. Dang had an aggregate grant date fair value as      calculated in accordance with SFAS No. 123R of  $674,887. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8 | Includes      55,398,382 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 eight percent      of any beneficial and pecuniary interest in them. Mr. Kinder made a cash      investment of $1,075,981 of his after-tax proceeds from the conversion in      the Going Private transaction of 15,750 shares of Kinder Morgan, Inc.      restricted stock in exchange for his Class A units. The Class A-1 units      and Class B units received by Mr. Kinder had an aggregate grant date fair      value as calculated in accordance with SFAS No. 123R of      $787,587. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 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      Kinder Morgan, Inc. restricted stock and options to acquire 48,459 shares      of Kinder Morgan, Inc. 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 $1,712,851. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10 | Mr.      Street made a cash investment of $3,813,005 of his after-tax proceeds from      the conversion in the Going Private transaction of 30,000 shares of Kinder      Morgan, Inc. restricted stock and options to acquire 34,588 shares of      Kinder |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 13.  Certain      Relationships and Related Transactions. (continued) | Kinder      Morgan Management, LLC Form 10-K |
|---------------------------------------------------------------------------------|----------------------------------------------|

|   | Morgan,      Inc. common stock in exchange for his Class A units. The Class A-1 units      and Class B units received by Mr. Street had an aggregate grant date fair      value as calculated in accordance with SFAS No. 123R of      $1,074,434. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | its      1.0101% direct general partner ownership interest (accounted for as      minority interest in the consolidated financial statements of Kinder      Morgan Energy Partners, L.P.); and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | its      0.9899% ownership interest indirectly owned via its 1% ownership interest      in Kinder Morgan Energy Partners, L.P. As of December 31, 2007, Kinder      Morgan G.P., Inc. owned 1,724,000 common units, representing approximately      0.70% of Kinder Morgan Energy Partners, L.P.’s outstanding limited partner      units. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 13.        Certain      Relationships and Related Transactions. (continued) | Kinder      Morgan Management, LLC Form 10-K |
|--------------------------------------------------------------------------------------------|----------------------------------------------|

----

| Item 13.                                  Certain      Relationships and Related Transactions. (continued) | Kinder      Morgan Management, LLC Form 10-K |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------|

| Derivatives-net      asset/(liability)                |           |
|-------------------------------------------------------|----------------|
| Accrued      other current liabilities                | $      (239.8) |
| Other      long-term liabilities and deferred credits | $      (386.5) |

----

| Item 13.                                  Certain      Relationships and Related Transactions. (continued) | Kinder      Morgan Management, LLC Form 10-K |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------|

|   | · | If      the director was an employee, or had an immediate family member who was an      executive officer, of us or Kinder Morgan Energy Partners, L.P. or any of      its affiliates, but the employment relationship ended more than three      years prior to the date of determination (or, in the case of employment of      a director as an interim chairman, interim chief executive officer or      interim executive officer, such employment relationship ended by the date      of determination); |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | If      during any twelve month period within the three years prior to the      determination the director received no more than, and has no immediate      family member that received more than, $100,000 in direct compensation      from Kinder |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 13.                                  Certain      Relationships and Related Transactions. (continued) | Kinder      Morgan Management, LLC Form 10-K |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------|

|   |   | Morgan      Energy Partners, L.P. or its affiliates, other than (i) director and      committee fees and pension or other forms of deferred compensation for      prior service (provided such compensation is not contingent in any way on      continued service), (ii) compensation received by a director for      former service as an interim chairman, interim chief executive officer or      interim executive officer, and (iii) compensation received by an      immediate family member for service as an employee (other than an      executive officer); |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | If      the director is at the date of determination a current employee, or has an      immediate family member that is at the date of determination a current      executive officer, of another company that has made payments to, or      received payments from, Kinder Morgan Energy Partners, L.P. and its      affiliates for property or services in an amount which, in each of the      three fiscal years prior to the date of determination, was less than the      greater of $1.0 million or 2% of such other company’s annual      consolidated gross revenues. Contributions to tax-exempt organizations are      not considered payments for purposes of this  determination; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | If      the director is also a director, but is not an employee or executive      officer, of Kinder Morgan Energy Partners, L.P.’s general partner or      another affiliate or affiliates of us or Kinder Morgan Energy Partners,      L.P., so long as such director is otherwise independent;    and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | If      the director beneficially owns less than 10% of each class of voting      securities of us, Kinder Morgan Energy Partners, L.P. or its general      partner. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Kinder      Morgan Management, LLC Form 10-K |
|----------------------------------------------|

| Item 14. | Principal      Accounting Fees andServices. |
|----------|---------------------------------------------|

|             | Year      Ended December 31, |
|------------------|------------------------------|
|             | 2007                         |   | 2006 |
|             | (In      dollars)            |
| Audit      fees1 | $                            | 343,275 |   | $ | 180,000 |
| Total            | $                            | 343,275 |   | $ | 180,000 |

| 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. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | monitor      the integrity of our financial statements, financial reporting processes,      systems of internal controls regarding finance, accounting and legal      compliance and disclosure controls and  procedures; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | monitor      our compliance with legal and regulatory  requirements; |
|--------|--------|----------------------------------------------------------------------|

|   | · | select,      appoint, engage, oversee, retain, evaluate and terminate our external      auditors, pre-approve all audit and non-audit services to be provided,      consistent with all applicable laws, to us by our external auditors, and      establish the fees and other compensation to be paid to our external      auditors; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | monitor      and evaluate the qualifications, independence and performance of our      external auditors and internal auditing function;  and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | establish      procedures for the receipt, retention, response to and treatment of      complaints, including confidential, anonymous submissions by our      employees, regarding accounting, internal controls, disclosure or auditing      matters, and provide an avenue of communication among our external      auditors, management, the internal auditing function and our Board of      Directors. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      auditors’ internal quality-controlprocedures; |
|--------|--------|--------------------------------------------------------------|

|   | · | any      material issues raised by the most recent internal quality-control review,      or peer review, of the externalauditors; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      independence of the external auditors;and |
|--------|--------|----------------------------------------------------|

|   | · | the      aggregate fees billed by our external auditors for each of the previous      two fiscal years. |
|--------|--------|---------------------------------------------------------------------------------------------------------|

----

| Kinder      Morgan Management, LLC Form 10-K |
|----------------------------------------------|

PART IV

| Item 15. | Exhibits      and Financial Statement Schedules. |
|----------|--------------------------------------------------|

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

| 2.   | Financial      Statement Schedules |
|----------------|------------------------------------|

| 3.   | Exhibits |
|----------------|----------|

|         | ExhibitNumber |         | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------------|---------------|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |     |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|    | 3.1           |    | Form      of Certificate of Formation of the Company (filed as Exhibit 3.1 to the      Company’s Registration Statement on Form S-1 (Registration No. 333-55868)      and incorporated by reference herein).                                                                                                                                                                                                                                                                                                                                                                       |
|         |          |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|         | 3.2           |         | Second      Amended and Restated Limited Liability Company Agreement of the Company,      as amended (filed as Exhibit 3.1 to the Company’s Current Report on Form      8-K filed on May 30, 2007 and incorporated by reference      herein).                                                                                                                                                                                                                                                                                                                                      |
|         |          |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|         | 3.3           |         | Amendment      No. 1, dated as of July 20, 2007, to Delegation of Control Agreement dated      May 18, 2001, among Kinder Morgan Management, LLC, Kinder Morgan G.P.,      Inc., and Kinder Morgan Energy Partners, L.P. and its operating limited      partnership subsidiaries, attached as Annex C to the Second Amended and      Restated Limited Liability Company Agreement of Kinder Morgan Management,      LLC, as amended (filed as Exhibit 3.1 to the Company’s Current Report on      Form 8-K filed on July 20, 2007 and incorporated by reference      herein). |
|         |          |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|         | 4.1           |         | Form      of certificate representing shares of the Company (filed as Exhibit 4.3 to      the Company’s Registration Statement on Form 8-A/A filed on July 24, 2002      and incorporated by reference herein).                                                                                                                                                                                                                                                                                                                                                                    |
|         |          |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|         | 4.2           |         | Form      of Purchase Provisions between the Company and Kinder Morgan, Inc.      (included as Annex B to the Second Amended and Restated Limited Liability      Company Agreement filed as Exhibit 3.1 to the Company’s Current Report on      Form 8-K filed on May 30, 2007 and incorporated by reference      herein).                                                                                                                                                                                                                                                         |
|         |          |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|         | 4.3           |         | Registration      Rights Agreement dated May 18, 2001 among the Company, Kinder Morgan      Energy Partners, L.P. and Kinder Morgan, Inc. (filed as Exhibit 4.3 to the      Company’s Annual Report on Form 10-K for the year ended December 31, 2002      and incorporated by reference herein).                                                                                                                                                                                                                                                                                  |
|         |          |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|         | 10.1          |         | Form      of Tax Indemnity Agreement between the Company and Kinder Morgan, Inc.      (filed as Exhibit 10.1 to the Company’s Registration Statement on Form S-1      (Registration No. 333-55868) and incorporated by reference      herein).                                                                                                                                                                                                                                                                                                                                     |
|         |          |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|         | 10.2          |         | Delegation      of Control Agreement among Kinder Morgan Management, LLC, Kinder Morgan      G.P., Inc. and Kinder Morgan Energy Partners, L.P. and its operating      partnerships (filed as Exhibit 10.1 to the Kinder Morgan Energy Partners,      L.P. June 30, 2001 Form 10-Q (Commission File No. 1-11234) and      incorporated by reference herein).                                                                                                                                                                                                                             |

----

| Item 15.  Exhibits      and Financial Statement Schedules.      (continued) | Kinder      Morgan Management, LLC Form 10-K |
|---------------------------------------------------------------------------------------|----------------------------------------------|

|   | ExhibitNumber |         | Description                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|---------------|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |          |    |                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 10.3          |         | Amendment      No. 1, dated as of July 20, 2007, to Delegation of Control Agreement dated      May 18, 2001, among Kinder Morgan Management, LLC, Kinder Morgan G.P.,      Inc., and Kinder Morgan Energy Partners, L.P. and its operating limited      partnership subsidiaries (filed as Exhibit 10.1 to the Company’s Current      Report on Form 8-K filed on July 20, 2007 and incorporated by reference      herein). |
|   |          |    |                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 10.4          |         | Resignation      and Non-Compete Agreement, dated as of July 21, 2004, between KMGP      Services, Inc. and Michael C. Morgan (filed as Exhibit 10.4 to Kinder      Morgan Management, LLC’s Quarterly Report on Form 10-Q for the quarter      ended June 30, 2004 and incorporated by reference  herein).                                                                                                                 |
|   |          |    |                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 21.1          | *            | List      of Subsidiaries.                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |          |    |                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 23.1          | *            | Consent      of PricewaterhouseCoopers LLP.                                                                                                                                                                                                                                                                                                                                                                                       |
|   |          |    |                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 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.                                                                                                                                                                                                                                                                     |

----

| Kinder      Morgan Management, LLC Form 10-K |
|----------------------------------------------|

SIGNATURES

|                         | KINDER      MORGAN MANAGEMENT, LLC(Registrant) |
|------------------------------|------------------------------------------------|
|                         | By                                             | /s/      Kimberly A. Dang |
|                         |                                           | Kimberly      A. DangVice      President and Chief Financial Officer |
| Date:      February 28, 2008 |                                           |

| /s/      Richard D. Kinder |    | Director,      Chairman and Chief Executive Officer        |
|----------------------------|--------------|------------------------------------------------------------|
| Richard      D. Kinder     |         | (Principal      Executive Officer)                         |
|                  |         |                                                       |
| /s/      Kimberly A. Dang  |    | Vice      President and Chief Financial Officer (Principal |
| Kimberly      A. Dang      |         | Financial      Officer and Principal Accounting Officer)   |
|                  |         |                                                       |
| /s/      Edward O. Gaylord |         | Director                                                   |
| Edward      O. Gaylord     |         |                                                       |
|                  |         |                                                       |
| /s/      Gary L. Hultquist |         | Director                                                   |
| Gary      L. Hultquist     |         |                                                       |
|                  |         |                                                       |
| /s/      C. Park Shaper    |         | Director      and President                                |
| C.      Park Shaper        |         |                                                       |
|                  |         |                                                       |
| /s/      Perry M. Waughtal |         | Director                                                   |
| Perry      M. Waughtal     |         |                                                       |

----

----

----

Annex A

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

|   |                                                   |
|--------|--------------------------------------------------------|
| x      | ANNUAL      REPORT PURSUANT TO SECTION 13 OR 15(d)     |
|   | OF      THE SECURITIES EXCHANGE ACT OF 1934            |
|   |                                                   |
|   | For      the fiscal year ended December 31, 2007       |
|   |                                                   |
|   | Or                                                     |
|   |                                                   |
| o      | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) |
|   | OF      THE SECURITIES EXCHANGE ACT OF 1934            |
|   |                                                   |
|   | For      the transition period from to                 |

|                                 |                     |
|--------------------------------------|--------------------------|
| Delaware                             | 76-0380342               |
| (State      or other jurisdiction of | (I.R.S.      Employer    |
| incorporation      or organization)  | Identification      No.) |

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

|                     |   |                                           |
|--------------------------|--------|------------------------------------------------|
| Title      of each class |   | Name      of each exchange on which registered |
|                     |   |                                           |
| Common      Units        |   | New      York Stock Exchange                   |

|                           |                     |                         |                             |
|--------------------------------|--------------------------|------------------------------|----------------------------------|
| Large      accelerated filer x | Accelerated      filer o | Non-accelerated      filer o | Smaller      reporting company o |

|                   |   |
|------------------------|--------|
| TABLE      OF CONTENTS |   |

|                |   |                                                                                                                              |   |       |
|---------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------|--------|------------|
|                |   |                                                                                                                              |   | PageNumber |
|                |   |                                                                                                                              |   |       |
|                |   |                                                                                                                              |   |       |
|                |   | PART      I                                                                                                                       |   |       |
| Items      1 and 2. |   | Business and      Properties                                                                                                      |   | 4          |
|                |   | General Development of      Business                                                                                              |   | 4          |
|                |   | Organizational      Structure                                                                                                     |   | 4          |
|                |   | Recent      Developments                                                                                                          |   | 5          |
|                |   | Financial Information      about Segments                                                                                         |   | 10         |
|                |   | Narrative Description      of Business                                                                                            |   | 10         |
|                |   | Business      Strategy                                                                                                            |   | 10         |
|                |   | Business      Segments                                                                                                            |   | 10         |
|                |   | Products      Pipelines                                                                                                           |   | 11         |
|                |   | Natural Gas      Pipelines                                                                                                        |   | 16         |
|                |   | CO2                                                                                                                               |   | 24         |
|                |   | Terminals                                                                                                                         |   | 29         |
|                |   | Trans      Mountain                                                                                                               |   | 30         |
|                |   | Major      Customers                                                                                                              |   | 31         |
|                |   | Regulation                                                                                                                        |   | 31         |
|                |   | Environmental      Matters                                                                                                        |   | 34         |
|                |   | Other                                                                                                                             |   | 36         |
|                |   | Financial Information      about Geographic Areas                                                                                 |   | 36         |
|                |   | Available      Information                                                                                                        |   | 36         |
| Item      1A.       |   | Risk      Factors                                                                                                                 |   | 37         |
| Item      1B.       |   | Unresolved Staff      Comments                                                                                                    |   | 46         |
| Item      3.        |   | Legal      Proceedings                                                                                                            |   | 46         |
| Item      4.        |   | Submission of Matters      to a Vote of Security Holders                                                                          |   | 46         |
|                |   |                                                                                                                              |   |       |
|                |   | PART      II                                                                                                                      |   |       |
| Item      5.        |   | Market for      Registrant’s Common Equity,      Related Stockholder Matters and Issuer Purchases of Equity      Securities |   | 47         |
| Item      6.        |   | Selected Financial      Data                                                                                                      |   | 48         |
| Item      7.        |   | Management’s Discussion and      Analysis of Financial Condition and Results of      Operations                             |   | 50         |
|                |   | Critical Accounting      Policies and Estimates                                                                                   |   | 51         |
|                |   | Results of      Operations                                                                                                        |   | 53         |
|                |   | Liquidity and Capital      Resources                                                                                              |   | 68         |
|                |   | Recent Accounting      Pronouncements                                                                                             |   | 77         |
|                |   | Information Regarding      Forward-Looking Statements                                                                             |   | 77         |
| Item      7A.       |   | Quantitative and      Qualitative Disclosures About Market Risk                                                                   |   | 79         |
|                |   | Energy Commodity      Market Risk                                                                                                 |   | 79         |
|                |   | Interest Rate      Risk                                                                                                           |   | 81         |
| Item      8.        |   | Financial Statements      and Supplementary Data                                                                                  |   | 82         |
| Item      9.        |   | Changes in and      Disagreements with Accountants on Accounting and Financial      Disclosure                                    |   | 82         |
| Item      9A.       |   | Controls and      Procedures                                                                                                      |   | 83         |
| Item      9B.       |   | Other      Information                                                                                                            |   | 83         |
|                |   |                                                                                                                              |   |       |
|                |   | PART      III                                                                                                                     |   |       |
| Item      10.       |   | Directors, Executive      Officers and Corporate Governance                                                                       |   | 84         |
|                |   | Directors and      Executive Officers of our General Partner and its      Delegate                                                |   | 84         |
|                |   | Corporate      Governance                                                                                                         |   | 86         |
|                |   | Section      16(a) Beneficial Ownership Reporting Compliance                                                                      |   | 87         |
| Item      11.       |   | Executive      Compensation                                                                                                       |   | 88         |
| Item      12.       |   | Security Ownership of      Certain Beneficial Owners and Management and Related      Stockholder      Matters                     |   | 103        |
| Item      13.       |   | Certain Relationships      and Related Transactions, and Director    Independence                                                 |   | 105        |
| Item      14.       |   | Principal Accounting      Fees and Services                                                                                       |   | 109        |
|                |   |                                                                                                                              |   |       |
|                |   | PART      IV                                                                                                                      |   |       |
| Item      15.       |   | Exhibits and Financial      Statement Schedules                                                                                   |   | 110        |
|                |   | Index to Financial      Statements                                                                                                |   | 114        |
| Signatures          |   |                                                                                                                              |   | 211        |

PART I

Items 1 and 2. Business andProperties.

(a) General Development of Business

Organizational Structure

Recent Developments

|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | Effective      January 1, 2007, we acquired the remaining approximate 50.2% interest in      the Cochin pipeline system that we did not already own from affiliates of      BP for an aggregate consideration of approximately $47.8 million,      consisting of $5.5 million in cash and a note payable having a fair value      of $42.3 million. As part of the transaction, the seller also agreed to      reimburse us for certain pipeline integrity management costs over a      five-year period in an aggregate amount not to exceed $50 million. Upon      closing, we became the operator of the pipeline;                           |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | • | On      January 17, 2007, we announced that our CO2      business segment will invest approximately $120 million to further      expand its operations and enable it to meet the increased demand for      carbon dioxide in the Permian Basin. The expansion activities will take      place in southwest Colorado and include developing a new carbon dioxide      source field (named the Doe Canyon Deep Unit that went in service during      the first quarter of 2008) and adding infrastructure at both the McElmo      Dome Unit and the Cortez Pipeline. The entire expansion is expected to be      completed by the middle of 2008; |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | • | On      January 30, 2007, we completed a public offering of senior notes. We      issued a total of $1.0 billion in principal amount of senior notes,      consisting of $600 million of 6.00% notes due February 1, 2017, and $400      million of 6.50% notes due February 1, 2037. We received proceeds from the      issuance of the notes, after underwriting discounts and commissions, of      $992.8 million, and we used the proceeds to reduce the borrowings under      our commercial paper program;                                                                                                                                |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | • | On      February 14, 2007, the first phase of the Rockies Express pipeline system,      the 327-mile REX-Entrega Project, was placed in service at a cost of      approximately $745 million and provided up to 500 million cubic feet of      natural gas capacity from the Meeker Hub in Rio Blanco County, Colorado      and Wamsutter Hub in Sweetwater County, Wyoming to the Cheyenne Hub in      Weld County, Colorado.                                                                                                                                                                                                                  |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |    | The      Rockies Express pipeline project is an approximate $4.9 billion,      1,679-mile natural gas pipeline system which is owned and currently being      developed by Rockies Express Pipeline LLC. The Rockies    Express                                                                                                                                                                                                                                                                                                                                                                                                                 |

|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | pipeline      project is to be completed in three phases: (i) a 327-mile, $745 million      pipeline running from the Meeker Hub to the Cheyenne Hub with a nominal      capacity of 500 million cubic feet per day; (ii) a 713-mile, $1.6 billion      pipeline from the Cheyenne Hub to an interconnect in Audrain County,      Missouri, transporting up to 1.5 billion cubic feet per day; and (iii) a      639-mile, $2.6 billion pipeline from Audrain County, Missouri to      Clarington, located in Monroe County, Ohio. When fully completed, the      Rockies Express pipeline system will have the capability to transport 1.8      billion cubic feet per day of natural gas, and binding firm commitments      have been secured for all of the pipeline capacity. On January 12, 2008,      interim service on the REX-West Project (second phase) commenced. Full      service on the REX-West system for 1.5 billion cubic feet per day of      contracted capacity is expected to commence in mid-March 2008. See “—(c)      Narrative Description of Business—Business Segments—Natural Gas      Pipelines—Rockies Express Pipeline” for more  information; |

|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | On      February 28, 2007, we announced plans to invest up to $100 million to      expand our liquids terminal facilities in order to help serve the growing      biodiesel market. We entered into long-term agreements as lessors with      Green Earth Fuels, LLC to build tankage that will handle biodiesel at our      Houston Ship Channel liquids facility. Green Earth Fuels completed      construction of an 86 million gallon biodiesel production facility at our      Galena Park, Texas liquids terminal in the fourth quarter of      2007;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | • | On      April 30, 2007, we acquired the Trans Mountain pipeline system from Knight      for $549.1 million. The Trans Mountain pipeline system, which transports      crude oil and refined products from Edmonton, Alberta, Canada to marketing      terminals and refineries in British Columbia and the state of Washington,      currently transports approximately 260,000 barrels per day. An additional      expansion that will increase capacity of the pipeline to 300,000 barrels      per day is expected to be in service by November 2008. Current accounting      principles require our consolidated financial statements and all other      financial information included in this report to be stated to assume that      the transfer of Trans Mountain net assets from Knight to us had occurred      at the date when both Trans Mountain and we met the accounting      requirements for entities under common control (January 1, 2006). As a      result, financial statements and financial information presented for prior      periods in this report have been restated to reflect our acquisition. In      addition, due to the fact that Trans Mountain’s operations are managed      separately, involve different products and marketing strategies, and      produce discrete financial information that is separately evaluated      internally by our management, we have identified our Trans Mountain      pipeline system as a separate reportable business segment. For additional      information regarding this acquisition, see Note 3 to our consolidated      financial statements; |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | • | On      May 14, 2007, we announced plans to construct a $72 million natural gas      pipeline designed to bring new supplies out of East Texas to markets in      the Houston and Beaumont, Texas areas. The new pipeline will consist of      approximately 63 miles of 24-inch diameter pipe and multiple      interconnections with other pipelines. It will connect our Kinder Morgan      Tejas system in Harris County, Texas to our Kinder Morgan Texas Pipeline      system in Polk County near Goodrich, Texas. In addition, we 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 will consist of approximately 225 million cubic      feet per day of natural gas using existing compression and be expandable      to over 400 million cubic feet per day with additional      compression;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | • | On      May 17, 2007, KMR closed the public offering of 5,700,000 of its shares at      a price of $52.26 per share. The net proceeds from the offering were used      by KMR to buy additional i-units from us. We used the proceeds of $297.9      million from our i-unit issuance to reduce the borrowings under our      commercial paper program;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | • | On      May 30, 2007, we purchased the Vancouver Wharves bulk marine terminal from      British Columbia Railway Company, a crown corporation owned by the      Province of British Columbia, for an aggregate consideration of $57.2      million, consisting of $38.8 million in cash and $18.4 million in assumed      liabilities. The Vancouver Wharves facility is located on the north shore      of the Port of Vancouver’s main harbor, and includes five deep-sea vessel      berths situated on a 139-acre site. The terminal assets include      significant rail infrastructure, dry bulk and liquid storage, and material      handling systems which allow the terminal to handle over 3.5 million tons      of cargo annually;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | On      June 21, 2007, we closed a public offering of $550 million in principal      amount of 6.95% senior notes. The notes are due January 15, 2038. We      received proceeds from the issuance of the notes, after underwriting      discounts and commissions, of $543.9 million, and we used the proceeds to      reduce our commercial paper debt;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | • | On      June 22, 2007, the Federal Energy Regulatory Commission, referred to in      this report as the FERC, issued an order granting construction and      operation of our Kinder Morgan Louisiana Pipeline project, and we      officially accepted the order on July 10, 2007. The Kinder Morgan      Louisiana Pipeline is expected to cost approximately $510 million and will      provide approximately 3.2 billion cubic feet per day of take-away natural      gas capacity from the Cheniere Sabine Pass liquefied natural gas terminal,      located in Cameron Parish, Louisiana, to various delivery points in      Louisiana and will provide interconnects with many other natural gas      pipelines, including Natural Gas Pipeline Company of America. The project      is supported by fully subscribed capacity and long-term customer      commitments with Chevron and Total and is expected to be in service by      January 1, 2009; |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | • | On      July 10, 2007, we announced a combined $41 million investment for two      terminal expansions to help meet the growing need for terminal services in      key markets along the Gulf Coast. The investment consists of (i) the      construction of a terminal that will include liquids storage, transfer and      packaging facilities at the Rubicon Plant site in Geismar, Louisiana; and      (ii) the purchase of liquids storage tanks from Royal Vopak in Westwego,      Louisiana. The tanks have a storage capacity of approximately 750,000      barrels for vegetable oil, biodiesel, ethanol and other liquids products.      The new terminal being built in Geismar will be capable of handling      inbound and outbound material via pipeline, rail, truck and barge/vessel.      Construction is expected to be complete by the fourth quarter of      2008;                                                                        |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | • | On      July 23, 2007, following the FERC’s expedited approval of our CALNEV      Pipeline’s proposed tariff rate structure, we announced our continuing      development of the approximate $426 million expansion of the pipeline      system into Las Vegas, Nevada. The expansion involves the construction of      a new 16-inch diameter pipeline, which will parallel existing utility      corridors between Colton, California and Las Vegas in order to minimize      environmental impacts. System capacity would increase to approximately      200,000 barrels per day upon completion of the expansion, and could be      increased as necessary to over 300,000 barrels per day with the addition      of pump stations. The CALNEV expansion is expected to be complete in early      2011;                                                                                                                                        |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | • | On      August 6, 2007, Kinder Morgan Interstate Gas Transmission LLC, referred to      in this report as KMIGT, filed for regulatory approval to construct and      operate a 41-mile, $29 million natural gas pipeline from the Cheyenne Hub      to markets in and around Greeley, Colorado. When completed, the Colorado      Lateral expansion project will provide firm transportation of up to 55      million cubic feet per day to a local utility under long-term contract. On      February 21, 2008, the FERC granted the certification      application;                                                                                                                                                                                                                                                                                                                                                                                          |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | • | On      August 23, 2007, we announced that we have begun construction on the      approximately C$467 million Anchor Loop project, the second phase of the      Trans Mountain pipeline system expansion that will increase pipeline      capacity from approximately 260,000 to 300,000 barrels of crude oil per      day. The project is expected to be complete in November 2008. In April      2007, we commissioned 10 new pump stations which boosted capacity on Trans      Mountain from 225,000 to approximately 260,000 barrels per day. The      pipeline is currently operating at full capacity;                                                                                                                                                                                                                                                                                                                                                  |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | • | On      August 28, 2007, we closed a public offering of $500 million in principal      amount of 5.85% senior notes. The notes are due September 15, 2012. We      received proceeds from the issuance of the notes, after underwriting      discounts and commissions, of $497.8 million, and we used the proceeds to      reduce our commercial paper debt;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | • | Effective      September 1, 2007, we acquired five bulk terminal facilities from Marine      Terminals, Inc. for an aggregate consideration of approximately $101.5      million, consisting of $100.3 million in cash and an assumed liability of      $1.2 million. The acquired assets and operations are primarily involved in      the handling and storage of steel and alloys, and also provide stevedoring      and harbor services, scrap handling, and scrap processing services to      customers in the steel and alloys industry. The operations are located in      Blytheville, Arkansas; Decatur, Alabama; Hertford, North Carolina; and      Berkley, South Carolina. Combined, thefive                                                                                                                                                                                                                                                       |

|   |   |                                                                                                                                                                                                                                                                                                                                             |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | facilities      handled approximately 13.7 million tons of steel products in 2007. Under      long-term contracts, the acquired terminal facilities will continue to      provide handling, processing, harboring and warehousing services to Nucor      Corporation, one of the nation’s largest steel and steel products      companies; |

|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | Effective      October 5, 2007, we sold our North System natural gas liquids and refined      petroleum products pipeline system and our 50% ownership interest in the      Heartland Pipeline Company to ONEOK Partners, L.P. for approximately      $298.6 million in cash. Our investment in net assets, including all      transaction related accruals, was approximately $145.8 million, most of      which represented property, plant and equipment, and we recognized      approximately $152.8 million of gain on the sale of these net assets. In      accordance with generally accepted accounting principles, we accounted for      the North System business as a discontinued operation for all periods      presented in this report, and we reported the gain with the caption as      “Gain on disposal of North System” on our accompanying consolidated      statement of income; |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | • | On      October 9, 2007, Midcontinent Express Pipeline LLC filed an application      with the FERC requesting a certificate of public convenience and necessity      that would authorize construction and operation of the approximate      500-mile Midcontinent Express Pipeline natural gas transmission system. We      own a 50% interest in Midcontinent Express Pipeline LLC and Energy      Transfer Partners L.P. owns the remaining interest. The Midcontinent      Express Pipeline will create long-haul, firm natural gas transportation      takeaway capacity, either directly or indirectly, from natural gas      producing regions located in Texas, Oklahoma and Arkansas. The total      project is expected to cost approximately $1.3 billion, and will have an      initial transportation capacity of approximately 1.4 billion cubic feet      per day of natural gas.                   |

|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | The      Midcontinent Express Pipeline will originate near Bennington, Oklahoma and      terminate at an interconnect with Williams’ Transco natural gas pipeline      system near Butler, Alabama. It will also connect to Natural Gas Pipeline      Company of America’s natural gas pipeline and to Energy Transfer Partners’      135-mile natural gas pipeline, which extends from the Barnett Shale      natural gas producing area in North Texas to an interconnect with the      Texoma Pipeline near Paris, Texas. The Midcontinent Express Pipeline now      has long-term binding commitments from multiple shippers for approximately      1.2 billion cubic feet per day and, in order to provide a seamless      transportation path from various locations in Oklahoma, the pipeline has      also executed a firm capacity lease agreement with Enogex, Inc., an      Oklahoma-based intrastate natural gas gathering and pipeline company that      is wholly-owned by OGE Energy Corp. Subject to the receipt of regulatory      approvals, construction of the pipeline is expected to commence in August      2008 and be in service during the first quarter of2009. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   | In      January 2008, in conjunction with the signing of additional binding      transportation commitments, Midcontinent Express and MarkWest entered into      an option agreement which provides MarkWest a one-time right to purchase a      10% ownership interest in Midcontinent Express after the pipeline is fully      constructed and placed into service. If the option is exercised, we and      Energy Transfer Partners will each own 45% of Midcontinent Express, while      MarkWest will own the remaining 10%;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | On      October 17, 2007, we announced that we will invest approximately $23      million to expand our Kinder Morgan Interstate Gas Transmission pipeline      system in order to serve five separate industrial plants (four of which      produce ethanol) near Grand Island, Nebraska. The project is fully      subscribed with long-term customer contracts, and subject to the receipt      of regulatory approvals filed December 21, 2007, the expansion project is      expected to be fully operational by the fall of 2008. Since 2000, our      KMIGT system has connected to 17 new ethanol plants, 11 of which are      located in the state of Nebraska; |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | • | On      November 26, 2007, we announced that we expect to declare cash      distributions of $4.02 per unit for 2008, an almost 16% increase over our      cash distributions of $3.48 per unit for 2007. This expectation includes      contributions from assets owned by us as of the announcement date and does      not include any potential benefits from unidentified acquisitions.      Additionally, our expectation does not take into account any capital costs      associated with financing the payment of reparations sought by shippers on      our Pacific operations’                                                                           |

|   |   |                                                                                                                                                                                                                                               |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | interstate      pipelines. Our expected growth in distributions in 2008 will be fueled by      incremental earnings from Rockies Express-West (the western portion of the      Rockies Express Pipeline), higher hedge prices on our               |
|   |   |                                                                                                                                                                                                                                               |
|   |   | crude      oil production (budgeted production volumes for the SACROC oil field unit      in 2008 are approximately equal to the volumes realized in 2007), and an      anticipated strong performance from our remaining business      portfolio; |

|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | In      December 2007, we completed a public offering of 7,130,000 of our common      units, including common units sold pursuant to the underwriters’      over-allotment option, at a price of $48.09 per unit, less commissions and      underwriting expenses. We received net proceeds of $342.9 million for the      issuance of these 7,130,000 common units, and we used the proceeds to      reduce the borrowings under our commercial paper  program;                                                                                                                                                                                                                                                               |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | • | In      December 2007, we completed a second expansion of our Pacific operations’      East Line pipeline segment. This expansion consisted of replacing      approximately 130 miles of 12-inch diameter pipe between El Paso, Texas      and Tucson, Arizona with new 16-inch diameter pipe, constructing      additional pump stations, and adding new storage tanks at Tucson. The      project, completed at a cost of approximately $154 million, will increase      East Line capacity by 36% (to approximately 200,000 barrels per day) to      meet the demand for refined petroleum products, and will provide the      platform for further incremental expansions through horsepower additions      to the system; |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | • | On      December 31, 2007, TransColorado Gas Transmission LLC completed an      approximate $50 million expansion to provide up to 250 million cubic feet      per day of natural gas transportation, starting January 1, 2008, from the      Blanco Hub to an interconnect with the Rockies Express pipeline system at      the Meeker Hub;                                                                                                                                                                                                                                                                                                                                                                                         |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | • | During      2007, we spent $1,691.6 million for additions to our property, plant and      equipment, including both expansion and maintenance projects. Our capital      expenditures included thefollowing:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $480.0      million in our Terminals segment, largely related to expanding the      petroleum products storage capacity at our liquids terminal facilities,      including the construction of additional liquids storage tanks at our      facilities in Canada and at our facilities located on the Houston Ship      Channel and the New York Harbor, and to various expansion projects and      improvements undertaken at multiple terminalfacilities; |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $382.5      million in our CO2      segment, mostly related to additional infrastructure, including      wells and injection and compression facilities, to support the expanding      carbon dioxide flooding operations at the SACROC and Yates oil field units      in West Texas and to expand our capacity to produce and deliver CO2 from      our McElmo Dome and Doe Canyon Source Fields;                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $305.7      million in our Trans Mountain segment, mostly related to pipeline      expansion and improvement projects undertaken to increase crude oil and      refined products delivery volumes;                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $264.0      million in our Natural Gas Pipelines segment, mostly related to current      construction of our Kinder Morgan Louisiana Pipeline and to various      expansion and improvement projects on our Texas intrastate natural gas      pipeline systems, including the development of additional natural gas      storage capacity at our natural gas storage facilities located at Markham      and Dayton, Texas; and                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $259.4      million in our Products Pipelines segment, mostly related to the continued      expansion work on our Pacific operations’ East Line products pipeline,      completion of construction projects resulting in additional capacity, and      an additional refined products line on our CALNEV Pipeline in order to      increase delivery service to the growing Las Vegas, Nevada      market;                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   | Our      capital expansion program in 2007 was approximately $2.6 billion      (including our share of capital expenditures for both the Rockies Express      and Midcontinent Express natural gas pipeline projects). Including all of      our business acquisition expenditures, total spending was $3.3 billion.      Our capital expansion program will continue to be significant in 2008, as      we expect to invest approximately $3.3 billion in expansion capital      expenditures (including our share of capital expenditures for both the      Rockies Express and Midcontinent Express natural gas pipeline projects),      which will help drive earnings and cash flow growth in 2009 and      beyond; |

|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | On      January 16, 2008, we announced that we plan to invest approximately $56      million to construct a petroleum coke terminal at the BP refinery located      in Whiting, Indiana. We have 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;                                   |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | • | On      February 12, 2008, we completed an additional public offering of senior      notes. We issued a total of $900 million in principal amount of senior      notes, consisting of $600 million of 5.95% notes due February 15, 2018,      and $300 million of 6.95% notes due January 15, 2038. We received proceeds      from the issuance of the notes, after underwriting discounts and      commissions, of approximately $894.1 million, and we used the proceeds to      reduce the borrowings under our commercial paper program;    and |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | • | On      February 12, 2008, we completed an additional offering of 1,080,000 of our      common units at a price of $55.65 per unit in a privately negotiated      transaction. We received net proceeds of $60.1 million for the issuance of      these 1,080,000 common units, and we used the proceeds to reduce the      borrowings under our commercial paperprogram.                                                                                                                                                                           |

(b) Financial Information about Segments 

(c) Narrative Description of Business

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;         |
|   |    |                                                                                                                                                                              |
|   | • | increasing      utilization of our existing assets while controlling costs, operating      safely, and employing environmentally sound operating      practices;                  |
|   |    |                                                                                                                                                                              |
|   | • | 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 |
|   |    |                                                                                                                                                                              |
|   | • | maximizing      the benefits of our financial structure to create and return value to our      unitholders.                                                                       |

Business Segments

|   |    |                                                                                                                                                                                                                                                                                                                                                                                |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | Products      Pipelines—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—which consists of approximately 14,700 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—      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—which      consists of approximately 108 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 |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | • | Trans      Mountain—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.                           |

Products Pipelines

Natural GasPipelines

|   |    |                                         |
|--------|---------|----------------------------------------------|
|   | • | our      Kinder Morgan Texas Pipeline;       |
|   |    |                                         |
|   | • | our      Kinder Morgan Tejas Pipeline;       |
|   |    |                                         |
|   | • | our      Mier-Monterrey Mexico Pipeline; and |
|   |    |                                         |
|   | • | our      Kinder Morgan North Texas Pipeline. |

|   |    |                                                              |
|--------|---------|-------------------------------------------------------------------|
|   | • | our      Kinder Morgan Interstate Gas Transmission Pipeline;      |
|   |    |                                                              |
|   | • | our      Trailblazer Pipeline;                                    |
|   |    |                                                              |
|   | • | our      Trans-Colorado Pipeline; and                             |
|   |    |                                                              |
|   | • | our      51% ownership interest in the Rockies Express  Pipeline. |

|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | 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). This segment is expected to be in service by January 1, 2009;      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. This portion of the project is      expected to be in service in the third quarter of  2008.                                                                                                                                                                                                                                                                                                                                                                                                     |

CO2

|             |                      |   |                   |   |                    |   |   |   |   |   |    |   |   |   |    |   |   |   |
|------------------|---------------------------|--------|------------------------|--------|-------------------------|--------|--------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|
|             | Productive      Wells (a) |   | Service      Wells (b) |   | Drilling      Wells (c) |   |
|             |                      |   |                   |   |                    |   |
|             | Gross                     |   |                   | Net    |                    | Gross  |   |   | Net    |   | Gross   |   |   | Net    |    |
|             |                      |   |                   |   |                    |   |   |   |   |   |    |   |   |   |    |
| Crude      Oil   |                      |   | 2,463                  |   |                    |   | 1,587  |   |   |   | 1,066   |   |   |   | 789     |   |   |   | 2 |   |   |   | 2 |   |
| Natural      Gas |                      |   | 8                      |   |                    |   | 4      |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
|             |                      |   |                   |   |                    |   |   |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Total      Wells |                      |   | 2,471                  |   |                    |   | 1,591  |   |   |   | 1,066   |   |   |   | 789     |   |   |   | 2 |   |   |   | 2 |   |
|             |                      |   |                   |   |                    |   |   |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |

|   |                                                                                                                                                                                                                                                                                                                                  |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)    | Includes      active wells and wells temporarily shut-in. As of December 31, 2007, we      did not operate any productive wells with multiple      completions.                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                  |
| (b)    | 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. |
|   |                                                                                                                                                                                                                                                                                                                                  |
| (c)    | Consists      of development wells in the process of being drilled as of December 31,      2007.A development well is a well drilled in an already discovered oil      field.                                                                                                                                                         |

|             |   |   |    |   |   |    |   |   |    |   |
|------------------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|
|             |   | 2007   |    | 2006   |   | 2005    |   |
|             |   |   |    |   |   |    |   |
| Productive       |   |   |    |   |   |    |   |   |    |   |
| Development      |   |   | 31      |   |   | 37      |   |   | 42      |   |
| Exploratory      |   |   | — |   |   | — |   |   | — |   |
| Dry              |   |   |    |   |   |    |   |   |    |   |
| Development      |   |   | — |   |   | — |   |   | — |   |
| Exploratory      |   |   | — |   |   | — |   |   | — |   |
|             |   |   |    |   |   |    |   |   |    |   |
| Total      Wells |   |   | 31      |   |   | 37      |   |   | 42      |   |
|             |   |   |    |   |   |    |   |   |    |   |

|   |                                                                                                                                                                                                                                                                                                                                                         |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 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 resevoir. |

|                   |   |   |   |   |   |   |   |
|------------------------|--------|--------|--------|--------|--------|--------|--------|
|                   |   | Gross  |   | Net    |   |
|                   |   |   |   |   |   |
| Developed      Acres   |   |   | 72,435 |   |   | 67,731 |   |
| Undeveloped      Acres |   |   | 8,788  |   |   | 8,129  |   |
|                   |   |   |   |   |   |   |   |
| Total                  |   |   | 81,223 |   |   | 75,860 |   |
|                   |   |   |   |   |   |   |   |

|                                                           |   |                         |   |   |   |   |   |   |   |
|----------------------------------------------------------------|--------|------------------------------|--------|--------|--------|--------|--------|--------|--------|
|                                                           |   | Year      Ended December 31, |   |
|                                                           |   |                         |   |
|                                                           |   | 2007                         |   |   | 2006   |   |   | 2005   |   |
|                                                           |   |                         |   |   |   |   |   |   |   |
| Consolidated      Companies(a)                                 |   |                         |   |   |   |   |   |   |   |
| Production      costs per barrel of oil equivalent(b)(c)(d)    |   | $                            | 16.22  |   |   | $      | 13.30  |   |   | $ | 10.00 |   |
|                                                           |   |                         |   |   |   |   |   |   |   |   |   |   |
| Crude      oil production (MBbl/d)                             |   |                         | 35.6   |   |   |   | 37.8   |   |   |   | 37.9 |   |
|                                                           |   |                         |   |   |   |   |   |   |   |   |   |   |
| Natural      gas liquids production (MBbl/d)(d)                |   |                         | 5.5    |   |   |   | 5.0    |   |   |   | 5.3 |   |
| Natural      gas liquids production from gas plants(MBbl/d)(e) |   |                         | 4.1    |   |   |   | 3.9    |   |   |   | 4.1 |   |
|                                                           |   |                         |   |   |   |   |   |   |   |   |   |   |
| Total      natural gas liquids production(MBbl/d)              |   |                         | 9.6    |   |   |   | 8.9    |   |   |   | 9.4 |   |
|                                                           |   |                         |   |   |   |   |   |   |   |   |   |   |
| Natural      gas production (MMcf/d)(d)(f)                     |   |                         | 0.8    |   |   |   | 1.3    |   |   |   | 3.7 |   |
| Natural      gas production from gas plants(MMcf/d)(e)(f)      |   |                         | 0.3    |   |   |   | 0.3    |   |   |   | 3.1 |   |
|                                                           |   |                         |   |   |   |   |   |   |   |   |   |   |
| Total      natural gas production(MMcf/d)(f)                   |   |                         | 1.1    |   |   |   | 1.6    |   |   |   | 6.8 |   |
|                                                           |   |                         |   |   |   |   |   |   |   |   |   |   |
| Average      sales prices including hedge gains/losses:        |   |                         |   |   |   |   |   |   |   |   |   |   |
| Crude      oil price per Bbl(g)                                |   | $                            | 36.05  |   |   | $      | 31.42  |   |   | $ | 27.36 |   |
|                                                           |   |                         |   |   |   |   |   |   |   |   |   |   |
| Natural      gas liquids price per Bbl(g)                      |   | $                            | 52.22  |   |   | $      | 43.52  |   |   | $ | 38.79 |   |
|                                                           |   |                         |   |   |   |   |   |   |   |   |   |   |
| Natural      gas price per Mcf(h)                              |   | $                            | 6.08   |   |   | $      | 6.36   |   |   | $ | 5.84 |   |
|                                                           |   |                         |   |   |   |   |   |   |   |   |   |   |
| Total      natural gas liquids price per Bbl(e)                |   | $                            | 52.91  |   |   | $      | 43.90  |   |   | $ | 38.98 |   |
|                                                           |   |                         |   |   |   |   |   |   |   |   |   |   |
| Total      natural gas price per Mcf(e)                        |   | $                            | 5.89   |   |   | $      | 7.02   |   |   | $ | 5.80 |   |
|                                                           |   |                         |   |   |   |   |   |   |   |   |   |   |
| Average      sales prices excluding hedge gains/losses:        |   |                         |   |   |   |   |   |   |   |   |   |   |
| Crude      oil price per Bbl(g)                                |   | $                            | 69.63  |   |   | $      | 63.27  |   |   | $ | 54.45 |   |
|                                                           |   |                         |   |   |   |   |   |   |   |   |   |   |
| Natural      gas liquids price per Bbl(g)                      |   | $                            | 52.22  |   |   | $      | 43.52  |   |   | $ | 38.79 |   |
|                                                           |   |                         |   |   |   |   |   |   |   |   |   |   |
| Natural      gas price per Mcf(h)                              |   | $                            | 6.08   |   |   | $      | 6.36   |   |   | $ | 5.84 |   |
|                                                           |   |                         |   |   |   |   |   |   |   |   |   |   |

|   |                                                                                                                                                                                                                                                                                                    |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)    | Amounts      relate to Kinder Morgan CO2 Company, L.P. and its consolidated      subsidaries.                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                    |
| (b)    | Computed      using production costs, excluding transportation costs, as defined by the      United States 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. |
|   |                                                                                                                                                                                                                                                                                                    |
| (c)    | 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.                                                          |
|   |                                                                                                                                                                                                                                                                                                    |
| (d)    | Includes      only production attributable to leasehold ownership.                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                    |
| (e)    | Includes      production attributable to our ownership in processing plants and third      party processing agreements.                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                    |
| (f)    | Excludes      natural gas production used as fuel.                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                    |
| (g)    | Hedge      gains/losses for crude oil and natural gas liquids are included with crude      oil.                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                    |
| (h)    | Natural      gas sales were not hedged.                                                                                                                                                                                                                                                                 |

Terminals

TransMountain

Major Customers

Regulation

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Order      No. 436 (1985) requiring 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 whether purchased from the pipeline or from other merchants such      as marketers or producers. |

Environmental Matters

Other

(d) FinancialInformation about Geographic Areas

(e) Available Information 

Item 1A. RiskFactors.

|   |    |                                                                                                                                         |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | demands      on management related to the increase in our size after an acquisition, an      expansion, or a completed construction project; |
|   |    |                                                                                                                                         |
|   | • | 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;                        |
|   |    |                                                                                                                                         |
|   | • | difficulties      in the assimilation and retention of necessary employees;    and                                                           |
|   |    |                                                                                                                                         |
|   | • | potential      adverse effects on operatingresults.                                                                                          |

|          |                            |
|---------------|---------------------------------|
| Item      1B. | Unresolved      Staff Comments. |

|         |                    |
|--------------|-------------------------|
| Item      3. | Legal      Proceedings. |

|    |                                                     |
|---------|----------------------------------------------------------|
| Item 4. | Submission      of Matters to a Vote of SecurityHolders. |

PART II

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

|                |   |             |   |   |   |   |   |              |   |   |                |   |
|---------------------|--------|------------------|--------|--------|--------|--------|--------|-------------------|--------|--------|---------------------|--------|
|                |   | Price      Range |   |   |   |   |   |              |   |
|                |   |             |   |   |   |   |   |              |   |
|                |   | High             |   |   | Low    |   |   | CashDistributions |   |   | i-unitDistributions |   |
|                |   |             |   |   |   |   |   |              |   |   |                |   |
| 2007                |   |             |   |   |   |   |   |              |   |   |                |   |
| First      Quarter  |   | $                | 53.50  |   |   | $      | 47.28  |              |   | $      | 0.8300              |   |   |   | 0.015378 |   |
| Second      Quarter |   |             | 57.35  |   |   |   | 52.11  |              |   |   | 0.8500              |   |   |   | 0.016331 |   |
| Third      Quarter  |   |             | 56.70  |   |   |   | 46.61  |              |   |   | 0.8800              |   |   |   | 0.017686 |   |
| Fourth      Quarter |   |             | 54.71  |   |   |   | 48.51  |              |   |   | 0.9200              |   |   |   | 0.017312 |   |
|                |   |             |   |   |   |   |   |              |   |   |                |   |   |   |   |   |
| 2006                |   |             |   |   |   |   |   |              |   |   |                |   |   |   |   |   |
| First      Quarter  |   | $                | 56.22  |   |   | $      | 44.70  |              |   | $      | 0.8100              |   |   |   | 0.018566 |   |
| Second      Quarter |   |             | 48.80  |   |   |   | 43.62  |              |   |   | 0.8100              |   |   |   | 0.018860 |   |
| Third      Quarter  |   |             | 46.53  |   |   |   | 42.80  |              |   |   | 0.8100              |   |   |   | 0.018981 |   |
| Fourth      Quarter |   |             | 48.98  |   |   |   | 43.01  |              |   |   | 0.8300              |   |   |   | 0.016919 |   |

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

|                                                                                                                            |   |                                               |     |   |    |   |     |    |   |   |     |   |   |   |     |
|---------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|----------|--------|---------|--------|----------|---------|--------|--------|----------|--------|--------|--------|----------|
|                                                                                                                            |   | Year      Ended December 31,                       |     |
|                                                                                                                            |   |                                               |     |
|                                                                                                                            |   | 2007(6)                                            |     |   | 2006(7) |   |     | 2005(8) |   |   | 2004(9)  |   |   |   | 2003     | (10) |
|                                                                                                                            |   |                                               |     |   |    |   |     |    |   |   |     |   |   |   |     |   |
|                                                                                                                            |   | (In      millions, except per unit and ratio data) |     |
| Income      and Cash Flow Data:                                                                                                 |   |                                               |     |   |    |   |     |    |   |   |     |   |   |   |     |   |
| Revenues                                                                                                                        |   | $                                                  | 9,217.7  |   |    | $      | 9,048.7  |    |   | $      | 9,745.9  |   |   | $      | 7,893.0  |   |   | $ | 6,583.6 |   |
| Costs,      Expenses and Other:                                                                                                 |   |                                               |     |   |    |   |     |    |   |   |     |   |   |   |     |   |   |   |   |   |
| Gas      purchases and other costs of sales                                                                                     |   |                                               | 5,809.8  |   |    |   | 5,990.9  |    |   |   | 7,167.3  |   |   |   | 5,767.0  |   |   |   | 4,880.0 |   |
| Operations      and maintenance                                                                                                 |   |                                               | 1,024.6  |   |    |   | 777.0    |    |   |   | 719.5    |   |   |   | 488.6    |   |   |   | 388.6 |   |
| Fuel      and power                                                                                                             |   |                                               | 237.5    |   |    |   | 223.7    |    |   |   | 178.5    |   |   |   | 146.4    |   |   |   | 102.2 |   |
| Depreciation,      depletion and amortization                                                                                   |   |                                               | 540.0    |   |    |   | 423.9    |    |   |   | 341.6    |   |   |   | 281.1    |   |   |   | 212.2 |   |
| General      and administrative                                                                                                 |   |                                               | 278.7    |   |    |   | 238.4    |    |   |   | 216.7    |   |   |   | 170.5    |   |   |   | 150.5 |   |
| Taxes,      other than income taxes                                                                                             |   |                                               | 153.8    |   |    |   | 134.4    |    |   |   | 106.5    |   |   |   | 79.1     |   |   |   | 60.3 |   |
| Other      expense (income)                                                                                                     |   |                                               | 365.6    |   |    |   | (31.2    | )       |   |   | —  |   |   |   | —  |   |   |   | — |   |
|                                                                                                                            |   |                                               |     |   |    |   |     |    |   |   |     |   |   |   |     |   |   |   |   |   |
|                                                                                                                            |   |                                               | 8,410.0  |   |    |   | 7,757.1  |    |   |   | 8,730.1  |   |   |   | 6,932.7  |   |   |   | 5,793.8 |   |
|                                                                                                                            |   |                                               |     |   |    |   |     |    |   |   |     |   |   |   |     |   |   |   |   |   |
| Operating      income                                                                                                           |   |                                               | 807.7    |   |    |   | 1,291.6  |    |   |   | 1,015.8  |   |   |   | 960.3    |   |   |   | 789.8 |   |
|                                                                                                                            |   |                                               |     |   |    |   |     |    |   |   |     |   |   |   |     |   |   |   |   |   |
| Other      income/(expense):                                                                                                    |   |                                               |     |   |    |   |     |    |   |   |     |   |   |   |     |   |   |   |   |   |
| Earnings      from equity investments                                                                                           |   |                                               | 69.7     |   |    |   | 74.0     |    |   |   | 89.6     |   |   |   | 81.8     |   |   |   | 91.2 |   |
| Amortization      of excess cost of equity investments                                                                          |   |                                               | (5.8     | )      |    |   | (5.6     | )       |   |   | (5.5     | )      |   |   | (5.6     | ) |   |   | (5.5 | ) |
| Interest,      net                                                                                                              |   |                                               | (391.4   | )      |    |   | (337.8   | )       |   |   | (259.0   | )      |   |   | (192.9   | ) |   |   | (181.4 | ) |
| Other,      net                                                                                                                 |   |                                               | 14.2     |   |    |   | 12.0     |    |   |   | 3.3      |   |   |   | 2.2      |   |   |   | 7.6 |   |
| Minority      interest                                                                                                          |   |                                               | (7.0     | )      |    |   | (15.4    | )       |   |   | (7.3     | )      |   |   | (9.6     | ) |   |   | (9.0 | ) |
| Income      tax provision                                                                                                       |   |                                               | (71.0    | )      |    |   | (29.0    | )       |   |   | (24.5    | )      |   |   | (19.7    | ) |   |   | (16.6 | ) |
|                                                                                                                            |   |                                               |     |   |    |   |     |    |   |   |     |   |   |   |     |   |   |   |   |   |
| Income      from continuing operations                                                                                          |   |                                               | 416.4    |   |    |   | 989.8    |    |   |   | 812.4    |   |   |   | 816.5    |   |   |   | 676.1 |   |
| Income      (loss) from discontinued operations(1)                                                                              |   |                                               | 173.9    |   |    |   | 14.3     |    |   |   | (0.2     | )      |   |   | 15.1     |   |   |   | 17.8 |   |
|                                                                                                                            |   |                                               |     |   |    |   |     |    |   |   |     |   |   |   |     |   |   |   |   |   |
| Income      before cumulative effect of a change in accounting    principle                                                     |   |                                               | 590.3    |   |    |   | 1,004.1  |    |   |   | 812.2    |   |   |   | 831.6    |   |   |   | 693.9 |   |
| Cumulative      effect of a change in accounting principle                                                                      |   |                                               | —  |   |    |   | —  |    |   |   | —  |   |   |   | —  |   |   |   | 3.4 |   |
|                                                                                                                            |   |                                               |     |   |    |   |     |    |   |   |     |   |   |   |     |   |   |   |   |   |
| Net      income                                                                                                                 |   | $                                                  | 590.3    |   |    | $      | 1,004.1  |    |   | $      | 812.2    |   |   | $      | 831.6    |   |   | $ | 697.3 |   |
| Less:      General Partner’s interest in net income                                                                       |   |                                               | (611.6   | )      |    |   | (513.3   | )       |   |   | (477.3   | )      |   |   | (395.1   | ) |   |   | (326.5 | ) |
|                                                                                                                            |   |                                               |     |   |    |   |     |    |   |   |     |   |   |   |     |   |   |   |   |   |
| Limited      Partners’ interest in net income (loss)                                                                      |   | $                                                  | (21.3    | )      |    | $      | 490.8    |    |   | $      | 334.9    |   |   | $      | 436.5    |   |   | $ | 370.8 |   |
|                                                                                                                            |   |                                               |     |   |    |   |     |    |   |   |     |   |   |   |     |   |   |   |   |   |
|                                                                                                                            |   |                                               |     |   |    |   |     |    |   |   |     |   |   |   |     |   |   |   |   |   |
| Basic      Limited Partners’ net income (loss) per unit:                                                                  |   |                                               |     |   |    |   |     |    |   |   |     |   |   |   |     |   |   |   |   |   |
| Income      (loss) per unit from continuing operations and before cumulative effect of      a change in accounting principle(2) |   | $                                                  | (0.82    | )      |    | $      | 2.12     |    |   | $      | 1.58     |   |   | $      | 2.14     |   |   | $ | 1.89 |   |
| Income      from discontinued operations                                                                                        |   |                                               | 0.73     |   |    |   | 0.07     |    |   |   | —  |   |   |   | 0.08     |   |   |   | 0.09 |   |
| Cumulative      effect of a change in accounting principle                                                                      |   |                                               | —  |   |    |   | —  |    |   |   | —  |   |   |   | —  |   |   |   | 0.02 |   |
|                                                                                                                            |   |                                               |     |   |    |   |     |    |   |   |     |   |   |   |     |   |   |   |   |   |
| Net      income (loss) per unit                                                                                                 |   | $                                                  | (0.09    | )      |    | $      | 2.19     |    |   | $      | 1.58     |   |   | $      | 2.22     |   |   | $ | 2.00 |   |
|                                                                                                                            |   |                                               |     |   |    |   |     |    |   |   |     |   |   |   |     |   |   |   |   |   |
|                                                                                                                            |   |                                               |     |   |    |   |     |    |   |   |     |   |   |   |     |   |   |   |   |   |
| Diluted      Limited Partners’ net income (loss) per unit:                                                                |   |                                               |     |   |    |   |     |    |   |   |     |   |   |   |     |   |   |   |   |   |
| Income      (loss) per unit from continuing operations and bef. cumulative effect of a      change in acctg. principle(2)       |   | $                                                  | (0.82    | )      |    | $      | 2.12     |    |   | $      | 1.58     |   |   | $      | 2.14     |   |   | $ | 1.89 |   |
| Income      from discontinued operations                                                                                        |   |                                               | 0.73     |   |    |   | 0.06     |    |   |   | —  |   |   |   | 0.08     |   |   |   | 0.09 |   |
| Cumulative      effect of a change in accounting principle                                                                      |   |                                               | —  |   |    |   | —  |    |   |   | —  |   |   |   | —  |   |   |   | 0.02 |   |
|                                                                                                                            |   |                                               |     |   |    |   |     |    |   |   |     |   |   |   |     |   |   |   |   |   |
| Net      income (loss) per unit                                                                                                 |   | $                                                  | (0.09    | )      |    | $      | 2.18     |    |   | $      | 1.58     |   |   | $      | 2.22     |   |   | $ | 2.00 |   |
|                                                                                                                            |   |                                               |     |   |    |   |     |    |   |   |     |   |   |   |     |   |   |   |   |   |
|                                                                                                                            |   |                                               |     |   |    |   |     |    |   |   |     |   |   |   |     |   |   |   |   |   |
| Per      unit cash distribution declared(3)                                                                                     |   | $                                                  | 3.48     |   |    | $      | 3.26     |    |   | $      | 3.13     |   |   | $      | 2.87     |   |   | $ | 2.63 |   |
| Ratio      of earnings to fixed charges(4)                                                                                      |   | $                                                  | 2.13     |   |    | $      | 3.64     |    |   |   | 3.76     |   |   |   | 4.84     |   |   |   | 4.68 |   |
| Additions      to property, plant and equipment                                                                                 |   | $                                                  | 1,691.6  |   |    | $      | 1,182.1  |    |   | $      | 863.1    |   |   | $      | 747.3    |   |   | $ | 577.0 |   |
|                                                                                                                            |   |                                               |     |   |    |   |     |    |   |   |     |   |   |   |     |   |   |   |   |   |
| Balance      Sheet Data (at end of period):                                                                                     |   |                                               |     |   |    |   |     |    |   |   |     |   |   |   |     |   |   |   |   |   |
| Net      property, plant and equipment                                                                                          |   | $                                                  | 11,591.3 |   |    | $      | 10,106.1 |    |   | $      | 8,864.6  |   |   | $      | 8,168.9  |   |   | $ | 7,091.6 |   |
| Total      assets                                                                                                               |   | $                                                  | 15,177.8 |   |    | $      | 13,542.2 |    |   | $      | 11,923.5 |   |   | $      | 10,552.9 |   |   | $ | 9,139.2 |   |
| Long-term      debt(5)                                                                                                          |   | $                                                  | 6,455.9  |   |    | $      | 4,384.3  |    |   | $      | 5,220.9  |   |   | $      | 4,722.4  |   |   | $ | 4,316.7 |   |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)    | Represents      income or loss from the operations of our North System natural gas liquids      pipeline system. For 2007 only, also includes a gain of $152.8 million on      disposal of our North System. For more information on our discontinued      operations, see Note 3 to our consolidated financial statements included      elsewhere in this report.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (2)    | Represents      income from continuing operations before cumulative effect of a change in      accounting principle per unit. Basic Limited Partners’ income per unit      from continuing operations before cumulative effect of a change in      accounting principle was computed by dividing the interest of our      unitholders in income from continuing operations before cumulative effect      of a change in accounting principle by the weighted average number of      units outstanding during the period. Diluted Limited Partners’ net income      per unit reflects the maximum potential dilution that could occur if units      whose issuance depends on the market price of the units at a future date      were considered outstanding, or if, by application of the treasury stock      method, options to issue units were exercised, both of which would result      in the issuance of additional units that would then share in our net      income.                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (3)    | Represents      the amount of cash distributions declared with respect to that      year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (4)    | For      the purpose of computing the ratio of earnings to fixed charges, earnings      are defined as income from continuing operations before income taxes and      cumulative effect of a change in accounting principle, and before minority      interest in consolidated subsidiaries, equity earnings (including      amortization of excess cost of equity investments) and unamortized      capitalized interest, plus fixed charges and distributed income of equity      investees. Fixed charges are defined as the sum of interest on all      indebtedness (excluding capitalized interest), amortization of debt      issuance costs and that portion of rental expense which we believe to be      representative of an interest factor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (5)    | Excludes      value of interest rate swaps. Increases to long-term debt for value of      interest rate swaps totaled $152.2 million as of December 31, 2007, $42.6      million as of December 31, 2006, $98.5 million as of December 31, 2005,      $130.2 million as of December 31, 2004, and $121.5 million as of December      31, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (6)    | Includes      results of operations for an approximate 50.2% interest in the Cochin      pipeline system, the Vancouver Wharves marine terminal, and terminal      assets acquired from Marine Terminals, Inc. since effective dates of      acquisition. We acquired the remaining 50.2% interest in Cochin that we      did not already own from affiliates of BP effective January 1, 2007. We      acquired the Vancouver Wharves bulk marine terminal operations from      British Columbia Railway Company effective May 30, 2007, and we acquired      certain bulk terminal assets from Marine Terminals, Inc. effective      September 1, 2007. Also includes Trans Mountain since January 1, 2007 as      discussed below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (7)    | Includes      results of operations for the net assets of Trans Mountain acquired on      April 30, 2007 from Knight Inc. (formerly Kinder Morgan, Inc.) since      January 1, 2006. Also includes results of operations for the oil and gas      properties acquired from Journey Acquisition-I, L.P. and Journey 2000,      L.P., the terminal assets and operations acquired from A&L Trucking,      L.P. and U.S. Development Group, Transload Services, LLC, and Devco USA      L.L.C. since effective dates of acquisition. The April 5, 2006 acquisition      of the Journey oil and gas properties were made effective March 1, 2006.      The assets and operations acquired from A&L Trucking and U.S.      Development Group were acquired in three separate transactions in April      2006. We acquired all of the membership interests in Transload Services,      LLC effective November 20, 2006, and we acquired all of the membership      interests in Devco USA L.L.C. effective December 1, 2006. We also acquired      a 66 2/3% ownership interest in Entrega Pipeline LLC effective February      23, 2006, however, our earnings were not materially impacted during 2006      due to the fact that regulatory accounting provisions required      capitalization of revenues and expenses until the second segment of the      Entrega Pipeline was complete and in-service.                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (8)    | Includes      results of operations for the 64.5% interest in the Claytonville unit, the      seven bulk terminal operations acquired from Trans-Global Solutions, Inc.,      the Kinder Morgan Staten Island terminal, the terminal facilities located      in Hawesville, Kentucky and Blytheville, Arkansas, General Stevedores,      L.P., the North Dayton natural gas storage facility, the Kinder Morgan      Blackhawk terminal, the terminal repair shop acquired from Trans-Global      Solutions, Inc., and the terminal assets acquired from Allied Terminals,      Inc. since effective dates of acquisition. We acquired the 64.5% interest      in the Claytonville unit effective January 31, 2005. We acquired the seven      bulk terminal operations from Trans-Global Solutions, Inc. effective April      29, 2005. The Kinder Morgan Staten Island terminal, the Hawesville,      Kentucky terminal and the Blytheville, Arkansas terminal were each      acquired separately in July 2005. We acquired all of the partnership      interests in General Stevedores, L.P. effective July 31, 2005. We acquired      the North Dayton natural gas storage facility effective August 1, 2005. We      acquired the Kinder Morgan Blackhawk terminal in August 2005 and the      terminal repair shop in September 2005. We acquired the terminal assets      from Allied Terminals, Inc. effective November 4, 2005. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (9)    | Includes      results of operations for the seven refined petroleum products terminals      acquired from ExxonMobil, Kinder Morgan Wink Pipeline, L.P., an additional      5% interest in the Cochin Pipeline System, Kinder Morgan River Terminals      LLC and its consolidated subsidiaries, TransColorado Gas Transmission      Company LLC, interests in nine refined petroleum products terminals      acquired from Charter Terminal Company and Charter-Triad Terminals, LLC,      and the Kinder Morgan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Fairless      Hills terminal since effective dates of acquisition. We acquired the seven      refined petroleum products terminals from ExxonMobil effective March 9,      2004. We acquired Kinder Morgan Wink Pipeline, L.P. effective August 31,      2004. The additional interest in Cochin was acquired effective October 1,      2004. We acquired Kinder Morgan River Terminals LLC and its consolidated      subsidiaries effective October 6, 2004. We acquired TransColorado      effective November 1, 2004, the interests in the nine Charter Terminal      Company and Charter-Triad Terminals, LLC refined petroleum products      terminals effective November 5, 2004, and the Kinder Morgan Fairless Hills      terminal effective December 1, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (10)   | Includes      results of operations for the bulk terminal operations acquired from M.J.      Rudolph Corporation, the additional 12.75% interest in the SACROC unit,      the five refined petroleum products terminals acquired from Shell, the      additional 42.5% interest in the Yates field unit, the crude oil gathering      operations surrounding the Yates field unit, an additional 65% interest in      the Pecos Carbon Dioxide Company, the remaining approximate 32% interest      in MidTex Gas Storage Company, LLP, the seven refined petroleum products      terminals acquired from ConocoPhillips and two bulk terminal facilities      located in Tampa, Florida since dates of acquisition. We acquired certain      bulk terminal operations from M.J. Rudolph effective January 1, 2003. The      additional 12.75% interest in SACROC was acquired effective June 1, 2003.      The five refined petroleum products terminals were acquired effective      October 1, 2003. The additional 42.5% interest in the Yates field unit,      the Yates gathering system and the additional 65% interest in Pecos Carbon      Dioxide Company were acquired effective November 1, 2003. The additional      32% ownership interest in MidTex was acquired November 1, 2003. The seven      refined petroleum products terminals were acquired December 11, 2003, and      the two bulk terminal facilities located in Tampa, Florida were acquired      effective December 10 and 23, 2003. |

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

|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | the      April 30, 2007 transfer of Trans Mountain as if such transfer had taken      place on January 1, 2006, the effective date of common control pursuant to      generally accepted accounting principles. The financial information      contained in this Management’s Discussion and Analysis of Financial      Condition and Results of Operations includes the financial results of      Trans Mountain for all periods subsequent to January 1, 2006;      and                                                                                                                                                            |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | • | the      reclassifications necessary to reflect the results of our North System as      discontinued operations. However, due to the fact that the sale of our      North System does not change the structure of our internal organization in      a manner that causes a change to our reportable business segments pursuant      to the provisions of SFAS No. 131, “Disclosures about Segments of an      Enterprise and Related Information,” we have included the North System’s      financial results within our Products Pipelines business segment      disclosures for all periods presented in this  report. |

Critical Accounting Policies and Estimates

|   |    |                                                                                                                 |
|--------|---------|----------------------------------------------------------------------------------------------------------------------|
|   | • | the      economic useful lives of our assets;                                                                        |
|   |    |                                                                                                                 |
|   | • | the      fair values used to allocate purchase price and to determine possible      asset impairment charges;        |
|   |    |                                                                                                                 |
|   | • | reserves      for environmental claims, legal fees, transportation rate cases and other      litigation liabilities; |
|   |    |                                                                                                                 |
|   | • | provisions      for uncollectible accounts receivables;                                                              |
|   |    |                                                                                                                 |
|   | • | exposures      under contractual indemnifications; and                                                               |
|   |    |                                                                                                                 |
|   | • | unbilled      revenues.                                                                                              |

Results of Operations

|   |                                                                     |                                                                                                                               |
|--------|--------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------|
|   | Our      business model is built to support two principal    components: |
|   |                                                                     |                                                                                                                               |
|   | •                                                                  | helping      customers by providing energy, bulk commodity and liquids products      transportation, storage and distribution; and |
|   |                                                                     |                                                                                                                               |
|   | •                                                                  | creating      long-term value for ourunitholders.                                                                                  |

|                                                                                                                                    |   |                         |    |   |   |   |    |   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|---------|--------|--------|--------|---------|--------|--------|
| Consolidated                                                                                                                            |   |                         |    |   |   |   |    |   |   |
|                                                                                                                                    |   | Year      Ended December 31, |    |
|                                                                                                                                    |   |                         |    |
|                                                                                                                                    |   | 2007                         |    |   | 2006   |   |    | 2005   |   |
|                                                                                                                                    |   |                         |    |   |   |   |    |   |   |
|                                                                                                                                    |   | (In      millions)           |    |
| Earnings      before depreciation, depletion and amortizationexpense      and amortization of excess cost of equity investments(a)      |   |                         |    |   |   |   |    |   |   |
| Products      Pipelines(b)                                                                                                              |   | $                            | 569.6   |   |   | $      | 491.2   |   |   | $ | 370.1 |   |
| Natural      Gas Pipelines(c)                                                                                                           |   |                         | 600.2   |   |   |   | 574.8   |   |   |   | 500.3 |   |
| CO2      (d)                                                                                                                            |   |                         | 537.0   |   |   |   | 488.2   |   |   |   | 470.9 |   |
| Terminals(e)                                                                                                                            |   |                         | 416.0   |   |   |   | 408.1   |   |   |   | 314.6 |   |
| Trans      Mountain(f)                                                                                                                  |   |                         | (293.6  | )      |   |   | 76.5    |   |   |   | — |   |
|                                                                                                                                    |   |                         |    |   |   |   |    |   |   |   |   |   |
| Segment      earnings before depreciation, depletion and amortizationexpense      and amortization of excess cost of equity investments |   |                         | 1,829.2 |   |   |   | 2,038.8 |   |   |   | 1,655.9 |   |
|                                                                                                                                    |   |                         |    |   |   |   |    |   |   |   |   |   |
| Depreciation,      depletion and amortization expense(g)                                                                                |   |                         | (547.0  | )      |   |   | (432.8  | )      |   |   | (349.8 | ) |
| Amortization      of excess cost of equity investments                                                                                  |   |                         | (5.8    | )      |   |   | (5.7    | )      |   |   | (5.6 | ) |
| Interest      and corporate administrative expenses(h)                                                                                  |   |                         | (686.1  | )      |   |   | (596.2  | )      |   |   | (488.3 | ) |
|                                                                                                                                    |   |                         |    |   |   |   |    |   |   |   |   |   |
| Net      income                                                                                                                         |   | $                            | 590.3   |   |   | $      | 1,004.1 |   |   | $ | 812.2 |   |
|                                                                                                                                    |   |                         |    |   |   |   |    |   |   |   |   |   |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)    | Includes      revenues, earnings from equity investments, allocable interest income and      other, net, less operating expenses, allocable income taxes, and other      expense (income). Operating expenses include natural gas purchases and      other costs of sales, operations and maintenance expenses, fuel and power      expenses, and taxes, other than income taxes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (b)    | 2007      amount includes (i) a $152.8 million gain from the sale of our North      System; (ii) a $136.8 million increase in expense associated with rate      case and other legal liability adjustments; (iii) a $15.9 million increase      in expense associated with environmental liability adjustments; (iv) a      $15.0 million expense for a litigation settlement reached with Contra      Costa County, California; (v) a $3.2 million increase in expense from the      settlement of certain litigation matters related to our West Coast refined      products terminal operations; and (vi) a $1.8 million increase in income      resulting from unrealized foreign currency gains on long-term debt      transactions. 2006 amount includes a $16.5 million increase in expense      associated with environmental liability adjustments, and a $5.7 million      increase in income resulting from certain transmix contract settlements.      2005 amount includes a $105.0 million increase in expense resulting from a      rate case liability adjustment, a $13.7 million increase in expense      resulting from a North System liquids inventory reconciliation adjustment,      and a $19.6 million increase in expense associated with environmental      liability adjustments. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (c)    | 2007      amount includes an expense of $1.0 million, reflecting our portion of a      loss from the early extinguishment of debt by Red Cedar Gathering Company,      and a $0.4 million decrease in expense associated with environmental      liability adjustments. 2006 amount includes a $1.5 million increase in      expense associated with environmental liability adjustments, a $15.1      million gain from the combined sale of our Douglas natural gas gathering      system and Painter Unit fractionation facility, and a $6.3 million      reduction in expense due to the release of a reserve related to a natural      gas purchase/sales contract. 2005 amount includes a $0.1 million reduction      in expense associated with environmental liability      adjustments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (d)    | 2007      amount includes a $0.2 million increase in expense associated with      environmental liability adjustments. 2006 amount includes a $1.8 million      loss on derivative contracts used to hedge forecasted crude oil sales.      2005 amount includes a $0.3 million increase in expense associated with      environmental liability adjustments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (e)    | 2007      amount includes (i) a $25.0 million increase in expense from the      settlement of certain litigation matters related to our Cora coal      terminal; (ii) a $2.0 million increase in expense associated with      environmental liability adjustments; (iii) an increase in income of $1.8      million from property casualty gains associated with the 2005 hurricane      season; and (iv) a $1.2 million increase in expense associated with legal      liability adjustments. 2006 amount includes an $11.3 million net increase      in income from the net effect of a property casualty insurance gain and      incremental repair and clean-up expenses (both associated with the 2005      hurricane season). 2005 amount includes a $3.5 million increase in expense      associated with environmental liability adjustments.                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (f)    | As      discussed in Note 3 to our consolidated financial statements included      elsewhere in this report, our consolidated financial statements, and all      other financial information included in this report, are presented as      though the April 30, 2007 transfer of Trans Mountain net assets had      occurred on the date when both Trans Mountain and we met the accounting      requirements for entities under common control (January 1, 2006). 2007      amount includes losses of $349.2 million for periods prior to our      acquisition date of April 30, 2007 (including a goodwill impairment      expense of $377.1 million), and a $1.3 million decrease in income from an      oil loss allowance. 2006 amount represents earnings for a period prior to      our acquisition date of April 30,2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (g)    | 2007      and 2006 amounts include Trans Mountain expenses of $6.3 million and $19.0      million, respectively, for periods prior to our acquisition date of April      30, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (h)    | Includes      unallocated interest income and income tax expense, interest and debt      expense, general and administrative expenses (including unallocated      litigation and environmental expenses), and minority interest expense.      2007 amount includes the following: (i) a $26.2 million increase in      expense, allocated to us from Knight, associated with closing the      going-private transaction. Knight Inc. was responsible for the payment of      the costs resulting from this transaction; (ii) a combined $6.7 million      increase in expense, related to Trans Mountain interest and general and      administrative expenses for periods prior to our acquisition date of April      30, 2007; (iii) a $2.4 million increase in interest expense related to our      Cochin Pipeline acquisition; (iv) a $2.1 million expense due to the      adjustment of certain insurance related liabilities; (v) a $1.7 million      increase in expense associated with the 2005 hurricane season; (vi) a $1.5      million expense for certain Trans Mountain acquisition costs; (vii) a $0.8      million expense related to the cancellation of certain commercial      insurance policies; and (viii) a total $3.9 million decrease in minority      interest expense, related to the minority interest effect from all of the      previously listed items. 2006 amount includes a combined $25.1 million      expense related to Trans Mountain interest and general and administrative      expenses, a $2.0 million increase in expense, primarily related to the      cancellation of certain commercial insurance policies and a $3.5 million      increase in minority interest expense, primarily related to the minority      interest effect from the property casualty insurance gain described in      footnote (e). 2005 amount includes a $25.0 million expense for a      litigation settlement reached between us and a former joint venture      partner on our Kinder Morgan Tejas natural gas pipeline system, a      cumulative $8.4 million expense related to settlements of environmental      matters at certain of our operating sites located in the state of      California, and a $3.0 million decrease in expense related to proceeds      received in connection with the settlement of claims in the Enron Corp.      bankruptcy proceeding. |

|                                                                                                                            |   |                                            |   |   |   |   |    |   |   |
|---------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|--------|--------|--------|--------|---------|--------|--------|
|                                                                                                                            |   | Year      Ended December 31,                    |   |
|                                                                                                                            |   |                                            |   |
|                                                                                                                            |   | 2007                                            |   |   | 2006   |   |    | 2005   |   |
|                                                                                                                            |   |                                            |   |   |   |   |    |   |   |
|                                                                                                                            |   | (In      millions, except operating statistics) |   |
| Revenues                                                                                                                        |   | $                                               | 844.4  |   |   | $      | 776.3   |   |   | $ | 711.8 |   |
| Operating      expenses(a)                                                                                                      |   |                                            | (451.8 | )      |   |   | (308.3  | )      |   |   | (366.0 | ) |
| Other      income(b)                                                                                                            |   |                                            | 154.8  |   |   |   | — |   |   |   | — |   |
| Earnings      from equity investments(c)                                                                                        |   |                                            | 32.5   |   |   |   | 16.3    |   |   |   | 28.5 |   |
| Interest      income and Other, net-income (expense)(d)                                                                         |   |                                            | 9.4    |   |   |   | 12.1    |   |   |   | 6.1 |   |
| Income      tax benefit (expense)(e)                                                                                            |   |                                            | (19.7  | )      |   |   | (5.2    | )      |   |   | (10.3 | ) |
|                                                                                                                            |   |                                            |   |   |   |   |    |   |   |   |   |   |
| Earnings      before depreciation, depletion and amortizationexpense      and amortization of excess cost of equity investments |   | $                                               | 569.6  |   |   | $      | 491.2   |   |   | $ | 370.1 |   |
|                                                                                                                            |   |                                            |   |   |   |   |    |   |   |   |   |   |
|                                                                                                                            |   |                                            |   |   |   |   |    |   |   |   |   |   |
| Gasoline      (MMBbl)                                                                                                           |   |                                            | 435.5  |   |   |   | 449.8   |   |   |   | 452.1 |   |
| Diesel      fuel (MMBbl)                                                                                                        |   |                                            | 164.1  |   |   |   | 158.2   |   |   |   | 163.1 |   |
| Jet      fuel (MMBbl)                                                                                                           |   |                                            | 125.1  |   |   |   | 119.5   |   |   |   | 118.1 |   |
|                                                                                                                            |   |                                            |   |   |   |   |    |   |   |   |   |   |
| Total      refined product volumes (MMBbl)                                                                                      |   |                                            | 724.7  |   |   |   | 727.5   |   |   |   | 733.3 |   |
| Natural      gas liquids (MMBbl)                                                                                                |   |                                            | 30.4   |   |   |   | 34.0    |   |   |   | 33.5 |   |
|                                                                                                                            |   |                                            |   |   |   |   |    |   |   |   |   |   |
| Total      delivery volumes (MMBbl)(f)                                                                                          |   |                                            | 755.1  |   |   |   | 761.5   |   |   |   | 766.8 |   |
|                                                                                                                            |   |                                            |   |   |   |   |    |   |   |   |   |   |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)    | 2007,      2006 and 2005 amounts include increases in expense of $15.9 million, $13.5      million and $19.6 million, respectively, associated with environmental      liability adjustments. 2007 amount also includes a $136.7 million increase      in expense associated with rate case and other legal liability      adjustments, a $15.0 million expense for a litigation settlement reached      with Contra Costa County, California, and a $3.2 million increase in      expense from the settlement of certain litigation matters related to our      West Coast refined products terminal operations. 2005 amount also includes      a $105.0 million increase in expense associated with a rate case liability      adjustment, and a $13.7 million increase in expense associated with a      North System liquids inventory reconciliation  adjustment. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (b)    | 2007      amount includes a $152.8 million gain from the sale of our North      System.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (c)    | 2007      amount includes a $0.1 million increase in expense associated with our      proportional share of legal liability adjustments on Plantation Pipe Line      Company. 2006 amount includes a $4.9 million increase in expense      associated with our proportional share of environmental liability      adjustments on Plantation Pipe Line Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (d)    | 2007      amount includes a $1.8 million increase in income resulting from      unrealized foreign currency gains on long-term debt transactions. 2006      amount includes a $5.7 million increase in income resulting from transmix      contract settlements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (e)    | 2006      amount includes a $1.9 million decrease in expense associated with our      proportional share of the tax effect on our share of environmental      expenses incurred by Plantation Pipe Line Company and described in      footnote (c).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (f)    | Includes      Pacific, Plantation, CALNEV, Central Florida, Cochin, and Cypress pipeline      volumes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

|                                                                  |   |                                   |   |   |                |   |   |   |   |   |   |   |
|-----------------------------------------------------------------------|--------|----------------------------------------|--------|--------|---------------------|--------|--------|--------|--------|--------|--------|--------|
| Year Ended December      31, 2007 versus Year Ended December 31, 2006 |   |
|                                                                  |   | EBDA                                   |   |   | Revenues            |   |
|                                                                  |   | increase/(decrease)                    |   |   | Increase/(decrease) |   |
|                                                                  |   |                                   |   |   |                |   |
|                                                                  |   | (In      millions, except percentages) |   |
| Cochin      Pipeline System                                           |   | $                                      | 30.0   |   |                |   | 212    | %      |   | $      | 39.2   |   |   |   | 110 | % |
| West      Coast Terminals                                             |   |                                   | 12.3   |   |                |   | 34     | %      |   |   | 7.5    |   |   |   | 12 | % |
| Plantation      Pipeline                                              |   |                                   | 8.6    |   |                |   | 27     | %      |   |   | 1.0    |   |   |   | 2 | % |
| Transmix      operations                                              |   |                                   | 8.0    |   |                |   | 36     | %      |   |   | 10.6   |   |   |   | 32 | % |
| Pacific      operations                                               |   |                                   | 5.8    |   |                |   | 2      | %      |   |   | 18.4   |   |   |   | 5 | % |
| CALNEV      Pipeline                                                  |   |                                   | 5.1    |   |                |   | 11     | %      |   |   | 3.4    |   |   |   | 5 | % |
| Southeast      Terminals                                              |   |                                   | 5.0    |   |                |   | 13     | %      |   |   | (12.9  | )      |   |   | (16 | )% |
| North      System                                                     |   |                                   | 4.9    |   |                |   | 21     | %      |   |   | (2.6   | )      |   |   | (6 | )% |
| All      other (including eliminations)                               |   |                                   | 4.2    |   |                |   | 11     | %      |   |   | 3.5    |   |   |   | 7 | % |
|                                                                  |   |                                   |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Total      Products Pipelines                                         |   | $                                      | 83.9   |   |                |   | 17     | %      |   | $      | 68.1   |   |   |   | 9 | % |
|                                                                  |   |                                   |   |   |                |   |   |   |   |   |   |   |   |   |   |   |

|                                                                  |                                   |   |                |   |   |   |   |   |   |   |   |   |
|-----------------------------------------------------------------------|----------------------------------------|--------|---------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Year Ended December      31, 2006 versus Year Ended December 31, 2005 |                                   |
|                                                                  | EBDA                                   |   | Revenues            |   |
|                                                                  | Increase/(decrease)                    |   | increase/(decrease) |   |
|                                                                  |                                   |   |                |   |
|                                                                  | (In      millions, except percentages) |   |
| Cochin      Pipeline System                                           |                                   | $      | (5.2                | )      |   |   | (27    | )%     |   | $      | (0.5   | )      |   |   | (1 | )% |
| Southeast      Terminals                                              |                                   |   | 4.9                 |   |   |   | 15     | %      |   |   | 24.5   |   |   |   | 43 | % |
| Plantation      Pipeline                                              |                                   |   | (4.2                | )      |   |   | (12    | )%     |   |   | 1.5    |   |   |   | 4 | % |
| Pacific      operations                                               |                                   |   | (5.4                | )      |   |   | (2     | )%     |   |   | 16.2   |   |   |   | 5 | % |
| West      Coast Terminals                                             |                                   |   | (2.6                | )      |   |   | (7     | )%     |   |   | 6.5    |   |   |   | 11 | % |
| Transmix      operations                                              |                                   |   | 2.6                 |   |   |   | 13     | %      |   |   | 3.9    |   |   |   | 13 | % |
| All      other (including eliminations)                               |                                   |   | 3.5                 |   |   |   | 3      | %      |   |   | 12.4   |   |   |   | 8 | % |
|                                                                  |                                   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Products Pipelines                                         |                                   | $      | (6.4                | )      |   |   | (1     | )%     |   | $      | 64.5   |   |   |   | 9 | % |
|                                                                  |                                   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |

|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | a      $4.9 million (15%) increase from our Southeast refined products terminal      operations, driven by higher liquids throughput volumes at higher rates,      relative to 2005, and higher margins from ethanol blending and sales      activities;                                                                                                                                                                                                                                                                                                                     |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | • | a      $4.1 million (1%) increase from our combined Pacific and CALNEV Pipeline      operations, primarily due to a $22.6 million (6%) increase in operating      revenues, which more than offset an $18.3 million (18%) increase in      combined operating expenses. The increase in operating revenues consisted      of a $14.7 million (5%) increase from refined products deliveries and a      $7.9 million (8%) increase from terminal and other fee revenue. The      increase in operating expenses was primarily due to higher fuel and power      expenses; and |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | • | a      $3.7 million (12%) increase from our Central Florida Pipeline, mainly due      to higher product delivery revenues in 2006 driven by higher average      tariff and terminal rates.                                                                                                                                                                                                                                                                                                                                                                                   |

|                                                                                                                            |   |                                            |     |   |   |   |     |   |   |
|---------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|----------|--------|--------|--------|----------|--------|--------|
|                                                                                                                            |   | Year      Ended December 31,                    |     |
|                                                                                                                            |   |                                            |     |
|                                                                                                                            |   | 2007                                            |     |   | 2006   |   |     | 2005   |   |
|                                                                                                                            |   |                                            |     |   |   |   |     |   |   |
|                                                                                                                            |   | (In      millions, except operating statistics) |     |
| Revenues                                                                                                                        |   | $                                               | 6,466.5  |   |   | $      | 6,577.7  |   |   | $ | 7,718.4 |   |
| Operating      expenses(a)                                                                                                      |   |                                            | (5,882.9 | )      |   |   | (6,057.8 | )      |   |   | (7,255.0 | ) |
| Other      income(b)                                                                                                            |   |                                            | 3.2      |   |   |   | 15.1     |   |   |   | — |   |
| Earnings      from equity investments(c)                                                                                        |   |                                            | 19.2     |   |   |   | 40.5     |   |   |   | 36.8 |   |
| Interest      income and Other, net-income (expense)                                                                            |   |                                            | 0.2      |   |   |   | 0.7      |   |   |   | 2.7 |   |
| Income      tax benefit (expense)                                                                                               |   |                                            | (6.0     | )      |   |   | (1.4     | )      |   |   | (2.6 | ) |
|                                                                                                                            |   |                                            |     |   |   |   |     |   |   |   |   |   |
| Earnings      before depreciation, depletion and amortizationexpense      and amortization of excess cost of equity investments |   | $                                               | 600.2    |   |   | $      | 574.8    |   |   | $ | 500.3 |   |
|                                                                                                                            |   |                                            |     |   |   |   |     |   |   |   |   |   |
|                                                                                                                            |   |                                            |     |   |   |   |     |   |   |   |   |   |
| Natural      gas transport volumes (Trillion Btus)(d)                                                                           |   |                                            | 1,577.3  |   |   |   | 1,440.9  |   |   |   | 1,317.9 |   |
|                                                                                                                            |   |                                            |     |   |   |   |     |   |   |   |   |   |
| Natural      gas sales volumes (Trillion Btus)(e)                                                                               |   |                                            | 865.5    |   |   |   | 909.3    |   |   |   | 924.6 |   |
|                                                                                                                            |   |                                            |     |   |   |   |     |   |   |   |   |   |

|   |                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)    | 2007,      2006 and 2005 amounts include a $0.4 million decrease in expense, a $1.5      million increase in expense and a $0.1 million decrease in expense,      respectively, associated with environmental liability adjustments. 2006      amount also includes a $6.3 million reduction in expense due to the      release of a reserve related to a natural gas purchase/sales      contract. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                |
| (b)    | 2006      amount represents a $15.1 million gain from the combined sale of our      Douglas natural gas gathering system and Painter Unit fractionation      facility.                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                |
| (c)    | 2007      amount includes an expense of $1.0 million reflecting our portion of a      loss from the early extinguishment of debt by Red Cedar Gathering      Company.                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                |
| (d)    | Includes      Rocky Mountain pipeline group and Texas intrastate natural gas pipeline      group pipeline volumes.                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                |
| (e)    | Represents      Texas intrastate natural gas pipelinegroup.                                                                                                                                                                                                                                                                                                                                         |

|                                                                       |   |                                   |    |                        |   |    |   |   |    |   |   |    |   |
|----------------------------------------------------------------------------|--------|----------------------------------------|---------|-----------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|
| Year      Ended December 31, 2007 versus Year Ended December 31,      2006 |   |
|                                                                       |   |
|                                                                       |   | EBDAincrease/(decrease)                |    | Revenuesincrease/(decrease) |   |
|                                                                       |   |                                   |    |                        |   |
|                                                                       |   | (In      millions, except percentages) |    |
| Texas      Intrastate Natural Gas Pipeline Group                           |   | $                                      | 57.0    |                        |   | 19      | %      | $      | (142.2  | )      |   | (2      | )%     |
| Casper      and Douglas gas processing                                     |   |                                   | 8.6     |                        |   | 67      | %      |   | 5.6     |   |   | 6       | %      |
| Rocky      Mountain Pipeline Group                                         |   |                                   | (11.6   | )                           |   | (6      | )%     |   | 29.0    |   |   | 10      | %      |
| Red      Cedar Gathering Company                                           |   |                                   | (7.4    | )                           |   | (20     | )%     |   | — |   |   | — |   |
| All      others                                                            |   |                                   | (0.7    | )                           |   | (15     | )%     |   | (3.8    | )      |   | (94     | )%     |
| Intrasegment      Eliminations                                             |   |                                   | — |                        |   | — |   |   | 0.2     |   |   | 11      | %      |
|                                                                       |   |                                   |    |                        |   |    |   |   |    |   |   |    |   |
| Total      Natural Gas Pipelines                                           |   | $                                      | 45.9    |                        |   | 8       | %      | $      | (111.2  | )      |   | (2      | )%     |
|                                                                       |   |                                   |    |                        |   |    |   |   |    |   |   |    |   |

|                                                                       |   |                                   |    |                        |   |    |   |   |     |   |   |    |   |
|----------------------------------------------------------------------------|--------|----------------------------------------|---------|-----------------------------|--------|---------|--------|--------|----------|--------|--------|---------|--------|
| Year      Ended December 31, 2006 versus Year Ended December 31,      2005 |   |
|                                                                       |   |
|                                                                       |   | EBDAIncrease/(decrease)                |    | Revenuesincrease/(decrease) |   |
|                                                                       |   |                                   |    |                        |   |
|                                                                       |   | (In      millions, except percentages) |    |
| Texas      Intrastate Natural Gas Pipeline Group                           |   | $                                      | 34.6    |                        |   | 13      | %      | $      | (1,165.7 | )      |   | (16     | )%     |
| Rocky      Mountain Pipeline Group                                         |   |                                   | 14.3    |                        |   | 8       | %      |   | 27.9     |   |   | 11      | %      |
| Red      Cedar Gathering Company                                           |   |                                   | 4.3     |                        |   | 13      | %      |   | —  |   |   | — |   |
| Casper      and Douglas gas processing                                     |   |                                   | 2.9     |                        |   | 30      | %      |   | (6.4     | )      |   | (6      | )%     |
| All      others                                                            |   |                                   | (1.4    | )                           |   | (21     | )%     |   | 2.5      |   |   | 167     | %      |
| Intrasegment      Eliminations                                             |   |                                   | — |                        |   | — |   |   | 1.0      |   |   | 39      | %      |
|                                                                       |   |                                   |    |                        |   |    |   |   |     |   |   |    |   |
| Total      Natural Gas Pipelines                                           |   | $                                      | 54.7    |                        |   | 11      | %      | $      | (1,140.7 | )      |   | (15     | )%     |
|                                                                       |   |                                   |    |                        |   |    |   |   |     |   |   |    |   |

|                                                                                                                             |                                            |   |    |   |   |   |    |   |   |   |    |   |
|----------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|
|                                                                                                                             | Year      Ended December 31,                    |
|                                                                                                                             |                                            |
|                                                                                                                             | 2007                                            | 2006   | 2005    |
|                                                                                                                             |                                            |   |    |
|                                                                                                                             | (In      millions, except operating statistics) |
| Revenues(a)                                                                                                                      |                                            | $      | 824.1   |   |   | $      | 736.5   |   |   | $      | 657.6   |   |
| Operating      expenses(b)                                                                                                       |                                            |   | (304.2  | )      |   |   | (268.1  | )      |   |   | (212.6  | )      |
| Other      income                                                                                                                |                                            |   | — |   |   |   | — |   |   |   | — |   |
| Earnings      from equity investments                                                                                            |                                            |   | 19.2    |   |   |   | 19.2    |   |   |   | 26.3    |   |
| Other,      net-income (expense)                                                                                                 |                                            |   | — |   |   |   | 0.8     |   |   |   | — |   |
| Income      tax benefit (expense)                                                                                                |                                            |   | (2.1    | )      |   |   | (0.2    | )      |   |   | (0.4    | )      |
|                                                                                                                             |                                            |   |    |   |   |   |    |   |   |   |    |   |
| Earnings      before depreciation, depletion and amortization expense and amortization      of excess cost of equity investments |                                            | $      | 537.0   |   |   | $      | 488.2   |   |   | $      | 470.9   |   |
|                                                                                                                             |                                            |   |    |   |   |   |    |   |   |   |    |   |
|                                                                                                                             |                                            |   |    |   |   |   |    |   |   |   |    |   |
| Carbon      dioxide delivery volumes (Bcf)(c)                                                                                    |                                            |   | 637.3   |   |   |   | 669.2   |   |   |   | 649.3   |   |
|                                                                                                                             |                                            |   |    |   |   |   |    |   |   |   |    |   |
| SACROC      oil production (gross)(MBbl/d)(d)                                                                                    |                                            |   | 27.6    |   |   |   | 30.8    |   |   |   | 32.1    |   |
|                                                                                                                             |                                            |   |    |   |   |   |    |   |   |   |    |   |
| SACROC      oil production (net)(MBbl/d)(e)                                                                                      |                                            |   | 23.0    |   |   |   | 25.7    |   |   |   | 26.7    |   |
|                                                                                                                             |                                            |   |    |   |   |   |    |   |   |   |    |   |
| Yates      oil production (gross)(MBbl/d)(d)                                                                                     |                                            |   | 27.0    |   |   |   | 26.1    |   |   |   | 24.2    |   |
|                                                                                                                             |                                            |   |    |   |   |   |    |   |   |   |    |   |
| Yates      oil production (net)(MBbl/d)(e)                                                                                       |                                            |   | 12.0    |   |   |   | 11.6    |   |   |   | 10.8    |   |
|                                                                                                                             |                                            |   |    |   |   |   |    |   |   |   |    |   |
| Natural      gas liquids sales volumes (net)(MBbl/d)(e)                                                                          |                                            |   | 9.6     |   |   |   | 8.9     |   |   |   | 9.4     |   |
|                                                                                                                             |                                            |   |    |   |   |   |    |   |   |   |    |   |
| Realized      weighted average oil price per Bbl(f)(g)                                                                           |                                            | $      | 36.05   |   |   | $      | 31.42   |   |   | $      | 27.36   |   |
|                                                                                                                             |                                            |   |    |   |   |   |    |   |   |   |    |   |
| Realized      weighted average natural gas liquids price per Bbl(g)(h)                                                           |                                            | $      | 52.91   |   |   | $      | 43.90   |   |   | $      | 38.98   |   |
|                                                                                                                             |                                            |   |    |   |   |   |    |   |   |   |    |   |

|   |                                                                                                                                                                  |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |
|   |                                                                                                                                                                  |
| (a)    | 2006      amount includes a $1.8 million loss (from a decrease in revenues) on      derivative contracts used to hedge forecasted crude oil    sales.                 |
|   |                                                                                                                                                                  |
| (b)    | 2007      and 2005 amounts include increases in expense associated with      environmental liability adjustments of $0.2 million and $0.3 million,      respectively. |

|   |                                                                                                                                                                                      |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (c)    | Includes      Cortez, Central Basin, Canyon Reef Carriers, Centerline and Pecos pipeline      volumes.                                                                                    |
|   |                                                                                                                                                                                      |
| (d)    | Represents      100% of the production from the field. We own an approximate 97% working      interest in the SACROC unit and an approximate 50% working interest in the      Yates unit. |
|   |                                                                                                                                                                                      |
| (e)    | Net      to Kinder Morgan, after royalties and outside working      interests.                                                                                                            |
|   |                                                                                                                                                                                      |
| (f)    | Includes      all Kinder Morgan crude oil production properties.                                                                                                                          |
|   |                                                                                                                                                                                      |
| (g)    | Hedge      gains/losses for crude oil and natural gas liquids are included with crude      oil.                                                                                           |
|   |                                                                                                                                                                                      |
| (h)    | Includes      production attributable to leasehold ownership and production attributable      to our ownership in processing plants and third party processing      agreements.           |

| Year Ended December      31, 2007 versus Year Ended December 31, 2006 |                                   |
|-----------------------------------------------------------------------|----------------------------------------|
|                                                                  |                                   |   |   |   |
|                                                                  | EBDA                                   |   | Revenues |   |
|                                                                  | increase/(decrease)                    |   | increase/(decrease) |   |
|                                                                  | (In      millions, except percentages) |   |
| Sales and Transportation      Activities                              |                                   | $ | (9.3 | ) |   |   | (5 | )% |   | $ | (8.8 | ) |   |   | (4 | )% |
| Oil and Gas Producing      Activities                                 |                                   |   | 56.5 |   |   |   | 19 | % |   |   | 81.6 |   |   |   | 14 | % |
| Intrasegment      Eliminations                                        |                                   |   | — |   |   |   | — |   |   |   | 13.0 |   |   |   | 21 | % |
| Total CO2                                                             |                                   | $ | 47.2 |   |   |   | 10 | % |   | $ | 85.8 |   |   |   | 12 | % |

| Year Ended December      31, 2006 versus Year Ended December 31, 2005 |                                   |
|-----------------------------------------------------------------------|----------------------------------------|
|                                                                  |                                   |   |   |   |
|                                                                  | EBDA                                   |   | Revenues |   |
|                                                                  | increase/(decrease)                    |   | increase/(decrease) |   |
|                                                                  | (In      millions, except percentages) |   |
| Sales and Transportation      Activities                              |                                   | $ | 24.4 |   |   |   | 15 | % |   | $ | 35.78 |   |   |   | 22 | % |
| Oil and Gas Producing      Activities                                 |                                   |   | (5.6 | ) |   |   | (2 | )% |   |   | 57.1 |   |   |   | 10 | % |
| Intrasegment      Eliminations                                        |                                   |   | — |   |   |   | — |   |   |   | (12.1 | ) |   |   | (25 | )% |
| Total CO2                                                             |                                   | $ | 18.8 |   |   |   | 4 | % |   | $ | 80.7 |   |   |   | 12 | % |

|                                                                                                                             |                                            |   |   |   |   |   |   |   |   |   |    |   |
|----------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|
|                                                                                                                             | Year      Ended December 31,                    |
|                                                                                                                             |                                            |
|                                                                                                                             | 2007                                            | 2006   | 2005   |
|                                                                                                                             |                                            |   |   |
|                                                                                                                             | (In      millions, except operating statistics) |
| Revenues                                                                                                                         |                                            | $      | 963.7  |   |   | $      | 864.8  |   |   | $      | 699.3   |   |
| Operating      expenses(a)                                                                                                       |                                            |   | (536.4 | )      |   |   | (461.9 | )      |   |   | (373.4  | )      |
| Other      income(b)                                                                                                             |                                            |   | 6.3    |   |   |   | 15.2   |   |   |   | — |   |
| Earnings      from equity investments                                                                                            |                                            |   | 0.6    |   |   |   | 0.2    |   |   |   | 0.1     |   |
| Other,      net-income (expense)                                                                                                 |                                            |   | 1.0    |   |   |   | 2.1    |   |   |   | (0.2    | )      |
| Income      tax benefit (expense)(c)                                                                                             |                                            |   | (19.2  | )      |   |   | (12.3  | )      |   |   | (11.2   | )      |
|                                                                                                                             |                                            |   |   |   |   |   |   |   |   |   |    |   |
| Earnings      before depreciation, depletion and amortization expense and amortization      of excess cost of equity investments |                                            | $      | 416.0  |   |   | $      | 408.1  |   |   | $      | 314.6   |   |
|                                                                                                                             |                                            |   |   |   |   |   |   |   |   |   |    |   |
|                                                                                                                             |                                            |   |   |   |   |   |   |   |   |   |    |   |
| Bulk      transload tonnage (MMtons)(d)                                                                                          |                                            |   | 87.1   |   |   |   | 95.1   |   |   |   | 85.5    |   |
|                                                                                                                             |                                            |   |   |   |   |   |   |   |   |   |    |   |
| Liquids      leaseable capacity (MMBbl)                                                                                          |                                            |   | 47.5   |   |   |   | 43.5   |   |   |   | 42.4    |   |
|                                                                                                                             |                                            |   |   |   |   |   |   |   |   |   |    |   |
| Liquids      utilization %                                                                                                       |                                            |   | 95.9   | %      |   |   | 96.3   | %      |   |   | 95.4    | %      |
|                                                                                                                             |                                            |   |   |   |   |   |   |   |   |   |    |   |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)    | 2007      and 2005 amounts include increases in expense associated with      environmental liability adjustments of $2.0 million and $3.5 million,      respectively.2007 amount also includes a $25.0 million increase in expense      from the settlement of certain litigation matters related to our Cora coal      terminal, and a $1.2 million increase in expense associated with legal      liability adjustments. 2006 amount includes a $2.8 million increase in      expense related to hurricane clean-up and repair    activities. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (b)    | 2007      and 2006 amounts include increases in income of $1.8 million and $15.2      million, respectively, from property casualty gains associated with the      2005 hurricane season.                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (c)    | 2006      amount includes a $1.1 million increase in expense associated with      hurricane expenses and casualty gain.                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (d)    | Volumes      for acquired terminals are included for 2007 and  2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | all      of the membership interests of Transload Services, LLC, which provides      material handling and steel processing services at 14 steel-related      terminal facilities located in the Chicago metropolitan area and various      cities in the United States, acquired November 20,2006;                                                                                                                                       |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | • | all      of the membership interests of Devco USA L.L.C., which includes a      proprietary technology that transforms molten sulfur into solid pellets      that are environmentally friendly and easier to transport, acquired      December 1, 2006;                                                                                                                                                                                   |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | • | the      Vancouver Wharves bulk marine terminal, which includes five deep-sea      vessel berths and terminal assets located on the north shore of the Port      of Vancouver’s main harbor. The assets include significant rail      infrastructure, dry bulk and liquid storage, and material handling      systems, and were acquired May 30, 2007; and                                                                          |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | • | the      terminal assets and operations acquired from Marine Terminals, Inc., which      are primarily involved in the handling and storage of steel and alloys and      consist of two separate facilities located in Blytheville, Arkansas, and      individual terminal facilities located in Decatur, Alabama, Hertford,      North Carolina, and Berkley, South Carolina. The assets were acquired      effective September 1, 2007. |

|   |    |                                                                                                                                       |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | our      Texas Petcoke terminals, located in and around the Ports of Houston and      Beaumont, Texas, acquired effective April 29,  2005; |

|   |    |                                                                                                                                                                                                                                      |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | three      terminals acquired separately in July 2005: our Kinder Morgan Staten      Island terminal, a dry-bulk terminal located in Hawesville, Kentucky and a      liquids/dry-bulk facility located in Blytheville, Arkansas;      and |
|   |    |                                                                                                                                                                                                                                      |
|   | • | all      of the ownership interests in General Stevedores, L.P., which operates a      break-bulk terminal facility located along the Houston Ship Channel,      acquired effective July 31, 2005.                                        |

|                                                                                                                                |                                            |    |    |   |   |   |    |   |   |   |    |   |
|-------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------|---------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|
|                                                                                                                                | Year      Ended December 31,                    |
|                                                                                                                                |                                            |
|                                                                                                                                | 2007                                            | 2006(c) | 2005    |
|                                                                                                                                |                                            |    |    |
|                                                                                                                                | (In      millions, except operating statistics) |
| Revenues                                                                                                                            |                                            | $       | 160.8   |   |   | $      | 137.8   |   |   | $      | — |   |
| Operating      expenses                                                                                                             |                                            |    | (65.9   | )      |   |   | (53.3   | )      |   |   | — |   |
| Other      income (expense)(a)                                                                                                      |                                            |    | (377.1  | )      |   |   | 0.9     |   |   |   | — |   |
| Earnings      from equity investments                                                                                               |                                            |    | — |   |   |   | — |   |   |   | — |   |
| Other,      net-income (expense)                                                                                                    |                                            |    | 8.0     |   |   |   | 1.0     |   |   |   | — |   |
| Income      tax benefit (expense)                                                                                                   |                                            |    | (19.4   | )      |   |   | (9.9    | )      |   |   | — |   |
|                                                                                                                                |                                            |    |    |   |   |   |    |   |   |   |    |   |
| Earnings      before depreciation, depletion and amortization expense and amortization      of excess cost of equity investments(b) |                                            | $       | (293.6  | )      |   | $      | 76.5    |   |   | $      | — |   |
|                                                                                                                                |                                            |    |    |   |   |   |    |   |   |   |    |   |
|                                                                                                                                |                                            |    |    |   |   |   |    |   |   |   |    |   |
| Transport      volumes (MMBbl)                                                                                                      |                                            |    | 94.4    |   |   |   | 83.7    |   |   |   | — |   |
|                                                                                                                                |                                            |    |    |   |   |   |    |   |   |   |    |   |

|   |                                                                                                                                                                                        |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)    | 2007      amount represents a goodwill impairment expense recorded by Knight in the      first quarter of 2007.                                                                             |
|   |                                                                                                                                                                                        |
| (b)    | 2007      amount includes losses of $349.2 million for periods prior to our      acquisition date of April 30, 2007, and a $1.3 million decrease in income      from an oil loss allowance. |
|   |                                                                                                                                                                                        |
| (c)    | 2006      amounts relate to periods prior to our acquisition date of April 30, 2007.      See discussion below.                                                                             |

|                                                         | Year EndedDecember    31,                              | Earnings |
|--------------------------------------------------------------|--------------------------------------------------------|----------|
|                                                         | 2007                                                   | 2006     | increase/(decrease) |
|                                                         | (In      millions-income (expense), exceptpercentages) |
| General      and administrative expenses(a)                  |                                                   | $        | (278.7 | ) |   | $ | (238.4 | ) |   | $ | (40.3 | ) |   |   | (17 | )% |
| Interest      expense, net of unallocable interest income(b) |                                                   |     | (395.8 | ) |   |   | (342.4 | ) |   |   | (53.4 | ) |   |   | (16 | )% |
| Unallocable      income tax benefit (expense)                |                                                   |     | (4.6 | ) |   |   | — |   |   |   | (4.6 | ) |   |   | — |   |
| Minority      interest(c)                                    |                                                   |     | (7.0 | ) |   |   | (15.4 | ) |   |   | 8.4 |   |   |   | 55 | % |
| Total      interest and corporate administrative expenses    |                                                   | $        | (686.1 | ) |   | $ | (596.2 | ) |   | $ | (89.9 | ) |   |   | (15 | )% |

|                                                         | Year EndedDecember    31,                              | Earnings |
|--------------------------------------------------------------|--------------------------------------------------------|----------|
|                                                         | 2006                                                   | 2005     | increase/(decrease) |
|                                                         | (In      millions-income (expense), exceptpercentages) |
| General      and administrative expenses(a)                  |                                                   | $        | (238.4 | ) |   | $ | (216.7 | ) |   | $ | (21.7 | ) |   |   | (10 | )% |
| Interest      expense, net of unallocable interest income(b) |                                                   |     | (342.4 | ) |   |   | (264.3 | ) |   |   | (78.1 | ) |   |   | (30 | )% |
| Minority      interest(c)                                    |                                                   |     | (15.4 | ) |   |   | (7.3 | ) |   |   | (8.1 | ) |   |   | (111 | )% |
| Total      interest and corporate administrative expenses    |                                                   | $        | (596.2 | ) |   | $ | (488.3 | ) |   | $ | (107.9 | ) |   |   | (22 | )% |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |
| (a)    | 2007      amount includes (i) a $26.2 million increase in expense, allocated to us      from Knight, associated with closing the going-private transaction. Knight      Inc. was responsible for the payment of the costs resulting from this      transaction; (ii) a $5.5 million expense related to Trans Mountain      expenses for periods prior to our acquisition date of April 30, 2007;      (iii) a $2.1 million expense due to the adjustment of certain insurance      related liabilities; (iv) a $1.7 million increase in expense associated      with the 2005 hurricane season; (v) a $1.5 million expense for certain      Trans Mountain acquisition costs; and (vi) a $0.8 million expense related      to the cancellation of certain commercial insurance policies. 2006 amount      includes Trans Mountain expenses of $18.8 million, a $2.4 million increase      in expense related to the cancellation of certain commercial insurance      policies, and a $0.4 million decrease in expense related to the allocation      of general and administrative expenses on hurricane related capital      expenditures for the replacement and repair of assets. 2005 amount      includes a $25.0 million expense for a litigation settlement reached      between us and a former joint venture partner on our Kinder Morgan Tejas      natural gas pipeline system, a cumulative $8.4 million expense related to      settlements of environmental matters at certain of our operating sites      located in the state of California, and a $3.0 million decrease in expense      related to proceeds received in connection with the settlement of claims      in the Enron Corp. bankruptcy proceeding. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

|   |                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b)    | 2007      amount includes a $2.4 million increase in expense related to imputed      interest on our Cochin Pipeline acquisition, and Trans Mountain expenses      of $1.2 million for periods prior to our acquisition date of April 30,      2007. 2006 amount includes Trans Mountain expenses of $6.3      million.                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                       |
| (c)    | 2007      amount includes a $3.9 million decrease in expense, related to the      minority interest effect from all of the 2007 items listed in footnotes      (a) and (b). 2006 amount includes a $3.5 million increase in expense,      primarily related to the minority interest effect from the property      casualty insurance gain associated with the 2005 hurricane      season. |

Liquidity and Capital Resources

|                                                                                                    |   |              |     |   |   |     |   |   |    |   |
|---------------------------------------------------------------------------------------------------------|--------|-------------------|----------|--------|--------|----------|--------|--------|---------|--------|
|                                                                                                    |   | December      31, |     |
|                                                                                                    |   |              |     |
|                                                                                                    |   | 2007              |     | 2006   |   | 2005     |   |
|                                                                                                    |   |              |     |   |   |     |   |
| Long-term      debt, excluding market value of interest rate swaps                                      |   | $                 | 6,455.9  |   | $      | 4,384.3  |   | $      | 5,220.9 |   |
| Minority      interest                                                                                  |   |              | 54.2     |   |   | 60.2     |   |   | 42.3    |   |
| Partners’      capital, excluding accumulated other comprehensive loss                            |   |              | 5,712.3  |   |   | 5,814.4  |   |   | 4,693.5 |   |
|                                                                                                    |   |              |     |   |   |     |   |   |    |   |
| Total      capitalization                                                                               |   |              | 12,222.4 |   |   | 10,258.9 |   |   | 9,956.7 |   |
| Short-term      debt, less cash and cash equivalents                                                    |   |              | 551.3    |   |   | 1,352.4  |   |   | (12.1   | )      |
|                                                                                                    |   |              |     |   |   |     |   |   |    |   |
| Total      invested capital                                                                             |   | $                 | 12,773.7 |   | $      | 11,611.3 |   | $      | 9,944.6 |   |
|                                                                                                    |   |              |     |   |   |     |   |   |    |   |
|                                                                                                    |   |              |     |   |   |     |   |   |    |   |
| Capitalization:                                                                                         |   |              |     |   |   |     |   |   |    |   |
| Long-term      debt, excluding market value of interest rate swaps                                      |   |              | 52.8     | %      |   | 42.7     | %      |   | 52.4    | %      |
| Minority      interest                                                                                  |   |              | 0.5      | %      |   | 0.6      | %      |   | 0.4     | %      |
| Partners’      capital, excluding accumulated other comprehensive loss                            |   |              | 46.7     | %      |   | 56.7     | %      |   | 47.2    | %      |
|                                                                                                    |   |              |     |   |   |     |   |   |    |   |
|                                                                                                    |   |              | 100.0    | %      |   | 100.0    | %      |   | 100.0   | %      |
|                                                                                                    |   |              |     |   |   |     |   |   |    |   |
| Invested      Capital:                                                                                  |   |              |     |   |   |     |   |   |    |   |
| Total      debt, less cash and cash equivalents and excluding market value of      interest rate swaps  |   |              | 54.9     | %      |   | 49.4     | %      |   | 52.4    | %      |
| Partners’      capital and minority interest, excluding accumulated other comprehensive      loss |   |              | 45.1     | %      |   | 50.6     | %      |   | 47.6    | %      |
|                                                                                                    |   |              |     |   |   |     |   |   |    |   |
|                                                                                                    |   |              | 100.0    | %      |   | 100.0    | %      |   | 100.0   | %      |
|                                                                                                    |   |              |     |   |   |     |   |   |    |   |

|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | cash      distributions and sustaining capital expenditures with existing cash and      cash flows from operating activities;                                                                                                                                                                                                                                                                                         |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | • | expansion      capital expenditures and working capital deficits with retained cash      (resulting from including i-units in the determination of cash      distributions per unit but paying quarterly distributions on i-units in      additional i-units rather than cash), additional borrowings, the issuance      of additional common units or the proceeds from purchases of additional      i-units by KMR; |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | • | interest      payments with cash flows from operating activities; and                                                                                                                                                                                                                                                                                                                                                 |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | • | debt      principal payments with additional borrowings, as such debt principal      payments become due, or by the issuance of additional common units or the      proceeds from purchases of additional i-units by KMR.                                                                                                                                                                                             |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                  |

|   |    |                                                                                                                                                                                                                                                             |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | $992.8      million from a January 30, 2007 public offering of a total of $1.0 billion      in principal amount of senior notes, consisting of $600 million of 6.00%      notes due February 1, 2017, and $400 million of 6.50% notes due February      1, 2037; |
|   |    |                                                                                                                                                                                                                                                             |
|   | • | $543.9      million from a June 21, 2007 public offering of $550 million in principal      amount of 6.95% senior notes due January 15, 2038; and                                                                                                                |
|   |    |                                                                                                                                                                                                                                                             |
|   | • | $497.8      million from an August 28, 2007 public offering of $500 million in      principal amount of 5.85% senior notes due September 15,    2012.                                                                                                            |
|   |    |                                                                                                                                                                                                                                                             |

|                                                                     |             |                 |                          |                                                                     |            |                                          |    |   |   |   |    |   |   |   |    |   |
|--------------------------------------------------------------------------|------------------|----------------------|-------------------------------|--------------------------------------------------------------------------|-----------------|-----------------------------------------------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|
| Entity                                                                   | InvestmentType   | OurOwnershipInterest | RemainingInterest(s)Ownership | TotalEntityAssets(5)                                                     | TotalEntityDebt | OurContingentShare      ofEntity      Debt(6) |
|                                                                     |             |                 |                          |                                                                     |            |                                          |
| Cortez      Pipeline Company                                             | GeneralPartner   | 50                   | %                             | (1)                                                                      |            | $                                             | 79.9    |   |   | $      | 157.3   |   |   | $      | 78.7    | (2)    |
|                                                                     |             |                 |                          |                                                                     |            |                                          |    |   |   |   |    |   |   |   |    |   |
|                                                                     |             |                 |                          |                                                                     |            |                                          |    |   |   |   |    |   |   |   |    |   |
| West2East      Pipeline LLC(3)                                           | LimitedLiability | 51                   | %                             | ConocoPhillips      andSempra      Energy                                |            | $                                             | 2,730.2 |   |   | $      | 2,225.4 |   |   | $      | 1,135.0 |   |
|                                                                     |             |                 |                          |                                                                     |            |                                          |    |   |   |   |    |   |   |   |    |   |
| Nassau      County,Florida      Ocean HighwayAnd      Port Authority (4) | N/A              | N/A                  |                          | Nassau      County,Florida      OceanHighway      andPort      Authority |            |                                          | N/A     |   |   |   | N/A     |   |   | $      | 22.5    |   |

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

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (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 Investors Incorporated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (2)    | We      are severally liable for our percentage ownership share (50%) of the      Cortez Pipeline Company debt. As of December 31, 2007, Shell Oil Company      shares our several guaranty obligations jointly and severally for $64.3      million of Cortez’s debt balance; however, we are obligated to indemnify      Shell for the liabilities it incurs in connection with such guaranty.      Accordingly, as of December 31, 2007 we have a letter of credit in the      amount of $37.5 million issued by JP Morgan Chase, in order to secure our      indemnification obligations to Shell for 50% of the Cortez debt balance of      $64.3 million.                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | Further,      pursuant to a Throughput and Deficiency Agreement, the partners of Cortez      Pipeline Company are required to contribute capital to Cortez in the event      of a cash deficiency. The agreement contractually supports the financings      of Cortez Capital Corporation, a wholly-owned subsidiary of Cortez      Pipeline Company, by obligating the partners of Cortez Pipeline to fund      cash deficiencies at Cortez Pipeline, including anticipated deficiencies      and cash deficiencies relating to the repayment of principal and interest      on the debt of Cortez Capital Corporation. The partners’ respective parent      or other companies further severally guarantee the obligations of the      Cortez Pipeline owners under thisagreement. |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (3)    | West2East      Pipeline LLC is a limited liability company and is the sole owner of      Rockies Express Pipeline LLC. As of December 31, 2007, the remaining      limited liability member interests in West2East Pipeline LLC are owned by      ConocoPhillips (24%) and Sempra Energy (25%). We owned a 66 2/3% ownership      interest in West2East Pipeline LLC from October 21, 2005 until June 30,      2006, and we included its results in our consolidated financial statements      until June 30, 2006. On June 30, 2006, our ownership interest was reduced      to 51%, West2East Pipeline LLC was deconsolidated, and we subsequently      accounted for our investment under the equity method of accounting. Upon      completion of the pipeline, our ownership percentage is expected to be      reduced to 50%.                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (4)    | Arose      from our 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, we acquired Nassau Terminals LLC and became      guarantor under the letter of credit agreement. In December 2002, we      issued a $28 million letter of credit under our credit facilities and the      former letter of credit guarantee was terminated. As of December 31, 2007,      the face amount of this letter of credit outstanding under our credit      facility was $22.5 million. Principal payments on the bonds are made on      the first of December each year and reductions are made to the letter of      credit. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (5)    | Principally      property, plant and equipment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (6)    | Represents      the portion of the entity’s debt that we may be responsible for if the      entity cannot satisfy theobligation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

|                                              |   |                                            |     |   |                    |   |    |               |   |   |           |   |   |              |    |
|---------------------------------------------------|--------|-------------------------------------------------|----------|--------|-------------------------|--------|---------|--------------------|--------|--------|----------------|--------|--------|-------------------|---------|
|                                              |   | Amount      of Commitment Expiration per Period |     |
|                                              |   |                                            |     |
|                                              |   | Total                                           |     |   | 1      Yearor      Less |   |    | 2-3      Years     |   |   | 4-5      Years |   |   | After      5Years |    |
|                                              |   |                                            |     |   |                    |   |    |               |   |   |           |   |   |              |    |
|                                              |   |                                            |     |   |                    |   |    | (In      millions) |   |   |           |   |   |              |    |
| Contractual      Obligations:                     |   |                                            |     |   |                    |   |    |               |   |   |           |   |   |              |    |
| Commercial      paper outstanding                 |   | $                                               | 589.1    |   |                    | $      | 589.1   |               |   | $      | —        |   |   | $                 | — |   |   | $ | — |   |
| Other      debt borrowings-principal payments     |   |                                            | 6,488.2  |   |                    |   | 21.1    |               |   |   | 537.0          |   |   |              | 1,681.4 |   |   |   | 4,248.7 |   |
| Interest      payments(a)                         |   |                                            | 5,947.2  |   |                    |   | 443.7   |               |   |   | 788.0          |   |   |              | 633.9   |   |   |   | 4,081.6 |   |
| Lease      obligations(b)                         |   |                                            | 130.7    |   |                    |   | 31.7    |               |   |   | 42.7           |   |   |              | 28.1    |   |   |   | 28.2 |   |
| Pension      and post-retirement welfare plans(c) |   |                                            | 62.1     |   |                    |   | 4.6     |               |   |   | 9.7            |   |   |              | 10.9    |   |   |   | 36.9 |   |
| Other      obligations(d)                         |   |                                            | 146.1    |   |                    |   | 44.9    |               |   |   | 84.1           |   |   |              | 17.1    |   |   |   | — |   |
|                                              |   |                                            |     |   |                    |   |    |               |   |   |           |   |   |              |    |   |   |   |   |   |
| Total                                             |   | $                                               | 13,363.4 |   |                    | $      | 1,135.1 |               |   | $      | 1,461.5        |   |   | $                 | 2,371.4 |   |   | $ | 8,395.4 |   |
|                                              |   |                                            |     |   |                    |   |    |               |   |   |           |   |   |              |    |   |   |   |   |   |
|                                              |   |                                            |     |   |                    |   |    |               |   |   |           |   |   |              |    |   |   |   |   |   |
| Other      commercial commitments:                |   |                                            |     |   |                    |   |    |               |   |   |           |   |   |              |    |   |   |   |   |   |
| Standby      letters of credit(e)                 |   | $                                               | 672.4    |   |                    | $      | 634.9   |               |   | $      | —        |   |   | $                 | — |   |   | $ | 37.5 |   |
|                                              |   |                                            |     |   |                    |   |    |               |   |   |           |   |   |              |    |   |   |   |   |   |
| Capital      expenditures(f)                      |   | $                                               | 250.5    |   |                    | $      | 250.5   |               |   |   | —        |   |   |              | — |   |   |   | — |   |
|                                              |   |                                            |     |   |                    |   |    |               |   |   |           |   |   |              |    |   |   |   |   |   |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)    | Interest      payment obligations exclude adjustments for interest rate swap      agreements.                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (b)    | Represents      commitments for capital leases, including interest, and operating      leases.                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (c)    | Represents      expected benefit payments from pension and post-retirement welfare plans      as of December 31, 2007.                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (d)    | Consist      of payments due under carbon dioxide take-or-pay  contracts.                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (e)    | The      $672.4 million in letters of credit outstanding as of December 31 2007      consisted of the following: (i) a combined $298.0 million in three letters      of credit supporting our hedging of energy commodity price risks; (ii) a      $100 million letter of credit that supports certain proceedings with the      California Public Utilities Commission involving refined products tariff      charges |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | on      the intrastate common carrier operations of our Pacific operations’      pipelines in the state of California; (iii) a combined $58.3 million in      ten letters of credit supporting our Trans Mountain pipeline system      operations; (iv) a $37.5 million letter of credit supporting our      indemnification obligations on the Series D note borrowings of Cortez      Capital Corporation; (v) our $30.3 million guarantee under letters of      credit totaling $45.5 million supporting our International Marine      Terminals Partnership Plaquemines, Louisiana Port, Harbor, and Terminal      Revenue Bonds; (vi) a $25.3 million letter of credit supporting our Kinder      Morgan Liquids Terminals LLC New Jersey Economic Development Revenue      Bonds; (vii) a $24.1 million letter of credit supporting our Kinder Morgan      Operating L.P. “B” tax-exempt bonds; (viii) a $22.5 million letter of      credit supporting Nassau County, Florida Ocean Highway and Port Authority      tax-exempt bonds; (ix) a $19.9 million letter of credit supporting the      construction of our Kinder Morgan Louisiana Pipeline; (x) a $15.5 million      letter of credit supporting our pipeline and terminal operations in      Canada; (xi) a $5.4 million letter of credit supporting our Arrow      Terminals, L.P. Illinois Development Revenue Bonds; and (xii) a combined      $20.4 million in eight letters of credit supporting environmental and      other obligations of us and our subsidiaries. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (f)    | Represents      commitments for the purchase of plant, property and equipment as of      December 31, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | Operating      Activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | a      $159.1 million increase in cash attributable to changes in the reserves      related to the legal fees, transportation rate cases and other litigation      liabilities of our pipeline and terminal operations (consisting of an      incremental $140.0 million non-cash operating expense accrued in 2007, and      payments of $19.1 million made in June 2006 to certain shippers on our      Pacific operations’ pipelines). The expense was associated with a      liability adjustment made in December 2007, and the payments related to a      settlement agreement reached in May 2006 that resolved certain challenges      by complainants with regard to delivery tariffs and gathering enhancement      fees at our Pacific operations’ Watson Station, located in Carson,      California;                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | • | a      $139.1 million increase in cash inflows relative to changes in (i) other      non-current assets and liabilities, including, among other things,      incremental transportation and dock prepayments received from pipeline      customers (due primarily to timing differences); and (ii) other      incremental non-cash expenses, including higher non-cash operating      expenses in 2007 associated with environmental liability adjustments, and      higher non-cash general and administrative expenses related to the      activities required to complete KMI’s going-private transaction (with      regard to the going-private transaction expenses, we were required to      recognize the full amounts allocated to us from Knight as expense on our      income statement; however, due to the fact that almost all of the      allocated expenses were associated with the acceleration of cashouts of      grants of both KMI restricted stock and options on KMI stock, we were not      responsible for paying these buyout expenses, and accordingly, recognized      the unpaid amount as both a contribution to “Partners’ Capital” and an      increase to “Minority interest” on our balance sheet); |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | • | a      $95.1 million increase in cash inflows relative to net changes in working      capital items, mainly due to timing differences that resulted in higher      2007 net cash inflows from the collection and payment of trade and related      party receivables and payables, and from lower payments on accrued tax and      interest liabilities; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | • | a      $51.6 million decrease in cash from overall lower partnership income—net      of the following non-cash items: (i) depreciation, depletion and      amortization expenses; (ii) gains and losses on property sales and      casualty indemnifications; (iii) earnings from equity investees; and (iv)      a $377.1 million goodwill impairment charge recognized in the first      quarter of 2007. The increases and decreases in our partnership income in      2007 compared to 2006 are discussed above in “—Results of      Operations.”                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | a      $326.1 million increase due to higher expenditures made for strategic      business acquisitions. In 2007, our acquisition outlays for assets and      investments totaled $713.3 million, primarily consisting of $549.1 million      for net payments made to Knight for our acquisition of the Trans Mountain      pipeline system, $100.3 million for the acquisition of bulk terminal      assets from Marine Terminals, Inc., and $38.8 million for the purchase of      the Vancouver Wharves bulk marine terminal. In 2006, our acquisition      outlays totaled $387.2 million, primarily consisting of $244.6 million for      the acquisition of Entrega Gas Pipeline LLC and $89.1 million for the      acquisition of bulk, liquids and refined products terminal operations and      related assets. Both our 2007 and 2006 acquisition expenditures are      discussed more fully in Note 3 to our consolidated financial statements      included elsewhere in this report; |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | • | a      $509.5 million increase from higher capital expenditures—largely due to      increased investments undertaken to expand and improve our bulk and      liquids terminalling operations, and our Trans Mountain pipeline system.      Our sustaining capital expenditures, defined as capital expenditures that      do not increase the capacity of an asset, totaled $152.6 million in 2007      and $125.5 million in 2006. The above amounts do not include the      sustaining capital expenditures of our Trans Mountain business segment for      periods prior to our acquisition date of April 30, 2007. Additionally, our      forecasted expenditures for sustaining capital expenditures for 2008 are      approximately $196.2 million. All of our capital expenditures, with the      exception of sustaining capital expenditures, are      discretionary;                                                                                                               |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | • | a      $273.6 million increase from incremental contributions to equity      investments in 2007, largely driven by incremental investments of $202.7      million and $61.6 million, respectively, for our proportionate share of      construction costs of the Rockies Express and Midcontinent Express      pipelines; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | • | a      $231.8 million decrease in cash used due to higher net proceeds received      from the sales of property, plant and equipment and other net assets (net      of salvage and removal costs). The increase from sales proceeds in 2007      versus 2006 was driven by the approximately $298.6 million we received for      the sale of our North System operations in October 2007. In April 2006, we      received $42.5 million from Momentum Energy Group, LLC for the combined      sale of our Douglas natural gas gathering system and Painter Unit      fractionation facility, and in the first half of 2006, we received $27.1      million from the sale of certain oil and gas properties originally      acquired from Journey Acquisition – I, L.P. and Journey 2000,      L.P.                                                                                                                                                                                           |

|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | a      $334.5 million increase from overall debt financing activities—which      include our issuances and payments of debt and our debt issuance costs.      The year-to-year increase in cash from financing activities was primarily      due to (i) a $1,784.5 million net increase in cash inflows from the      issuances and payments of senior notes in 2007; and (ii) a $1,453.6      million decrease in cash from lower overall net commercial paper      borrowings in 2007, relative to 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |    | The      decrease in commercial paper borrowings includes a decrease of $412.5      million from borrowings under the commercial paper program of Rockies      Express Pipeline LLC in the first half of 2006. We held and consolidated a      66 2/3% ownership interest in Rockies Express Pipeline LLC until June 30,      2006. Effective June 30, 2006, ConocoPhillips exercised its option to      acquire a 25% ownership interest in West2East Pipeline LLC (and its      subsidiary Rockies Express Pipeline LLC), and West2East Pipeline LLC was      then deconsolidated and accounted for under the equity method of      accounting. Generally accepted accounting principles required us to      include its cash inflows and outflows in our consolidated statement of      cash flows for the six months ended June 30, 2006; however, following the      change from full consolidation to the equity method, Rockies Express’ debt      balances were not included in our consolidated balance sheet as of or      subsequent to June 30, 2006. |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |    | The      $1,784.5 million increase in cash inflows from changes in senior notes      outstanding was associated with public debt offerings completed on January      30, 2007, June 21, 2007 and August 28, 2007. On these dates,      we                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    | completed      offerings of $1.0 billion, $550 million and $500 million, respectively, in      principal amount of senior notes in four separate series: (i) $600 million      of 6.00% notes due February 1, 2017; (ii) $400 million of 6.50% notes due      February 1, 2037; (iii) $550 million of 6.95% notes due January 15, 2038;      and (iv) $500 million of 5.85% notes due September 15, 2012. Combined, we      received proceeds, net of underwriting discounts and commissions, of      $2,034.5 million from these long-term debt offerings and we used the      proceeds from each of these offerings to reduce the borrowings under our      commercial paper program. In addition, on August 15, 2007, we repaid $250      million of 5.35% senior notes that matured on thatdate;                                     |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | • | a      $392.4 million increase from overall equity financing activities—which      include our issuances of limited partner units. In May 2007, we received      proceeds of $297.9 million, after commissions and underwriting expenses,      for our issuance of 5,700,000 i-units to KMR, and in December 2007, we      received net proceeds of $342.9 million from a public offering of      7,130,000 common units. In 2006, we received proceeds of $248.4 million      from the issuance of additional common units, primarily related to our      August 2006 public offering of 5,750,000 of our common units at a price of      $44.80, less commissions and underwriting expenses. We used the proceeds      from each of these equity issuances to reduce the borrowings under our      commercial paper program; and |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | • | a      $100.9 million decrease from lower contributions from minority      interests—principally due to contributions of $104.2 million received in      2006 from Sempra Energy with regard to their ownership interest in Rockies      Express. The contributions from Sempra included an $80.0 million      contribution for its 33 1/3% share of the purchase price of Entrega Gas      Pipeline LLC, discussed above in “—Investing  Activities.”                                                                                                                                                                                                                                                                                                                                                           |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

|   |    |                                                                                                                                                                                                                                            |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | first,      98% to the owners of all classes of units pro rata and 2% to our general      partner until the owners of all classes of units have received a total of      $0.15125 per unit in cash or equivalent i-units for such      quarter; |

|   |    |                                                                                                                                                                                                                                                                                      |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | second,      85% of any available cash then remaining to the owners of all classes of      units pro rata and 15% to our general partner 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 our general partner 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 and Class B units in cash and to      owners of i-units in the equivalent number of i-units, and 50% to our      general partner.                    |

Recent Accounting Pronouncements

Information Regarding Forward-Looking Statements

|   |    |                                                                                                                                                                                                |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | price      trends and overall demand for natural gas liquids, refined petroleum      products, oil, carbon dioxide, natural gas, coal and other bulk materials      and chemicals in North America; |
|   |    |                                                                                                                                                                                                |
|   | • | economic      activity, weather, alternative energy sources, conservation and      technological advances that may affect price trends and      demand;                                             |
|   |    |                                                                                                                                                                                                |
|   | • | changes      in our tariff rates implemented by the Federal Energy Regulatory      Commission or the California Public Utilities  Commission;                                                       |
|   |    |                                                                                                                                                                                                |
|   | • | our      ability to acquire new businesses and assets and integrate those      operations into our existing operations, as well as our ability to make      expansions to our facilities;           |

|   |    |                                                                                                                                                                                                                                                                                                     |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | difficulties      or delays experienced by railroads, barges, trucks, ships or pipelines in      delivering products to or from our terminals or  pipelines;                                                                                                                                             |
|   |    |                                                                                                                                                                                                                                                                                                     |
|   | • | our      ability to successfully identify and close acquisitions and make      cost-saving changes in operations;                                                                                                                                                                                        |
|   |    |                                                                                                                                                                                                                                                                                                     |
|   | • | shut-downs      or cutbacks at major refineries, petrochemical or chemical plants, ports,      utilities, military bases or other businesses that use our services or      provide services or products to us;                                                                                           |
|   |    |                                                                                                                                                                                                                                                                                                     |
|   | • | crude      oil and natural gas production from exploration and production areas that      we serve, including, among others, the Permian Basin area of West      Texas;                                                                                                                                  |
|   |    |                                                                                                                                                                                                                                                                                                     |
|   | • | changes      in laws or regulations, third-party relations and approvals, decisions of      courts, regulators and governmental bodies that may adversely affect our      business or our ability to compete;                                                                                            |
|   |    |                                                                                                                                                                                                                                                                                                     |
|   | • | changes      in accounting pronouncements that impact the measurement of our results of      operations, the timing of when such measurements are to be made and      recorded, and the disclosures surrounding these  activities;                                                                       |
|   |    |                                                                                                                                                                                                                                                                                                     |
|   | • | our      ability to offer and sell equity securities and debt securities or obtain      debt financing in sufficient amounts to implement that portion of our      business plan that contemplates growth through acquisitions of operating      businesses and assets and expansions of our facilities; |
|   |    |                                                                                                                                                                                                                                                                                                     |
|   | • | our      indebtedness could make us vulnerable to general adverse economic and      industry conditions, limit our ability to borrow additional funds, and/or      place us at competitive disadvantages compared to our competitors that      have less debt or have other adverse consequences;        |
|   |    |                                                                                                                                                                                                                                                                                                     |
|   | • | interruptions      of electric power supply to our facilities due to natural disasters, power      shortages, strikes, riots, terrorism, war or other  causes;                                                                                                                                           |
|   |    |                                                                                                                                                                                                                                                                                                     |
|   | • | our      ability to obtain insurance coverage without significant levels of      self-retention of risk;                                                                                                                                                                                                 |
|   |    |                                                                                                                                                                                                                                                                                                     |
|   | • | acts      of nature, sabotage, terrorism or other similar acts causing damage      greater than our insurance coverage limits;                                                                                                                                                                           |
|   |    |                                                                                                                                                                                                                                                                                                     |
|   | • | capital      markets conditions;                                                                                                                                                                                                                                                                         |
|   |    |                                                                                                                                                                                                                                                                                                     |
|   | • | 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;                                                                                                                                                                                  |
|   |    |                                                                                                                                                                                                                                                                                                     |
|   | • | the      ability to achieve cost savings and revenue growth;                                                                                                                                                                                                                                             |
|   |    |                                                                                                                                                                                                                                                                                                     |
|   | • | inflation;                                                                                                                                                                                                                                                                                               |
|   |    |                                                                                                                                                                                                                                                                                                     |
|   | • | interest      rates;                                                                                                                                                                                                                                                                                     |
|   |    |                                                                                                                                                                                                                                                                                                     |
|   | • | the      pace of deregulation of retail natural gas and  electricity;                                                                                                                                                                                                                                    |
|   |    |                                                                                                                                                                                                                                                                                                     |
|   | • | foreign      exchange fluctuations;                                                                                                                                                                                                                                                                      |
|   |    |                                                                                                                                                                                                                                                                                                     |
|   | • | the      timing and extent of changes in commodity prices for oil, natural gas,      electricity and certain agricultural products;                                                                                                                                                                      |
|   |    |                                                                                                                                                                                                                                                                                                     |
|   | • | the      extent of our success in discovering, developing and producing oil and gas      reserves, including the risks inherent in exploration and development      drilling, well completion and other development  activities;                                                                         |

|   |    |                                                                                                                                                                                  |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | engineering      and mechanical or technological difficulties with operational equipment,      in well completions and workovers, and in drilling new    wells;                       |
|   |    |                                                                                                                                                                                  |
|   | • | the      uncertainty inherent in estimating future oil and natural gas production      or reserves;                                                                                   |
|   |    |                                                                                                                                                                                  |
|   | • | the      ability to complete expansion projects on time and on    budget;                                                                                                             |
|   |    |                                                                                                                                                                                  |
|   | • | the      timing and success of business development efforts; and                                                                                                                      |
|   |    |                                                                                                                                                                                  |
|   | • | unfavorable      results of litigation and the fruition of contingencies referred to in      Note 16 to our consolidated financial statements included elsewhere in      this report. |

Item 7A. Quantitativeand Qualitative Disclosures About Market Risk.

Energy Commodity Market Risk

|                                       |               |
|--------------------------------------------|--------------------|
|                                       | Credit      Rating |
|                                       |               |
| BNP      Paribas                           | AA+                |
| J.      Aron & Company / Goldman Sachs | AA–          |
| Morgan      Stanley                        | AA–          |

Interest Rate Risk

Item 8. FinancialStatements and Supplementary Data.

Item 9. Changes inand Disagreements with Accountants on Accounting and FinancialDisclosure.

Item 9A. Controls andProcedures.

|   |    |                                                                                                            |
|--------|---------|-----------------------------------------------------------------------------------------------------------------|
|   | • | the      Vancouver Wharves bulk marine terminal, acquired May 30, 2007;      and                                |
|   |    |                                                                                                            |
|   | • | the      terminal assets and operations acquired from Marine Terminals, Inc.,      effective September 1, 2007. |

Item 9B. OtherInformation.

PART III

Item 10. Directors,Executive Officers and Corporate Governance

Directors and Executive Officers of our General Partner and itsDelegate

|                      |   |   |   |                                                                 |
|---------------------------|--------|--------|--------|----------------------------------------------------------------------|
| Name                      |   | Age    |   | Position      with our General Partner and KMR                       |
|                      |   |   |   |                                                                 |
| Richard      D. Kinder    |   | 63     |   | Director,      Chairman and Chief Executive Officer                  |
| C.      Park Shaper       |   | 39     |   | Director      and President                                          |
| Steven      J. Kean       |   | 46     |   | Executive      Vice President and Chief Operating Officer            |
| Edward      O. Gaylord    |   | 76     |   | Director                                                             |
| Gary      L. Hultquist    |   | 64     |   | Director                                                             |
| Perry      M. Waughtal    |   | 72     |   | Director                                                             |
| Kimberly      A. Dang     |   | 38     |   | Vice      President, Investor Relations and Chief Financial  Officer |
| Jeffrey      R. Armstrong |   | 39     |   | Vice      President (President, Terminals)                           |
| Thomas      A. Bannigan   |   | 54     |   | Vice      President (President, Products Pipelines)                  |
| Richard      T. Bradley   |   | 52     |   | Vice      President (President, CO2)                                 |
| David      D. Kinder      |   | 33     |   | Vice      President, Corporate Development and Treasurer             |
| Joseph      Listengart    |   | 39     |   | Vice      President, General Counsel and Secretary                   |
| Scott      E. Parker      |   | 47     |   | Vice      President (President, Natural Gas Pipelines)               |
| James      E. Street      |   | 51     |   | Vice      President, Human Resources andAdministration               |

Corporate Governance

|   | • | Knight’s      EBITDA less capital spending, or the EBITDA less capital spending of one      of its subsidiaries or businessunits; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Knight’s      net income or the net income of one of its subsidiaries or business      units; |
|--------|---------|-----------------------------------------------------------------------------------------------------|

|   | • | Knight’s      revenues or the revenues of one of its subsidiaries or business      units; |
|--------|---------|-------------------------------------------------------------------------------------------------|

|   | • | Knight’s      unit revenues minus unit variable costs or the unit revenues minus unit      variable costs of one of its subsidiaries or business    units; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Knight’s      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 its subsidiaries or      business units; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Knight’s      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 its subsidiaries or businessunits; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Knight’s      capital expenditures or the capital expenditures of one of its      subsidiaries or business units; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------|

|   | • | Knight’s      operations and maintenance expense or general and administrative expense,      or the operations and maintenance expense or general and administrative      expense of one of its subsidiaries or business units;  or |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Knight’s      debt-equity ratios and key profitability ratios, or the debt-equity ratios      and key profitability ratios of one of its subsidiaries or business      units. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Knight      Annual Incentive Plan |
|-----------------------------------|
| Bonus      Opportunities for 2007 |

| 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) |
|                                                                                       |              |   |   |   |
| Scott      E. Parker, Vice President (President, Natural Gas      Pipelines)..........     |              |   | 1,500,000 | (3) |
|                                                                                       |              |   |   |   |
| C.      Park Shaper, Director and      President.......................................... |              |   | 1,500,000 | (3) |
|                                                                                       |              |   |   |   |

| (1) | Declined      to participate. |
|-----|-------------------------------|

| (2) | Under      the plan, for 2007, 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. The KMR compensation committee may, in its sole      discretion, reduce the award payable by us to any participant for any      reason. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Under      the plan, for 2007, 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. The KMR compensation committee may, in its sole      discretion, reduce the award payable by us to any participant for any      reason. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Pension      Benefits  |              |
|------------------------|-------------------|
|                   |              | Current |   | Present      Value of |   |   |   |
|                   |              | Credited      Yrs |   | Accumulated |   | Contributions |   |
| Name                   | Plan      Name    | of      Service |   | Benefit(1) |   | During      2007 |   |
| Richard D.      Kinder | Cash      Balance | 7 | $ | — |   | $ | — |   |
| Kimberly A.      Dang  | Cash      Balance | 6 |   | 31,408 |   |   | 7,294 |   |
| Steven J.    Kean      | Cash      Balance | 6 |   | 41,724 |   |   | 7,767 |   |
| Scott E.      Parker   | Cash      Balance | 9 |   | 71,515 |   |   | 9,130 |   |
| C. Park    Shaper      | Cash      Balance | 7 |   | 51,079 |   |   | 8,194 |   |

| (1) | The      present values in the Pension Benefits table are based on certain      assumptions-including a 5.75% discount rate, RP 2000 mortality      (post-retirement only), 5% cash balance interest crediting rate, and lump      sums calculated using a 5% interest rate and IRS mortality. We assumed      benefits would commence at normal retirement date or unreduced retirement      date, if earlier. No death or turnover was assumed prior to retirement      date. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                            |   |   |   |    |   |    |   | (1)         |   | (2)         |   | (3)          |   | (4)             |   | (5)            |   | (6)              |   |      |   |
|---------------------------------|--------|--------|--------|---------|--------|---------|--------|-------------|--------|-------------|--------|--------------|--------|-----------------|--------|----------------|--------|------------------|--------|-----------|--------|
|                            |   |   |   |    |   |    |   |        |   |        |   | Non-Equity   |   |            |   |           |   | Unit      Awards |   |      |   |
|                            |   |   |   |    |   |    |   | Stock       |   | Option      |   | Incentive    |   | Change          |   |           |   | by      Knight   |   |      |   |
| Name      and                   |   |   |   |    |   |    |   | Awards      |   | Awards      |   | Plan         |   | in      Pension |   | All      Other |   | Holdco           |   |      |   |
| Principal      Position         |   | Year   |   | Salary  |   | Bonus   |   | by      KMI |   | by      KMI |   | Compensation |   | Value           |   | Compensation   |   | LLC              |   | Total     |   |
| Richard      D. Kinder          |   | 2007   | $      | 1       | $      | — | $      | —     | $      | —     | $      | —      | $      | —         | $      | —        | $      | 1,016,000        | $      | 1,016,001 |   |
| Director,      Chairman and     |   | 2006   |   | 1       |   | — |   | —     |   | —     |   | —      |   | —         |   | —        |   | —          |   | 1         |   |
| Chief      Executive Officer    |   |   |   |    |   |    |   |        |   |        |   |         |   |            |   |           |   |             |   |      |   |
|                            |   |   |   |    |   |    |   |        |   |        |   |         |   |            |   |           |   |             |   |      |   |
| Kimberly      A. Dang           |   | 2007   |   | 200,000 |   | — |   | 338,095     |   | —     |   | 400,000      |   | 7,294           |   | 32,253         |   | 73,800           |   | 1,051,442 |   |
| Vice      President and         |   | 2006   |   | 200,000 |   | — |   | 139,296     |   | 37,023      |   | 270,000      |   | 6,968           |   | 46,253         |   | —          |   | 699,540   |   |
| Chief      Financial Officer    |   |   |   |    |   |    |   |        |   |        |   |         |   |            |   |           |   |             |   |      |   |
|                            |   |   |   |    |   |    |   |        |   |        |   |         |   |            |   |           |   |             |   |      |   |
| Steven      J. Kean             |   | 2007   |   | 200,000 |   | — |   | 4,397,080   |   | —     |   | 1,100,000    |   | 7,767           |   | 147,130        |   | 295,010          |   | 6,146,987 |   |
| Executive      Vice President   |   | 2006   |   | 200,000 |   | — |   | 1,591,192   |   | 147,943     |   | —      |   | 7,422           |   | 284,919        |   | —          |   | 2,231,476 |   |
| And                             |   |   |   |    |   |    |   |        |   |        |   |         |   |            |   |           |   |             |   |      |   |
| Chief      Operating Officer    |   |   |   |    |   |    |   |        |   |        |   |         |   |            |   |           |   |             |   |      |   |
|                            |   |   |   |    |   |    |   |        |   |        |   |         |   |            |   |           |   |             |   |      |   |
| Scott      E. Parker            |   | 2007   |   | 200,000 |   | — |   | 2,340,080   |   | —     |   | 1,100,000    |   | 9,130           |   | 307,688        |   | —          |   | 3,956,898 |   |
| Vice      President (President, |   | 2006   |   | 200,000 |   | 350,000 |   | 881,317     |   | 29,490      |   | 500,000      |   | 8,735           |   | 164,630        |   | —          |   | 2,134,172 |   |
| Natural      Gas Pipelines)     |   |   |   |    |   |    |   |        |   |        |   |         |   |            |   |           |   |             |   |      |   |
|                            |   |   |   |    |   |    |   |        |   |        |   |         |   |            |   |           |   |             |   |      |   |
| C.      Park Shaper             |   | 2007   |   | 200,000 |   | — |   | 1,950,300   |   | —     |   | 1,200,000    |   | 8,194           |   | 155,953        |   | 466,110          |   | 3,980,557 |   |
| Director      and President     |   | 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 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 KMI 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. However,      Knight 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 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 KMI 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 KMI going-private transaction, Messrs.      Kean and Shaper agreed to the cancellation of 10,467 and 22,031 options,      respectively. These cancelled options had weighted average exercise prices      of $39.12 and $24.75 per share, respectively. However, Knight bore all of      the costs associated with thisacceleration. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Represents      amounts paid according to the provisions of the Knight Annual Incentive      Plan. In the case of Mr. Parker, for the year 2006, an additional $350,000      was paid outside of the plan, as reflected in the Bonus column. Amounts      were earned in |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| (5) | Amounts      represent value of contributions to the Knight Savings Plan (a 401(k)      plan), value of group-term life insurance exceeding $50,000, taxable      parking subsidy and dividends paid on unvested restricted stock awards.      Amounts each year include $10,000 representing the value of contributions      to the Knight 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. Parker $77,000; and Mr. Shaper      $144,375; for 2006—Mrs. Dang $35,875; Mr. Kean $273,000; Mr. Parker      $154,000; and Mr. Shaper $336,875. Mr. Parker’s 2007 amount also includes      amounts for imputed income for company provided cellphone, a $100,000      relocation allowance, and a $130,000 payment to compensate for loss of      dividends associated with the KMI going-private    transaction. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (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      Knight or any of its other 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 Item 13. “Certain Relationships and      Related Transactions, and Director Independence—Related Transactions—KMI      Going-Private Transaction” for further discussion of these      units. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | each      option or other award to purchase shares of KMI common stock granted under      any Kinder Morgan employee or director equity plan, whether vested or      unvested, that was outstanding immediately prior to the effective time of      the buyout, vested as of the effective time of the buyout, and was      cancelled and converted into the right to receive a cash payment equal to      the number of shares of KMI common stock underlying such options      multiplied by the amount (if any) by which the $107.50 per share merger      consideration issued in the going-private transaction exceeded the option      exercise price, without interest and less any applicable withholding tax;      and |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | each      share of restricted stock or restricted stock unit under any Kinder Morgan      stock plan or benefit plan vested as of the effective time of the buyout      and was cancelled and converted into the right to receive a cash payment      equal to the number of outstanding shares of restricted stock or      restricted stock units, multiplied by the $107.50 per share merger      consideration, without interest and less any applicable withholding      tax. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   |   | Option      Awards |    |   | Stock      Awards |   |
|------------------------|--------|--------------------|---------|--------|-------------------|--------|
|                   |   | Stock              |    |   | Value             |   |   | Shares      of |   |   | Value |   |
| Name                   |   | Options            |    |   | Realized      (1) |   |   | Restricted      Stock |   |   | Realized      (2) |   |
| Richard D.      Kinder |   |               | — |   |              | $      | — |   |   |   | — |   |   | $ | — |   |
| Kimberly A.      Dang  |   |               | 24,750  |   |              |   | 1,443,178 |   |   |   | 8,000 |   |   |   | 860,000 |   |
| Steven J.      Kean(3) |   |               | 25,533  |   |              |   | 1,375,772 |   |   |   | 78,000 |   |   |   | 8,385,000 |   |
| Scott E.      Parker   |   |               | 10,000  |   |              |   | 537,000 |   |   |   | 44,000 |   |   |   | 4,730,000 |   |
| C. Park      Shaper(4) |   |               | 197,969 |   |              |   | 12,529,810 |   |   |   | 82,500 |   |   |   | 8,868,750 |   |

| (1) | Calculated      based on the actual exercise prices underlying the related options, as      opposed to the weighted average exercise price per share of      options. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Calculated      as $107.50 multiplied by the number of shares of restricted      stock. |
|-----|-----------------------------------------------------------------------------------------|

| (3) | Mr.      Kean, as a condition to his being permitted to participate as an investor      in Knight, agreed to the cancellation of 10,467 of his options shown      above, with a weighted average exercise price of $39.12 per share, prior      to the going-private transaction. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Mr.      Shaper, as a condition to his being permitted to participate as an      investor in Knight, agreed to the cancellation of 22,031 of his options      shown above, with a weighted average exercise price of $24.75 per share,      prior to the going-privatetransaction. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   |                  |   | Estimated      Possible Payouts Under  |    |   | All      other stock |   |      |            |   |
|------------------------|-----------------------|--------|----------------------------------------|---------|--------|----------------------|--------|-----------|-----------------|--------|
|                   |                  |   | Non-Equity Incentive Plan      Awards1 |    |   | awards2              |   |      | Grant      date |   |
|                   |                  |   |                                   |    |   |                 |   |      |            |   |   | Number |   |   | fair      value |   |
| Name                   | Grant      date       |   | Threshold                              |    |   | Target               |   |      | Maximum         |   |   | of      units |   |   | of      stock awards3 |   |
| Richard      D. Kinder | May      30, 2007     |   |                                   |    |   |                 |   |      |            |   |   |   | 791,405,452 |   |   | $ | 9,200,000 |   |
|                   |                  |   |                                   |    |   |                 |   |      |            |   |   |   |   |   |   |   |   |   |
| Kimberly      A. Dang  | January      17, 2007 |   | $                                      | 500,000 |   |                 | $      | 1,000,000 |            |   | $ | 1,500,000 |   |   |   |   |   |   |   |   |   |
|                   | May      30, 2007     |   |                                   |    |   |                 |   |      |            |   |   |   |   |   |   | 49,893,032 |   |   |   | 674,887 |   |
|                   |                  |   |                                   |    |   |                 |   |      |            |   |   |   |   |   |   |   |   |   |   |   |   |
| Steven      J. Kean    | January      17, 2007 |   |                                   | 750,000 |   |                 |   | 1,500,000 |            |   |   | 2,000,000 |   |   |   |   |   |   |   |   |   |
|                   | May      30, 2007     |   |                                   |    |   |                 |   |      |            |   |   |   |   |   |   | 162,114,878 |   |   |   | 2,720,252 |   |
|                   |                  |   |                                   |    |   |                 |   |      |            |   |   |   |   |   |   |   |   |   |   |   |   |
| Scott      E. Parker   | January      17, 2007 |   |                                   | 500,000 |   |                 |   | 1,500,000 |            |   |   | 2,000,000 |   |   |   |   |   |   |   |   |   |
|                   |                  |   |                                   |    |   |                 |   |      |            |   |   |   |   |   |   |   |   |   |   |   |   |
| C.      Park Shaper    | January      17, 2007 |   |                                   | 750,000 |   |                 |   | 1,500,000 |            |   |   | 2,000,000 |   |   |   |   |   |   |   |   |   |
|                   | May      30, 2007     |   |                                   |    |   |                 |   |      |            |   |   |   |   |   |   | 225,436,274 |   |   |   | 4,315,475 |   |

| 1 | Represents      grants under the Knight Annual Incentive Plan for performance in 2007. See      “Elements of Compensation— |
|---|----------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Represents      the sum of the number of Class A-1 units and the number of Class B units      of Knight Holdco LLC awarded to the named executive officers in connection      with the going-private transaction. See Item 13. “Certain Relationships      and Related Transactions, and Director Independence—Related      Transactions—KMI Going-Private Transaction” for detail regarding these      awards. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | Amounts      represent the fair value calculated in accordance with SFAS No. 123R      attributable to Class A-1 and Class B units of Knight Holdco LLC awarded      by Knight Holdco LLC to the named executive officers in connection with      the going-private transaction. None of the named executive officers has      received any payments in connection with such units, and none of us or our      subsidiaries are obligated to pay any amounts in respect of such units.      See Item 13. “Certain Relationships and Related Transactions, and Director      Independence—Related Transactions—KMI Going-Private Transaction” for      further discussion of these units. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   | Stock      awards:  |
|------------------------|---------------------|
|                   |                |   |   |   | Market      value of |
|                   |                |   | Number      of units that |   | units      of stock that |
| Name                   | Type      of units: |   | have      not vested |   | have      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 |
| 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 units. See Item 13. “Certain Relationships and Related      Transactions, and Director Independence—Related Transactions—KMI      Going-Private Transaction” for further discussion of these      units. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   | Fees      Earned or |   | Common      Unit |   | All      Other  |   |    |   |
|------------------------|---------------------|--------|------------------|--------|-----------------|--------|---------|--------|
| Name                   | Paid      in Cash   |   | Awards(1)        |   | Compensation(2) |   | Total   |   |
| Edward O.      Gaylord |                | $      | 64,089           |   |            | $      | 95,911  |   |   | $ | 111,466 |   |   | $ | 271,466 |   |
| Gary L.      Hultquist |                |   | 63,120           |   |            |   | 96,880  |   |   |   | 65,840 |   |   |   | 225,840 |   |
| Perry M.      Waughtal |                |   | 148              |   |            |   | 159,852 |   |   |   | 114,726 |   |   |   | 274,726 |   |

| (1) | Represents      the value of cash compensation received in the form of our common units      according to the provisions of our Common Unit Compensation Plan for      Non-Employee Directors. Value computed as the number of common units      elected to be received in lieu of cash times the closing price on date of      election. For Mr. Gaylord, 1,980 units elected on January 17, 2007 times      the closing price of $48.44; for Mr. Hultquist, 2,000 units elected times      the closing price of $48.44; and for Mr. Waughtal, 3,300 units elected      times the closing price of $48.44. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | For      each, represents (i) the value of common unit appreciation rights earned      according to the provisions of our Directors’ Unit Appreciation Rights      Plan for Non-Employee Directors, determined according to the provisions of      SFAS No. 123R—for each common unit appreciation right, equal to the      increase in value of a corresponding common unit from December 31, 2006 to      December 31, 2007; and (ii) distributions paid on unvested common units      awarded according to the provisions of our Common Unit Compensation Plan      for Non-Employee Directors. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Item 12. SecurityOwnership of Certain Beneficial Owners and Management and Related StockholderMatters.

|                                                               |   |                   |       |                 |   |                                     |   |                 |      |                    |   |                 |   |   |       |   |   |    |   |
|--------------------------------------------------------------------|--------|------------------------|------------|----------------------|--------|------------------------------------------|--------|----------------------|-----------|-------------------------|--------|----------------------|--------|--------|------------|--------|--------|---------|--------|
|                                                               |   | Common      Units      |       | Class      B Units   |   | Kinder      MorganManagement      Shares |   |
|                                                               |   |                   |       |                 |   |                                     |   |
|                                                               |   | Numberof      Units(2) |       | Percentof      Class |   | Numberof      Units(3)                   |   | Percentof      Class |      | Number      ofShares(4) |   | Percentof      Class |   |
|                                                               |   |                   |       |                 |   |                                     |   |                 |      |                    |   |                 |   |
| Richard      D. Kinder(5)                                          |   |                   | 315,979    |                 |   | *                                        |   |                 | —   |                    |   | —              |   |   | 84,663     |   |   | *       |   |
| C.      Park Shaper                                                |   |                   | 4,000      |                 |   | *                                        |   |                 | —   |                    |   | —              |   |   | 23,793     |   |   | *       |   |
| Edward      O. Gaylord(6)                                          |   |                   | 40,000     |                 |   | *                                        |   |                 | —   |                    |   | —              |   |   | —    |   |   | — |   |
| Gary      L. Hultquist                                             |   |                   | 11,500     |                 |   | *                                        |   |                 | —   |                    |   | —              |   |   | —    |   |   | — |   |
| Perry      M. Waughtal(7)                                          |   |                   | 46,918     |                 |   | *                                        |   |                 | —   |                    |   | —              |   |   | 46,180     |   |   | *       |   |
| Steven      J. Kean                                                |   |                   | —    |                 |   | —                                  |   |                 | —   |                    |   | —              |   |   | —    |   |   | — |   |
| Scott      E. Parker                                               |   |                   | —    |                 |   | —                                  |   |                 | —   |                    |   | —              |   |   | —    |   |   | — |   |
| Kimberly      A. Dang                                              |   |                   | 121        |                 |   | *                                        |   |                 | —   |                    |   | —              |   |   | 440        |   |   | *       |   |
| Directors      and Executive Officers as a group (14 persons)(8)   |   |                   | 435,995    |                 |   | *                                        |   |                 | —   |                    |   | —              |   |   | 175,027    |   |   | *       |   |
| Knight      Inc.(9)                                                |   |                   | 14,355,735 |                 |   | 8.43                                     | %      |                 | 5,313,400 |                    |   | 100.00               | %      |   | 10,334,746 |   |   | 14.27   | %      |
| Kayne      Anderson Capital Advisors,L.P. and Richard A. Kayne(10) |   |                   | —    |                 |   | —                                  |   |                 | —   |                    |   | —              |   |   | 7,869,016  |   |   | 10.86   | %      |
| Tortoise      Capital Advisors, L.L.C.(11)                         |   |                   | —    |                 |   | —                                  |   |                 | —   |                    |   | —              |   |   | 4,314,123  |   |   | 5.96    | %      |
| Janus      Capital Management LLC(12)                              |   |                   | —    |                 |   | —                                  |   |                 | —   |                    |   | —              |   |   | 3,647,958  |   |   | 5.04    | %      |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)    | Except      as noted otherwise, all units and KMR shares involve sole voting power and      sole investment power. For KMR, see note (4). On January 18, 2005, KMR’s      board of directors initiated a rule requiring each director to own a      minimum of 10,000 common units, KMR shares, or a combination      thereof.                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (2)    | As      of January 31, 2008, we had 170,224,734 common units issued and      outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (3)    | As      of January 31, 2008, we had 5,313,400 Class B units issued and      outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (4)    | Represent      the limited liability company shares of KMR. As of January 31, 2008, there      were 72,432,482 issued and outstanding KMR shares, including two voting      shares owned by our general partner. In all cases, our i-units will be      voted in proportion to the affirmative and negative votes, abstentions and      non-votes of owners of KMR shares. Through the provisions in our      partnership agreement and KMR’s limited liability company agreement, the      number of outstanding KMR shares, including voting shares owned by our      general partner, and the number of our i-units will at all times be      equal. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (5)    | Includes      7,879 common units owned by Mr. Kinder’s spouse. Mr. Kinder disclaims any      and all beneficial or pecuniary interest in theseunits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (6)    | Includes      1,520 restricted common units.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (7)    | Includes      2,818 restricted common units.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (8)    | Includes      4,338 restricted common units. Also includes 671 KMR shares purchased by      one of our executives for his children. The executive disclaims any      beneficial ownership in such KMR shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (9)    | Includes      common units owned by Knight Inc. and its consolidated subsidiaries,      including 1,724,000 common units owned by Kinder Morgan G.P.,      Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (10)   | As      reported on the Schedule 13G/A filed February 13, 2008 by Kayne Anderson      Capital Advisors, L.P. and Richard A. Kayne. Kayne Anderson Capital      Advisors, L.P. reported that in regard to KMR shares, it had sole voting      power over 0                                                                                                                                                                                                                                                                                                                                                                                                     |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | shares,      shared voting power over 7,867,883 shares, sole disposition power over 0      shares and shared disposition power over 7,867,883 shares. Mr. Kayne      reports that in regard to KMR shares, he had sole voting power over 1,133      shares, shared voting power over 7,867,883 shares, sole disposition power      over 1,133 shares and shared disposition power over 7,867,883 shares.      Kayne Anderson Capital Advisors, L.P.’s and Richard A. Kayne’s address is      1800 Avenue of the Stars, Second Floor, Los Angeles, California      90067. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (11)   | As      reported on the Schedule 13G/A filed February 12, 2008 by Tortoise Capital      Advisors, L.L.C. Tortoise Capital Advisors, L.L.C. reported that in regard      to KMR shares, it had sole voting power over 0 shares, shared voting power      over 4,202,836 shares, sole disposition power over 0 shares and shared      disposition power over 4,314,123 shares. Tortoise Capital Advisors,      L.L.C.’s address is 10801 Mastin Blvd., Suite 222, Overland Park, Kansas      66210.                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (12)   | As      reported on the Schedule 13G filed February 14, 2008 by Janus Capital      Management LLC. Janus Capital Management LLC reported that in regard to      KMR shares, it had sole voting power over 3,647,958 shares, shared voting      power over 0 shares, sole disposition power over 3,647,958 shares and      shared disposition power over 0 shares. Janus Capital Management LLC’s      address is 151 Detroit Street, Denver, Colorado  80206.                                                                                                                  |

|                                                            |   |                                                                                                          |   |   |
|-----------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|--------|--------|
| 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 |   | 141,820                                                                                                       |   |   |
|                                                            |   |                                                                                                          |   |   |
|                                                            |   |                                                                                                          |   |   |
| Total                                                           |   | 141,820                                                                                                       |   |   |
|                                                            |   |                                                                                                          |   |   |

|                                                          |               |            |           | %      of Class |               |            |
|---------------------------------------------------------------|--------------------|-----------------|----------------|-----------------|--------------------|-----------------|
|                                                          |               | %      of Class | Class      A-1 | A-1             |               | %      of Class |
|                                                          | Class A      Units | A      Units(1) | Units          | Units(2)        | Class B      Units | B      Units(3) |
| Richard D.      Kinder(4)                                     | 2,424,000,000      | 30.6            | –        | –         | 791,405,452        | 40.0            |
| Edward O.      Gaylord                                        | –            | –         | –        | –         | –            | –         |
| Gary L.      Hultquist                                        | –            | –         | –        | –         | –            | –         |
| Perry M.      Waughtal                                        | –            | –         | –        | –         | –            | –         |
| C. Park      Shaper(5)                                        | 13,598,785         | *               | 7,799,775      | 28.3            | 217,636,499        | 11.0            |
| Steven J.      Kean(6)                                        | 6,684,149          | *               | 3,833,788      | 13.9            | 158,281,090        | 8.0             |
| Kimberly A.      Dang(7)                                      | 750,032            | *               | 430,191        | 1.6             | 49,462,841         | 2.5             |
| David D.      Kinder(8)                                       | 1,075,981          | *               | 617,144        | 2.3             | 55,398,382         | 2.8             |
| Joseph      Listengart(9)                                     | 6,059,449          | *               | 3,475,483      | 12.6            | 79,140,545         | 4.0             |
| Scott E.      Parker                                          | –            | –         | –        | –         | –            | –         |
| James E.      Street(10)                                      | 3,813,005          | *               | 2,187,003      | 7.9             | 49,462,841         | 2.5             |
| Executive officers and directors      as a group (14 persons) | 2,460,763,539      | 31.1            | 21,086,247     | 76.5            | 1,626,338,205      | 82.2            |

| * | Less      than 1%. |
|---|--------------------|

| (1) | As      of January 31, 2008, Knight Holdco LLC had 7,914,367,913 Class A Units      issued and outstanding. |
|-----|-------------------------------------------------------------------------------------------------------------|

| (2) | As      of January 31, 2008, 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. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | As      of January 31, 2008, Knight Holdco LLC had 1,922,620,621 Class B Units      issued and outstanding and 55,893,008 phantom Class B Units issued and      outstanding. The phantom Class B Units were issued to Canadian management      employees. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | 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. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | 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  $4,315,475. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | 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$2,720,252. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | Includes      49,462,841 Class B Units that Ms. Dang transferred to a limited      partnership. Ms. Dang may be deemed to be the beneficial owner of these      transferred Class B Units, because Ms. Dang has voting and disposition      power of these Class B Units, but she disclaims ten percent of any      beneficial and pecuniary interest in them. Ms. 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 Ms. Dang      had an aggregate grant date fair value as calculated in accordance with      SFAS No. 123R of $674,887. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8) | Includes      55,398,382 Class B Units that Mr. Kinder transferred to a limited      partnership. Mr. Kinder may be deemed to be the benficial owner of these      transferred Class B Units, because Mr. Kinder controls the voting and      disposition power of these Class B Units, but he disclaims eight percent      of any benficial and pecuniary interest in them. Mr. Kinder made a cash      investment of $1,075,981 of his after-tax proceeds from the conversion in      the going-private transaction of 15,750 shares of KMI restricted stock in      exchange for his Class A units. The Class A-1 units and Class B units      received by Mr. Kinder had an aggregate grant date fair value as      calculated in accordance with SFAS No. 123R of  $787,587. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (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  $1,712,851. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (10) | Mr.      Street made a cash investment of $3,813,005 of his after-tax proceeds from      the conversion in the going-private transaction of 30,000 shares of KMI      restricted stock and options to acquire 34,588 shares of KMI common stock      in exchange for his Class A units. The Class A-1 units and Class B units      received by Mr. Street had an aggregate grant date fair value as      calculated in accordance with SFAS No. 123R of  $1,074,434. |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Item 14. PrincipalAccounting Fees and Services

|               |                         |   |      |   |   |   |
|--------------------|------------------------------|--------|-----------|--------|--------|--------|
|               | Year      Ended December 31, |   |
|               |                         |   |
|               | 2007                         |   | 2006      |   |
|               |                         |   |      |   |
| Audit      fees(1) |                         | $      | 2,070,205 |   |   | $      | 2,038,215 |   |
| Tax      fees(2)   |                         |   | 2,563,793 |   |   |   | 1,470,466 |   |
|               |                         |   |      |   |   |   |   |   |
| Total              |                         | $      | 4,633,998 |   |   | $      | 3,508,681 |   |
|               |                         |   |      |   |   |   |   |   |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |
|   |
| (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)    | For      2007 and 2006, amounts include fees of $2,352,533 and $1,356,399,      respectively, billed for professional services rendered for tax processing      and preparation of Forms K-1 for our unitholders. Amounts also include      fees of $211,260 and $114,067, respectively, billed for professional      services rendered for tax return review services and for general state,      local and foreign tax compliance and consulting  services. |

PART IV

Item 15. Exhibits andFinancial Statement Schedules

|   |                                                                            |
|--------|---------------------------------------------------------------------------------|
|   | (a)(1)      and (2) Financial      Statements and Financial Statement Schedules |
|   |                                                                            |
|   | See      “Index to Financial Statements” set forth on page 114.     |
|   |                                                                            |
|   | (a)(3)      Exhibits                                                            |

|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *3.1      —  |   | Third      Amended and Restated Agreement of Limited Partnership of Kinder Morgan      Energy Partners, L.P. (filed as Exhibit 3.1 to Kinder Morgan Energy      Partners, L.P. Form 10-Q (File No. 1-11234) for the quarter ended June 30,      2001, filed on August 9, 2001).                                                                                                                                                                                                  |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| *3.2      —  |   | Amendment      No. 1 dated November 19, 2004 to Third Amended and Restated Agreement of      Limited Partnership of Kinder Morgan Energy Partners, L.P. (filed as      Exhibit 99.1 to Kinder Morgan Energy Partners, L.P. Form 8-K, filed      November 22, 2004).                                                                                                                                                                                                              |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| *3.3      —  |   | Amendment      No. 2 to Third Amended and Restated Agreement of Limited Partnership of      Kinder Morgan Energy Partners, L.P. (filed as Exhibit 99.1 to Kinder      Morgan Energy Partners, L.P. Form 8-K, filed May 5,  2005).                                                                                                                                                                                                                                                |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| *4.1      —  |   | Specimen      Certificate evidencing Common Units representing Limited Partner Interests      (filed as Exhibit 4.1 to Amendment No. 1 to Kinder Morgan Energy Partners,      L.P. Registration Statement on Form S-4, File No. 333-44519, filed on      February 4, 1998).                                                                                                                                                                                                      |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| *4.2      —  |   | Indenture      dated as of January 29, 1999 among Kinder Morgan Energy Partners, L.P.,      the guarantors listed on the signature page thereto and U.S. Trust Company      of Texas, N.A., as trustee, relating to Senior Debt Securities (filed as      Exhibit 4.1 to the Partnership’s Current Report on Form 8-K filed February      16, 1999, File No. 1-11234 (the “February 16, 1999 Form      8-K”)).                                                 |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| *4.3      —  |   | First      Supplemental Indenture dated as of January 29, 1999 among Kinder Morgan      Energy Partners, L.P., the subsidiary guarantors listed on the signature      page thereto and U.S. Trust Company of Texas, N.A., as trustee, relating      to $250,000,000 of 6.30% Senior Notes due February 1, 2009 (filed as      Exhibit 4.2 to the February 16, 1999 Form 8-K (File No.      1-11234)).                                                                            |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| *4.4      —  |   | Second      Supplemental Indenture dated as of September 30, 1999 among Kinder Morgan      Energy Partners, L.P. and U.S. Trust Company of Texas, N.A., as trustee,      relating to release of subsidiary guarantors under the $250,000,000 of      6.30% Senior Notes due February 1, 2009 (filed as Exhibit 4.4 to the      Partnership’s Form 10-Q (File No. 1-11234) for the quarter ended September      30, 1999 (the “1999 Third Quarter Form 10-Q”)). |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| *4.5      —  |   | Indenture      dated November 8, 2000 between Kinder Morgan Energy Partners, L.P. and      First Union National Bank, as Trustee (filed as Exhibit 4.8 to Kinder      Morgan Energy Partners, L.P. Form 10-K for 2001 (File No.      1-11234)).                                                                                                                                                                                                                                  |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| *4.6      —  |   | Form      of 7.50% Notes due November 1, 2010 (contained in the Indenture filed as      Exhibit 4.8 to the Kinder Morgan Energy Partners, L.P. Form 10-K (File No.      1-11234) for 2001).                                                                                                                                                                                                                                                                                      |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| *4.7      —  |   | Indenture      dated January 2, 2001 between Kinder Morgan Energy Partners and First      Union National Bank, as trustee, relating to Senior Debt Securities      (including form of Senior Debt Securities) (filed as Exhibit 4.11 to      Kinder Morgan Energy Partners, L.P. Form 10-K (File No. 1-11234) for      2000).                                                                                                                                                    |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| *4.8      —  |   | Indenture      dated January 2, 2001 between Kinder Morgan Energy Partners and First      Union National Bank, as trustee, relating to Subordinated Debt Securities      (including form of Subordinated Debt Securities) (filed as Exhibit 4.12 to      Kinder Morgan Energy Partners, L.P. Form 10-K (File No. 1-11234) for      2000).                                                                                                                                        |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| *4.9      —  |   | Certificate      of Vice President and Chief Financial Officer of Kinder Morgan Energy      Partners, L.P. establishing the terms of the 6.75% Notes due March 15,      2011 and the 7.40% Notes due March 15, 2031 (filed as Exhibit 4.1 to      Kinder Morgan Energy Partners, L.P. Form 8-K (File No. 1-11234), filed on      March 14, 2001).                                                                                                                                |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| *4.10      — |   | Specimen      of 6.75% Notes due March 15, 2011 in book-entry form (filed as Exhibit 4.2      to Kinder Morgan Energy Partners, L.P. Form 8-K (File No. 1-11234), filed      on March 14, 2001).                                                                                                                                                                                                                                                                                 |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| *4.11      — |   | Specimen      of 7.40% Notes due March 15, 2031 in book-entry form (filed as Exhibit 4.3      to Kinder Morgan Energy Partners, L.P. Form 8-K (File No. 1-11234), filed      on March 14, 2001).                                                                                                                                                                                                                                                                                 |

|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *4.12      — |   | Certificate      of Vice President and Chief Financial Officer of Kinder Morgan Energy      Partners, L.P. establishing the terms of the 7.125% Notes due March 15,      2012 and the 7.750% Notes due March 15, 2032 (filed as Exhibit 4.1 to      Kinder Morgan Energy Partners, L.P. Form 10-Q (File No. 1-11234) for the      quarter ended March 31, 2002, filed on May 10, 2002).                                                                               |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| *4.13      — |   | Specimen      of 7.125% Notes due March 15, 2012 in book-entry form (filed as Exhibit      4.2 to Kinder Morgan Energy Partners, L.P. Form 10-Q (File No. 1-11234)      for the quarter ended March 31, 2002, filed on May 10,    2002).                                                                                                                                                                                                                              |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| *4.14      — |   | Specimen      of 7.750% Notes due March 15, 2032 in book-entry form (filed as Exhibit      4.3 to Kinder Morgan Energy Partners, L.P. Form 10-Q (File No. 1-11234)      for the quarter ended March 31, 2002, filed on May 10,    2002).                                                                                                                                                                                                                              |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| *4.15      — |   | Indenture      dated August 19, 2002 between Kinder Morgan Energy Partners, L.P. and      Wachovia Bank, National Association, as Trustee (filed as Exhibit 4.1 to      the Kinder Morgan Energy Partners, L.P. Registration Statement on Form S-4      (File No. 333-100346) filed on October 4, 2002 (the “October 4, 2002 Form      S-4”)).                                                                                                            |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| *4.16      — |   | First      Supplemental Indenture to Indenture dated August 19, 2002, dated August      23, 2002 between Kinder Morgan Energy Partners, L.P. and Wachovia Bank,      National Association, as Trustee (filed as Exhibit 4.2 to the October 4,      2002 Form S-4).                                                                                                                                                                                                    |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| *4.17      — |   | Form      of 7.30% Note (contained in the Indenture filed as Exhibit 4.1 to the      October 4, 2002 Form S-4).                                                                                                                                                                                                                                                                                                                                                       |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| *4.18      — |   | Senior      Indenture dated January 31, 2003 between Kinder Morgan Energy Partners,      L.P. and Wachovia Bank, National Association (filed as Exhibit 4.2 to the      Kinder Morgan Energy Partners, L.P. Registration Statement on Form S-3      (File No. 333-102961) filed on February 4, 2003 (the “February 4, 2003      Form S-3”)).                                                                                                              |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| *4.19      — |   | Form      of Senior Note of Kinder Morgan Energy Partners, L.P. (included in the      Form of Senior Indenture filed as Exhibit 4.2 to the February 4, 2003 Form      S-3).                                                                                                                                                                                                                                                                                           |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| *4.20      — |   | Subordinated      Indenture dated January 31, 2003 between Kinder Morgan Energy Partners,      L.P. and Wachovia Bank, National Association (filed as Exhibit 4.4 to the      February 4, 2003 Form S-3).                                                                                                                                                                                                                                                             |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| *4.21      — |   | Form      of Subordinated Note of Kinder Morgan Energy Partners, L.P. (included in      the Form of Subordinated Indenture filed as Exhibit 4.4 to the February 4,      2003 Form S-3).                                                                                                                                                                                                                                                                               |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| *4.22      — |   | Certificate      of Vice President, Treasurer and Chief Financial Officer and Vice      President, General Counsel and Secretary 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 5.00% Notes due December 15, 2013      (filed as Exhibit 4.25 to Kinder Morgan Energy Partners, L.P. Form 10-K      for 2003 filed March 5, 2004).                           |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| *4.23      — |   | Certificate      of Executive Vice President and Chief Financial Officer and Vice      President, General Counsel and Secretary 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 5.125% Notes due November 15, 2014      (filed as Exhibit 4.27 to Kinder Morgan Energy Partners, L.P. Form 10-K      for 2004 filed March 4, 2005).                           |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| *4.24      — |   | Certificate      of Vice President, Treasurer and Chief Financial Officer and Vice      President, General Counsel and Secretary of Kinder Morgan Management, LLC      and Kinder Morgan G.P., Inc., on behalf of Kinder Morgan Energy Partners,      L.P. establishing the terms of the 5.80% Notes due March 15, 2035 (filed      as Exhibit 4.1 to Kinder Morgan Energy Partners, L.P. Form 10-Q for the      quarter ended March 31, 2005, filed on May 6, 2005). |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| *4.25      — |   | Certificate      of 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 4.28 to Kinder Morgan      Energy Partners, L.P. Form 10-K for 2006 filed March 1,    2007).                                                                |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| *4.26      — |   | 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. Form 10-Q for the quarter ended June 30, 2007      filed August 8, 2007).                         |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| *4.27      — |   | 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. Form 10-Q for the quarter ended September 30,      2007 filed November 9, 2007).                  |

|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|---------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.28      —   |   | 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.                                                                                                                                                                                                                                                                            |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 4.29      —   |   | Certain      instruments with respect to long-term debt of Kinder Morgan Energy      Partners, L.P. and its consolidated subsidiaries which relate to debt that      does not exceed 10% of the total assets of Kinder Morgan Energy Partners,      L.P. and its consolidated subsidiaries are omitted pursuant to Item 601(b)      (4) (iii) (A) of Regulation S-K, 17 C.F.R. sec.229.601. Kinder Morgan      Energy Partners, L.P. hereby agrees to furnish supplementally to the      Securities and Exchange Commission a copy of each such instrument upon      request. |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| *10.1      —  |   | Kinder      Morgan Energy Partners, L.P. Common Unit Option Plan (filed as Exhibit      10.6 to the Kinder Morgan Energy Partners, L.P. 1997 Form 10-K, File No.      1-11234).                                                                                                                                                                                                                                                                                                                                                                                               |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| *10.2      —  |   | Delegation      of Control Agreement among Kinder Morgan Management, LLC, Kinder Morgan      G.P., Inc. and Kinder Morgan Energy Partners, L.P. and its operating      partnerships (filed as Exhibit 10.1 to the Kinder Morgan Energy Partners,      L.P. Form 10-Q for the quarter ended June 30, 2001).                                                                                                                                                                                                                                                                    |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| *10.3      —  |   | Amendment      No. 1 to Delegation of Control Agreement, dated as of July 20, 2007, among      Kinder Morgan G.P., Inc., Kinder Morgan Management, LLC, Kinder Morgan      Energy Partners, L.P. and its operating partnerships (filed as Exhibit      10.1 to Kinder Morgan Energy Partners, L.P.’s Current Report on Form 8-K      on July 20, 2007).                                                                                                                                                                                                                 |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| *10.4      —  |   | Kinder      Morgan Energy Partners, L.P. Directors’ Unit Appreciation Rights Plan      (filed as Exhibit 10.6 to the Kinder Morgan Energy Partners, L.P. Form      10-K for 2003 filed March 5, 2004).                                                                                                                                                                                                                                                                                                                                                                  |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| *10.5      —  |   | Amendment      No. 1 to Kinder Morgan Energy Partners, L.P. Directors’ Unit Appreciation      Rights Plan (filed as Exhibit 10.7 to the Kinder Morgan Energy Partners,      L.P. Form 10-K for 2003 filed March 5, 2004).                                                                                                                                                                                                                                                                                                                                               |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| *10.6      —  |   | Resignation      and Non-Compete agreement dated July 21, 2004 between KMGP Services, Inc.      and Michael C. Morgan, President of Kinder Morgan, Inc., Kinder Morgan      G.P., Inc. and Kinder Morgan Management, LLC (filed as Exhibit 10.1 to the      Kinder Morgan Energy Partners, L.P. Form 10-Q for the quarter ended June      30, 2004, filed on August 5, 2004).                                                                                                                                                                                                 |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| *10.7      —  |   | Kinder      Morgan Energy Partners, L.P. Common Unit Compensation Plan for      Non-Employee Directors (filed as Exhibit 10.2 to Kinder Morgan Energy      Partners, L.P. Form 8-K filed January 21, 2005).                                                                                                                                                                                                                                                                                                                                                                   |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| *10.8      —  |   | Form      of Common Unit Compensation Agreement entered into with Non-Employee      Directors (filed as Exhibit 10.1 to Kinder Morgan Energy Partners, L.P.      Form 8-K filed January 21, 2005).                                                                                                                                                                                                                                                                                                                                                                            |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| *10.9      —  |   | Five-Year      Credit Agreement dated as of August 5, 2005 among Kinder Morgan Energy      Partners, L.P., the lenders party thereto and Wachovia Bank, National      Association as Administrative Agent (filed as Exhibit 10.1 to Kinder      Morgan Energy Partners, L.P.’s Current Report on Form 8-K, filed on August      11, 2005).                                                                                                                                                                                                                              |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| *10.10      — |   | First      Amendment, dated October 28, 2005, to Five-Year Credit Agreement dated as      of August 5, 2005 among Kinder Morgan Energy Partners, L.P., the lenders      party thereto and Wachovia Bank, National Association as Administrative      Agent (filed as Exhibit 10.1 to Kinder Morgan Energy Partners, L.P.’s Form      10-Q for the quarter ended September 30, 2006).                                                                                                                                                                                    |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| *10.11      — |   | Second      Amendment, dated April 13, 2006, to Five-Year Credit Agreement dated as of      August 5, 2005 among Kinder Morgan Energy Partners, L.P., the lenders      party thereto and Wachovia Bank, National Association as Administrative      Agent (filed as Exhibit 10.2 to Kinder Morgan Energy Partners, L.P.’s Form      10-Q for the quarter ended September 30, 2006).                                                                                                                                                                                     |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| *10.12      — |   | Third      Amendment, dated October 6, 2006, to Five-Year Credit Agreement dated as      of August 5, 2005 among Kinder Morgan Energy Partners, L.P., the lenders      party thereto and Wachovia Bank, National Association as Administrative      Agent (filed as Exhibit 10.3 to Kinder Morgan Energy Partners, L.P.’s Form      10-Q for the quarter ended September 30, 2006).                                                                                                                                                                                     |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 11.1      —   |   | Statement      re: computation of per share earnings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 12.1      —   |   | Statement      re: computation of ratio of earnings to fixed charges.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 21.1      —   |   | List      of Subsidiaries.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 23.1      —   |   | Consent      of PricewaterhouseCoopers LLP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 23.2      —   |   | Consent      of Netherland, Sewell and Associates, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 31.1      —   |   | Certification      by CEO 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      by CFO 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      by CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section      906 of the Sarbanes-Oxley Act of 2002. |
|              |   |                                                                                                                                     |
| 32.2      — |   | Certification      by CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section      906 of the Sarbanes-Oxley Act of2002.  |

|   |                                                                                                                                             |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|
|   |
|   |
| *      | Asterisk      indicates exhibits incorporated by reference as indicated; all other      exhibits are filed herewith, except as noted  otherwise. |

INDEX TO FINANCIAL STATEMENTS

|                                                                                                               |   |       |
|--------------------------------------------------------------------------------------------------------------------|--------|------------|
|                                                                                                               |   | PageNumber |
|                                                                                                               |   |       |
| KINDER      MORGAN ENERGY PARTNERS, L.P. AND SUBSIDIARIES                                                          |   |       |
|                                                                                                               |   |       |
| Report of Independent      Registered Public Accounting Firm                                                       |   | 115        |
|                                                                                                               |   |       |
| Consolidated      Statements of Income for the years ended December 31, 2007, 2006, and      2005                  |   | 117        |
|                                                                                                               |   |       |
| Consolidated      Statements of Comprehensive Income for the years ended December 31, 2007,      2006, and 2005    |   | 118        |
|                                                                                                               |   |       |
| Consolidated Balance      Sheets as of December 31, 2007 and 2006                                                  |   | 119        |
|                                                                                                               |   |       |
| Consolidated      Statements of Cash Flows for the years ended December 31, 2007, 2006, and      2005              |   | 120        |
|                                                                                                               |   |       |
| Consolidated      Statements of Partners’ Capital for the years      ended December 31, 2007, 2006, and 2005 |   | 122        |
|                                                                                                               |   |       |
| Notes      to Consolidated Financial Statements                                                                    |   | 123        |

Report of Independent Registered Public Accounting Firm

|   |    |                                                                                                             |
|--------|---------|------------------------------------------------------------------------------------------------------------------|
|   | • | The      Vancouver Wharves bulk marine terminal, acquired May 30, 2007;      and                                 |
|   |    |                                                                                                             |
|   | • | The      terminal assets and operations acquired from Marine Terminals, Inc.,      effective September 30, 2007, |

CONSOLIDATED STATEMENTS OF INCOME

|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
|----------------------------------------------------------------------------|--------|--------------------------------------------|---------|--------|--------|---------|--------|--------|---------|--------|
|                                                                       |   | Year      Ended December 31,               |    |
|                                                                       |   |                                       |    |
|                                                                       |   | 2007                                       |    | 2006   |   | 2005    |   |
|                                                                       |   |                                       |    |   |   |    |   |
|                                                                       |   | (In      millions except per unit amounts) |    |
| Revenues                                                                   |   |                                       |    |   |   |    |   |   |    |   |
| Natural      gas sales                                                     |   | $                                          | 5,834.7 |   | $      | 6,039.9 |   | $      | 7,198.5 |   |
| Services                                                                   |   |                                       | 2,449.2 |   |   | 2,177.6 |   |   | 1,810.5 |   |
| Product      sales and other                                               |   |                                       | 933.8   |   |   | 831.2   |   |   | 736.9   |   |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
|                                                                       |   |                                       | 9,217.7 |   |   | 9,048.7 |   |   | 9,745.9 |   |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
| Costs,      Expenses and Other                                             |   |                                       |    |   |   |    |   |   |    |   |
| Gas      purchases and other costs of sales                                |   |                                       | 5,809.8 |   |   | 5,990.9 |   |   | 7,167.3 |   |
| Operations      and maintenance                                            |   |                                       | 1,024.6 |   |   | 777.0   |   |   | 719.5   |   |
| Fuel      and power                                                        |   |                                       | 237.5   |   |   | 223.7   |   |   | 178.5   |   |
| Depreciation,      depletion and amortization                              |   |                                       | 540.0   |   |   | 423.9   |   |   | 341.6   |   |
| General      and administrative                                            |   |                                       | 278.7   |   |   | 238.4   |   |   | 216.7   |   |
| Taxes,      other than income taxes                                        |   |                                       | 153.8   |   |   | 134.4   |   |   | 106.5   |   |
| Goodwill      impairment expense                                           |   |                                       | 377.1   |   |   | — |   |   | — |   |
| Other      expense (income)                                                |   |                                       | (11.5   | )      |   | (31.2   | )      |   | — |   |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
|                                                                       |   |                                       | 8,410.0 |   |   | 7,757.1 |   |   | 8,730.1 |   |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
| Operating      Income                                                      |   |                                       | 807.7   |   |   | 1,291.6 |   |   | 1,015.8 |   |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
| Other      Income (Expense)                                                |   |                                       |    |   |   |    |   |   |    |   |
| Earnings      from equity investments                                      |   |                                       | 69.7    |   |   | 74.0    |   |   | 89.6    |   |
| Amortization      of excess cost of equity investments                     |   |                                       | (5.8    | )      |   | (5.6    | )      |   | (5.5    | )      |
| Interest,      net                                                         |   |                                       | (391.4  | )      |   | (337.8  | )      |   | (259.0  | )      |
| Other,      net                                                            |   |                                       | 14.2    |   |   | 12.0    |   |   | 3.3     |   |
| Minority      Interest                                                     |   |                                       | (7.0    | )      |   | (15.4   | )      |   | (7.3    | )      |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
| Income      from Continuing Operations Before Income Taxes                 |   |                                       | 487.4   |   |   | 1,018.8 |   |   | 836.9   |   |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
| Income      Taxes                                                          |   |                                       | (71.0   | )      |   | (29.0   | )      |   | (24.5   | )      |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
| Income      from Continuing Operations                                     |   |                                       | 416.4   |   |   | 989.8   |   |   | 812.4   |   |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
| Discontinued      Operations:                                              |   |                                       |    |   |   |    |   |   |    |   |
| Income      (loss) from operations of North System                         |   |                                       | 21.1    |   |   | 14.3    |   |   | (0.2    | )      |
| Gain      on disposal of North System                                      |   |                                       | 152.8   |   |   | — |   |   | — |   |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
| Income      (loss) from Discontinued Operations                            |   |                                       | 173.9   |   |   | 14.3    |   |   | (0.2    | )      |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
| Net      Income                                                            |   | $                                          | 590.3   |   | $      | 1,004.1 |   | $      | 812.2   |   |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
| Calculation      of Limited Partners’ interest in Net Income (loss): |   |                                       |    |   |   |    |   |   |    |   |
| Income      from Continuing Operations                                     |   | $                                          | 416.4   |   | $      | 989.8   |   | $      | 812.4   |   |
| Less:      General Partner’s interest                                |   |                                       | (609.9  | )      |   | (513.2  | )      |   | (477.3  | )      |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
| Limited      Partners’ interest                                      |   |                                       | (193.5  | )      |   | 476.6   |   |   | 335.1   |   |
| Add:      Limited Partners’ interest in Discontinued Operations      |   |                                       | 172.2   |   |   | 14.2    |   |   | (0.2    | )      |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
| Limited      Partners’ interest in Net Income (loss)                 |   | $                                          | (21.3   | )      | $      | 490.8   |   | $      | 334.9   |   |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
| Basic      Limited Partners’ Net Income (loss) per Unit:             |   |                                       |    |   |   |    |   |   |    |   |
| Income      (loss) from Continuing Operations                              |   | $                                          | (0.82   | )      | $      | 2.12    |   | $      | 1.58    |   |
| Income      from Discontinued Operations                                   |   |                                       | 0.73    |   |   | 0.07    |   |   | — |   |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
| Net      Income (loss)                                                     |   | $                                          | (0.09   | )      | $      | 2.19    |   | $      | 1.58    |   |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
| Weighted      average number of units outstanding                          |   |                                       | 236.9   |   |   | 224.6   |   |   | 212.2   |   |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
| Diluted      Limited Partners’ Net Income (loss) per Unit:           |   |                                       |    |   |   |    |   |   |    |   |
| Income      (loss) from Continuing Operations                              |   | $                                          | (0.82   | )      | $      | 2.12    |   | $      | 1.58    |   |
| Income      from Discontinued Operations                                   |   |                                       | 0.73    |   |   | 0.06    |   |   | — |   |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
| Net      Income (loss)                                                     |   | $                                          | (0.09   | )      | $      | 2.18    |   | $      | 1.58    |   |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
| Weighted      average number of units outstanding                          |   |                                       | 236.9   |   |   | 224.9   |   |   | 212.4   |   |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |
| Per      unit cash distribution declared                                   |   | $                                          | 3.48    |   | $      | 3.26    |   | $      | 3.13    |   |
|                                                                       |   |                                       |    |   |   |    |   |   |    |   |

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

|                                                                                                                                                                                                                                                                          |   |                         |   |   |   |    |   |   |     |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|--------|--------|--------|---------|--------|--------|----------|--------|
|                                                                                                                                                                                                                                                                          |   | Year      Ended December 31, |   |
|                                                                                                                                                                                                                                                                          |   |                         |   |
|                                                                                                                                                                                                                                                                          |   | 2007                         |   | 2006   |   | 2005    |   |
|                                                                                                                                                                                                                                                                          |   |                         |   |   |   |    |   |
|                                                                                                                                                                                                                                                                          |   | (In      millions)           |   |
|                                                                                                                                                                                                                                                                          |   |                         |   |
| Net      Income                                                                                                                                                                                                                                                               |   | $                            | 590.3  |   | $      | 1,004.1 |   | $      | 812.2    |   |
|                                                                                                                                                                                                                                                                          |   |                         |   |   |   |    |   |   |     |   |
| Change      in fair value of derivatives used for hedging purposes                                                                                                                                                                                                            |   |                         | (974.2 | )      |   | (187.5  | )      |   | (1,045.6 | )      |
| Reclassification      of change in fair value of derivatives to net income                                                                                                                                                                                                    |   |                         | 433.2  |   |   | 428.1   |   |   | 424.0    |   |
| Foreign      currency translation adjustments                                                                                                                                                                                                                                 |   |                         | 132.5  |   |   | (19.6   | )      |   | (0.7     | )      |
| Minimum      pension liability adjustments, pension and other post-retirement benefit      plan actuarial gains/losses, and reclassification of pension and other      post-retirement benefit plan actuarial gains/losses and prior service      costs/credits to net income |   |                         | (3.5   | )      |   | (1.8    | )      |   | —  |   |
|                                                                                                                                                                                                                                                                          |   |                         |   |   |   |    |   |   |     |   |
| Total      other comprehensive income                                                                                                                                                                                                                                         |   |                         | (412.0 | )      |   | 219.2   |   |   | (622.3   | )      |
|                                                                                                                                                                                                                                                                          |   |                         |   |   |   |    |   |   |     |   |
|                                                                                                                                                                                                                                                                          |   |                         |   |   |   |    |   |   |     |   |
| Comprehensive      Income                                                                                                                                                                                                                                                     |   | $                            | 178.3  |   | $      | 1,223.3 |   | $      | 189.9    |   |
|                                                                                                                                                                                                                                                                          |   |                         |   |   |   |    |   |   |     |   |

CONSOLIDATED BALANCE SHEETS

|                                                                                                                             |   |                       |   |     |   |   |   |   |     |   |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|--------|----------|--------|--------|--------|--------|----------|--------|--------|
|                                                                                                                             |   | December      31,          |
|                                                                                                                             |   |                       |
|                                                                                                                             |   | 2007                       |   | 2006     |
|                                                                                                                             |   |                       |   |     |
|                                                                                                                             |   | (Dollars      in millions) |
| ASSETS                                                                                                                           |   |                       |   |     |   |   |   |
| Current      Assets                                                                                                              |   |                       |   |     |   |   |   |
| Cash      and cash equivalents                                                                                                   |   |                       | $      | 58.9     |   |   |   | $      | 6.7      |   |   |
| Restricted      deposits                                                                                                         |   |                       |   | 67.9     |   |   |   |   | —  |   |   |
| Accounts,      notes and interest receivable, net Trade                                                                          |   |                       |   | 960.2    |   |   |   |   | 854.7    |   |   |
| Related      parties                                                                                                             |   |                       |   | 3.6      |   |   |   |   | 7.9      |   |   |
| Inventories                                                                                                                      |   |                       |   |     |   |   |   |   |     |   |   |
| Products                                                                                                                         |   |                       |   | 19.5     |   |   |   |   | 20.4     |   |   |
| Materials      and supplies                                                                                                      |   |                       |   | 18.3     |   |   |   |   | 16.6     |   |   |
| Gas      imbalances                                                                                                              |   |                       |   |     |   |   |   |   |     |   |   |
| Trade                                                                                                                            |   |                       |   | 21.2     |   |   |   |   | 7.8      |   |   |
| Related      parties                                                                                                             |   |                       |   | 5.7      |   |   |   |   | 11.6     |   |   |
| Other      current assets                                                                                                        |   |                       |   | 54.4     |   |   |   |   | 111.1    |   |   |
|                                                                                                                             |   |                       |   |     |   |   |   |   |     |   |   |
|                                                                                                                             |   |                       |   | 1,209.7  |   |   |   |   | 1,036.8  |   |   |
|                                                                                                                             |   |                       |   |     |   |   |   |   |     |   |   |
| Property,      Plant and Equipment, net                                                                                          |   |                       |   | 11,591.3 |   |   |   |   | 10,106.1 |   |   |
| Investments                                                                                                                      |   |                       |   | 655.4    |   |   |   |   | 426.3    |   |   |
| Notes      receivable                                                                                                            |   |                       |   |     |   |   |   |   |     |   |   |
| Trade                                                                                                                            |   |                       |   | 0.1      |   |   |   |   | 1.2      |   |   |
| Related      parties                                                                                                             |   |                       |   | 87.9     |   |   |   |   | 96.2     |   |   |
| Goodwill                                                                                                                         |   |                       |   | 1,077.8  |   |   |   |   | 1,421.0  |   |   |
| Other      intangibles, net                                                                                                      |   |                       |   | 238.6    |   |   |   |   | 213.2    |   |   |
| Deferred      charges and other assets                                                                                           |   |                       |   | 317.0    |   |   |   |   | 241.4    |   |   |
|                                                                                                                             |   |                       |   |     |   |   |   |   |     |   |   |
| Total      Assets                                                                                                                |   |                       | $      | 15,177.8 |   |   |   | $      | 13,542.2 |   |   |
|                                                                                                                             |   |                       |   |     |   |   |   |   |     |   |   |
| LIABILITIES      AND PARTNERS’ CAPITAL                                                                                     |   |                       |   |     |   |   |   |   |     |   |   |
| Current      Liabilities                                                                                                         |   |                       |   |     |   |   |   |   |     |   |   |
| Accounts      payable                                                                                                            |   |                       |   |     |   |   |   |   |     |   |   |
| Cash      book overdrafts                                                                                                        |   |                       | $      | 19.0     |   |   |   | $      | 46.2     |   |   |
| Trade                                                                                                                            |   |                       |   | 926.7    |   |   |   |   | 784.1    |   |   |
| Related      parties                                                                                                             |   |                       |   | 22.6     |   |   |   |   | 203.3    |   |   |
| Current      portion of long-term debt                                                                                           |   |                       |   | 610.2    |   |   |   |   | 1,359.1  |   |   |
| Accrued      interest                                                                                                            |   |                       |   | 131.2    |   |   |   |   | 83.7     |   |   |
| Accrued      taxes                                                                                                               |   |                       |   | 73.8     |   |   |   |   | 35.4     |   |   |
| Deferred      revenues                                                                                                           |   |                       |   | 22.8     |   |   |   |   | 20.0     |   |   |
| Gas      imbalances                                                                                                              |   |                       |   |     |   |   |   |   |     |   |   |
| Trade                                                                                                                            |   |                       |   | 23.7     |   |   |   |   | 15.9     |   |   |
| Related      parties                                                                                                             |   |                       |   | —  |   |   |   |   | —  |   |   |
| Accrued      other current liabilities                                                                                           |   |                       |   | 728.3    |   |   |   |   | 589.6    |   |   |
|                                                                                                                             |   |                       |   |     |   |   |   |   |     |   |   |
|                                                                                                                             |   |                       |   | 2,558.3  |   |   |   |   | 3,137.3  |   |   |
|                                                                                                                             |   |                       |   |     |   |   |   |   |     |   |   |
| Long-Term      Liabilities and Deferred Credits                                                                                  |   |                       |   |     |   |   |   |   |     |   |   |
| Long-term      debt                                                                                                              |   |                       |   |     |   |   |   |   |     |   |   |
| Outstanding                                                                                                                      |   |                       |   | 6,455.9  |   |   |   |   | 4,384.3  |   |   |
| Value      of interest rate swaps                                                                                                |   |                       |   | 152.2    |   |   |   |   | 42.6     |   |   |
|                                                                                                                             |   |                       |   |     |   |   |   |   |     |   |   |
|                                                                                                                             |   |                       |   | 6,608.1  |   |   |   |   | 4,426.9  |   |   |
| Deferred      revenues                                                                                                           |   |                       |   | 14.2     |   |   |   |   | 18.8     |   |   |
| Deferred      income taxes                                                                                                       |   |                       |   | 202.4    |   |   |   |   | 185.2    |   |   |
| Asset      retirement obligations                                                                                                |   |                       |   | 50.8     |   |   |   |   | 48.9     |   |   |
| Other      long-term liabilities and deferred credits                                                                            |   |                       |   | 1,254.1  |   |   |   |   | 716.6    |   |   |
|                                                                                                                             |   |                       |   |     |   |   |   |   |     |   |   |
|                                                                                                                             |   |                       |   | 8,129.6  |   |   |   |   | 5,396.4  |   |   |
|                                                                                                                             |   |                       |   |     |   |   |   |   |     |   |   |
| Commitments      and Contingencies (Notes 13 and 16)                                                                             |   |                       |   |     |   |   |   |   |     |   |   |
| Minority      Interest                                                                                                           |   |                       |   | 54.2     |   |   |   |   | 60.2     |   |   |
|                                                                                                                             |   |                       |   |     |   |   |   |   |     |   |   |
| Partners’      Capital                                                                                                     |   |                       |   |     |   |   |   |   |     |   |   |
| Common      Units (170,220,396 and 162,816,303 units issued and outstanding as of      December 31, 2007 and 2006, respectively) |   |                       |   | 3,048.4  |   |   |   |   | 3,414.9  |   |   |
| Class      B Units (5,313,400 and 5,313,400 units issued and outstanding as of      December 31, 2007 and 2006, respectively)    |   |                       |   | 102.0    |   |   |   |   | 126.1    |   |   |
| i-Units      (72,432,482 and 62,301,676 units issued and outstanding as of December 31,      2007 and 2006, respectively)        |   |                       |   | 2,400.8  |   |   |   |   | 2,154.2  |   |   |
| General      Partner                                                                                                             |   |                       |   | 161.1    |   |   |   |   | 119.2    |   |   |
| Accumulated      other comprehensive loss                                                                                        |   |                       |   | (1,276.6 | )      |   |   |   | (866.1   | )      |   |
|                                                                                                                             |   |                       |   |     |   |   |   |   |     |   |   |
|                                                                                                                             |   |                       |   | 4,435.7  |   |   |   |   | 4,948.3  |   |   |
|                                                                                                                             |   |                       |   |     |   |   |   |   |     |   |   |
| Total      Liabilities and Partners’ Capital                                                                               |   |                       | $      | 15,177.8 |   |   |   | $      | 13,542.2 |   |   |
|                                                                                                                             |   |                       |   |     |   |   |   |   |     |   |   |

CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                        |   |                         |   |     |   |   |   |   |     |   |   |   |   |     |   |   |
|---------------------------------------------------------------------------------------------|--------|------------------------------|--------|----------|--------|--------|--------|--------|----------|--------|--------|--------|--------|----------|--------|--------|
|                                                                                        |   | Year      Ended December 31, |
|                                                                                        |   |                         |
|                                                                                        |   | 2007                         |   | 2006     |   | 2005   |
|                                                                                        |   |                         |   |     |   |   |
|                                                                                        |   | (In      millions)           |
| Cash      Flows From Operating Activities                                                   |   |                         |   |     |   |   |   |   |     |   |
| Net      income                                                                             |   |                         | $      | 590.3    |   |   |   | $      | 1,004.1  |   |   |   | $      | 812.2    |   |   |
| Adjustments      to reconcile net income to net cash provided by operating      activities: |   |                         |   |     |   |   |   |   |     |   |   |   |   |     |   |   |
| Depreciation,      depletion and amortization                                               |   |                         |   | 547.0    |   |   |   |   | 432.8    |   |   |   |   | 349.8    |   |   |
| Amortization      of excess cost of equity investments                                      |   |                         |   | 5.8      |   |   |   |   | 5.7      |   |   |   |   | 5.6      |   |   |
| Impairment      of goodwill                                                                 |   |                         |   | 377.1    |   |   |   |   | —  |   |   |   |   | —  |   |   |
| Gains      and other non-cash income from the sale of property, plant and      equipment    |   |                         |   | (162.5   | )      |   |   |   | (15.2    | )      |   |   |   | (0.5     | )      |   |
| Gains      from property casualty indemnifications                                          |   |                         |   | (1.8     | )      |   |   |   | (15.2    | )      |   |   |   | —  |   |   |
| Earnings      from equity investments                                                       |   |                         |   | (71.5    | )      |   |   |   | (76.2    | )      |   |   |   | (91.7    | )      |   |
| Distributions      from equity investments                                                  |   |                         |   | 104.1    |   |   |   |   | 67.9     |   |   |   |   | 63.1     |   |   |
| Changes      in components of working capital:                                              |   |                         |   |     |   |   |   |   |     |   |   |   |   |     |   |   |
| Accounts      receivable                                                                    |   |                         |   | 92.6     |   |   |   |   | 15.8     |   |   |   |   | (240.7   | )      |   |
| Other      current assets                                                                   |   |                         |   | 3.9      |   |   |   |   | 13.8     |   |   |   |   | (14.1    | )      |   |
| Inventories                                                                                 |   |                         |   | (6.9     | )      |   |   |   | 0.9      |   |   |   |   | (13.5    | )      |   |
| Accounts      payable                                                                       |   |                         |   | (79.7    | )      |   |   |   | (48.8    | )      |   |   |   | 294.9    |   |   |
| Accrued      interest                                                                       |   |                         |   | 47.3     |   |   |   |   | 8.0      |   |   |   |   | 17.9     |   |   |
| Accrued      liabilities                                                                    |   |                         |   | (9.5     | )      |   |   |   | (10.6    | )      |   |   |   | 4.5      |   |   |
| Accrued      taxes                                                                          |   |                         |   | 40.7     |   |   |   |   | 14.2     |   |   |   |   | (2.3     | )      |   |
| Rate      reparations, refunds and other litigation reserve    adjustments                  |   |                         |   | 140.0    |   |   |   |   | (19.1    | )      |   |   |   | 105.0    |   |   |
| Other,      net                                                                             |   |                         |   | 124.9    |   |   |   |   | (14.2    | )      |   |   |   | (0.8     | )      |   |
|                                                                                        |   |                         |   |     |   |   |   |   |     |   |   |   |   |     |   |   |
| Net      Cash Provided by Operating Activities                                              |   |                         |   | 1,741.8  |   |   |   |   | 1,363.9  |   |   |   |   | 1,289.4  |   |   |
|                                                                                        |   |                         |   |     |   |   |   |   |     |   |   |   |   |     |   |   |
|                                                                                        |   |                         |   |     |   |   |   |   |     |   |   |   |   |     |   |   |
| Cash      Flows From Investing Activities                                                   |   |                         |   |     |   |   |   |   |     |   |   |   |   |     |   |   |
| Acquisitions      of assets and equity investments                                          |   |                         |   | (713.3   | )      |   |   |   | (387.2   | )      |   |   |   | (307.8   | )      |   |
| Additions      to property, plant and equip. for expansion and maintenance      projects    |   |                         |   | (1,691.6 | )      |   |   |   | (1,182.1 | )      |   |   |   | (863.1   | )      |   |
| Sale      of property, plant and equipment, and other net assets net of removal      costs  |   |                         |   | 302.6    |   |   |   |   | 70.8     |   |   |   |   | 9.9      |   |   |
| Property      casualty indemnifications                                                     |   |                         |   | 8.0      |   |   |   |   | 13.1     |   |   |   |   | —  |   |   |
| Net      proceeds from (Investments in) margin deposits                                     |   |                         |   | (70.2    | )      |   |   |   | 2.3      |   |   |   |   | —  |   |   |
| Contributions      to equity investments                                                    |   |                         |   | (276.1   | )      |   |   |   | (2.5     | )      |   |   |   | (1.2     | )      |   |
| Natural      gas stored underground and natural gas liquids line-fill                       |   |                         |   | 12.3     |   |   |   |   | (12.9    | )      |   |   |   | (18.7    | )      |   |
| Other                                                                                       |   |                         |   | (0.2     | )      |   |   |   | (3.4     | )      |   |   |   | (0.2     | )      |   |
|                                                                                        |   |                         |   |     |   |   |   |   |     |   |   |   |   |     |   |   |
| Net      Cash Used in Investing Activities                                                  |   |                         |   | (2,428.5 | )      |   |   |   | (1,501.9 | )      |   |   |   | (1,181.1 | )      |   |
|                                                                                        |   |                         |   |     |   |   |   |   |     |   |   |   |   |     |   |   |
|                                                                                        |   |                         |   |     |   |   |   |   |     |   |   |   |   |     |   |   |
| Cash      Flows From Financing Activities                                                   |   |                         |   |     |   |   |   |   |     |   |   |   |   |     |   |   |
| Issuance      of debt                                                                       |   |                         |   | 7,686.1  |   |   |   |   | 4,632.5  |   |   |   |   | 4,900.9  |   |   |
| Payment      of debt                                                                        |   |                         |   | (6,409.3 | )      |   |   |   | (3,698.7 | )      |   |   |   | (4,463.2 | )      |   |
| Repayments      from (Loans to) related party                                               |   |                         |   | 4.4      |   |   |   |   | 1.1      |   |   |   |   | 2.1      |   |   |
| Debt      issue costs                                                                       |   |                         |   | (13.8    | )      |   |   |   | (2.0     | )      |   |   |   | (6.0     | )      |   |
| Increase      (Decrease) in cash book overdrafts                                            |   |                         |   | (27.2    | )      |   |   |   | 15.8     |   |   |   |   | 0.6      |   |   |
| Proceeds      from issuance of common units                                                 |   |                         |   | 342.9    |   |   |   |   | 248.4    |   |   |   |   | 415.6    |   |   |
| Proceeds      from issuance of i-units                                                      |   |                         |   | 297.9    |   |   |   |   | —  |   |   |   |   | —  |   |   |
| Contributions      from minority interest                                                   |   |                         |   | 8.9      |   |   |   |   | 109.8    |   |   |   |   | 7.8      |   |   |
| Distributions      to partners:                                                             |   |                         |   |     |   |   |   |   |     |   |   |   |   |     |   |   |
| Common      units                                                                           |   |                         |   | (552.6   | )      |   |   |   | (512.1   | )      |   |   |   | (460.6   | )      |   |
| Class      B units                                                                          |   |                         |   | (18.0    | )      |   |   |   | (17.2    | )      |   |   |   | (16.3    | )      |   |
| General      Partner                                                                        |   |                         |   | (567.7   | )      |   |   |   | (523.2   | )      |   |   |   | (460.9   | )      |   |
| Minority      interest                                                                      |   |                         |   | (16.0    | )      |   |   |   | (119.0   | )      |   |   |   | (12.1    | )      |   |
| Other,      net                                                                             |   |                         |   | 0.1      |   |   |   |   | (3.0     | )      |   |   |   | (3.9     | )      |   |
|                                                                                        |   |                         |   |     |   |   |   |   |     |   |   |   |   |     |   |   |
| Net      Cash Provided by (Used in) Financing Activities                                    |   |                         |   | 735.7    |   |   |   |   | 132.4    |   |   |   |   | (96.0    | )      |   |
|                                                                                        |   |                         |   |     |   |   |   |   |     |   |   |   |   |     |   |   |
|                                                                                        |   |                         |   |     |   |   |   |   |     |   |   |   |   |     |   |   |
| Effect      of exchange rate changes on cash and cash equivalents                           |   |                         |   | 3.2      |   |   |   |   | 0.2      |   |   |   |   | (0.2     | )      |   |
|                                                                                        |   |                         |   |     |   |   |   |   |     |   |   |   |   |     |   |   |
|                                                                                        |   |                         |   |     |   |   |   |   |     |   |   |   |   |     |   |   |
| Increase      (Decrease) in Cash and Cash Equivalents                                       |   |                         |   | 52.2     |   |   |   |   | (5.4     | )      |   |   |   | 12.1     |   |   |
| Cash      and Cash Equivalents, beginning of year                                           |   |                         |   | 6.7      |   |   |   |   | 12.1     |   |   |   |   | —  |   |   |
|                                                                                        |   |                         |   |     |   |   |   |   |     |   |   |   |   |     |   |   |
| Cash      and Cash Equivalents, end of year                                                 |   |                         | $      | 58.9     |   |   |   | $      | 6.7      |   |   |   | $      | 12.1     |   |   |
|                                                                                        |   |                         |   |     |   |   |   |   |     |   |   |   |   |     |   |   |

|                                                                           |   |                         |   |    |   |   |   |   |    |   |   |   |   |    |   |   |
|--------------------------------------------------------------------------------|--------|------------------------------|--------|---------|--------|--------|--------|--------|---------|--------|--------|--------|--------|---------|--------|--------|
|                                                                           |   | Year      Ended December 31, |
|                                                                           |   |                         |
|                                                                           |   | 2007                         |   | 2006    |   | 2005   |
|                                                                           |   |                         |   |    |   |   |
|                                                                           |   | (In      millions)           |
| Noncash      Investing and Financing Activities:                               |   |                         |   |    |   |   |   |   |    |   |
| Contribution      of net assets to partnership investments                     |   |                         | $      | — |   |   |   | $      | 17.0    |   |   |   | $      | — |   |   |
| Assets      acquired by the issuance of units                                  |   |                         |   | 15.0    |   |   |   |   | 1.6     |   |   |   |   | 49.6    |   |   |
| Assets      acquired by the assumption or incurrence of liabilities            |   |                         |   | 19.7    |   |   |   |   | 6.1     |   |   |   |   | 76.6    |   |   |
| Assets      acquired by the transfer of Trans Mountain                         |   |                         |   | — |   |   |   |   | 1,199.5 |   |   |   |   | — |   |   |
| Liabilities      assumed by the transfer of Trans Mountain                     |   |                         |   | — |   |   |   |   | 282.5   |   |   |   |   | — |   |   |
| Related      party asset settlements with Knight                               |   |                         |   | 276.2   |   |   |   |   | — |   |   |   |   | — |   |   |
| Related      party liability settlements with Knight                           |   |                         |   | 556.6   |   |   |   |   | — |   |   |   |   | — |   |   |
|                                                                           |   |                         |   |    |   |   |   |   |    |   |   |   |   |    |   |   |
| Supplemental      disclosures of cash flow information:                        |   |                         |   |    |   |   |   |   |    |   |   |   |   |    |   |   |
| Cash      paid during the year for interest (net of capitalized      interest) |   |                         |   | 336.0   |   |   |   |   | 329.2   |   |   |   |   | 245.6   |   |   |
| Cash      paid during the year for income taxes                                |   |                         |   | 6.2     |   |   |   |   | 25.6    |   |   |   |   | 7.3     |   |   |

CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

|                                                                                                         |   |   |        |   |   |     |   |                       |        |   |   |     |   |   |        |   |   |     |   |
|--------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|----------|--------|----------------------------|-------------|--------|--------|----------|--------|--------|-------------|--------|--------|----------|--------|
|                                                                                                         |   | 2007   |        | 2006   |   | 2005     |   |
|                                                                                                         |   |   |        |   |   |     |   |
|                                                                                                         |   |   | Units       |   |   | Amount   |   |                       | Units       |   |   | Amount   |   |   | Units       |   |   | Amount   |   |
|                                                                                                         |   |   |        |   |   |     |   |                       |        |   |   |     |   |   |        |   |   |     |   |
|                                                                                                         |   |   |        |   |   |     |   | (Dollars      in millions) |        |   |   |     |   |   |        |
| Common      Units:                                                                                           |   |   |        |   |   |     |   |                       |        |   |   |     |   |   |        |   |   |     |   |
| Beginning      Balance                                                                                       |   |   | 162,816,303 |   | $      | 3,414.9  |   |                       | 157,005,326 |   | $      | 2,680.4  |   |   | 147,537,908 |   | $      | 2,438.0  |   |
| Net      income (loss)                                                                                       |   |   | —     |   |   | (20.4    | )      |                       | —     |   |   | 347.8    |   |   | —     |   |   | 237.8    |   |
| Units      issued as consideration pursuant to common unit compensation plan for      non-employee directors |   |   | 7,280       |   |   | 0.4      |   |                       | 5,250       |   |   | 0.3      |   |   | 5,250       |   |   | 0.3      |   |
| Units      issued as consideration in the acquisition of assets                                              |   |   | 266,813     |   |   | 15.0     |   |                       | 34,627      |   |   | 1.6      |   |   | 1,022,068   |   |   | 49.6     |   |
| Units      issued for cash                                                                                   |   |   | 7,130,000   |   |   | 342.5    |   |                       | 5,771,100   |   |   | 248.2    |   |   | 8,440,100   |   |   | 415.3    |   |
| Trans      Mountain Acquisition                                                                              |   |   | —     |   |   | (166.8   | )      |                       | —     |   |   | 648.7    |   |   | —     |   |   | —  |   |
| Knight      Inc. going-private transaction exp.                                                              |   |   | —     |   |   | 15.4     |   |                       | —     |   |   | —  |   |   | —     |   |   | —  |   |
| Distributions                                                                                                |   |   | —     |   |   | (552.6   | )      |                       | —     |   |   | (512.1   | )      |   | —     |   |   | (460.6   | )      |
|                                                                                                         |   |   |        |   |   |     |   |                       |        |   |   |     |   |   |        |   |   |     |   |
| Ending      Balance                                                                                          |   |   | 170,220,396 |   |   | 3,048.4  |   |                       | 162,816,303 |   |   | 3,414.9  |   |   | 157,005,326 |   |   | 2,680.4  |   |
|                                                                                                         |   |   |        |   |   |     |   |                       |        |   |   |     |   |   |        |   |   |     |   |
| Class      B Units:                                                                                          |   |   |        |   |   |     |   |                       |        |   |   |     |   |   |        |   |   |     |   |
| Beginning      Balance                                                                                       |   |   | 5,313,400   |   |   | 126.1    |   |                       | 5,313,400   |   |   | 109.6    |   |   | 5,313,400   |   |   | 117.4    |   |
| Net      income (loss)                                                                                       |   |   | —     |   |   | (0.6     | )      |                       | —     |   |   | 11.6     |   |   | —     |   |   | 8.5      |   |
| Trans      Mountain Acquisition                                                                              |   |   | —     |   |   | (6.0     | )      |                       | —     |   |   | 22.1     |   |   | —     |   |   | —  |   |
| Knight      Inc. going-private transaction exp.                                                              |   |   | —     |   |   | 0.5      |   |                       | —     |   |   | —  |   |   | —     |   |   | —  |   |
| Distributions                                                                                                |   |   | —     |   |   | (18.0    | )      |                       | —     |   |   | (17.2    | )      |   | —     |   |   | (16.3    | )      |
|                                                                                                         |   |   |        |   |   |     |   |                       |        |   |   |     |   |   |        |   |   |     |   |
| Ending      Balance                                                                                          |   |   | 5,313,400   |   |   | 102.0    |   |                       | 5,313,400   |   |   | 126.1    |   |   | 5,313,400   |   |   | 109.6    |   |
|                                                                                                         |   |   |        |   |   |     |   |                       |        |   |   |     |   |   |        |   |   |     |   |
| i-Units:                                                                                                     |   |   |        |   |   |     |   |                       |        |   |   |     |   |   |        |   |   |     |   |
| Beginning      Balance                                                                                       |   |   | 62,301,676  |   |   | 2,154.2  |   |                       | 57,918,373  |   |   | 1,783.6  |   |   | 54,157,641  |   |   | 1,695.0  |   |
| Net      income (loss)                                                                                       |   |   | —     |   |   | (0.3     | )      |                       | —     |   |   | 131.4    |   |   | —     |   |   | 88.7     |   |
| Units      issued for cash                                                                                   |   |   | 5,700,000   |   |   | 297.6    |   |                       | —     |   |   | —  |   |   | —     |   |   | (0.1     | )      |
| Trans      Mountain Acquisition                                                                              |   |   | —     |   |   | (57.4    | )      |                       | —     |   |   | 239.2    |   |   | —     |   |   | —  |   |
| Knight      Inc. going-private transaction exp.                                                              |   |   | —     |   |   | 6.7      |   |                       | —     |   |   | —  |   |   | —     |   |   | —  |   |
| Distributions                                                                                                |   |   | 4,430,806   |   |   | —  |   |                       | 4,383,303   |   |   | —  |   |   | 3,760,732   |   |   | —  |   |
|                                                                                                         |   |   |        |   |   |     |   |                       |        |   |   |     |   |   |        |   |   |     |   |
| Ending      Balance                                                                                          |   |   | 72,432,482  |   |   | 2,400.8  |   |                       | 62,301,676  |   |   | 2,154.2  |   |   | 57,918,373  |   |   | 1,783.6  |   |
|                                                                                                         |   |   |        |   |   |     |   |                       |        |   |   |     |   |   |        |   |   |     |   |
| General      Partner:                                                                                        |   |   |        |   |   |     |   |                       |        |   |   |     |   |   |        |   |   |     |   |
| Beginning      Balance                                                                                       |   |   | —     |   |   | 119.2    |   |                       | —     |   |   | 119.9    |   |   | —     |   |   | 103.5    |   |
| Net      income                                                                                              |   |   | —     |   |   | 611.6    |   |                       | —     |   |   | 513.3    |   |   | —     |   |   | 477.3    |   |
| Trans      Mountain Acquisition                                                                              |   |   | —     |   |   | (2.2     | )      |                       | —     |   |   | 9.2      |   |   | —     |   |   | —  |   |
| Knight      Inc. going-private transaction exp.                                                              |   |   | —     |   |   | 0.2      |   |                       | —     |   |   | —  |   |   | —     |   |   | —  |   |
| Distributions                                                                                                |   |   | —     |   |   | (567.7   | )      |                       | —     |   |   | (523.2   | )      |   | —     |   |   | (460.9   | )      |
|                                                                                                         |   |   |        |   |   |     |   |                       |        |   |   |     |   |   |        |   |   |     |   |
| Ending      Balance                                                                                          |   |   | —     |   |   | 161.1    |   |                       | —     |   |   | 119.2    |   |   | —     |   |   | 119.9    |   |
|                                                                                                         |   |   |        |   |   |     |   |                       |        |   |   |     |   |   |        |   |   |     |   |
| Accum.      other comprehensive income (loss):                                                               |   |   |        |   |   |     |   |                       |        |   |   |     |   |   |        |   |   |     |   |
| Beginning      Balance                                                                                       |   |   | —     |   |   | (866.1   | )      |                       | —     |   |   | (1,079.7 | )      |   | —     |   |   | (457.4   | )      |
| Change      in fair value of derivatives used for hedging purposes                                           |   |   | —     |   |   | (974.2   | )      |                       | —     |   |   | (187.5   | )      |   | —     |   |   | (1,045.6 | )      |
| Reclassification      of change in fair value of derivatives to net income                                   |   |   | —     |   |   | 433.2    |   |                       | —     |   |   | 428.1    |   |   | —     |   |   | 424.0    |   |
| Foreign      currency translation adjustments                                                                |   |   | —     |   |   | 132.5    |   |                       | —     |   |   | (19.6    | )      |   | —     |   |   | (0.7     | )      |
| Pension      and other post-retirement benefit liability changes                                             |   |   | —     |   |   | (3.5     | )      |                       | —     |   |   | (1.8     | )      |   | —     |   |   | —  |   |
| Adj.      to initially apply SFAS No. 158-pension and other post-retirement benefit      acctg. changes      |   |   | —     |   |   | 1.5      |   |                       | —     |   |   | (5.6     | )      |   | —     |   |   | —  |   |
|                                                                                                         |   |   |        |   |   |     |   |                       |        |   |   |     |   |   |        |   |   |     |   |
| Ending      Balance                                                                                          |   |   | —     |   |   | (1,276.6 | )      |                       | —     |   |   | (866.1   | )      |   | —     |   |   | (1,079.7 | )      |
|                                                                                                         |   |   |        |   |   |     |   |                       |        |   |   |     |   |   |        |   |   |     |   |
|                                                                                                         |   |   |        |   |   |     |   |                       |        |   |   |     |   |   |        |   |   |     |   |
| Total      Partners’ Capital                                                                           |   |   | 247,966,278 |   | $      | 4,435.7  |   |                       | 230,431,379 |   | $      | 4,948.3  |   |   | 220,237,099 |   | $      | 3,613.8  |   |
|                                                                                                         |   |   |        |   |   |     |   |                       |        |   |   |     |   |   |        |   |   |     |   |

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|   |    |                                                                                                                                                                                                                      |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | Products      Pipelines - transporting, storing and processing refined petroleum      products;                                                                                                                           |
|   |    |                                                                                                                                                                                                                      |
|   | • | Natural      Gas Pipelines - transporting, storing, selling, gathering, treating and      processing natural gas;                                                                                                         |
|   |    |                                                                                                                                                                                                                      |
|   | • | CO2-      producing, transporting and selling carbon dioxide, commonly called      CO2, for      use in, and selling crude oil, natural gas and natural gas liquids      produced from, enhanced oil recovery operations; |
|   |    |                                                                                                                                                                                                                      |
|   | • | Terminals      - transloading, storing and delivering a wide variety of bulk, petroleum,      petrochemical and other liquid products at terminal facilities located      across North America; and                       |
|   |    |                                                                                                                                                                                                                      |
|   | • | Trans      Mountain – transporting crude oil and refined petroleum products from      Edmonton, Alberta, Canada to marketing terminals and refineries in British      Columbia and the state ofWashington.          |

|   |    |                                                           |
|--------|---------|----------------------------------------------------------------|
|   | • | Kinder      Morgan Operating L.P. “A” (OLP-A);     |
|   |    |                                                           |
|   | • | Kinder      Morgan Operating L.P. “B” (OLP-B);     |
|   |    |                                                           |
|   | • | Kinder      Morgan Operating L.P. “C” (OLP-C);     |
|   |    |                                                           |
|   | • | Kinder      Morgan Operating L.P. “D” (OLP-D); and |
|   |    |                                                           |
|   | • | Kinder      Morgan CO2      Company (KMCO2).                   |

|                                 |   |                                   |   |                                            |   |                                      |   |          |   |                             |    |   |   |   |   |   |   |   |   |   |   |
|--------------------------------------|--------|----------------------------------------|--------|-------------------------------------------------|--------|-------------------------------------------|--------|---------------|--------|----------------------------------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                 |   | Valuation      and Qualifying Accounts |   |                                            |   |                                      |   |          |   |
| Allowance      for Doubtful Accounts |   | Balance      atbeginning      ofPeriod |   | Additionscharged      to costsand      expenses |   | Additionscharged      to otheraccounts(1) |   | Deductions(2) |   | Balance      atend      ofperiod |    |
|                                 |   |                                   |   |                                            |   |                                      |   |          |   |                             |    |
| Year      ended December 31, 2007    |   | $                                      | 6.8    |                                            |   | $                                         | 0.4    |          |   | $                                | — |   |   | $      | (0.2   | )      |   | $      | 7.0    |   |   |
|                                 |   |                                   |   |                                            |   |                                      |   |          |   |                             |    |   |   |   |   |   |   |   |   |   |   |
| Year      ended December 31, 2006    |   | $                                      | 6.5    |                                            |   | $                                         | 0.3    |          |   | $                                | 0.3     |   |   | $      | (0.3   | )      |   | $      | 6.8    |   |   |
|                                 |   |                                   |   |                                            |   |                                      |   |          |   |                             |    |   |   |   |   |   |   |   |   |   |   |
| Year      ended December 31, 2005    |   | $                                      | 8.6    |                                            |   | $                                         | 0.2    |          |   | $                                | — |   |   | $      | (2.3   | )      |   | $      | 6.5    |   |   |

|   |                                                                                                                                       |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------|
| (1)    | Amount      for 2006 represents the allowance recognized when we acquired Devco USA      L.L.C. ($0.2) and Transload Services, LLC ($0.1). |
|   |                                                                                                                                       |
| (2)    | Deductions      represent the write-off ofreceivables.                                                                                     |

|   |    |                                                                                                                                                                                                                           |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | the      1.0101% general partner interest in each of our five operating      partnerships;                                                                                                                                     |
|   |    |                                                                                                                                                                                                                           |
|   | • | the      0.5% special limited partner interest in SFPP, L.P.;                                                                                                                                                                  |
|   |    |                                                                                                                                                                                                                           |
|   | • | the      50% interest in Globalplex Partners, a Louisiana joint venture owned 50%      and controlled by Kinder Morgan Bulk Terminals, Inc.;                                                                                   |
|   |    |                                                                                                                                                                                                                           |
|   | • | the      33 1/3% interest in International Marine Terminals Partnership, a      Louisiana partnership owned 66 2/3% and controlled by Kinder Morgan      Operating L.P. “C”;                                       |
|   |    |                                                                                                                                                                                                                           |
|   | • | the      approximate 31% interest in the Pecos Carbon Dioxide Company, a Texas      general partnership owned approximately 69% and controlled by Kinder      Morgan CO2      Company, L.P. and its consolidated subsidiaries; |
|   |    |                                                                                                                                                                                                                           |
|   | • | the      1% interest in River Terminals Properties, L.P., a Tennessee partnership      owned 99% and controlled by Kinder Morgan River Terminals LLC;      and                                                                 |
|   |    |                                                                                                                                                                                                                           |
|   | • | the      30% interest in Guilford County Terminal Company, LLC, a limited liability      company owned 70% and controlled by Kinder Morgan Southeast Terminals      LLC.                                                       |
|   |    |                                                                                                                                                                                                                           |

|                   |   |                                                                     |   |                                  |   |                                                     |   |                                                  |   |   |   |   |   |    |   |   |   |   |     |   |   |
|------------------------|--------|--------------------------------------------------------------------------|--------|---------------------------------------|--------|----------------------------------------------------------|--------|-------------------------------------------------------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|----------|--------|--------|
|                   |   | Net      unrealizedgains/(losses)on      cash flowhedge      derivatives |   | Foreigncurrencytranslationadjustments |   | Pension      andOtherPost-retirementliability      adjs. |   | TotalAccumulated      othercomprehensiveincome/(loss) |   |
|                   |   |                                                                     |   |                                  |   |                                                     |   |                                                  |   |
| December      31, 2005 |   |                                                                     | $      | (1,079.3                              | )      |                                                     |   | $                                                     | (0.4   | )      |   |   | $      | — |   |   |   | $      | (1,079.7 | )      |   |
| Change      for period |   |                                                                     |   | 240.6                                 |   |                                                     |   |                                                  | (19.6  | )      |   |   |   | (7.4    | )      |   |   |   | 213.6    |   |   |
|                   |   |                                                                     |   |                                  |   |                                                     |   |                                                  |   |   |   |   |   |    |   |   |   |   |     |   |   |
| December      31, 2006 |   |                                                                     |   | (838.7                                | )      |                                                     |   |                                                  | (20.0  | )      |   |   |   | (7.4    | )      |   |   |   | (866.1   | )      |   |
| Change      for period |   |                                                                     |   | (541.0                                | )      |                                                     |   |                                                  | 132.5  |   |   |   |   | (2.0    | )      |   |   |   | (410.5   | )      |   |
|                   |   |                                                                     |   |                                  |   |                                                     |   |                                                  |   |   |   |   |   |    |   |   |   |   |     |   |   |
| December      31, 2007 |   |                                                                     | $      | (1,379.7                              | )      |                                                     |   | $                                                     | 112.5  |   |   |   | $      | (9.4    | )      |   |   | $      | (1,276.6 | )      |   |
|                   |   |                                                                     |   |                                  |   |                                                     |   |                                                  |   |   |   |   |   |    |   |   |   |   |     |   |   |

|                              |   |                    |   |    |   |   |   |
|-----------------------------------|--------|-------------------------|--------|---------|--------|--------|--------|
|                              |   | As      of December 31, |   |
|                              |   |                    |   |
|                              |   | 2007                    |   | 2006    |   |
|                              |   |                    |   |    |   |
| Regulated      Assets:            |   |                    |   |    |   |
| Employee      benefit costs       |   |                    | $      | 0.6     |   |   |   | $ | 0.4 |   |   |
| Fuel      Tracker                 |   |                    |   | 2.4     |   |   |   |   | 1.6 |   |   |
| Deferred      regulatory expenses |   |                    |   | 3.4     |   |   |   |   | 3.2 |   |   |
|                              |   |                    |   |    |   |   |   |   |   |   |   |
| Total      regulatory assets      |   |                    |   | 6.4     |   |   |   |   | 5.2 |   |   |
|                              |   |                    |   |    |   |   |   |   |   |   |   |
| Regulated      Liabilities:       |   |                    |   |    |   |   |   |   |   |   |   |
| Deferred      income taxes        |   |                    |   | — |   |   |   |   | 0.9 |   |   |
|                              |   |                    |   |    |   |   |   |   |   |   |   |
| Total      regulatory liabilities |   |                    |   | — |   |   |   |   | 0.9 |   |   |
|                              |   |                    |   |    |   |   |   |   |   |   |   |
|                              |   |                    |   |    |   |   |   |   |   |   |   |
| Net      regulatory assets        |   |                    | $      | 6.4     |   |   |   | $ | 4.3 |   |   |
|                              |   |                    |   |    |   |   |   |   |   |   |   |

|   |   |   |   |                                           |   |                              |   |          |   |                              |   |                            |    |     |   |             |   |    |   |   |   |   |    |   |   |   |   |    |   |   |   |   |    |   |   |
|--------|--------|--------|--------|------------------------------------------------|--------|-----------------------------------|--------|---------------|--------|-----------------------------------|--------|---------------------------------|---------|----------|--------|------------------|--------|---------|--------|--------|--------|--------|---------|--------|--------|--------|--------|---------|--------|--------|--------|--------|---------|--------|--------|
|   |   |   |   |                                           |   | Allocation      of Purchase Price |   |
|   |   |   |   |                                           |   |                              |   |
|   |   |   |   |                                           |   | (in      millions)                |   |
|   |   |   |   |                                           |   |                              |   |
| Ref.   |   | Date   |   | Acquisition                                    |   | PurchasePrice                     |   | CurrentAssets |   | PropertyPlant      &Equipment |   | DeferredCharges&      Other |    | Goodwill |   | MinorityInterest |   |
|   |   |   |   |                                           |   |                              |   |          |   |                              |   |                            |    |     |   |             |   |
| (1)    |   | 1/05   |   | Claytonville      Oil Field Unit               |   |                              | $      | 6.5           |   |                              |   | $                               | — |     |   |             | $      | 6.5     |   |   |   | $      | — |   |   |   | $      | — |   |   |   | $      | — |   |   |
| (2)    |   | 4/05   |   | Texas      Petcoke Terminal Region             |   |                              |   | 247.2         |   |                              |   |                            | — |     |   |             |   | 72.5    |   |   |   |   | 161.4   |   |   |   |   | 13.3    |   |   |   |   | — |   |   |
| (3)    |   | 7/05   |   | Terminal      Assets                           |   |                              |   | 36.2          |   |                              |   |                            | 0.5     |     |   |             |   | 35.7    |   |   |   |   | — |   |   |   |   | — |   |   |   |   | — |   |   |
| (4)    |   | 7/05   |   | General      Stevedores, L.P.                  |   |                              |   | 10.4          |   |                              |   |                            | 0.6     |     |   |             |   | 5.2     |   |   |   |   | 0.2     |   |   |   |   | 4.4     |   |   |   |   | — |   |   |
| (5)    |   | 8/05   |   | North      Dayton Natural Gas Storage Facility |   |                              |   | 109.4         |   |                              |   |                            | — |     |   |             |   | 71.7    |   |   |   |   | 11.7    |   |   |   |   | 26.0    |   |   |   |   | — |   |   |
| (6)    |   | 8-9/05 |   | Terminal      Assets                           |   |                              |   | 4.3           |   |                              |   |                            | 0.4     |     |   |             |   | 3.9     |   |   |   |   | — |   |   |   |   | — |   |   |   |   | — |   |   |
| (7)    |   | 11/05  |   | Allied      Terminal Assets                    |   |                              |   | 13.3          |   |                              |   |                            | 0.2     |     |   |             |   | 12.6    |   |   |   |   | 0.5     |   |   |   |   | — |   |   |   |   | — |   |   |
| (8)    |   | 2/06   |   | Entrega      Gas Pipeline LLC                  |   |                              |   | 244.6         |   |                              |   |                            | — |     |   |             |   | 244.6   |   |   |   |   | — |   |   |   |   | — |   |   |   |   | — |   |   |
| (9)    |   | 4/06   |   | Oil      and Gas Properties                    |   |                              |   | 63.6          |   |                              |   |                            | 0.1     |     |   |             |   | 63.5    |   |   |   |   | — |   |   |   |   | — |   |   |   |   | — |   |   |
| (10)   |   | 4/06   |   | Terminal      Assets                           |   |                              |   | 61.9          |   |                              |   |                            | 0.5     |     |   |             |   | 43.6    |   |   |   |   | — |   |   |   |   | 17.8    |   |   |   |   | — |   |   |
| (11)   |   | 11/06  |   | Transload      Services, LLC                   |   |                              |   | 16.6          |   |                              |   |                            | 1.6     |     |   |             |   | 6.6     |   |   |   |   | — |   |   |   |   | 8.4     |   |   |   |   | — |   |   |
| (12)   |   | 12/06  |   | Devco      USA L.L.C.                          |   |                              |   | 7.3           |   |                              |   |                            | 0.8     |     |   |             |   | — |   |   |   |   | 6.5     |   |   |   |   | — |   |   |   |   | — |   |   |
| (13)   |   | 12/06  |   | Roanoke,      Virginia Products Terminal       |   |                              |   | 6.4           |   |                              |   |                            | — |     |   |             |   | 6.4     |   |   |   |   | — |   |   |   |   | — |   |   |   |   | — |   |   |
| (14)   |   | 1/07   |   | Interest      in Cochin Pipeline               |   |                              |   | 47.8          |   |                              |   |                            | — |     |   |             |   | 47.8    |   |   |   |   | — |   |   |   |   | — |   |   |   |   | — |   |   |
| (15)   |   | 5/07   |   | Vancouver      Wharves Terminal.               |   |                              |   | 57.2          |   |                              |   |                            | 6.5     |     |   |             |   | 50.7    |   |   |   |   | — |   |   |   |   | — |   |   |   |   | — |   |   |
| (16)   |   | 9/07   |   | Marine      Terminals, Inc. Assets             |   |                              |   | 101.5         |   |                              |   |                            | 0.2     |     |   |             |   | 60.8    |   |   |   |   | 40.5    |   |   |   |   | — |   |   |   |   | — |   |   |
|   |   |   |   |                                           |   |                              |   |          |   |                              |   |                            |    |     |   |             |   |    |   |   |   |   |    |   |   |   |   |    |   |   |   |   |    |   |   |

|                                                   |   |                         |    |   |   |   |    |   |   |
|--------------------------------------------------------|--------|------------------------------|---------|--------|--------|--------|---------|--------|--------|
|                                                   |   | Year      Ended December 31, |    |
|                                                   |   |                         |    |
|                                                   |   | 2007                         |    |   | 2006   |   |    | 2005   |   |
|                                                   |   |                         |    |   |   |   |    |   |   |
| Operating      revenues                                |   | $                            | 41.1    |   |   | $      | 43.7    |   |   | $ | 41.2 |   |
| Operating      expenses                                |   |                         | (14.8   | )      |   |   | (22.7   | )      |   |   | (35.2 | ) |
| Depreciation      and amortization                     |   |                         | (7.0    | )      |   |   | (8.9    | )      |   |   | (8.2 | ) |
| Earnings      from equity investments                  |   |                         | 1.8     |   |   |   | 2.2     |   |   |   | 2.1 |   |
| Amortization      of excess cost of equity investments |   |                         | — |   |   |   | (0.1    | )      |   |   | (0.1 | ) |
| Other,      net – income (expense)               |   |                         | — |   |   |   | 0.1     |   |   |   | — |   |
|                                                   |   |                         |    |   |   |   |    |   |   |   |   |   |
| Income      (loss) from operations                     |   |                         | 21.1    |   |   |   | 14.3    |   |   |   | (0.2 | ) |
| Income      from disposal                              |   |                         | 152.8   |   |   |   | — |   |   |   | — |   |
|                                                   |   |                         |    |   |   |   |    |   |   |   |   |   |
| Total      earnings from discontinued operations       |   | $                            | 173.9   |   |   | $      | 14.3    |   |   | $ | (0.2 | ) |
|                                                   |   |                         |    |   |   |   |    |   |   |   |   |   |

|                                   |                         |   |    |   |   |   |
|----------------------------------------|------------------------------|--------|---------|--------|--------|--------|
|                                   | Year      Ended December 31, |   |
|                                   |                         |   |
|                                   | 2007                         |   | 2006    |   |
|                                   |                         |   |    |   |
| Balance      at beginning of period    |                         | $      | 50.3    |   |   | $      | 43.2 |   |
| Liabilities      incurred              |                         |   | 0.4     |   |   |   | 6.8 |   |
| Liabilities      settled               |                         |   | (1.1    | )      |   |   | (2.2 | ) |
| Accretion      expense                 |                         |   | 2.6     |   |   |   | 2.5 |   |
| Revisions      in estimated cash flows |                         |   | — |   |   |   | — |   |
|                                   |                         |   |    |   |   |   |   |   |
| Balance      at end of period          |                         | $      | 52.2    |   |   | $      | 50.3 |   |
|                                   |                         |   |    |   |   |   |   |   |

|                          |   |                         |   |   |   |   |   |   |   |
|-------------------------------|--------|------------------------------|--------|--------|--------|--------|--------|--------|--------|
|                          |   | Year      Ended December 31, |   |
|                          |   |                         |   |
|                          |   | 2007                         |   |   | 2006   |   |   | 2005   |   |
|                          |   |                         |   |   |   |   |   |   |   |
| Taxes      currently payable: |   |                         |   |   |   |   |   |   |   |
| Federal                       |   | $                            | 12.7   |   |   | $      | 12.8   |   |   | $ | 9.6 |   |
| State                         |   |                         | 8.2    |   |   |   | 2.3    |   |   |   | 2.1 |   |
| Foreign                       |   |                         | 31.5   |   |   |   | 11.2   |   |   |   | 0.4 |   |
|                          |   |                         |   |   |   |   |   |   |   |   |   |   |
| Total                         |   |                         | 52.4   |   |   |   | 26.3   |   |   |   | 12.1 |   |
| Taxes      deferred:          |   |                         |   |   |   |   |   |   |   |   |   |   |
| Federal                       |   |                         | 11.8   |   |   |   | 1.6    |   |   |   | 8.1 |   |
| State                         |   |                         | 6.2    |   |   |   | 0.2    |   |   |   | 0.8 |   |
| Foreign                       |   |                         | 0.6    |   |   |   | 0.9    |   |   |   | 3.5 |   |
|                          |   |                         |   |   |   |   |   |   |   |   |   |   |
| Total                         |   |                         | 18.6   |   |   |   | 2.7    |   |   |   | 12.4 |   |
|                          |   |                         |   |   |   |   |   |   |   |   |   |   |
| Total      tax provision      |   | $                            | 71.0   |   |   | $      | 29.0   |   |   | $ | 24.5 |   |
|                          |   |                         |   |   |   |   |   |   |   |   |   |   |
| Effective      tax rate       |   |                         | 14.6   | %      |   |   | 2.8    | %      |   |   | 2.9 | % |

|                                                               |   |                         |   |   |   |   |   |   |
|--------------------------------------------------------------------|--------|------------------------------|--------|--------|--------|--------|--------|--------|
|                                                               |   | Year      Ended December 31, |   |
|                                                               |   |                         |   |
|                                                               |   | 2007                         |   | 2006   |   | 2005   |   |
|                                                               |   |                         |   |   |   |   |   |
| Federal      income tax rate                                       |   |                         | 35.0   | %      | 35.0   | %      | 35.0   | %      |
| Increase      (decrease) as a result of:                           |   |                         |   |   |   |   |   |   |
| Partnership      earnings not subject to tax                       |   |                         | (35.0  | )%     | (35.0  | )%     | (35.0  | )%     |
| Corporate      subsidiary earnings subject to tax                  |   |                         | 3.0    | %      | 1.0    | %      | 1.1    | %      |
| Income      tax expense attributable to corporate equity earnings  |   |                         | 2.3    | %      | 0.5    | %      | 1.1    | %      |
| Income      tax expense attributable to foreign corporate earnings |   |                         | 6.6    | %      | 1.1    | %      | 0.5    | %      |
| State      taxes                                                   |   |                         | 2.7    | %      | 0.2    | %      | 0.2    | %      |
|                                                               |   |                         |   |   |   |   |   |   |
| Effective      tax rate                                            |   |                         | 14.6   | %      | 2.8    | %      | 2.9    | %      |
|                                                               |   |                         |   |   |   |   |   |   |

|                                                    |   |              |   |   |   |   |
|---------------------------------------------------------|--------|-------------------|--------|--------|--------|--------|
|                                                    |   | December      31, |   |
|                                                    |   |              |   |
|                                                    |   | 2007              |   |   | 2006   |   |
|                                                    |   |              |   |   |   |   |
| Deferred      tax assets:                               |   |              |   |   |   |   |
| Book      accruals                                      |   | $                 | 13.1   |   |   | $      | 1.4 |   |
| Net      Operating Loss/Alternative minimum tax credits |   |              | 1.2    |   |   |   | 3.0 |   |
| Other                                                   |   |              | 1.7    |   |   |   | 1.3 |   |
|                                                    |   |              |   |   |   |   |   |   |
| Total      deferred tax assets                          |   |              | 16.0   |   |   |   | 5.7 |   |
|                                                    |   |              |   |   |   |   |   |   |
| Deferred      tax liabilities:                          |   |              |   |   |   |   |   |   |
| Property,      plant and equipment                      |   |              | 189.9  |   |   |   | 106.9 |   |
| Other                                                   |   |              | 28.5   |   |   |   | 84.0 |   |
|                                                    |   |              |   |   |   |   |   |   |
| Total      deferred tax liabilities                     |   |              | 218.4  |   |   |   | 190.9 |   |
|                                                    |   |              |   |   |   |   |   |   |
| Net      deferred tax liabilities                       |   | $                 | 202.4  |   |   | $      | 185.2 |   |
|                                                    |   |              |   |   |   |   |   |   |

|                                                                                     |   |              |     |   |   |     |   |
|------------------------------------------------------------------------------------------|--------|-------------------|----------|--------|--------|----------|--------|
|                                                                                     |   | December      31, |     |
|                                                                                     |   |              |     |
|                                                                                     |   | 2007              |     | 2006   |   |
|                                                                                     |   |              |     |   |   |
| Natural      gas, liquids, crude oil and carbon dioxide pipelines                        |   | $                 | 5,498.4  |   | $      | 4,795.9  |   |
| Natural      gas, liquids, carbon dioxide pipeline, and terminals station      equipment |   |              | 5,076.2  |   |   | 4,549.3  |   |
| Natural      gas, liquids (including linefill), and transmix processing                  |   |              | 168.3    |   |   | 172.7    |   |
| Other                                                                                    |   |              | 1,060.4  |   |   | 844.9    |   |
| Accumulated      depreciation and depletion                                              |   |              | (2,044.0 | )      |   | (1,641.2 | )      |
|                                                                                     |   |              |     |   |   |     |   |
|                                                                                     |   |              | 9,759.3  |   |   | 8,721.6  |   |
| Land      and land right-of-way                                                          |   |              | 551.5    |   |   | 532.9    |   |
| Construction      work in process                                                        |   |              | 1,280.5  |   |   | 851.6    |   |
|                                                                                     |   |              |     |   |   |     |   |
| Property,      Plant and Equipment, net                                                  |   | $                 | 11,591.3 |   | $      | 10,106.1 |   |
|                                                                                     |   |              |     |   |   |     |   |

|   |    |                                            |
|--------|---------|-------------------------------------------------|
|   | • | Plantation      Pipe Line Company (51%);        |
|   |    |                                            |
|   | • | West2East      Pipeline LLC (51%);              |
|   |    |                                            |
|   | • | Red      Cedar Gathering Company (49%);         |
|   |    |                                            |
|   | • | Midcontinent      Express Pipeline LLC (50%);   |
|   |    |                                            |
|   | • | Thunder      Creek Gas Services, LLC (25%); and |
|   |    |                                            |
|   | • | Cortez      Pipeline Company (50%).             |

|                                   |   |              |   |   |   |    |   |
|----------------------------------------|--------|-------------------|--------|--------|--------|---------|--------|
|                                   |   | December      31, |   |
|                                   |   |              |   |
|                                   |   | 2007              |   | 2006   |   |
|                                   |   |              |   |   |   |
| Plantation      Pipe Line Company      |   | $                 | 195.4  |   | $      | 199.6   |   |
| West2East      Pipeline LLC            |   |              | 191.9  |   |   | — |   |
| Red      Cedar Gathering Company       |   |              | 135.6  |   |   | 160.6   |   |
| Midcontinent      Express Pipeline LLC |   |              | 63.0   |   |   | — |   |
| Thunder      Creek Gas Services, LLC   |   |              | 37.0   |   |   | 37.2    |   |
| Cortez      Pipeline Company           |   |              | 14.2   |   |   | 16.2    |   |
| All      Others                        |   |              | 18.3   |   |   | 12.7    |   |
|                                   |   |              |   |   |   |    |   |
| Total      Equity Investments          |   | $                 | 655.4  |   | $      | 426.3   |   |
|                                   |   |              |   |   |   |    |   |

|                                   |   |                         |   |   |   |   |    |   |   |
|----------------------------------------|--------|------------------------------|--------|--------|--------|--------|---------|--------|--------|
|                                   |   | Year      Ended December 31, |   |
|                                   |   |                         |   |
|                                   |   | 2007                         |   |   | 2006   |   |    | 2005   |   |
|                                   |   |                         |   |   |   |   |    |   |   |
| Red      Cedar Gathering Company       |   | $                            | 28.0   |   |   | $      | 36.3    |   |   | $ | 32.0 |   |
| Cortez      Pipeline Company           |   |                         | 19.2   |   |   |   | 19.2    |   |   |   | 26.3 |   |
| Plantation      Pipe Line Company      |   |                         | 29.4   |   |   |   | 12.8    |   |   |   | 24.9 |   |
| Thunder      Creek Gas Services, LLC   |   |                         | 2.2    |   |   |   | 2.4     |   |   |   | 2.8 |   |
| Midcontinent      Express Pipeline LLC |   |                         | 1.4    |   |   |   | — |   |   |   | — |   |
| West2East      Pipeline LLC            |   |                         | (12.4  | )      |   |   | — |   |   |   | — |   |
| All      Others                        |   |                         | 1.9    |   |   |   | 3.3     |   |   |   | 3.6 |   |
|                                   |   |                         |   |   |   |   |    |   |   |   |   |   |
| Total                                  |   | $                            | 69.7   |   |   | $      | 74.0    |   |   | $ | 89.6 |   |
|                                   |   |                         |   |   |   |   |    |   |   |   |   |   |
| Amortization      of excess costs      |   | $                            | (5.8   | )      |   | $      | (5.6    | )      |   | $ | (5.5 | ) |
|                                   |   |                         |   |   |   |   |    |   |   |   |   |   |

|                                                                                                    |                         |   |   |   |   |   |   |   |   |
|---------------------------------------------------------------------------------------------------------|------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                                                    | Year      Ended December 31, |   |
|                                                                                                    |                         |   |
| Income      Statement                                                                                   | 2007                         |   | 2006   |   | 2005   |   |
|                                                                                                    |                         |   |   |   |   |   |
| Revenues                                                                                                |                         | $      | 473.0  |   |   | $      | 441.9  |   |   | $ | 440.7 |   |
| Costs      and expenses                                                                                 |                         |   | 355.1  |   |   |   | 299.5  |   |   |   | 279.6 |   |
|                                                                                                    |                         |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      before extraordinary items and cumulative effect of a change in accounting      principle |                         |   | 117.9  |   |   |   | 142.4  |   |   |   | 161.1 |   |
| Net      income                                                                                         |                         | $      | 117.9  |   |   | $      | 142.4  |   |   | $ | 161.1 |   |
|                                                                                                    |                         |   |   |   |   |   |   |   |   |   |   |   |

|                                      |              |   |    |   |   |   |
|-------------------------------------------|-------------------|--------|---------|--------|--------|--------|
|                                      | December      31, |   |
|                                      |              |   |
| Balance      Sheet                        | 2007              |   | 2006    |   |
|                                      |              |   |    |   |
| Current      assets                       |              | $      | 138.3   |   |   | $      | 95.5 |   |
| Non-current      assets                   |              |   | 3,519.5 |   |   |   | 1,506.0 |   |
| Current      liabilities                  |              |   | 319.5   |   |   |   | 213.2 |   |
| Non-current      liabilities              |              |   | 2,624.1 |   |   |   | 1,127.3 |   |
| Partners’/owners’      equity |              |   | 714.2   |   |   |   | 261.0 |   |

|                                       |              |                      |    |      |             |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |
|--------------------------------------------|-------------------|---------------------------|---------|-----------|------------------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|
|                                       | ProductsPipelines | Natural      GasPipelines | CO2     | Terminals | TransMountain(a) | Total  |
|                                       |              |                      |    |      |             |   |
| Balance      as of December 31, 2005       |              | $                         | 263.2   |      |             | $      | 288.4   |   |   | $      | 46.1    |   |   | $      | 201.3   |   |   | $      | — |   |   | $      | 799.0   |   |
| Acquisitions      and purchase price adjs. |              |                      | — |      |             |   | — |   |   |   | — |   |   |   | 30.0    |   |   |   | 593.2   |   |   |   | 623.2   |   |
| Disposals                                  |              |                      | — |      |             |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Impairments                                |              |                      | — |      |             |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Currency      translation adjustments      |              |                      | — |      |             |   | — |   |   |   | — |   |   |   | — |   |   |   | (1.2    | )      |   |   | (1.2    | )      |
|                                       |              |                      |    |      |             |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |
| Balance      as of December 31, 2006       |              | $                         | 263.2   |      |             | $      | 288.4   |   |   | $      | 46.1    |   |   | $      | 231.3   |   |   | $      | 592.0   |   |   | $      | 1,421.0 |   |
| Acquisitions      and purchase price adjs. |              |                      | — |      |             |   | — |   |   |   | — |   |   |   | (2.2    | )      |   |   | — |   |   |   | (2.2    | )      |
| Disposals                                  |              |                      | — |      |             |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Impairments                                |              |                      | — |      |             |   | — |   |   |   | — |   |   |   | — |   |   |   | (377.1  | )      |   |   | (377.1  | )      |
| Currency      translation adjustments      |              |                      | — |      |             |   | — |   |   |   | — |   |   |   | — |   |   |   | 36.1    |   |   |   | 36.1    |   |
|                                       |              |                      |    |      |             |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |
| Balance      as of December 31, 2007       |              | $                         | 263.2   |      |             | $      | 288.4   |   |   | $      | 46.1    |   |   | $      | 229.1   |   |   | $      | 251.0   |   |   | $      | 1,077.8 |   |
|                                       |              |                      |    |      |             |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | On      April 18, 2007, we announced that we would acquire the Trans Mountain      pipeline system from Knight (formerly KMI), and this transaction was      completed April 30, 2007 (discussed in Note 3). Following the provisions      of generally accepted accounting principles, this transaction caused      Knight to consider the fair value of the Trans Mountain pipeline system,      and to determine whether goodwill related to these assets was impaired.      Knight recorded a goodwill impairment charge of $377.1 million in the      first quarter of 2007. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| For      our investments in entities that are not fully consolidated but instead      are included in our financial statements under the equity method of      accounting, the premium we pay that represents excess cost over underlying      fair value of net assets is referred to as equity method goodwill, and      under SFAS No. 142, this excess cost is not subject to amortization but      rather to impairment testing pursuant to APB No. 18. The impairment test      under APB No. 18 considers whether the fair value of the equity investment      as a whole, not the underlying net assets, has declined and whether that      decline is other than temporary. Therefore, in addition to our annual      impairment test of goodwill, we periodically reevaluate the amount at      which we carry the excess of cost over fair value of net assets accounted      for under the equity method, as well as the amortization period for such      assets, to determine whether current events or circumstances warrant      adjustments to our carrying value and/or revised estimates of useful lives      in accordance with APB Opinion No. 18. As of both December 31, 2007 and      2006, we have reported $138.2 million in equity method goodwill within the      caption “Investments” in our accompanying consolidated balance      sheets. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| We      also periodically reevaluate the difference between the fair value of net      assets accounted for under the equity method and our proportionate share      of the underlying book value (that is, the investee’s net assets per its      financial statements) of the investee at date of acquisition. In almost      all instances, this differential, relating to the discrepancy between our      share of the investee’s recognized net assets at book values and at      current fair values, represents our share of undervalued depreciable      assets, and since those assets (other than land) are subject to      depreciation, we amortize this portion of our investment cost against our      share of investee earnings. We reevaluate this differential, as well as      the amortization period for such undervalued depreciable assets, to      determine whether current events or circumstances warrant adjustments to      our carrying value and/or revised estimates of useful lives in accordance      with                                                                                                                                                                                                                                                                                                                             |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------|
| APB      Opinion No. 18. The caption “Investments” in our accompanying consolidated      balance sheets includes excess fair value of net assets over book value      costs of $174.7 million as of December 31, 2007 and $177.1 million as of      December 31, 2006.                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Other      Intangibles |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                   |
| Excluding      goodwill, our other intangible assets include customer relationships,      contracts and agreements, technology-based assets, and lease value. These      intangible assets have definite lives, are being amortized on a      straight-line basis over their estimated useful lives, and are reported      separately as “Other intangibles, net” in our accompanying consolidated      balance sheets. Following is information related to our intangible assets      subject to amortization (inmillions): |

|                                                  |                  |                  |   |   |   |   |   |   |
|-------------------------------------------------------|-----------------------|-----------------------|--------|--------|--------|--------|--------|--------|
|                                                  | December      31,2007 | December      31,2006 |
|                                                  |                  |                  |
| Customer      relationships, contracts and agreements |                  |                  |   |   |   |   |   |   |
| Gross      carrying amount                            |                  | $                     | 264.1  |   |   | $      | 224.4  |   |
| Accumulated      amortization                         |                  |                  | (36.9  | )      |   |   | (23.1  | )      |
|                                                  |                  |                  |   |   |   |   |   |   |
| Net      carrying amount                              |                  |                  | 227.2  |   |   |   | 201.3  |   |
|                                                  |                  |                  |   |   |   |   |   |   |
|                                                  |                  |                  |   |   |   |   |   |   |
| Technology-based      assets, lease value and other   |                  |                  |   |   |   |   |   |   |
| Gross      carrying amount                            |                  |                  | 13.3   |   |   |   | 13.3   |   |
| Accumulated      amortization                         |                  |                  | (1.9   | )      |   |   | (1.4   | )      |
|                                                  |                  |                  |   |   |   |   |   |   |
| Net      carrying amount                              |                  |                  | 11.4   |   |   |   | 11.9   |   |
|                                                  |                  |                  |   |   |   |   |   |   |
|                                                  |                  |                  |   |   |   |   |   |   |
| Total      Other intangibles, net                     |                  | $                     | 238.6  |   |   | $      | 213.2  |   |
|                                                  |                  |                  |   |   |   |   |   |   |

|                                                  |                         |   |   |   |   |   |   |   |   |
|-------------------------------------------------------|------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                  | Year Ended December      31, |   |
|                                                  |                         |   |   |   |   |   |
|                                                  | 2007                         |   | 2006   |   | 2005   |   |
|                                                  |                         |   |   |   |   |   |
| Customer      relationships, contracts and agreements |                         | $      | 13.8   |   |   | $      | 13.5   |   |   | $ | 8.6 |   |
| Technology-based      assets, lease value and other   |                         |   | 0.5    |   |   |   | 0.2    |   |   |   | 0.1 |   |
|                                                  |                         |   |   |   |   |   |   |   |   |   |   |   |
| Total      amortization                               |                         | $      | 14.3   |   |   | $      | 13.7   |   |   | $ | 8.7 |   |
|                                                  |                         |   |   |   |   |   |   |   |   |   |   |   |

|         |   |
|--------------|--------|
| 9.      Debt |   |

|                                           |                  |                  |    |   |   |   |    |   |
|------------------------------------------------|-----------------------|-----------------------|---------|--------|--------|--------|---------|--------|
|                                           | December      31,2007 | December      31,2006 |
|                                           |                  |                  |
| Commercial      paper borrowings               |                  | $                     | 589.1   |   |   | $      | 1,098.2 |   |
| Short-term      portion of:                    |                  |                  |    |   |   |   |    |   |
| 5.35%      senior notes due August 15, 2007    |                  |                  | — |   |   |   | 250.0   |   |
| 5.40%      note due March 31, 2012(a)          |                  |                  | 9.9     |   |   |   | — |   |
| 5.23%      senior notes due January 2, 2014(b) |                  |                  | 6.2     |   |   |   | 5.9     |   |
| 7.84%      senior notes due July 23, 2008(c)   |                  |                  | 5.0     |   |   |   | 5.0     |   |
|                                           |                  |                  |    |   |   |   |    |   |
| Total      short-term debt                     |                  | $                     | 610.2   |   |   | $      | 1,359.1 |   |
|                                           |                  |                  |    |   |   |   |    |   |

|   |    |                                                                                                                                                     |                                                                                                                                                                                                                                   |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | 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 we make 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.       |

|                                                                                                         |   |              |   |    |   |   |   |   |     |   |   |
|--------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|---------|--------|--------|--------|--------|----------|--------|--------|
|                                                                                                         |   | December      31, |   |
|                                                                                                         |   |              |   |
|                                                                                                         |   | 2007              |   | 2006    |   |
|                                                                                                         |   |              |   |    |   |
| Kinder      Morgan Energy Partners, L.P. borrowings:                                                         |   |              |   |    |   |   |   |   |     |   |   |
| 5.35%      senior notes due August 15, 2007                                                                  |   |              | $      | — |   |   |   | $      | 250.0    |   |   |
| 6.30%      senior notes due February 1, 2009                                                                 |   |              |   | 250.0   |   |   |   |   | 250.0    |   |   |
| 7.50%      senior notes due November 1, 2010                                                                 |   |              |   | 250.0   |   |   |   |   | 250.0    |   |   |
| 6.75%      senior notes due March 15, 2011                                                                   |   |              |   | 700.0   |   |   |   |   | 700.0    |   |   |
| 7.125%      senior notes due March 15, 2012                                                                  |   |              |   | 450.0   |   |   |   |   | 450.0    |   |   |
| 5.85%      senior notes due September 15, 2012                                                               |   |              |   | 500.0   |   |   |   |   | —  |   |   |
| 5.00%      senior notes due December 15, 2013                                                                |   |              |   | 500.0   |   |   |   |   | 500.0    |   |   |
| 5.125%      senior notes due November 15, 2014                                                               |   |              |   | 500.0   |   |   |   |   | 500.0    |   |   |
| 6.00%      senior notes due February 1, 2017                                                                 |   |              |   | 600.0   |   |   |   |   | —  |   |   |
| 7.400%      senior notes due March 15, 2031                                                                  |   |              |   | 300.0   |   |   |   |   | 300.0    |   |   |
| 7.75%      senior notes due March 15, 2032                                                                   |   |              |   | 300.0   |   |   |   |   | 300.0    |   |   |
| 7.30%      senior notes due August 15, 2033                                                                  |   |              |   | 500.0   |   |   |   |   | 500.0    |   |   |
| 5.80%      senior notes due March 15, 2035                                                                   |   |              |   | 500.0   |   |   |   |   | 500.0    |   |   |
| 6.50%      senior notes due February 1, 2037                                                                 |   |              |   | 400.0   |   |   |   |   | —  |   |   |
| 6.95%      senior notes due January 15, 2038                                                                 |   |              |   | 550.0   |   |   |   |   | —  |   |   |
| Commercial      paper borrowings                                                                             |   |              |   | 589.1   |   |   |   |   | 1,098.2  |   |   |
| Subsidiary      borrowings:                                                                                  |   |              |   |    |   |   |   |   |     |   |   |
| Central      Florida Pipe Line LLC-7.840% senior notes due July 23,2008                                      |   |              |   | 5.0     |   |   |   |   | 10.0     |   |   |
| Arrow      Terminals L.P.-IL Development Revenue Bonds due January 1,      2010                              |   |              |   | 5.3     |   |   |   |   | 5.3      |   |   |
| Kinder      Morgan Operating L.P. “A”-5.40% BP note, due March 31,2012                           |   |              |   | 23.6    |   |   |   |   | —  |   |   |
| Kinder      Morgan Canada Company-5.40% BP note, due March 31, 2012                                          |   |              |   | 21.0    |   |   |   |   | —  |   |   |
| Kinder      Morgan Texas Pipeline, L.P.-5.23% Senior Notes, due January 2,      2014                         |   |              |   | 43.2    |   |   |   |   | 49.1     |   |   |
| Kinder      Morgan Liquids Terminals LLC-N.J. Development Revenue Bonds due Jan. 15,      2018               |   |              |   | 25.0    |   |   |   |   | 25.0     |   |   |
| Kinder      Morgan Operating L.P. “B”-Jackson-Union Cos. IL Revenue Bonds due April 1,      2024 |   |              |   | 23.7    |   |   |   |   | 23.7     |   |   |
| International      Marine Terminals-Plaquemines, LA Revenue Bonds due March 15,      2025                    |   |              |   | 40.0    |   |   |   |   | 40.0     |   |   |
| Other      miscellaneous subsidiary debt                                                                     |   |              |   | 1.4     |   |   |   |   | 1.4      |   |   |
| Unamortized      debt discount on senior notes                                                               |   |              |   | (11.2   | )      |   |   |   | (9.3     | )      |   |
| Current      portion of long-term debt                                                                       |   |              |   | (610.2  | )      |   |   |   | (1,359.1 | )      |   |
|                                                                                                         |   |              |   |    |   |   |   |   |     |   |   |
| Total      Long-term debt                                                                                    |   |              | $      | 6,455.9 |   |   |   | $      | 4,384.3  |   |   |
|                                                                                                         |   |              |   |    |   |   |   |   |     |   |   |

|   |    |                                                                                                                                                                                                                                                             |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | $992.8      million from a January 30, 2007 public offering of a total of $1.0 billion      in principal amount of senior notes, consisting of $600 million of 6.00%      notes due February 1, 2017, and $400 million of 6.50% notes due February      1, 2037; |
|   |    |                                                                                                                                                                                                                                                             |
|   | • | $543.9      million from a June 21, 2007 public offering of $550 million in principal      amount of 6.95% senior notes due January 15, 2038; and                                                                                                                |
|   |    |                                                                                                                                                                                                                                                             |
|   | • | $497.8      million from an August 28, 2007 public offering of $500 million in      principal amount of 5.85% senior notes due September 15,    2012.                                                                                                            |

|       |       |   |    |   |
|------------|------------|--------|---------|--------|
| Year       | Commitment |
|       |       |
| 2008       |       | $      | 610.2   |   |
| 2009       |       |   | 265.8   |   |
| 2010       |       |   | 270.7   |   |
| 2011       |       |   | 715.1   |   |
| 2012       |       |   | 964.3   |   |
| Thereafter |       |   | 4,240.0 |   |
|       |       |   |    |   |
| Total      |       | $      | 7,066.1 |   |
|       |       |   |    |   |

|            |   |                   |           |                     |   |           |   |                     |           |   |   |           |   |
|-----------------|--------|------------------------|----------------|--------------------------|--------|----------------|--------|--------------------------|----------------|--------|--------|----------------|--------|
|            |   | December      31, 2007 |           | December      31, 2006   |   |
|            |   |                   |           |                     |   |
|            |   | CarryingValue          |           | EstimatedFair      Value |   | CarryingValue  |   | EstimatedFair      Value |           |
|            |   |                   |           |                     |   |           |   |                     |           |
| Total      Debt |   |                   | $      7,066.1 |                     |   | $      7,201.8 |   |                     | $      5,743.4 |   |   | $      5,865.0 |   |

|                                        |   |              |   |           |   |             |   |   |           |   |   |   |   |           |   |   |
|---------------------------------------------|--------|-------------------|--------|----------------|--------|------------------|--------|--------|----------------|--------|--------|--------|--------|----------------|--------|--------|
|                                        |   | BeforeApplication |   | Adjustments    |   | AfterApplication |   |
|                                        |   |              |   |           |   |             |   |
| Prepaid      benefit cost                   |   |              |   | $      — |   |             |   |   | $      — |   |   |   |   | $      — |   |   |
| Accrued      benefit liability              |   |              |   | 30.3           |   |             |   |   | (1.9           | )      |   |   |   | 28.4           |   |   |
| Intangible      asset                       |   |              |   | —        |   |             |   |   | —        |   |   |   |   | —        |   |   |
| Deferred      income tax liability          |   |              |   | (6.4           | )      |             |   |   | (1.2           | )      |   |   |   | (7.6           | )      |   |
| Minority      interest                      |   |              |   | —        |   |             |   |   | —        |   |   |   |   | —        |   |   |
| Accumulated      other comprehensive income |   |              |   | —        |   |             |   |   | 3.1            |   |   |   |   | 3.1            |   |   |

|                             |   |                  |        |                  |   |        |   |
|----------------------------------|--------|-----------------------|-------------|-----------------------|--------|-------------|--------|
|                             |   | December      31,2007 |        | December      31,2006 |   |
|                             |   |                  |        |                  |   |
| Common      units                |   |                  | 170,220,396 |                  |   | 162,816,303 |   |
| Class      B units               |   |                  | 5,313,400   |                  |   | 5,313,400   |   |
| i-units                          |   |                  | 72,432,482  |                  |   | 62,301,676  |   |
|                             |   |                  |        |                  |   |        |   |
| Total      limited partner units |   |                  | 247,966,278 |                  |   | 230,431,379 |   |
|                             |   |                  |        |                  |   |        |   |

|   |    |                                                                                                                                                                                                                                                                                       |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | $0.92,      the cash amount distributed per common unit                                                                                                                                                                                                                                    |
|   |    |                                                                                                                                                                                                                                                                                       |
| by     |    |                                                                                                                                                                                                                                                                                       |
|   |    |                                                                                                                                                                                                                                                                                       |
|   | • | $53.143,      the average of KMR’s limited liability shares’ closing market prices from      January 14-28, 2008, the ten consecutive trading days preceding the date      on which the shares began to trade ex-dividend under the rules of the New      York Stock Exchange. |

|   |    |                                                                                                                                                    |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | its      1.0101% direct general partner ownership interest (accounted for as      minority interest in our consolidated financial statements);      and |
|   |    |                                                                                                                                                    |
|   | • | its      0.9899% ownership interest indirectly owned via its 1% ownership interest      in us.                                                          |

|   |    |                                                                                                                                                                                                                                                                                     |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | first,      98% to the owners of all classes of units pro rata and 2% to our general      partner until the owners of all classes of units have received a total of      $0.15125 per unit in cash or equivalent i-units for such      quarter;                                          |
|   |    |                                                                                                                                                                                                                                                                                     |
|   | • | second,      85% of any available cash then remaining to the owners of all classes of      units pro rata and 15% to our general partner 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 our general partner 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 and Class B units in cash and to      owners of i-units in the equivalent number of i-units, and 50% to our      general partner. |

|                                                  |           |
|-------------------------------------------------------|----------------|
| Derivatives-net      asset/(liability)                |           |
| Accrued      other current liabilities                | $      (239.8) |
| Other      long-term liabilities and deferred credits | $      (386.5) |

|                                |   |                  |   |                  |   |   |   |   |   |   |   |
|-------------------------------------|--------|-----------------------|--------|-----------------------|--------|--------|--------|--------|--------|--------|--------|
|                                |   | December      31,2007 |   | December      31,2006 |   |
|                                |   |                  |   |                  |   |
| Leasehold      improvements         |   |                  | $      | 2.2                   |   |   |   | $      | 2.2    |   |   |
| Less:      Accumulated amortization |   |                  |   | (0.3                  | )      |   |   |   | (0.2   | )      |   |
|                                |   |                  |   |                  |   |   |   |   |   |   |   |
| Total                               |   |                  | $      | 1.9                   |   |   |   | $      | 2.0    |   |   |
|                                |   |                  |   |                  |   |   |   |   |   |   |   |

|                                                 |       |   |   |   |
|------------------------------------------------------|------------|--------|--------|--------|
| Year                                                 | Commitment |
|                                                 |       |
| 2008                                                 |       | $      | 0.2    |   |
| 2009                                                 |       |   | 0.2    |   |
| 2010                                                 |       |   | 0.2    |   |
| 2011                                                 |       |   | 0.2    |   |
| 2012                                                 |       |   | 0.2    |   |
| Thereafter                                           |       |   | 0.6    |   |
|                                                 |       |   |   |   |
| Subtotal                                             |       |   | 1.6    |   |
| Less:      Amount representing interest              |       |   | (0.6   | )      |
|                                                 |       |   |   |   |
| Present      value of minimum capital lease payments |       | $      | 1.0    |   |
|                                                 |       |   |   |   |

|                        |   |   |       |   |   |   |   |
|-----------------------------|--------|--------|------------|--------|--------|--------|--------|
| Year                        |   |   | Commitment |   |
|                        |   |   |       |   |
| 2008                        |   |   | $          | 31.5   |   |   |
| 2009                        |   |   |       | 22.8   |   |   |
| 2010                        |   |   |       | 19.5   |   |   |
| 2011                        |   |   |       | 15.6   |   |   |
| 2012                        |   |   |       | 12.1   |   |   |
| Thereafter                  |   |   |       | 27.6   |   |   |
|                        |   |   |       |   |   |   |
| Total      minimum payments |   |   | $          | 129.1  |   |   |
|                        |   |   |       |   |   |   |

|                                                  |   |                  |   |                  |   |   |   |   |   |   |   |
|-------------------------------------------------------|--------|-----------------------|--------|-----------------------|--------|--------|--------|--------|--------|--------|--------|
|                                                  |   | December      31,2007 |   | December      31,2006 |   |
|                                                  |   |                  |   |                  |   |
| Derivatives-net      asset/(liability)                |   |                  |   |                  |   |   |   |   |   |   |   |
| Other      current assets                             |   |                  | $      | 37.0                  |   |   |   | $      | 91.9   |   |   |
| Deferred      charges and other assets                |   |                  |   | 4.4                   |   |   |   |   | 12.7   |   |   |
| Accrued      other current liabilities                |   |                  |   | (593.9                | )      |   |   |   | (431.4 | )      |   |
| Other      long-term liabilities and deferred credits |   |                  | $      | (836.8                | )      |   |   | $      | (510.2 | )      |   |

|                                                  |   |                  |   |                  |   |   |   |   |   |   |   |
|-------------------------------------------------------|--------|-----------------------|--------|-----------------------|--------|--------|--------|--------|--------|--------|--------|
|                                                  |   | December      31,2007 |   | December      31,2006 |   |
|                                                  |   |                  |   |                  |   |
| Derivatives-net      asset/(liability)                |   |                  |   |                  |   |   |   |   |   |   |   |
| Deferred      charges and other assets                |   |                  | $      | 138.0                 |   |   |   | $      | 65.2   |   |   |
| Other      long-term liabilities and deferred credits |   |                  |   | —               |   |   |   |   | (22.6  | )      |   |
|                                                  |   |                  |   |                  |   |   |   |   |   |   |   |
| Net      fair value of interest rate swaps            |   |                  | $      | 138.0                 |   |   |   | $      | 42.6   |   |   |
|                                                  |   |                  |   |                  |   |   |   |   |   |   |   |

|   |    |                        |
|--------|---------|-----------------------------|
|   | • | Products      Pipelines;    |
|   |    |                        |
|   | • | Natural      Gas Pipelines; |
|   |    |                        |
|   | • | CO2;                        |
|   |    |                        |
|   | • | Terminals;      and         |
|   |    |                        |
|   | • | Trans      Mountain.        |

|                                   |   |   |    |   |   |   |    |   |   |
|----------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                                   |   | 2007   |    |   | 2006   |   |    | 2005   |   |
|                                   |   |   |    |   |   |   |    |   |   |
| Revenues                               |   |   |    |   |   |   |    |   |   |
| Products      Pipelines                |   |   |    |   |   |   |    |   |   |
| Revenues      from external customers  |   | $      | 844.4   |   |   | $      | 776.3   |   |   | $ | 711.8 |   |
| Intersegment      revenues             |   |   | — |   |   |   | — |   |   |   | — |   |
| Natural      Gas Pipelines             |   |   |    |   |   |   |    |   |   |   |   |   |
| Revenues      from external customers  |   |   | 6,466.5 |   |   |   | 6,577.7 |   |   |   | 7,718.4 |   |
| Intersegment      revenues             |   |   | — |   |   |   | — |   |   |   | — |   |
| CO2                                    |   |   |    |   |   |   |    |   |   |   |   |   |
| Revenues      from external customers  |   |   | 824.1   |   |   |   | 736.5   |   |   |   | 657.6 |   |
| Intersegment      revenues             |   |   | — |   |   |   | — |   |   |   | — |   |
| Terminals                              |   |   |    |   |   |   |    |   |   |   |   |   |
| Revenues      from external customers  |   |   | 963.0   |   |   |   | 864.1   |   |   |   | 699.3 |   |
| Intersegment      revenues             |   |   | 0.7     |   |   |   | 0.7     |   |   |   | — |   |
| Trans      Mountain                    |   |   |    |   |   |   |    |   |   |   |   |   |
| Revenues      from external customers  |   |   | 160.8   |   |   |   | 137.8   |   |   |   | — |   |
| Intersegment      revenues             |   |   | — |   |   |   | — |   |   |   | — |   |
|                                   |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      segment revenues            |   |   | 9,259.5 |   |   |   | 9,093.1 |   |   |   | 9,787.1 |   |
| Less:      Total intersegment revenues |   |   | (0.7    | )      |   |   | (0.7    | )      |   |   | — |   |
|                                   |   |   |    |   |   |   |    |   |   |   |   |   |
|                                   |   |   | 9,258.8 |   |   |   | 9,092.4 |   |   |   | 9,787.1 |   |
| Less:      Discontinued operations     |   |   | (41.1   | )      |   |   | (43.7   | )      |   |   | (41.2 | ) |
|                                   |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      consolidated revenues       |   | $      | 9,217.7 |   |   | $      | 9,048.7 |   |   | $ | 9,745.9 |   |
|                                   |   |   |    |   |   |   |    |   |   |   |   |   |

|                                                       |   |   |    |   |   |   |    |   |   |
|------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                                                       |   | 2007   |    |   | 2006   |   |    | 2005   |   |
|                                                       |   |   |    |   |   |   |    |   |   |
| Operating      expenses(a)                                 |   |   |    |   |   |   |    |   |   |
| Products      Pipelines                                    |   | $      | 451.8   |   |   | $      | 308.3   |   |   | $ | 366.0 |   |
| Natural      Gas Pipelines                                 |   |   | 5,882.9 |   |   |   | 6,057.8 |   |   |   | 7,255.0 |   |
| CO2                                                        |   |   | 304.2   |   |   |   | 268.1   |   |   |   | 212.6 |   |
| Terminals                                                  |   |   | 536.4   |   |   |   | 461.9   |   |   |   | 373.4 |   |
| Trans      Mountain                                        |   |   | 65.9    |   |   |   | 53.3    |   |   |   | — |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      segment operating expenses                      |   |   | 7,241.2 |   |   |   | 7,149.4 |   |   |   | 8,207.0 |   |
| Less:      Total intersegment operating expenses           |   |   | (0.7    | )      |   |   | (0.7    | )      |   |   | — |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
|                                                       |   |   | 7,240.5 |   |   |   | 7,148.7 |   |   |   | 8,207.0 |   |
| Less:      Discontinued operations                         |   |   | (14.8   | )      |   |   | (22.7   | )      |   |   | (35.2 | ) |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      consolidated operating expenses                 |   | $      | 7,225.7 |   |   | $      | 7,126.0 |   |   | $ | 8,171.8 |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Other      expense (income)                                |   |   |    |   |   |   |    |   |   |   |   |   |
| Products      Pipelines                                    |   | $      | (154.8  | )      |   | $      | — |   |   | $ | — |   |
| Natural      Gas Pipelines                                 |   |   | (3.2    | )      |   |   | (15.1   | )      |   |   | — |   |
| CO2                                                        |   |   | — |   |   |   | — |   |   |   | — |   |
| Terminals                                                  |   |   | (6.3    | )      |   |   | (15.2   | )      |   |   | — |   |
| Trans      Mountain(b)                                     |   |   | 377.1   |   |   |   | (0.9    | )      |   |   | — |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      segment Other expense (income)                  |   |   | 212.8   |   |   |   | (31.2   | )      |   |   | — |   |
| Less:      Discontinued operations                         |   |   | 152.8   |   |   |   | — |   |   |   | — |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      consolidated Other expense (income)             |   | $      | 365.6   |   |   | $      | (31.2   | )      |   | $ | — |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Depreciation,      depletion and amortization              |   |   |    |   |   |   |    |   |   |   |   |   |
| Products      Pipelines                                    |   | $      | 89.2    |   |   | $      | 82.9    |   |   | $ | 79.1 |   |
| Natural      Gas Pipelines                                 |   |   | 64.8    |   |   |   | 65.4    |   |   |   | 61.7 |   |
| CO2                                                        |   |   | 282.2   |   |   |   | 190.9   |   |   |   | 149.9 |   |
| Terminals                                                  |   |   | 89.3    |   |   |   | 74.6    |   |   |   | 59.1 |   |
| Trans      Mountain                                        |   |   | 21.5    |   |   |   | 19.0    |   |   |   | — |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      segment depreciation, depletion and amortiz.    |   |   | 547.0   |   |   |   | 432.8   |   |   |   | 349.8 |   |
| Less:      Discontinued operations                         |   |   | (7.0    | )      |   |   | (8.9    | )      |   |   | (8.2 | ) |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      consol. depreciation, depletion and amortiz.    |   | $      | 540.0   |   |   | $      | 423.9   |   |   | $ | 341.6 |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Earnings      from equity investments                      |   |   |    |   |   |   |    |   |   |   |   |   |
| Products      Pipelines                                    |   | $      | 32.5    |   |   | $      | 16.3    |   |   | $ | 28.5 |   |
| Natural      Gas Pipelines                                 |   |   | 19.2    |   |   |   | 40.5    |   |   |   | 36.8 |   |
| CO2                                                        |   |   | 19.2    |   |   |   | 19.2    |   |   |   | 26.3 |   |
| Terminals                                                  |   |   | 0.6     |   |   |   | 0.2     |   |   |   | 0.1 |   |
| Trans      Mountain                                        |   |   | — |   |   |   | — |   |   |   | — |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      segment earnings from equity investments        |   |   | 71.5    |   |   |   | 76.2    |   |   |   | 91.7 |   |
| Less:      Discontinued operations                         |   |   | (1.8    | )      |   |   | (2.2    | )      |   |   | (2.1 | ) |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      consolidated equity earnings                    |   | $      | 69.7    |   |   | $      | 74.0    |   |   | $ | 89.6 |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Amortization      of excess cost of equity investments     |   |   |    |   |   |   |    |   |   |   |   |   |
| Products      Pipelines                                    |   | $      | 3.4     |   |   | $      | 3.4     |   |   | $ | 3.4 |   |
| Natural      Gas Pipelines                                 |   |   | 0.4     |   |   |   | 0.3     |   |   |   | 0.2 |   |
| CO2                                                        |   |   | 2.0     |   |   |   | 2.0     |   |   |   | 2.0 |   |
| Terminals                                                  |   |   | — |   |   |   | — |   |   |   | — |   |
| Trans      Mountain                                        |   |   | — |   |   |   | — |   |   |   | — |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      segment amortization of excess cost of invests. |   |   | 5.8     |   |   |   | 5.7     |   |   |   | 5.6 |   |
| Less:      Discontinued operations                         |   |   | — |   |   |   | (0.1    | )      |   |   | (0.1 | ) |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      consol. amortization of excess cost of invests. |   | $      | 5.8     |   |   | $      | 5.6     |   |   | $ | 5.5 |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Interest      income                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Products      Pipelines                                    |   | $      | 4.4     |   |   | $      | 4.5     |   |   | $ | 4.6 |   |
| Natural      Gas Pipelines                                 |   |   | — |   |   |   | 0.1     |   |   |   | 0.7 |   |
| CO2                                                        |   |   | — |   |   |   | — |   |   |   | — |   |
| Terminals                                                  |   |   | — |   |   |   | — |   |   |   | — |   |
| Trans      Mountain                                        |   |   | — |   |   |   | — |   |   |   | — |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      segment interest income                         |   |   | 4.4     |   |   |   | 4.6     |   |   |   | 5.3 |   |
| Unallocated      interest income                           |   |   | 1.3     |   |   |   | 3.1     |   |   |   | 4.1 |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      consolidated interest income                    |   | $      | 5.7     |   |   | $      | 7.7     |   |   | $ | 9.4 |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |

|                                                                                                                             |   |   |    |   |   |   |    |   |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                                                                                                                             |   | 2007   |    |   | 2006   |   |    | 2005   |   |
|                                                                                                                             |   |   |    |   |   |   |    |   |   |
| Other,      net-income (expense)                                                                                                 |   |   |    |   |   |   |    |   |   |
| Products      Pipelines                                                                                                          |   | $      | 5.0     |   |   | $      | 7.6     |   |   | $ | 1.5 |   |
| Natural      Gas Pipelines                                                                                                       |   |   | 0.2     |   |   |   | 0.6     |   |   |   | 2.0 |   |
| CO2                                                                                                                              |   |   | — |   |   |   | 0.8     |   |   |   | — |   |
| Terminals                                                                                                                        |   |   | 1.0     |   |   |   | 2.1     |   |   |   | (0.2 | ) |
| Trans      Mountain                                                                                                              |   |   | 8.0     |   |   |   | 1.0     |   |   |   | — |   |
|                                                                                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      segment other, net-income (expense)                                                                                   |   |   | 14.2    |   |   |   | 12.1    |   |   |   | 3.3 |   |
| Less:      Discontinued operations                                                                                               |   |   | — |   |   |   | (0.1    | )      |   |   | — |   |
|                                                                                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      consolidated other, net-income (expense)                                                                              |   | $      | 14.2    |   |   | $      | 12.0    |   |   | $ | 3.3 |   |
|                                                                                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
|                                                                                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Income      tax benefit (expense)                                                                                                |   |   |    |   |   |   |    |   |   |   |   |   |
| Products      Pipelines                                                                                                          |   | $      | (19.7   | )      |   | $      | (5.2    | )      |   | $ | (10.3 | ) |
| Natural      Gas Pipelines                                                                                                       |   |   | (6.0    | )      |   |   | (1.4    | )      |   |   | (2.6 | ) |
| CO2                                                                                                                              |   |   | (2.1    | )      |   |   | (0.2    | )      |   |   | (0.4 | ) |
| Terminals                                                                                                                        |   |   | (19.2   | )      |   |   | (12.3   | )      |   |   | (11.2 | ) |
| Trans      Mountain                                                                                                              |   |   | (19.4   | )      |   |   | (9.9    | )      |   |   | — |   |
|                                                                                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      segment income tax benefit (expense)                                                                                  |   |   | (66.4   | )      |   |   | (29.0   | )      |   |   | (24.5 | ) |
| Unallocated      income tax benefit (expense)                                                                                    |   |   | (4.6    | )      |   |   | — |   |   |   | — |   |
|                                                                                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      consolidated income tax benefit (expense)                                                                             |   | $      | (71.0   | )      |   | $      | (29.0   | )      |   | $ | (24.5 | ) |
|                                                                                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
|                                                                                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Segment      earnings(c)                                                                                                         |   |   |    |   |   |   |    |   |   |   |   |   |
| Products      Pipelines                                                                                                          |   | $      | 477.0   |   |   | $      | 404.9   |   |   | $ | 287.6 |   |
| Natural      Gas Pipelines                                                                                                       |   |   | 535.0   |   |   |   | 509.1   |   |   |   | 438.4 |   |
| CO2                                                                                                                              |   |   | 252.8   |   |   |   | 295.3   |   |   |   | 319.0 |   |
| Terminals                                                                                                                        |   |   | 326.7   |   |   |   | 333.5   |   |   |   | 255.5 |   |
| Trans      Mountain                                                                                                              |   |   | (315.1  | )      |   |   | 57.5    |   |   |   | — |   |
|                                                                                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      segment earnings                                                                                                      |   |   | 1,276.4 |   |   |   | 1,600.3 |   |   |   | 1,300.5 |   |
| Interest      and corporate administrative expenses(d)                                                                           |   |   | (686.1  | )      |   |   | (596.2  | )      |   |   | (488.3 | ) |
|                                                                                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      consolidated net income                                                                                               |   | $      | 590.3   |   |   | $      | 1,004.1 |   |   | $ | 812.2 |   |
|                                                                                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
|                                                                                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Segment      earnings before depreciation, depletion, amortization and amortization of      excess cost of equity investments(e) |   |   |    |   |   |   |    |   |   |   |   |   |
| Products      Pipelines                                                                                                          |   | $      | 569.6   |   |   | $      | 491.2   |   |   | $ | 370.1 |   |
| Natural      Gas Pipelines                                                                                                       |   |   | 600.2   |   |   |   | 574.8   |   |   |   | 500.3 |   |
| CO2                                                                                                                              |   |   | 537.0   |   |   |   | 488.2   |   |   |   | 470.9 |   |
| Terminals                                                                                                                        |   |   | 416.0   |   |   |   | 408.1   |   |   |   | 314.6 |   |
| Trans      Mountain                                                                                                              |   |   | (293.6  | )      |   |   | 76.5    |   |   |   | — |   |
|                                                                                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      segment earnings before DD&A                                                                                      |   |   | 1,829.2 |   |   |   | 2,038.8 |   |   |   | 1,655.9 |   |
| Total      segment depreciation, depletion and amortiz.                                                                          |   |   | (547.0  | )      |   |   | (432.8  | )      |   |   | (349.8 | ) |
| Total      segment amortization of excess cost of invests.                                                                       |   |   | (5.8    | )      |   |   | (5.7    | )      |   |   | (5.6 | ) |
| Interest      and corporate administrative expenses                                                                              |   |   | (686.1  | )      |   |   | (596.2  | )      |   |   | (488.3 | ) |
|                                                                                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      consolidated net income                                                                                               |   | $      | 590.3   |   |   | $      | 1,004.1 |   |   | $ | 812.2 |   |
|                                                                                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
|                                                                                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Capital      expenditures(f)                                                                                                     |   |   |    |   |   |   |    |   |   |   |   |   |
| Products      Pipelines                                                                                                          |   | $      | 259.4   |   |   | $      | 196.0   |   |   | $ | 271.5 |   |
| Natural      Gas Pipelines                                                                                                       |   |   | 264.0   |   |   |   | 271.6   |   |   |   | 102.9 |   |
| CO2                                                                                                                              |   |   | 382.5   |   |   |   | 283.0   |   |   |   | 302.1 |   |
| Terminals                                                                                                                        |   |   | 480.0   |   |   |   | 307.7   |   |   |   | 186.6 |   |
| Trans      Mountain                                                                                                              |   |   | 305.7   |   |   |   | 123.8   |   |   |   | — |   |
|                                                                                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      consolidated capital expenditures                                                                                     |   | $      | 1,691.6 |   |   | $      | 1,182.1 |   |   | $ | 863.1 |   |
|                                                                                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
|                                                                                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Investments      at December 31                                                                                                  |   |   |    |   |   |   |    |   |   |   |   |   |
| Products      Pipelines                                                                                                          |   | $      | 202.3   |   |   | $      | 211.1   |   |   | $ | 223.7 |   |
| Natural      Gas Pipelines                                                                                                       |   |   | 427.5   |   |   |   | 197.9   |   |   |   | 177.1 |   |
| CO2                                                                                                                              |   |   | 14.2    |   |   |   | 16.1    |   |   |   | 17.9 |   |
| Terminals                                                                                                                        |   |   | 10.6    |   |   |   | 0.5     |   |   |   | 0.6 |   |
| Trans      Mountain                                                                                                              |   |   | 0.8     |   |   |   | 0.7     |   |   |   | — |   |
|                                                                                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      consolidated investments                                                                                              |   | $      | 655.4   |   |   | $      | 426.3   |   |   | $ | 419.3 |   |
|                                                                                                                             |   |   |    |   |   |   |    |   |   |   |   |   |

|                           |   |   |     |   |   |     |   |   |     |   |
|--------------------------------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|
|                           |   | 2007   |     | 2006   |   | 2005     |   |
|                           |   |   |     |   |   |     |   |
| Assets      at December 31     |   |   |     |   |   |     |   |   |     |   |
| Products      Pipelines        |   | $      | 4,045.0  |   | $      | 3,910.5  |   | $      | 3,873.9  |   |
| Natural      Gas Pipelines     |   |   | 4,347.3  |   |   | 3,946.6  |   |   | 4,140.0  |   |
| CO2                            |   |   | 2,004.5  |   |   | 1,870.8  |   |   | 1,772.8  |   |
| Terminals                      |   |   | 3,036.4  |   |   | 2,397.5  |   |   | 2,052.5  |   |
| Trans      Mountain            |   |   | 1,440.8  |   |   | 1,314.0  |   |   | —  |   |
|                           |   |   |     |   |   |     |   |   |     |   |
| Total      segment assets      |   |   | 14,874.0 |   |   | 13,439.4 |   |   | 11,839.2 |   |
| Corporate      assets(g)       |   |   | 303.8    |   |   | 102.8    |   |   | 84.3     |   |
|                           |   |   |     |   |   |     |   |   |     |   |
| Total      consolidated assets |   | $      | 15,177.8 |   | $      | 13,542.2 |   | $      | 11,923.5 |   |
|                           |   |   |     |   |   |     |   |   |     |   |

|   |                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)    | Includes      natural gas purchases and other costs of sales, operations and maintenance      expenses, fuel and power expenses and taxes, other than income      taxes.                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                             |
| (b)    | 2007      amount represents an expense of $377.1 million attributable to a goodwill      impairment charge recognized by Knight, as discussed in Notes 3 and      8.                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                             |
| (c)    | Includes      revenues, earnings from equity investments, allocable interest income, and      other, net, less operating expenses, allocable income taxes, other expense      (income), depreciation, depletion and amortization, and amortization of      excess cost of equity investments.                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                             |
| (d)    | Includes      unallocated interest income and income tax expense, interest and debt      expense, general and administrative expenses, and minority interest      expense.                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                             |
| (e)    | Includes      revenues, earnings from equity investments, allocable interest income, and      other, net, less operating expenses, allocable income taxes, and other      expense (income).                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                             |
| (f)    | Includes      sustaining capital expenditures of $152.6 million in 2007 (not including      Trans Mountain for periods prior to our acquisition date of April 30,      2007), $125.5 million in 2006 (not including Trans Mountain) and $140.8      million in 2005. Sustaining capital expenditures are defined as capital      expenditures which do not increase the capacity of an    asset. |
|   |                                                                                                                                                                                                                                                                                                                                                                                             |
| (g)    | Includes      cash and cash equivalents, margin and restricted deposits, certain      unallocable deferred charges, and risk management assets related to the      fair value of interest rate swaps.                                                                                                                                                                                            |

|                                                |   |   |     |   |   |     |   |   |    |   |
|-----------------------------------------------------|--------|--------|----------|--------|--------|----------|--------|--------|---------|--------|
|                                                |   | 2007   |     | 2006   |   | 2005     |   |
|                                                |   |   |     |   |   |     |   |
| Revenues      from external customers               |   |   |     |   |   |     |   |   |    |   |
| United      States                                  |   | $      | 8,986.3  |   | $      | 8,889.9  |   | $      | 9,715.1 |   |
| Canada                                              |   |   | 211.9    |   |   | 139.3    |   |   | 11.8    |   |
| Mexico      and other(a)                            |   |   | 19.5     |   |   | 19.5     |   |   | 19.0    |   |
|                                                |   |   |     |   |   |     |   |   |    |   |
| Total      consol. revenues from external customers |   | $      | 9,217.7  |   | $      | 9,048.7  |   | $      | 9,745.9 |   |
|                                                |   |   |     |   |   |     |   |   |    |   |
|                                                |   |   |     |   |   |     |   |   |    |   |
| Long-lived      assets at December 31(b)            |   |   |     |   |   |     |   |   |    |   |
| United      States                                  |   | $      | 11,054.3 |   | $      | 9,917.2  |   | $      | 9,442.8 |   |
| Canada                                              |   |   | 1,420.0  |   |   | 766.4    |   |   | 48.2    |   |
| Mexico      and other                               |   |   | 89.5     |   |   | 91.4     |   |   | 92.3    |   |
|                                                |   |   |     |   |   |     |   |   |    |   |
| Total      consolidated long-lived assets           |   | $      | 12,563.8 |   | $      | 10,775.0 |   | $      | 9,583.3 |   |
|                                                |   |   |     |   |   |     |   |   |    |   |

|   |                                                                                                                                     |
|--------|------------------------------------------------------------------------------------------------------------------------------------------|
| (a)    | Includes      operations in Mexico and the Netherlands.                                                                                  |
|   |                                                                                                                                     |
| (b)    | Long-lived      assets exclude (i) goodwill; (ii) other intangibles, net; and (iii)      long-term note receivables from relatedparties. |

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | FERC      Docket No. OR92-8, et      al.—Complainants/Protestants: Chevron; Navajo; ARCO; BP WCP;      Western Refining; ExxonMobil; Tosco; and Texaco (Ultramar is an      intervenor)—Defendant: SFPP Consolidated proceeding involving shipper      complaints against certain East Line and West Line rates. All five issues      (and others) described four paragraphs above are involved in these      proceedings. Portions of this proceeding were appealed (and re-appealed)      to the D.C. Court and remanded to the FERC. BP WCP, Chevron, and      ExxonMobil requested a hearing before the FERC on remanded grandfathering      and income tax allowance issues. The FERC issued an Order on Rehearing,      Remand, Compliance, and Tariff Filings on December 26, 2007, which denied      the requests for a hearing, affirmed the income tax allowance policy and      further clarified the implementation of that policy, and required SFPP to      file a compliance filing; |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| • | FERC      Docket Nos. OR92-8-028,      etal.—Complainants/Protestants:      BP WCP; ExxonMobil; Chevron;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|    | ConocoPhillips;      and Ultramar—Defendant: SFPPProceeding      involving shipper complaints against SFPP’s Watson Station rates. A      settlement was reached for April 1, 1999 forward; whether SFPP owes      reparations for shipments prior to that date is still before the      FERC;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| • | FERC      Docket No. OR96-2, et      al.—Complainants/Protestants: All Shippers except Chevron (which is      an intervenor)—Defendant: SFPPConsolidated      proceeding involving shipper complaints against all SFPP rates. All five      issues (and others) described four paragraphs above are involved in these      proceedings. Portions of this proceeding were appealed (and re-appealed)      to the D.C. Court and remanded to the FERC. The FERC issued an Order on      Rehearing, Remand, Compliance, and Tariff Filings on December 26, 2007,      which denied the requests for a hearing, affirmed the income tax allowance      policy and further clarified the implementation of that policy, and      required SFPP to file a compliance filing;                                                                                                                                                                                                                              |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| • | FERC      Docket Nos. OR02-4 and OR03-5—Complainant/Protestant: Chevron—Defendant:      SFPP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|    | Chevron      initiated proceeding to permit Chevron to become complainant in OR96-2.      Appealed to the D.C. Court and held in abeyance pending final disposition      of the OR96-2 proceedings;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| • | FERC      Docket No. OR04-3—Complainants/Protestants: America West Airlines;      Southwest Airlines; Northwest Airlines; and Continental      Airlines—Defendant: SFPPComplaint      alleges that West Line and Watson Station rates are unjust and      unreasonable. Watson Station issues severed and consolidated into a      proceeding focused only on Watson-related issues. The FERC has set the      complaints against the West Line rates for hearing but denied the request      to consolidate the dockets with the ongoing proceedings involving SFPP’s      North and Oregon Line rates;                                                                                                                                                                                                                                                                                                                                                                                      |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| • | FERC      Docket Nos. OR03-5, OR05-4 and OR05-5—Complainants/Protestants: BP WCP;      ExxonMobil; and ConocoPhillips (other shippers intervened)—Defendant:      SFPPComplaints      allege that SFPP’s interstate rates are not just and reasonable. The FERC      has set the complaints against the West and East Line rates for hearing,      but denied the request to consolidate the dockets with the ongoing      proceedings involving SFPP’s North and Oregon Line  rates;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| • | FERC      Docket No. OR03-5-001—Complainants/Protestants: BP WCP; ExxonMobil; and      ConocoPhillips (other shippers intervened)—Defendant: SFPPThe      FERC severed the portions of the complaints in Docket Nos. OR03-5, OR05-4,      and OR05-5 regarding SFPP’s North and Oregon Line rates into a separate      proceeding in Docket No. OR03-5-001, which has been set for      hearing;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| • | FERC      Docket No. OR07-1—Complainant/Protestant: Tesoro—Defendant:      SFPP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|    | Complaint      alleges that SFPP’s North Line rates are not just and reasonable.      Complaint held in abeyance pending resolution at the D.C. Court of, among      other things, income tax allowance and grandfathering issues. The D.C.      Court issued an opinion on these issues on May 29, 2007, upholding the      FERC’s income tax allowance policy;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | FERC      Docket No. OR07-2—Complainant/Protestant: Tesoro—Defendant:      SFPP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|    | Complaint      alleges that SFPP’s West Line rates are not just and reasonable. Complaint      held in abeyance pending resolution at the D.C. Court of, among other      things, income tax allowance and grandfathering issues. The D.C. Court      issued an opinion on these issues on May 29, 2007, upholding the FERC’s      income tax allowance policy. A request that the FERC set the complaint for      hearing – which SFPP opposed – is pending before the  FERC;                                                                                                                                         |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| • | FERC      Docket No. OR07-3—Complainants/Protestants: BP WCP; Chevron; ExxonMobil;      Tesoro; and Valero Marketing—Defendant: SFPPComplaint      alleges that SFPP’s North Line indexed rate increase was not just and      reasonable. The FERC has dismissed the complaint and denied rehearing the      dismissal. Petitions for review filed by BP WCP and ExxonMobil at the D.C.      Court;                                                                                                                                                                                                                          |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| • | FERC      Docket No. OR07-4—Complainants/Protestants: BP WCP; Chevron; and      ExxonMobil—Defendants: SFPP; Kinder Morgan G.P., Inc.; and Knight      Inc.Complaint      alleges that SFPP’s rates are not just and reasonable. Complaint held in      abeyance pending resolution at the D.C. Court of, among other things,      income tax allowance and grandfathering issues. The D.C. Court issued an      opinion on these issues on May 29, 2007, upholding the FERC’s income tax      allowance policy;                                                                                                       |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| • | FERC      Docket Nos. OR07-5 and OR07-7 (consolidated)—Complainants/Protestants:      ExxonMobil and Tesoro—Defendants: Calnev; Kinder Morgan G.P., Inc.; and      Knight Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|    | Complaints      allege that none of Calnev’s current rates are just or reasonable. In      light of the D.C. Court’s May 29, 2007 ruling, on July 19, 2007, the FERC,      among other things, dismissed with prejudice the complaints against Kinder      Morgan GP Inc. and Knight, Inc. and allowed complainants to file amended      complaints. ExxonMobil filed a request for rehearing of the dismissal of      the complaints against Kinder Morgan GP, Inc. and Knight Inc., which is      currently pending before the FERC. The FERC has not acted on the amended      complaints;                                      |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| • | FERC      Docket No. OR07-6—Complainant/Protestant: ConocoPhillips—Defendant:      SFPP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|    | Complaint      alleges that SFPP’s North Line indexed rate increase was not just and      reasonable. The FERC has dismissed the complaint and denied rehearing of      the dismissal. The FERC had consolidated this case with OR07-3 and issued      orders that applied to both OR07-3 and OR07-6. Although the FERC orders in      these dockets have been appealed by certain of the complainants in OR07-3,      they have not been appealed by ConocoPhillips inOR07-6;                                                                                                                                                           |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| • | FERC      Docket No. OR07-8 (consolidated with Docket No.      OR07-11)—Complainant/Protestant: BP WCP—Defendant: SFPPComplaint      alleges that SFPP’s 2005 indexed rate increase was not just and      reasonable. On June 6, 2007, the FERC dismissed challenges to SFPP’s      underlying rate but held in abeyance the portion of the Complaint      addressing SFPP’s July 1, 2005 index-based rate increases. SFPP requested      rehearing on July 6, 2007, which the FERC denied. On February 13, 2008,      the FERC set this complaint for hearing, but referred it to settlement      negotiations; |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| • | FERC      Docket No. OR07-9—Complainant/Protestant: BP WCP—Defendant:      SFPP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|    | Complaint      alleges that SFPP’s ultra low sulphur diesel (ULSD) recovery fee violates      the filed rate doctrine and that, in any event, the recovery fee is unjust      and unreasonable. On July 6, 2007, the FERC dismissed the complaint. BP      WCP requested rehearing, which the FERC denied. A petition for review was      filed by BP WCP. The FERC’s motion to dismiss or hold the case in abeyance      is pending;                                                                                                                                                                                              |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| • | FERC      Docket No. OR07-10—Complainants/Protestants: BP WCP; ConocoPhillips;      Valero; and ExxonMobil—Defendant: Calnev                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|    | Calnev      filed a petition with the FERC on May 14, 2007, requesting that the FERC      issue a declaratory order approving Calnev’s proposed rate methodology and      granting other relief with respect to a substantial proposed expansion of      Calnev’s mainline pipeline system. On July 20, 2007, the FERC granted      Calnev’s petition for declaratoryorder;                                                                                                                                                                                                                                                  |

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | FERC      Docket No. OR07-11 (consolidated with Docket No.      OR07-8)—Complainant/Protestant: ExxonMobil—Defendant: SFPPComplaint      alleges that SFPP’s 2005 indexed rate increase was not just and      reasonable. On February 13, 2008, the FERC set this complaint for hearing,      but referred it to settlement negotiations. It is consolidated with the      complaint in Docket No. OR07-8;                                                                                                                                                                                                                                                                          |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| • | FERC      Docket No. OR07-14—Complainants/Protestants: BP WCP and      Chevron—Defendants: SFPP; Calnev; Operating Limited Partnership “D”;      Kinder Morgan Energy Partners, L.P.; Kinder Morgan Management LLC; Kinder      Morgan General Partner, Inc.; Knight Inc.; and Knight Holdco, LLC      Complaint alleges violations of the Interstate Commerce Act and FERC’s      cash management regulations, seeks review of the FERC Form 6 annual      reports of SFPP and Calnev, and again requests interim refunds and      reparations. The FERC dismissed the complaints;                                                                                     |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| • | FERC      Docket No. OR07-16—Complainant/Protestant: Tesoro—Defendant:      Calnev                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|    | Complaint      challenges Calnev’s 2005, 2006, and 2007 indexing adjustments. The FERC      dismissed the complaint. A petition for review was filed by Tesoro. A      scheduling order for briefs and oral argument has not yet been issued by      the D.C. Court;                                                                                                                                                                                                                                                                                                                                                                                                                            |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| • | FERC      Docket No. OR07-18—Complainants/Protestants: Airline Complainants;      Chevron; and Valero Marketing—Defendant: CalnevComplaint      alleges that Calnev’s rates are unjust and unreasonable and that none of      Calnev’s rates are grandfathered under EPAct 1992. In December 2007, the      FERC issued an order accepting and holding in abeyance the portion of the      complaint against the non-grandfathered portion of Calnev’s rates. The      order also gave complainants 45 days to amend their complaint against the      grandfathered portion of Calnev’s rates in light of clarifications      provided in the FERC’s order; |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| • | FERC      Docket No. OR07-19—Complainant/Protestant: ConocoPhillips—Defendant:      Calnev                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|    | Complaint      alleges that Calnev’s rates are unjust and unreasonable and that none of      Calnev’s rates are grandfathered under EPAct 1992. In December 2007, the      FERC issued an order accepting and holding in abeyance the portion of the      complaint against the non-grandfathered portion of Calnev’s rates. The      order also gave complainants 45 days to amend their complaint against the      grandfathered portion of Calnev’s rates in light of clarifications      provided in the FERC’s order;                                                                                                                                              |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| • | FERC      Docket No. OR07-20—Complainant/Protestant: BP WCP—Defendant:      SFPP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|    | Complaint      alleges that SFPP’s 2007 indexed rate increase was not just and      reasonable. In December 2007, the FERC dismissed the complaint.      Complainant filed a request for rehearing which is currently pending      before the FERC. In February 2008, the FERC accepted a joint offer of      settlement that dismisses, with prejudice, the East Line index rate      portion of the complaint in OR07-20;                                                                                                                                                                                                                                                                     |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| • | FERC      Docket No. OR07-22—Complainant/Protestant: BP WCP—Defendant:      Calnev                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|    | Complaint      alleges that Calnev’s rates are unjust and unreasonable and that none of      Calnev’s rates are grandfathered under EPAct 1992. In December 2007, the      FERC issued an order giving complainant 45 days to amend its complaint in      light of guidance provided by the FERC;                                                                                                                                                                                                                                                                                                                                                                                         |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| • | FERC      Docket No. IS05-230 (North Line rate case)—Complainants/Protestants:      Shippers—Defendant: SFPPSFPP      filed to increase North Line rates to reflect increased costs due to      installation of new pipe between Concord and Sacramento, California.      Various shippers protested. Administrative law judge decision pending      before the FERC on exceptions. On August 31, 2007, BP WCP and ExxonMobil      filed a motion to reopen the record on the issue of SFPP’s appropriate      rate of return on equity, which SFPP answered on September 18, 2007. The      FERC has yet to issue an order on shipper’s motion;                              |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| • | FERC      Docket No. IS05-327—Complainants/Protestants: Shippers—Defendant:      SFPP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|    | SFPP      filed to increase certain rates on its pipelines pursuant to FERC’s      indexing methodology. Various shippers protested, but FERC determined that      the tariff filings were consistent with its regulations. The D.C. Court      dismissed a petition for review, citing a lack of jurisdiction to review a      decision by FERC not to order aninvestigation;                                                                                                                                                                                                                                                                                                                  |

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | FERC      Docket No. IS06-283 (East Line rate case)—Complainants/Protestants:      Shippers—Defendant: SFPPSFPP      filed to increase East Line rates to reflect increased costs due to      installation of new pipe between El Paso, Texas and Tucson, Arizona.      Various shippers protested. In November 2007, the parties submitted a      joint offer of settlement which was certified to the FERC in December      2007. In February 2008, the FERC accepted the joint offer of settlement      which, among other things, resolved all protests and complaints related to      the East Line Phase I Expansion Tariff;                                                                                                                                             |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| • | FERC      Docket No. IS06-296—Complainant/Protestant: ExxonMobil—Defendant:      Calnev                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|    | Calnev      sought to increase its interstate rates pursuant to the FERC’s indexing      methodology. ExxonMobil filed a protest respecting Calnev’s indexing      adjustments. This proceeding is currently held in abeyance pending ongoing      settlement discussions. Calnev has also filed a motion to dismiss or, to      hold the investigation in abeyance, which is pending before the FERC.      Calnev and ExxonMobil have reached an agreement in principle to settle      this and other dockets;                                                                                                                                                                                                                                                                |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| • | FERC      Docket No. IS06-356—Complainants/Protestants: Shippers—Defendant:      SFPP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|    | SFPP      filed to increase certain rates on its pipelines pursuant to FERC’s      indexing methodology. Various shippers protested, but FERC found the      tariff filings consistent with its regulations. FERC has rescinded the      index increase for the East Line rates, and SFPP has requested rehearing.      The D.C. Court dismissed a petition for review, citing the rehearing      request pending before the FERC. On September 20, 2007, the FERC denied      SFPP’s request for rehearing. In November 2007, all parties submitted a      joint offer of settlement. In February 2008, the FERC accepted the joint      offer of settlement which, among other things, resolved all protests and      complaints related to the East Line 2006 Index Tariff; |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| • | FERC      Docket No. IS07-137 (ULSD surcharge)—Complainants/Protestants:      Shippers—Defendant: SFPP SFPP filed tariffs to include a per barrel ULSD      recovery fee and a surcharge for ULSD-related litigation costs on diesel      products. Various shippers protested. Tariffs related to ULSD recovery fee      accepted subject to refund and proceeding is being held in abeyance      pending resolution of other proceedings involving SFPP. SFPP rescinded the      ULSD litigation surcharge in compliance with FERC order. Request for      rehearing filed by Chevron and Tesoro. The FERC ultimately denied      rehearing in an order issued on November 13, 2007;                                                                                         |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| • | FERC      Docket No. IS07-229—Complainants/Protestants: BP WCP and      ExxonMobil—Defendant: SFPP SFPP filed to increase certain rates on its      pipelines pursuant to FERC’s indexing methodology. Two shippers filed      protests. The FERC found the tariff filings consistent with its      regulations but suspended the increased rates subject to refund pending      challenges to SFPP’s underlying rates. In November 2007, all parties      submitted a joint offer of settlement. In February 2008, the FERC accepted      the joint offer of settlement which, among other things, resolved all      protests and complaints related to the East Line 2007 Index      Tariff;                                                                     |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| • | FERC      Docket No. IS07-234—Complainants/Protestants: BP WCP and      ExxonMobil—Defendant: Calnev Calnev filed to increase certain rates on its      pipeline pursuant to FERC’s indexing methodology. Two shippers protested.      The FERC found the tariff filings consistent with its regulations but      suspended the increased rates subject to refund pending challenges to      SFPP’s underlying rates. Calnev and ExxonMobil have reached an agreement      in principle to settle this and other dockets;                                                                                                                                                                                                                                          |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| • | FERC      Docket No. IS08-28—Complainants/Protestants: ConocoPhillips; Chevron; BP      WCP; ExxonMobil;Southwest      Airlines; Western; and Valero—Defendant: SFPPSFPP      filed to increase its East Line rates based on costs incurred related to      an expansion. Various shippers filed protests, which SFPP answered. The      FERC issued an order on November 29, 2007 accepting and suspending the      tariff subject to refund. The proceeding is being held in abeyance      pursuant to ongoing settlement negotiations; and                                                                                                                                                                                                                                  |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| • | Motions      to compel payment of interim damages (various      dockets)—Complainants/Protestants: Shippers—Defendants: SFPP; Kinder      Morgan G.P., Inc.; and Knight Inc.Motions      seek payment of interim refunds or escrow of funds pending resolution of      various complaints and protests involving SFPP. The FERC denied shippers’      refund requests in an order issued on December 26, 2007 in Docket Nos.      OR92-8, et      al.                                                                                                                                                                                                                                                                                                                    |

|   |    |                                                                                                                                                                              |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | the      Standards of Conduct apply only to the relationship between interstate gas      transmission pipelines and their marketing affiliates, not their energy      affiliates; |
|   |    |                                                                                                                                                                              |
|   | • | all      risk management personnel can be shared;                                                                                                                                 |
|   |    |                                                                                                                                                                              |
|   | • | the      requirement to post discretionary tariff actions was eliminated (but      interstate gas pipelines must still maintain a log of discretionary tariff      waivers);      |
|   |    |                                                                                                                                                                              |
|   | • | lawyers      providing legal advice may be shared employees; and                                                                                                                  |
|   |    |                                                                                                                                                                              |
|   | • | new      interstate gas transmission pipelines are not subject to the Standards of      Conduct until they commenceservice.                                                       |

|                                                       |   |   |    |   |
|------------------------------------------------------------|--------|--------|---------|--------|
|                                                       |   | 2007   |    |
|                                                       |   |   |    |   |
| Balance      at beginning of period                        |   | $      | 3.2     |   |
| Additions      based on current year tax positions         |   |   | 4.7     |   |
| Additions      based on prior year tax positions           |   |   | 0.1     |   |
| Reductions      based on settlements with taxing authority |   |   | — |   |
| Reductions      due to lapse in statute of limitations     |   |   | (1.7    | )      |
|                                                       |   |   |    |   |
| Balance      at end of period                              |   | $      | 6.3     |   |
|                                                       |   |   |    |   |

|                  |               |            |                                 |                                   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|-----------------------|--------------------|-----------------|--------------------------------------|----------------------------------------|-----------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                  | OperatingRevenues  | OperatingIncome | Income      fromContinuingOperations | Income      fromDiscontinuedOperations | Net      Income |
|                  |               |            |                                 |                                   |            |
|                  | (In      millions) |
| 2007                  |               |            |                                 |                                   |            |   |   |   |   |   |
| First      Quarter(a) |               | $               | 2,171.7                              |                                   |            | $      | (75.5  | )      |   | $      | (156.6 | )      |   | $      | 7.1    |   |   | $      | (149.5 | )      |
| Second      Quarter   |               |            | 2,366.4                              |                                   |            |   | 314.6  |   |   |   | 227.3  |   |   |   | 5.4    |   |   |   | 232.7  |   |
| Third      Quarter    |               |            | 2,230.8                              |                                   |            |   | 311.4  |   |   |   | 205.2  |   |   |   | 8.6    |   |   |   | 213.8  |   |
| Fourth      Quarter   |               |            | 2,448.8                              |                                   |            |   | 257.2  |   |   |   | 140.5  |   |   |   | 152.8  |   |   |   | 293.3  |   |
| 2006                  |               |            |                                 |                                   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| First      Quarter    |               | $               | 2,413.3                              |                                   |            | $      | 314.0  |   |   | $      | 249.9  |   |   | $      | 3.0    |   |   | $      | 252.9  |   |
| Second      Quarter   |               |            | 2,216.1                              |                                   |            |   | 317.7  |   |   |   | 251.0  |   |   |   | 3.4    |   |   |   | 254.4  |   |
| Third      Quarter    |               |            | 2,296.8                              |                                   |            |   | 311.4  |   |   |   | 227.1  |   |   |   | 2.4    |   |   |   | 229.5  |   |
| Fourth      Quarter   |               |            | 2,122.5                              |                                   |            |   | 348.5  |   |   |   | 261.8  |   |   |   | 5.5    |   |   |   | 267.3  |   |

|                                                         |                                       |                                         |            |   |   |   |   |   |   |   |   |   |
|--------------------------------------------------------------|--------------------------------------------|----------------------------------------------|-----------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                         | Income(loss)      fromContinuingOperations | Income      (loss)fromDiscontinuedOperations | Net      Income |
|                                                         |                                       |                                         |            |
| Basic      Limited Partners’ income (loss) per Unit:   |                                       |                                         |            |   |   |   |
| 2007                                                         |                                       |                                         |            |   |   |   |
| First      Quarter(a)                                        |                                       | $                                            | (1.27           | )      |   | $      | 0.03   |   |   | $      | (1.24  | )      |
| Second      Quarter                                          |                                       |                                         | 0.34            |   |   |   | 0.02   |   |   |   | 0.36   |   |
| Third      Quarter                                           |                                       |                                         | 0.21            |   |   |   | 0.03   |   |   |   | 0.24   |   |
| Fourth      Quarter                                          |                                       |                                         | (0.12           | )      |   |   | 0.62   |   |   |   | 0.50   |   |
| 2006                                                         |                                       |                                         |            |   |   |   |   |   |   |   |   |   |
| First      Quarter                                           |                                       | $                                            | 0.54            |   |   | $      | 0.02   |   |   | $      | 0.56   |   |
| Second      Quarter                                          |                                       |                                         | 0.55            |   |   |   | 0.01   |   |   |   | 0.56   |   |
| Third      Quarter                                           |                                       |                                         | 0.41            |   |   |   | 0.01   |   |   |   | 0.42   |   |
| Fourth      Quarter                                          |                                       |                                         | 0.62            |   |   |   | 0.02   |   |   |   | 0.64   |   |
| Diluted      Limited Partners’ income (loss) per Unit: |                                       |                                         |            |   |   |   |   |   |   |   |   |   |
| 2007                                                         |                                       |                                         |            |   |   |   |   |   |   |   |   |   |
| First      Quarter(a)                                        |                                       | $                                            | (1.27           | )      |   | $      | 0.04   |   |   | $      | (1.23  | )      |
| Second      Quarter                                          |                                       |                                         | 0.34            |   |   |   | 0.02   |   |   |   | 0.36   |   |
| Third      Quarter                                           |                                       |                                         | 0.21            |   |   |   | 0.03   |   |   |   | 0.24   |   |
| Fourth      Quarter                                          |                                       |                                         | (0.12           | )      |   |   | 0.62   |   |   |   | 0.50   |   |
| 2006                                                         |                                       |                                         |            |   |   |   |   |   |   |   |   |   |
| First      Quarter                                           |                                       | $                                            | 0.54            |   |   | $      | 0.02   |   |   | $      | 0.56   |   |
| Second      Quarter                                          |                                       |                                         | 0.54            |   |   |   | 0.02   |   |   |   | 0.56   |   |
| Third      Quarter                                           |                                       |                                         | 0.41            |   |   |   | 0.01   |   |   |   | 0.42   |   |
| Fourth      Quarter                                          |                                       |                                         | 0.62            |   |   |   | 0.02   |   |   |   | 0.64   |   |

|   |                                                                                                                                                                      |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)    | 2007      first quarter includes an expense of $377.1 million attributable to a      goodwill impairment charge recognized by Knight, as discussed in Notes 3      and 8. |

|                                                               |              |   |    |   |   |   |    |   |   |
|--------------------------------------------------------------------|-------------------|--------|---------|--------|--------|--------|---------|--------|--------|
| Capitalized      Costs Related to Oil and Gas Producing Activities |
|                                                               | December      31, |
|                                                               |              |
|                                                               | 2007              |   | 2006    |   | 2005   |   |
|                                                               |              |   |    |   |   |   |
| Consolidated      Companies(a)                                     |              |
| Wells      and equipment, facilities and other                     |              | $      | 1,612.5 |   |   | $      | 1,369.5 |   |   | $ | 1,097.9 |   |
| Leasehold                                                          |              |   | 348.1   |   |   |   | 347.4   |   |   |   | 320.7 |   |
|                                                               |              |   |    |   |   |   |    |   |   |   |   |   |
| Total      proved oil and gas properties                           |              |   | 1,960.6 |   |   |   | 1,716.9 |   |   |   | 1,418.6 |   |
| Accumulated      depreciation and depletion                        |              |   | (725.5  | )      |   |   | (470.2  | )      |   |   | (303.3 | ) |
|                                                               |              |   |    |   |   |   |    |   |   |   |   |   |
| Net      capitalized costs                                         |              | $      | 1,235.1 |   |   | $      | 1,246.7 |   |   | $ | 1,115.3 |   |
|                                                               |              |   |    |   |   |   |    |   |   |   |   |   |

|   |                                                                                                                                                                                                                                                                                                       |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |
| (a)    | Amounts      relate to Kinder Morgan CO2      Company, L.P. and its consolidated subsidaries. Includes capitalized asset      retirement costs and associated accumulated depreciation. There are no      capitalized costs associated with unproved oil and gas properties for the      periods reported. |

|                                                                         |                         |   |    |   |   |   |   |   |   |
|------------------------------------------------------------------------------|------------------------------|--------|---------|--------|--------|--------|--------|--------|--------|
| Costs      Incurred in Exploration, Property Acquisitions and    Development |
|                                                                         | Year      Ended December 31, |
|                                                                         |                         |
|                                                                         | 2007                         |   | 2006    |   | 2005   |   |
|                                                                         |                         |   |    |   |   |   |
| Consolidated      Companies(a)                                               |                         |
| Property      Acquisition                                                    |                         |   |    |   |   |   |   |   |   |
| Proved      oil and gas properties                                           |                         | $      | — |   |   | $      | 36.6   |   |   | $ | 6.4 |   |
| Development                                                                  |                         |   | 244.4   |   |   |   | 261.8  |   |   |   | 281.7 |   |

|   |                                                                                                                                                                                                                                                                                                                                                                        |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |
| (a)    | Amounts      relate to Kinder Morgan CO2      Company, L.P. and its consolidated subsidaries. There are no capitalized      costs associated with unproved oil and gas properties for the periods      reported. All capital expenditures were made to develop our proved oil and      gas properties and no exploration costs were incurred for the periods      reported. |

|                                                            |                         |   |   |   |   |   |   |   |   |
|-----------------------------------------------------------------|------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| Results      of Operations for Oil and Gas Producing Activities |                         |
|                                                            |                         |   |   |   |   |   |   |   |   |
|                                                            | Year      Ended December 31, |   |
|                                                            |                         |   |
|                                                            | 2007                         |   | 2006   |   | 2005   |   |
|                                                            |                         |   |   |   |   |   |
| Consolidated      Companies(a)                                  |                         |   |   |   |   |   |
| Revenues(b)                                                     |                         | $      | 589.7  |   |   | $      | 524.7  |   |   | $ | 469.1 |   |
| Expenses:                                                       |                         |   |   |   |   |   |   |   |   |   |   |   |
| Production      costs                                           |                         |   | 243.9  |   |   |   | 208.9  |   |   |   | 159.6 |   |
| Other      operating expenses(c)                                |                         |   | 56.9   |   |   |   | 66.4   |   |   |   | 59.0 |   |
| Depreciation,      depletion and amortization expenses          |                         |   | 258.5  |   |   |   | 169.4  |   |   |   | 130.5 |   |
|                                                            |                         |   |   |   |   |   |   |   |   |   |   |   |
| Total      expenses                                             |                         |   | 559.3  |   |   |   | 444.7  |   |   |   | 349.1 |   |
|                                                            |                         |   |   |   |   |   |   |   |   |   |   |   |
| Results      of operations for oil and gas producing activities |                         | $      | 30.4   |   |   | $      | 80.0   |   |   | $ | 120.0 |   |
|                                                            |                         |   |   |   |   |   |   |   |   |   |   |   |

|   |                                                                                                                                                                                                  |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)    | Amounts      relate to Kinder Morgan CO2      Company, L.P. and its consolidated subsidaries.                                                                                                         |
|   |                                                                                                                                                                                                  |
| (b)    | Revenues      include losses attributable to our hedging contracts of $434.2 million,      $441.7 million and $374.3 million for the years ended December 31, 2007,      2006 and 2005, respectively. |
|   |                                                                                                                                                                                                  |
| (c)    | Consists      primarily of carbon dioxideexpense.                                                                                                                                                     |

|                                            |   |                           |    |        |   |                   |   |   |   |   |
|-------------------------------------------------|--------|--------------------------------|---------|-------------|--------|------------------------|--------|--------|--------|--------|
| Reserve      Quantity Information               |   |
|                                            |   |                           |    |        |   |                   |   |   |   |   |
|                                            |   | Consolidated      Companies(a) |    |
|                                            |   |                           |    |
|                                            |   | Crude      Oil(MBbls)          |    | NGLs(MBbls) |   | Nat.      Gas(MMcf)(b) |   |
|                                            |   |                           |    |        |   |                   |   |
| Proved      developed and undeveloped reserves: |   |                           |    |        |   |                   |   |   |   |   |
| As      of December 31, 2004                    |   |                           | 123,731 |        |   | 20,245                 |   |   | 1,590  |   |
| Revisions      of previous estimates(c)         |   |                           | 9,807   |        |   | (4,278                 | )      |   | 1,608  |   |
| Improved      Recovery(d)                       |   |                           | 21,715  |        |   | 4,847                  |   |   | 242    |   |
| Production                                      |   |                           | (13,815 | )           |   | (1,920                 | )      |   | (1,335 | )      |
| Purchases      of reserves in place             |   |                           | 513     |        |   | 89                     |   |   | 48     |   |
|                                            |   |                           |    |        |   |                   |   |   |   |   |
| As      of December 31, 2005                    |   |                           | 141,951 |        |   | 18,983                 |   |   | 2,153  |   |
| Revisions      of previous estimates(e)         |   |                           | (4,615  | )           |   | (6,858                 | )      |   | (1,408 | )      |
| Production                                      |   |                           | (13,811 | )           |   | (1,817                 | )      |   | (461   | )      |
| Purchases      of reserves in place             |   |                           | 453     |        |   | 25                     |   |   | 7      |   |
|                                            |   |                           |    |        |   |                   |   |   |   |   |
| As      of December 31, 2006                    |   |                           | 123,978 |        |   | 10,333                 |   |   | 291    |   |
| Revisions      of previous estimates(f)         |   |                           | 10,361  |        |   | 2,784                  |   |   | 1,077  |   |
| Production                                      |   |                           | (12,984 | )           |   | (2,005                 | )      |   | (290   | )      |
|                                            |   |                           |    |        |   |                   |   |   |   |   |
| As      of December 31, 2007                    |   |                           | 121,355 |        |   | 11,112                 |   |   | 1,078  |   |
|                                            |   |                           |    |        |   |                   |   |   |   |   |
|                                            |   |                           |    |        |   |                   |   |   |   |   |
| Proved      developed reserves:                 |   |                           |    |        |   |                   |   |   |   |   |
| As      of December 31, 2004                    |   |                           | 71,307  |        |   | 8,873                  |   |   | 1,357  |   |
| As      of December 31, 2005                    |   |                           | 78,755  |        |   | 9,918                  |   |   | 1,650  |   |
| As      of December 31, 2006                    |   |                           | 69,073  |        |   | 5,877                  |   |   | 291    |   |
| As      of December 31, 2007                    |   |                           | 70,868  |        |   | 5,517                  |   |   | 1,078  |   |

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

| (b) | Natural      gas reserves are computed at 14.65 pounds per square inch absolute and 60      degrees fahrenheit. |
|-----|-----------------------------------------------------------------------------------------------------------------|

| (c) | Crude      oil revisions are based on better than expected recoveries on the SACROC      unit carbon dioxide flood project. Natural gas liquids revisions are based      on a lower than expected natural gas liquid yield at the SACROC unit      carbon dioxide flood project. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | Improved      recovery is due to significant additional areas of the SACROC unit being      added to the future carbon dioxide flood  project. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------|

| (e) | Based      on lower than expected recoveries of a section of the SACROC unit carbon      dioxide flood project. |
|-----|-----------------------------------------------------------------------------------------------------------------|

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

|   |    |                                                                                                                                                                                                             |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | 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 economic conditions; |
|   |    |                                                                                                                                                                                                             |
|   | • | 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.                                                                                                                    |

|                                                          |   |                    |     |   |   |   |     |   |   |
|---------------------------------------------------------------|--------|-------------------------|----------|--------|--------|--------|----------|--------|--------|
|                                                          |   | As      of December 31, |     |
|                                                          |   |                    |     |
|                                                          |   | 2007                    |     |   | 2006   |   |     | 2005   |   |
|                                                          |   |                    |     |   |   |   |     |   |   |
| Consolidated      Companies(a)                                |   |                    |     |   |   |   |     |   |   |
| Future      cash inflows from production                      |   | $                       | 12,099.5 |   |   | $      | 7,534.7  |   |   | $ | 9,150.6 |   |
| Future      production costs                                  |   |                    | (3,536.2 | )      |   |   | (2,617.9 | )      |   |   | (2,756.6 | ) |
| Future      development costs(b)                              |   |                    | (1,919.2 | )      |   |   | (1,256.8 | )      |   |   | (869.0 | ) |
|                                                          |   |                    |     |   |   |   |     |   |   |   |   |   |
| Undiscounted      future net cash flows                       |   |                    | 6,644.1  |   |   |   | 3,660.0  |   |   |   | 5,525.0 |   |
| 10%      annual discount                                      |   |                    | (2,565.7 | )      |   |   | (1,452.2 | )      |   |   | (2,450.0 | ) |
|                                                          |   |                    |     |   |   |   |     |   |   |   |   |   |
| Standardized      measure of discounted future net cash flows |   | $                       | 4,078.4  |   |   | $      | 2,207.8  |   |   | $ | 3,075.0 |   |
|                                                          |   |                    |     |   |   |   |     |   |   |   |   |   |

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

|   |                             |
|--------|----------------------------------|
| (b)    | Includes      abandonment costs. |

|                                                      |   |   |    |   |   |    |   |   |    |   |
|-----------------------------------------------------------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|
|                                                      |   | 2007   |    | 2006   |   | 2005    |   |
|                                                      |   |   |    |   |   |    |   |
| Consolidated      Companies(a)                            |   |   |    |   |   |    |   |
| Present      value as of January 1                        |   | $      | 2,207.8 |   | $      | 3,075.0 |   | $      | 2,045.0 |   |
| Changes      during the year:                             |   |   |    |   |   |    |   |   |    |   |
| Revenues      less production and other costs(b)          |   |   | (722.1  | )      |   | (690.0  | )      |   | (624.4  | )      |
| Net      changes in prices, production and other costs(b) |   |   | 2,153.2 |   |   | (123.0  | )      |   | 1,013.4 |   |
| Development      costs incurred                           |   |   | 244.5   |   |   | 261.8   |   |   | 281.7   |   |
| Net      changes in future development costs              |   |   | (547.8  | )      |   | (446.0  | )      |   | (492.3  | )      |
| Purchases      of reserves in place                       |   |   | — |   |   | 3.2     |   |   | 9.4     |   |
| Revisions      of previous quantity estimates(c)          |   |   | 510.8   |   |   | (179.5  | )      |   | 51.1    |   |
| Improved      Recovery(d)                                 |   |   | — |   |   | — |   |   | 587.5   |   |
| Accretion      of discount                                |   |   | 198.1   |   |   | 307.4   |   |   | 204.4   |   |
| Timing      differences and other                         |   |   | 33.9    |   |   | (1.1    | )      |   | (0.8    | )      |
|                                                      |   |   |    |   |   |    |   |   |    |   |
| Net      change for the year                              |   |   | 1,870.6 |   |   | (867.2  | )      |   | 1,030.0 |   |
|                                                      |   |   |    |   |   |    |   |   |    |   |
| Present      value as of December 31                      |   | $      | 4,078.4 |   | $      | 2,207.8 |   | $      | 3,075.0 |   |
|                                                      |   |   |    |   |   |    |   |   |    |   |

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

| (b) | Excludes      the effect of losses attributable to our hedging contracts of $434.2      million, $441.7 million and $374.3 million for the years ended December      31, 2007, 2006 and 2005,respectively. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | 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. 2005 revisions are based on better than expected crude oil      recoveries on the SACROC unit carbon dioxide flood project, partially      offset by a lower than expected natural gas liquids yield at the SACROC      unit carbon dioxide flood project. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | Improved      recovery is due to significant additional areas of the SACROC unit being      added to the future carbon dioxide flood  project. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------|

SIGNATURES

|   |                                                                                 |
|--------|--------------------------------------------------------------------------------------|
|   | KINDER MORGAN ENERGY PARTNERS,      L.P.(A Delaware Limited Partnership)             |
|   |                                                                                 |
|   | By:      KINDER MORGAN G.P., INC.,      its sole General Partner                     |
|   |                                                                                 |
|   | By:      KINDER MORGAN MANAGEMENT,      LLC,the Delegate of Kinder Morgan G.P., Inc. |
|   |                                                                                 |
|   | By:      /s/ KIMBERLY A. DANG                                                        |
|   |                                                                                 |
|   |                                                                                 |
|   | Kimberly      A. Dang,Vice      President and Chief FinancialOfficer                 |

|                       |   |                                      |   |                   |
|----------------------------|--------|-------------------------------------------|--------|------------------------|
| Signature                  |   | Title                                     |   | Date                   |
|                       |   |                                      |   |                   |
| /s/      KIMBERLY A. DANG  |   | Vice      President and Chief Financial   |   | February      25, 2008 |
|                       |   | Officer      of Kinder Morgan             |   |                   |
| Kimberly      A. Dang      |   | Management,      LLC, Delegate of         |   |                   |
|                       |   | Kinder      Morgan G.P., Inc. (principal  |   |                   |
|                       |   | financial      officer and principal      |   |                   |
|                       |   | accounting      officer)                  |   |                   |
|                       |   |                                      |   |                   |
| /s/      RICHARD D. KINDER |   | Chairman      of the Board and Chief      |   | February      25, 2008 |
|                       |   | Executive      Officer of Kinder Morgan   |   |                   |
| Richard      D. Kinder     |   | Management,      LLC, Delegate of         |   |                   |
|                       |   | Kinder      Morgan G.P., Inc. (principal  |   |                   |
|                       |   | executive      officer)                   |   |                   |
|                       |   |                                      |   |                   |
| /s/      EDWARD O. GAYLORD |   | Director      of Kinder Morgan            |   | February      25, 2008 |
|                       |   | Management,      LLC, Delegate of         |   |                   |
| Edward      O. Gaylord     |   | Kinder      Morgan G.P., Inc.             |   |                   |
|                       |   |                                      |   |                   |
| /s/      GARY L. HULTQUIST |   | Director      of Kinder Morgan            |   | February      25, 2008 |
|                       |   | Management,      LLC, Delegate of         |   |                   |
| Gary      L. Hultquist     |   | Kinder      Morgan G.P., Inc.             |   |                   |
|                       |   |                                      |   |                   |
| /s/      PERRY M. WAUGHTAL |   | Director      of Kinder Morgan            |   | February      25, 2008 |
|                       |   | Management,      LLC, Delegate of         |   |                   |
| Perry      M. Waughtal     |   | Kinder      Morgan G.P., Inc.             |   |                   |
|                       |   |                                      |   |                   |
| /s/      C. PARK SHAPER    |   | Director      and President of            |   | February      25, 2008 |
|                       |   | Kinder      Morgan Management, LLC,       |   |                   |
| C.      Park Shaper        |   | Delegate      of Kinder Morgan G.P., Inc. |   |                   |

----

----