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(a)

Participating securities include Class B shares, Class C shares, and unvested restricted stock awards issued to non-senior management employees that contain rights to dividends.  Our Class B and Class C shares are entitled to participate in our earnings, only to the extent of cash distributions made to them. As a result, no earnings in excess of dividends received were allocated to the Class B and Class C shares in our determination of basic and diluted earnings per share.

(b)

The Class A shares earnings per share as compared to the Class P shares earnings per share has been reduced due to the sharing of economic benefits (including dividends) amongst the Class A, B, and C shares.  Class A, B and C shares owned by Richard Kinder, the sponsor investors, the original shareholders, and other management are referred to as “investor retained stock,” and are convertible into a fixed number of Class P shares.  In the aggregate, our investor retained stock is entitled to receive a dividend per share on a fully-converted basis equal to the dividend per share on our common stock.  The conversion of shares of investor retained stock into Class P shares will not increase our total fully-converted shares outstanding, impact the aggregate dividends we pay or the dividends we pay per share on our Class P common stock.

(c)	For the diluted earnings per share calculation, total net income attributable to each class of common stock is divided by the adjusted weighted-average shares outstanding during the period, including all dilutive potential shares.

(d)	The weighted-average shares outstanding calculation is based on the actual days in which the shares were outstanding for the period

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•	include the results of EP for all periods presented;

•

include the results of discontinued operations from (i) EP Energy and (ii) KMP’s FTC Natural Gas Pipelines disposal group (see below) including (i) a $2 billion gain (net of income taxes) on the sale of EP Energy for the nine months ended September 30, 2012 and (ii) $934 million of losses (net of income taxes) on selling costs and the remeasurement of the asset disposal group for the nine months ended September 30, 2012;

•	include incremental interest expense related to financing the transactions;

•	include incremental depreciation and amortization expense on assets and liabilities that were revalued as part of the purchase price allocation;

•	reflect income taxes for the above adjustments at our effective income tax rate; and

•	reflect the increase in KMI Class P shares outstanding.

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(a)	Excludes debt fair value adjustments of $2,695 million and $1,095 million as of September 30, 2012 and December 31, 2011, respectively, which are included in the caption “Debt fair value adjustments” on the accompanying consolidated balance sheets.

(b)	See Note 13 for a reconciliation of KMI's, KMP's and EPB's short-term and long-term debt balances.

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(a)	KMP's subsidiary, TGP is the obligor of six separate series of fixed-rate unsecured senior notes having a combined principal amount of $1,790 million. KMP assumed these debt borrowings during the third quarter 2012 as part of the drop-down transaction.

▪	certain limitations on indebtedness, including payments and amendments;

▪	certain limitations on entering into mergers, consolidations, sales of assets and investments;

▪	limitations on granting liens; and

▪	prohibitions on making any dividend to shareholders if an event of default exists or would exist upon making such dividend.

▪	the bridge loans under the bridge facility will bear interest, at KMI's option, at either (i) adjusted LIBOR plus an applicable margin varying from 2.50% per annum to 4.25% per annum depending on certain debt ratings of KMI or (ii) an alternate base rate plus an applicable margin varying from 1.50% per annum to 3.25% per annum depending on certain debt ratings of KMI; and

▪	the term loans under the term loan facility will bear interest, at KMI's option, at either (i) adjusted LIBOR plus an applicable margin varying from 3.00% per annum to 4.75% per annum depending on certain debt ratings of KMI, or (ii) an alternate base rate plus an applicable margin varying from 2.00% per annum to 3.75% per annum depending on certain debt ratings of KMI.

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(a)

Capital Trust I (Trust I), is a 100%-owned business trust that issued 6.5 million of 4.75% trust convertible preferred securities for $325 million. Trust I exists for the sole purpose of issuing preferred securities and investing the proceeds in 4.75% convertible subordinated debentures, which are due 2028. Trust I's sole source of income is interest earned on these debentures. This interest income is used to pay distributions on the preferred securities. EP provides a full and unconditional guarantee of Trust I's preferred securities. There are no significant restrictions on EP's ability to obtain funds from its subsidiaries by distribution, dividend or loan.

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(a)	In August 2012, the interest rate on Kinder Morgan G.P. Inc.'s Term Cumulative Preferred Stock converted from a fixed rate of 8.330% to a 3-month LIBOR floating rate plus a spread of 3.8975%.

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(a)	Amounts reflect the change in the fair value of interest rate swap agreements and the change in the fair value of the associated fixed rate debt which exactly offset each other as a result of no hedge ineffectiveness.

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(a)

We expect to reclassify an approximate $17 million gain associated with energy commodity price risk management activities, and included in our accumulated other comprehensive loss and noncontrolling interest balances as of September 30, 2012, into earnings during the next twelve months (when the associated forecast sales and purchases are also expected to occur), however, actual amounts reclassified into earnings could vary materially as a result of changes in market prices.

(b)

No material amounts were reclassified into earnings as a result of the discontinuance of cash flow hedges because it was probable that the original forecast transactions would no longer occur by the end of the originally specified time period or within an additional two-month period of time thereafter, but rather, the amounts reclassified were the result of the hedged forecast transactions actually affecting earnings (i.e., when the forecast sales and purchases actually occurred).

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•	Level 1 Inputs—quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date;

•	Level 2 Inputs—inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.  If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability; and

•	Level 3 Inputs—unobservable inputs for the asset or liability.  These unobservable inputs reflect the entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances (which might include the reporting entity’s own data).

(a)	Level 1 consists primarily of the New York Mercantile Exchange (NYMEX) natural gas futures.  Level 2 consists

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•

Natural Gas Pipelines—for all periods presented in our financial statements this segment includes the sale, transport, processing, treating, storage and gathering of natural gas for KMP and equity earnings from our 20% interest in NGPL PipeCo LLC. Following our May 25, 2012 EP acquisition, this segment also includes the natural gas operations of EP, its subsidiaries (including EPB) and its equity investments;

•	Products Pipelines—KMP— the transportation and terminaling of refined petroleum products, including gasoline, diesel fuel, jet fuel and natural gas liquids;

•	CO2—KMP—the production and sale of crude oil from fields in the Permian Basin of West Texas and the transportation and marketing of carbon dioxide used as a flooding medium for recovering crude oil from mature oil fields;

•	Terminals—KMP—the transloading and storing of refined petroleum products and dry and liquid bulk products, including coal, petroleum coke, cement, alumina, salt and other bulk chemicals;

•	Kinder Morgan Canada—KMP—the transportation of crude oil and refined products from Alberta, Canada to marketing terminals and refineries in British Columbia, the state of Washington and the Rocky Mountains and Central regions of the United States; and

•	Other—Following our May 25, 2012 EP acquisition, this segment primarily includes several physical natural gas contracts with power plants associated with EP's legacy trading activities. These contracts obligate EP to sell natural gas to these plants and have various expiration dates ranging from 2012 to 2028.

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(a)	See Note 2 “Acquisitions and Divestiture—KMI Acquisition of El Paso Corporation.”

(b)	Primarily represents NGPL PipeCo LLC fee revenues, see Note 8.

(c)	Includes revenues, earnings from equity investments, allocable interest income, and other, net, less operating expenses, allocable income taxes, and other expense (income).

(d)	Three and nine month 2011 amounts include a $167 million loss from the remeasurement of KMP's previously held 50% equity interest in KinderHawk to fair value (discussed further in Note 2).

(e)	Three and nine month 2012 amounts include increases in expense of $9 million associated with rate case liability adjustments. Three and nine month 2011 amounts include increases in expense of $69 million and $234 million, respectively, associated with rate case, leased right-of-way, and other legal liability adjustments.

(f)

Three and nine month 2012 amounts include a $21 million decrease and a $362 million increase, respectively, of pre-tax expenses associated with the EP acquisition and EP Energy sale. The three months ended September 30, 2012 amount includes a $38 million benefit associated with pension income and legal recoveries. The nine months ended September 30, 2012 amount includes (i) $157 million in employee severance, retention and bonus costs; (ii) $87 million of accelerated EP stock based compensation allocated to the post-combination period under applicable GAAP rules; (iii) $37 million in advisory fees; and (iv) $96 million for legal fees and reserves. 2011 nine month amount includes (i) a $100 million (pre-tax) increase in special bonus expense (we paid the bonuses using the $64 million (after-tax) in available earnings and profits reserved for this purpose and not paid in dividends to our Class A shareholders); (ii) an $11 million increase in expense associated with our initial public offering; and (iii) a reduction to expense for a $46 million private transaction litigation insurance reimbursement.

(g)	Includes (i) interest expense and (ii) miscellaneous other income and expenses not allocated to reportable segments. Three and nine month 2012 amounts include $95 million and $106 million, respectively, of expense for capitalized financing fees associated with the EP acquisition financing that were written-off (due to debt repayments) or amortized in the three months ended September 30, 2012.

(h)	Represents amounts attributable to KMP’s FTC Natural Gas Pipelines disposal group and other, net of tax. Three and nine month 2012 amounts include a non-cash loss of $179 million and $934 million, respectively, from both the remeasurement of net assets to fair value and estimated costs to sell (discussed further in Note 2).

(i)

Includes cash and cash equivalents, margin and restricted deposits, unallocable interest receivable, prepaid assets and deferred charges, risk management assets related to the fair value of interest rate swaps, goodwill and miscellaneous corporate assets (such as information technology and telecommunications equipment) not allocated to individual segments and primarily associated with our EP acquisition.

(j)	Primarily represents amounts attributable to KMP’s FTC Natural Gas Pipelines disposal group and EPB’s “Assets held for sale.”

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•

FERC Docket No. IS08-390 (West Line Rates) (Opinion Nos. 511 and 511-A) - Protestants: BP, ExxonMobil, Phillips 66, Valero Marketing, Chevron, the Airlines - Status: FERC order issued on December 16, 2011 (Opinion No. 511-A).  While the order made certain findings that were adverse to SFPP, it ruled in favor of SFPP on many significant issues.  SFPP made a compliance filing at the end of January 2012, and its rates reflect this filing.  SFPP also filed a rehearing request on certain adverse rulings in the FERC order. Petitions for review of Opinion Nos. 511 and 511-A have been filed at the D.C. Circuit and are held in abeyance pending a ruling on SFPP's request for rehearing.  It is not possible to predict the outcome of the FERC review of the rehearing request or appellate review;

•

FERC Docket No. IS09-437 (East Line Rates) - Protestants: BP, ExxonMobil, ConocoPhillips, Valero Marketing, Chevron, Western Refining, Navajo, HollyFrontier, and Southwest Airlines - Status: Opinion and Order on Initial Decision, Opinion No. 522, issued on September 20, 2012. The FERC generally made findings favorable to SFPP on significant issues and consistent with FERC’s Opinion Nos. 511 and 511-A. Requests for rehearing, if any, must be filed in October 2012. It is not possible to predict the outcome of FERC review of any request for rehearing or appellate review of this order;

•

FERC Docket No. IS11-444 (2011 West Line Index Rate Increases) - Protestants: BP, ExxonMobil, Phillips 66, Valero Marketing, Chevron, the Airlines, Tesoro, Western Refining, Navajo, and HollyFrontier - Status:  The shippers filed a motion for summary disposition that was granted in the shippers' favor in an initial decision issued on March 16, 2012.  SFPP filed a brief with the FERC taking exception to the initial decision.  The FERC will review the initial decision, and it is not possible to predict the outcome of FERC or appellate review;

•

FERC Docket Nos. IS12-390 (SFPP East Line Index Rates))/IS12-388 and IS12-501 (SFPP West Line Index Rates)- Protestants: the Airlines, BP, Chevron, HollyFrontier, Phillips 66, Tesoro, Valero Marketing, and Western Refining - Status: Collectively, these shippers protested SFPP's index-based rate increases for its East Line (IS12-390) and West Line (IS12-388 and IS12-501). FERC rejected the protests against SFPP's East Line rate increases and accepted the protests against SFPP's West Line rate increases (IS12-388). Following FERC acceptance of the West Line protests, SFPP withdrew these rate increases, and FERC terminated the IS12-388 proceeding. SFPP subsequently made a new filing to increase its West Line rates by a smaller index-based percentage (IS12-501), which FERC accepted notwithstanding shipper protests. Shippers requested rehearing of FERC's acceptance of the East Line and West Line rate increases, and those requests are pending before FERC. It is not possible to predict the outcome of FERC or appellate review;

•

FERC Docket Nos. IS12-388/IS12-500 (SFPP West Line Index Rates) - Protestants: the Airlines, BP, Chevron, Phillips 66, Tesoro, Valero Marketing-Status: These shippers protested SFPP's index-based rate increases for its West Line. Following FERC acceptance of the protests, SFPP withdrew these rate increases and subsequently increased its West Line rates by a smaller percentage that FERC found acceptable as to SFPP's East Line in IS12-390. Shippers

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•	FERC Docket No. OR11-13 (SFPP Base Rates) - Complainant: Phillips 66 - Status: SFPP to provide further data within 90 days of the issuance of a final order in Docket No. IS08-390. Phillips 66 permitted to amend its complaint based on additional data;

•	FERC Docket No. OR11-16 (SFPP Base Rates) - Complainant:  Chevron - Status: SFPP to provide further data within 90 days of the issuance of a final order in Docket No. IS08-390.  Chevron permitted to amend its complaint based on additional data; and

•	FERC Docket No. OR11-18 (SFPP Base Rates) - Complainant:  Tesoro - Status:  SFPP to provide further data within 90 days of the issuance of a final order in Docket No. IS08-390.  Tesoro permitted to amend its complaint based on additional data.

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(a)

Based on (i)  KMP distributions of $1.26 and $3.69 per common unit declared for the three and nine months ended September 30, 2012, respectively, and $1.16 and $3.45 per common unit declared for the three and nine months ended September 30, 2011, respectively; (ii) 340 million and 319 million aggregate common units, Class B units and i-units (collectively, KMP units) outstanding as of April 30, 2012 and April 29, 2011, respectively; (iii) 347 million and 330 million aggregate KMP units outstanding as of July 31, 2012 and July 29, 2011, respectively; (iv) 365 million and 333 million aggregate KMP units outstanding as of October 31, 2012 and October 31, 2011, respectively; and (v) waived incentive distributions of $6 million and $19 million for the three and nine months ended September 30, 2012, respectively, and $7 million and $21 million for the three and nine months ended September 30, 2011, respectively. In conjunction with KMP’s acquisition of its initial 50% interest in May 2010, and subsequently, the remaining 50% interest in May 2011 of KinderHawk, we as general partner of KMP have agreed to waive receipt of a portion of our incentive distributions related to this investment from the first quarter of 2010 through the first quarter of 2013.

(b)	Based on 26 million KMP units owned by us for the three months ended September 30, 2012 and 22 million KMP units owned by us in the prior periods multiplied by the KMP per unit distribution declared, as outlined in footnote (a) above.

(c)

Assumes that we sold the KMR shares that we estimate to be received as distributions for the three and nine months ended September 30, 2012 and received as distributions for the three and nine months ended September 30, 2011, respectively.  We did not sell any KMR shares in the first nine months of 2012 or 2011.  We intend periodically to sell the KMR shares we receive as distributions to generate cash.

(d)	2011 KMP distributions to us have been presented on a declared basis and NGPL amounts have been presented on a cash available basis to be consistent with the current year presentation.

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(e)	Based on (i) EPB distributions of $0.58 and $1.13 per common unit declared for the three months and nine months ended September 30, 2012, respectively; and (ii) 208 million and 216 million common units outstanding as of July 31, 2012 and October 31, 2012, respectively.

(f)	Based on 90 million EPB units owned by us multiplied by the EPB per unit distribution declared, as outlined in footnote (e) above.

(g)	Includes our share of depreciation expense incurred by our equity investees,

(h)	2012 amounts include interest associated with KMI incremental debt issued to finance the cash portion of the EP acquisition purchase price as well as EP consolidated interest expense, excluding EPB.  EP interest expense is shown on an accrual basis (rather than a cash basis, as KMI is shown).  Due to the timing of the EP cash interest payments, more than 7/12 of the payments occur after May 24.

(i)	Includes our share of sustaining capital expenditures incurred by our equity investees.

(j)	Represents cash available from EP, exclusive of EPB operations, for the period after May 24, 2012.

(k)

Excludes $37 million and $322 million in after-tax expenses associated with the EP acquisition and EP Energy sale for the three and nine months ended September 30, 2012, respectively. The three months ended September 30, 2012 include (i) $60 million of expense for capitalized financing fees associated with the EP acquisition financing that were written-off (due to debt repayments) or amortized in the third quarter and (ii) $23 million benefit associated with pension income and tax benefits on deferred compensation. The nine months ended September 30, 2012 include (i) $99 million in employee severance, retention and bonus costs; (ii) $55 million of accelerated EP stock based compensation allocated to the post-combination period under applicable GAAP rules; (iii) $37 million in advisory fees; (iv) $67 million write-off (primarily due to debt repayments) or amortization of capitalized financing fees; and (v) $70 million for legal fees and reserves.

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(a)

Includes revenues, earnings from equity investments, allocable interest income and other, net, less operating expenses, allocable income taxes, and other expense (income).  Operating expenses include natural gas purchases and other costs of sales, operations and maintenance expenses, and taxes, other than income taxes.  Segment earnings include KMP's allocable income tax expense of $13 million and $7 million for the three months ended September 30, 2012 and 2011, respectively, and $29 million and $14 million for the nine months ended September 30, 2012 and 2011, respectively.

(b)

2012 amount includes EBDA related to the natural gas pipeline operations of EP, its subsidiaries (including EPB) and equity investments. 2012 amount includes a $1 million increase in expense related to hurricane clean-up and repair activities and a $1 million decrease in income from incremental severance expenses. 2011 amount includes a $167 million loss from the remeasurement of KMP's previously held 50% equity interest in KinderHawk Field Services LLC to fair value. 2012 amount includes decreases in segment earnings of $3 million related to assets sold which had been revalued as part of the going-private transaction and recorded in the application of the purchase method of accounting.

(c)

2012 amount includes a $34 million increase in expense associated with environmental liability adjustments, a $9 million increase in expense associated with rate case liability adjustments, and an $8 million gain from the disposal of property related to the sale of a portion of KMP's former Gaffey Street terminal land, located in San Pedro, California. 2011 amount includes a $69 million increase in expense associated with rate case, leased rights-of-way and other legal liability adjustments, and a $6 million increase in expense associated with environmental liability adjustments.

(d)

2012 and 2011 amounts include a $5 million decrease in income and an $8 million increase in income, respectively, from unrealized gains and losses on derivative contracts used to hedge forecast crude oil sales. Also, 2011 amounts include increases in segment earnings resulting from valuation adjustments of $4 million primarily related to derivative contracts in place at the time of the going-private transaction and recorded in the application of the purchase method of accounting.

(e)

2012 amount includes a $1 million increase in expense related to hurricane clean-up and repair activities. 2011 amount includes (i) a $1 million increase in expense associated with storm damage and repair activities at the Carteret, New Jersey liquids terminal; (ii) a $1 million loss from property write-offs associated with the on-going dissolution of KMP's partnership interest in Globalplex Handling; and (iii) a $1 million gain from the sale of KMP's ownership interest in Arrow Terminals B.V. Also, 2011 amount includes decreases in segment earnings of $2 million related to assets sold, which had been revalued as part of the Going Private

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(f)	Following our May 25, 2012 EP acquisition, this segment primarily includes several physical natural gas sales contracts with power plants associated with EP's legacy trading activities. These contracts obligate EP to sell natural gas to these plants and have various expiration dates ranging from 2012 to 2028.

(g)

2012 amount includes $21 million of pre-tax net benefit associated with the EP acquisition and EP Energy sale. The amount includes (i) $38 million benefit associated with pension income and legal recoveries, partially offset by $8 million of severance and $9 million of other costs, primarily legal. 2012 also includes (i) a $3 million increase in unallocated severance expenses and (ii) a $2 million increase in expense for certain asset and business acquisition costs. 2011 amount includes a $1 million decrease in unallocated payroll tax expense related to KMP's portion ($87 million) of the special bonus discussed in item (i) of footnote (n) below.

(h)	2012 amounts include (i) $95 million of capitalized financing fees associated with the EP acquisition financing that were written-off (due to debt repayment) or amortized in the third quarter.

(i)

Represents amounts primarily attributable to KMP’s FTC Natural Gas Pipelines disposal group and other, net of tax.  2012 amount consists of a $131 million loss before depreciation, depletion and amortization expense and amortization of excess cost of equity investments (including a $179 million non-cash loss from both costs to sell and the remeasurement of net assets to fair value). 2011 amount consists of $61 million of earnings before depreciation, depletion and amortization expense and amortization of excess cost of equity investments, and $6 million of depreciation and amortization expense.

(j)

2012 amount includes EBDA related to the natural gas pipeline operations of EP, its subsidiaries (including EPB) and equity investments for the period after the May 25, 2012 EP acquisition. 2012 amount includes a $1 million increase in expense related to hurricane clean-up and repair activities and a $1 million decrease in income from incremental severance expenses. 2011 amount includes a $167 million loss from the remeasurement of KMP's previously held 50% equity interest in KinderHawk Field Services LLC to fair value. Also, 2012 and 2011 amounts include decreases in segment earnings of $3 million and $1 million, respectively, related to assets sold which had been revalued as part of the Going Private transaction and recorded in the application of the purchase method of accounting.

(k)

2012 amount includes a $34 million increase in expense associated with environmental liability adjustments, a $9 million increase in expense associated with rate case liability adjustments, and an $8 million gain from the disposal of property related to the sale of a portion of KMP's former Gaffey Street terminal land. 2011 amount includes (i) a $234 million increase in expense associated with rate case, leased rights-of-way, and other legal liability adjustments; (ii) a $6 million increase in expense associated with environmental liability adjustments; and (iii) an $11 million gain from the disposal of property related to the sale of a portion of KMP's former Gaffey Street terminal land. Also, 2012 amount includes a $2 million decrease in earnings related to assets sold which had been revalued as part of the going-private transaction and recorded in the application of the purchase method of accounting.

(l)

2012 and 2011 amounts include an $8 million decrease in income and a $10 million increase in income, respectively, from unrealized gains and losses on derivative contracts used to hedge forecast crude oil sales. 2012 amount also includes a $7 million gain from the sale of KMP's ownership interest in the Claytonville oil field unit. Also, 2011 amounts include increases in segment earnings resulting from valuation adjustments of $13 million primarily related to derivative contracts in place at the time of the going-private transaction and recorded in the application of the purchase method of accounting.

(m)

2012 amount includes a $12 million casualty indemnification gain related to a 2010 casualty at the Port Sulphur, Louisiana, International Marine Terminal facility, and a $1 million increase in expense related to hurricane clean-up and repair activities. 2011 amount includes (i) a $5 million decrease in expense (reflecting tax savings) related to non-cash compensation expense allocated to KMP from us; (ii) a $4 million casualty indemnification gain related to a 2008 fire at the Pasadena, Texas liquids terminal; (iii) a combined $2 million increase in income from adjustments associated with the sale of KMP's ownership interest in the boat fleeting business KMP acquired from Megafleet Towing Co., Inc. in April 2009; (iv) a combined $2 million increase in income associated with the sale of a 51% ownership interest in two of KMP's subsidiaries: River Consulting LLC and Devco USA L.L.C.; (v) a $1 million gain from the sale of KMP's ownership interest in Arrow Terminals B.V.; (vi) a $4 million increase in expense at KMP's Carteret terminal, associated with storm and fire damage and repair activities, environmental liability adjustments, and the settlement of a certain litigation matter; (vii) a $1 million loss from property write-offs associated with the on-going dissolution of KMP's partnership interest in Globalplex Handling; and (viii) a $1 million loss from property write-offs associated with the 2010 casualty at KMP's International Marine Terminal facility. Also, 2012 and 2011 amounts include $1 million and $2 million, respectively, decreases in segment earnings related to assets sold, which had been revalued as part of the going-private transaction and recorded in the application of the purchase method of accounting.

(n)	2011 amounts include a $2 million decrease in expense (reflecting tax savings) related to non-cash compensation expense allocated to KMP from us.

(o)

2012 amount includes (i) $362 million of pre-tax expenses associated with the EP acquisition and EP Energy sale. The amount includes (a) $157 million in employee severance, retention and bonus costs; (b) $87 million of accelerated EP stock based compensation allocated to the post-combination period under applicable GAAP rules; (c) $37 million in advisory fees and (d) $96 million for legal fees and reserves. 2012 also includes a $2 million increase in expense for certain asset and business acquisition costs. 2011 amount includes (i) a $100 million (pre-tax) increase in a special bonus expense for non-senior employees. The cost of this bonus was not borne by our Class P shareholders. KMI paid for these bonuses, which included the amounts allocated to KMP, using $64 million (after-tax) in available earnings and profits reserved for this purpose and not paid in dividends to KMI's Class A shareholders; (ii) a $1 million increase in unallocated payroll tax expense related to KMP's portion ($87 million) of the special bonus discussed preceding; (iii) a $1 million increase in expense for certain asset and business acquisition costs; (iv) a reduction to expense for a $46 million going private transaction litigation insurance reimbursement; (v) a $11 million increase of expense associated with our initial public offering; (vi) a $1 million increase in expense related to non-cash compensation expense; and (vii) a $1 million increase in going private transaction litigation expense.

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(p)	2012 amounts include (i) $106 million of capitalized financing fees that were written-off (primarily due to debt repayments) or amortized.

(q)

Represents amounts primarily attributable to KMP’s FTC Natural Gas Pipelines disposal group and other, net of tax.  2012 amount consists of (i) a $782 million loss before depreciation, depletion and amortization expense and amortization of excess cost of equity investments (including a $934 million non-cash loss from remeasurement of net assets to fair value); and (ii) $7 million of depreciation and amortization expense. 2011 amount consists of (i) $164 million of earnings before depreciation, depletion and amortization expense and amortization of excess cost of equity investments (including a $10 million increase in expense from the write-off of a receivable for fuel under-collected prior to 2011); and (ii) $18 million of depreciation and amortization expense.

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(a)	Three and nine month 2012 amounts include a $1 million increase in expense related to hurricane clean-up and repair activities.

(b)	Three and nine month 2012 amounts include a $3 million decrease, and nine month 2011 amount includes an $1 million decrease in segment earnings. All these decreases were related to assets sold, which had been revalued as part of the Going Private transaction and recorded in the application of the purchase method of accounting.

(c)	Three and nine month 2012 amounts include a $1 million decrease in earnings from incremental severance expenses.

(d)	Three and nine month 2011 amounts include a $167 million loss from the remeasurement of KMP's previously held 50% equity interest in KinderHawk Field Services LLC to fair value.

(e)

Represents earnings (losses) before depreciation, depletion and amortization expense attributable to KMP’s FTC Natural Gas Pipelines disposal group. Three and nine month 2012 amounts include non-cash losses of $179 million and $934 million, respectively, from remeasurements of the FTC Natural Gas Pipelines disposal group to fair value and costs to sell. Nine month 2011 amount includes a $10 million increase in expense from the write-off of a receivable for fuel under-collected prior to 2011. Three and nine month 2012 amounts also include revenues of $71 million and $204 million, respectively, and three and nine month 2011 amounts also include revenues of $83 million and $241 million, respectively.

(f)

Includes Kinder Morgan Interstate Gas Transmission LLC, Trailblazer Pipeline Company LLC, TransColorado Gas Transmission Company LLC, Midcontinent Express Pipeline LLC, Kinder Morgan Louisiana Pipeline LLC, Fayetteville Express Pipeline LLC, Rockies Express Pipeline LLC, Texas intrastate natural gas pipeline group pipeline and EP natural gas pipeline operations (including EPB, EPNG and Tennessee Gas Pipeline) volumes. Volumes for acquired pipelines are included for all periods.

(g)	Represents Texas intrastate natural gas pipeline group volumes.

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(a)	Represents EBDA and revenues from those EP subsidiaries not included in KMP and EPB, and including equity-method investments.

(b)	EPNG is presented separately in the tables above at 100%.

(c)	Equity investment.  We record earnings under the equity method of accounting, but we receive distributions in amounts essentially equal to equity earnings plus depreciation and amortization expenses less sustaining capital expenditures.

(d)	Represents amounts attributable to KMP’s FTC Natural Gas Pipelines disposal group.

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•	$646 million and $887 million incremental earnings from assets acquired on May 25, 2012 from EP, including earnings from EPB, EPNG and Tennessee Gas Pipeline, for the three and nine months ended September 30, 2012, respectively;

▪	incremental equity earnings of $9 million and $15 million, respectively, from KMP's 50%-owned Eagle Ford Gathering LLC, which initiated flow on its natural gas gathering system on August 1, 2011;

▪

increases of $7 million (118%) and $28 million (239%), respectively, attributable to incremental equity earnings from KMP's 50%-owned Fayetteville Express pipeline system-driven by a ramp-up in firm contract transportation volumes, and to lower interest expense. Period-to-period transportation revenues increased due to increases in natural gas transmission volumes of 8% and 15%, respectively, and the decreases in interest expense related to Fayetteville's refinancing of its prior bank credit facility in July 2011;

▪

decreases of $12 million (17%) and $19 million (8%), respectively, from the Texas intrastate natural gas pipeline group. The decreases were driven by higher operating and maintenance expenses, lower margins on natural gas processing activities, and for the comparable nine month periods, by lower margins on natural gas sales. The increases in expenses were driven by both higher pipeline integrity maintenance and unexpected well repairs. The decreases in processing margins were mostly due to lower natural gas liquids prices, and the period-to-period decrease in sales margin was primarily due to lower average natural gas sales prices;

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a decrease of $3 million (7%) and an increase of $63 million (93%), respectively, from KMP's now wholly-owned KinderHawk Field Services LLC. The quarter-to-quarter decrease in earnings related primarily to lower gathering volumes and lower cashout settlement revenues. The increase across the comparable nine month periods was mainly due to incremental earnings resulting from the inclusion of a full nine months of operations in 2012. Effective July 1, 2011, KMP acquired the remaining 50% ownership interest in KinderHawk that it did not already own.

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(a)

Three and nine month 2012 amounts include a $34 million increase in expense associated with environmental liability adjustments, and a $9 million increase in expense associated with rate case liability adjustments. Three and nine month 2011 amounts include increases in expense of $69 million and $234 million, respectively, associated with rate case, leased rights-of-way and other legal liability adjustments, and a $6 million increase in expense associated with environmental liability adjustments.

(b)

Three and nine month 2012 amounts include a gain of $8 million, and nine month 2011 amount includes a gain of $11 million, all from the disposal of property related to the sale of a portion of KMP's former Gaffey Street terminal land. Also nine month 2012 amount includes a $2 million decrease in segment earnings related to assets sold, which had been revalued as part of the going-private transaction and recorded in the application of the purchase method of accounting.

(c)	Volumes include ethanol pipeline volumes.

(d)	Includes Pacific, Plantation, Calnev, Central Florida, Cochin and Cypress pipeline volumes.

(e)	Represents total ethanol volumes, including ethanol pipeline volumes included in gasoline volumes above.

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an increase of $3 million (34%) and a decrease of $11 million (44%), respectively, from KMP's transmix processing operations. The quarter-to-quarter increase in earnings was driven by favorable pricing. The drop in earnings across the comparable nine month periods was primarily due to a decrease in processing volumes and unfavorable net carrying value adjustments to product inventory. The period-to-period increases in revenues were due mainly to the expiration of certain transmix fee-based processing agreements in March 2012. Due to the expiration of these contracts, KMP now directly purchases incremental volumes of transmix and sells incremental volumes of refined products, resulting in both higher revenues and higher costs of sales expenses;

▪

increases of $2 million (15%) and $12 million (30%), respectively, from the Cochin Pipeline-the increase in earnings in the comparable quarterly periods was primarily due to a favorable income tax adjustment. The increase in earnings across the comparable year-to-date periods was largely due to a 25% increase in pipeline throughput volumes (due in part to completed expansion projects since the end of the third quarter of 2012), and to the favorable settlement of a pipeline access dispute;

▪	decreases of $2 million (15%) and $6 million (14%), respectively, from the Calnev Pipeline-chiefly due to lower period-to-period delivery volumes that were due in part to incremental services offered by a competing pipeline;

▪	for the comparable three month periods, a $2 million (11%) increase from the Southeast terminal operations-due mainly to increased throughput volumes of refined products and biofuels;

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decreases of $1 million (2%) and $17 million (7%), respectively, from the Pacific operations. Earnings were essentially flat across both quarterly periods, but decreased in the comparable nine month periods due primarily to lower operating revenues. Mainline transportation revenues dropped in the first nine months of 2012, due largely to lower average FERC tariffs as a result of rate case rulings settlements made since the end of the third quarter of 2011; and

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▪	for the comparable nine month periods, an increase of $3 million (8%) from KMP's approximate 51% interest in the Plantation pipeline system-due largely to higher transportation revenues driven by higher average tariff rates since the end of the third quarter of 2011.

(a)

Three and nine month 2012 amounts include unrealized losses of $5 million and $8 million, respectively, and three and nine month 2011 amounts include unrealized gains of $8 million and $10 million, respectively, all relating to derivative contracts used to hedge forecast crude oil sales.  Also, three and nine month 2011 amounts include increases in segment earnings resulting from valuation adjustments of $4 million and $13 million, respectively, primarily related to derivative contracts in place at the time of the going-private transaction and recorded in the application of the purchase method of accounting.

(b)	Nine month 2012 amount represents the gain from the sale of KMP's ownership interest in the Claytonville oil field unit.

(c)	Includes McElmo Dome and Doe Canyon sales volumes.

(d)	Represents 100% of the production from the field.  KMP owns an approximately 97% working interest in the SACROC unit, an approximately 50% working interest in the Yates unit, and an approximately 99% working interest in the Katz Strawn unit.

(e)	Net to KMP, after royalties and outside working interests.

(f)	Includes all of KMP’s crude oil production properties.

(g)	Includes production attributable to leasehold ownership and production attributable to KMP’s ownership in processing plants and third-party processing agreements.

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(a)

Three and nine month 2012 amounts include increases in expense of $1 million related to hurricane clean-up and repair activities. Three and nine month 2011 amounts include increases in expense of $1 million and $4 million, respectively, at the Carteret, New Jersey liquids terminal, associated with storm and fire damage and repair activities, environmental liability adjustments, and the settlement of a certain litigation matter. Nine month 2011 amount also includes a $1 million increase in expense associated with the sale of KMP's ownership interest in the boat fleeting business it acquired from Megafleet Towing Co., Inc. in April 2009.

(b)

Nine month 2012 amount includes a $12 million casualty indemnification gain related to a 2010 casualty at the Port Sulphur, Louisiana, International Marine Terminal facility. Three and nine month 2011 amounts include a $1 million loss from property write-offs associated with the on-going dissolution of KMP's partnership interest in Globalplex Handling, and a $1 million gain from the sale of its ownership interest in Arrow Terminals B.V. Nine month 2011 amount also includes (i) a $4 million casualty indemnification gain related to a 2008 fire at the Pasadena, Texas liquids terminal; (ii) a $1 million gain associated with the sale of KMP's ownership interest in the boat fleeting business described in footnote (a); and (iii) a $1 million loss from property write-offs associated with the 2010 casualty at KMP's International Marine Terminal facility. Also, nine month 2012 amount includes a $1 million decrease; and both three and nine month 2011 amounts include a $2 million decrease in segment earnings, all related to assets sold, which had been revalued as part of the going-private transaction and recorded in the application of the purchase method of accounting.

(c)	Nine month 2011 amount includes a $4 million gain associated with the sale of a 51% ownership interest in two of KMP's subsidiaries: River Consulting LLC and Devco USA L.L.C.

(d)

Nine month 2011 amount includes (i) a $5 million decrease in expense (reflecting tax savings) related to non-cash compensation expense allocated to KMP from us; (ii) a $2 million decrease in expense (reflecting tax savings) related to the net decrease in income from the sale of KMP's ownership interest in the boat fleeting business described in footnote (a); and (iii) a $2 million increase in expense associated with the increase in income from the sale of a 51% ownership interest in two of its subsidiaries described in footnote (c).

(e)	Volumes for acquired terminals are included for all periods and include KMP’s proportionate share of joint venture tonnage.

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(a)	Nine month 2011 amount includes a $2 million decrease in expense (reflecting tax savings) related to non-cash compensation expense allocated to KMP from us.

(b)	Represents Trans Mountain pipeline system volumes.

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(a)	Equity investment.  KMP records earnings under the equity method of accounting.

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(a)

Three and nine month 2012 amounts include $24 million decrease and $330 million increase, respectively, of pre-tax expenses associated with the EP acquisition and EP Energy sale. The three months ended September 30, 2012 amount includes $38 million benefit associated with pension income and legal recoveries, partially offset by $5 million of severance and $9 million of other costs, primarily legal. The nine months ended September 30, 2012 amount includes (i) $125 million (also see footnote (d) below for EPB portion) in employee severance, retention and bonus costs; (ii) $87 million of accelerated EP stock based compensation allocated to the post-combination period under applicable GAAP rules; (iii) $37 million in advisory fees; and (iv) $96 million for legal fees and reserves.  Nine month 2011 amount includes (i) $46 million reduction to expense for a Going Private transaction litigation insurance reimbursement; (ii) KMI's portion ($13 million) of a $100 million special bonus to non-senior employees. The cost of this bonus was not borne by KMI's Class P shareholders. In May of 2011, KMI paid for the $100 million of special bonuses, which included the amounts allocated to KMP, using $64 million (after-tax) in available earnings and profits reserved for this purpose and not paid in dividends to KMI's Class A shareholders. See also footnote (c) below; (iii) $11 million of expense associated with our initial public offering; (iv) $1 million increase in expense related to non-cash compensation expense; and (v) $1 million increase in Going Private transaction litigation expense. Three month 2011 amount includes $1 million increase in Going Private transaction litigation expense.

(b)

For the three and nine months ended September 30, 2012 and 2011, the NGPL PipeCo LLC fixed fee revenues of $8 million, $6 million, $26 million and $26 million, respectively, have been included in the “Product sales and other” caption in our accompanying consolidated statements of income with the offsetting expenses primarily included in the “General and administrative” expense caption in our accompanying consolidated statements of income.  Also, see Note 8 to our consolidated financial statements included elsewhere in this report.

(c)

Three and nine month 2012 amounts include (i) increases in expense of $13 million and $56 million, respectively, attributable to the drop-down asset group for periods prior to KMP's acquisition date of August 1, 2012; (ii) $3 million and $4 million, respectively, increases in unallocated severance expense; and (iii) increases in expense of $2 million for certain asset and business acquisition costs. Three and nine month 2011 amounts include (i) a $1 million decrease in unallocated payroll tax expense and a $1 million increase in unallocated payroll tax expense, respectively, related to the special bonus discussed below and (ii) increases in expense of $1 million and $2 million, respectively, for certain KMP asset and business acquisition costs. Nine month 2011 amount also includes a combined $90 million increase in non-cash compensation expense (including $87 million related to a special bonus expense to non-senior management employees) allocated by us to KMP; however, KMP does not have any obligation, nor did KMP pay any amounts related to this expense.

(d)

Includes expenses and transactions for the periods after the May 25, 2012 EP acquisition date. Three and nine month 2012 general and administrative amounts include $3 million and $32 million, respectively, for severance cost. This expense is attributable to non-cash severance costs allocated to EPB from us as a result of KMI's and EP's merger; however, EPB does not have any obligation, nor did EPB pay any amounts related to this expense.

(e)	Three and nine month 2012 amounts include (i) $95 million and $106 million, respectively, of capitalized financing fees, almost all of which was associated with the EP acquisition financing, that was written-off (due primarily due to debt repayment) or amortized.

(f)	Three and nine month 2012 amounts include (i) increases in expense of $8 million and $21 million, respectively, attributable to the drop-down asset group for periods prior to KMP's August 1, 2012 acquisition date and (ii) increases in expense of $1 million attributable to incremental fees related to KMP's short-term bridge loan credit facility.

(g)	Includes expenses and transactions for the periods after the May 25, 2012 EP acquisition date.

(h)	“Other, net” primarily represents an offset to interest income shown above and included in segment earnings.

(i)	Nine month 2012 includes $43 million decrease to expense due to expenses incurred during the 37-days ended June 30, 2012 attributable

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▪	a $5.0 billion cash outlay due to our acquisition of EP in May 2012, net of cash acquired of $6.6 billion (as discussed in Note 2 “Acquisitions and Divestiture—KMI Acquisition of El Paso Corporation” to our consolidated financial statements included elsewhere in this report);

▪	a $554 million decrease in cash due to higher capital expenditures, as described above in “—Capital Expenditures;” and

▪

an $873 million increase in cash due to KMP's lower expenditures for the acquisitions of assets and investments from unrelated parties. In the first nine months of 2012, KMP paid a combined $72 million for asset acquisitions, including (i) $30 million to acquire a carbon dioxide source field and related assets; and (ii) $28 million to acquire an ethanol and biodiesel terminaling facility. In the first nine months of 2011, KMP spent an aggregate amount of $945 million for asset and investment acquisitions, including (i) $835 million for both its remaining 50% ownership interest in KinderHawk Field Services LLC and its 25% equity interest in EagleHawk Field Services LLC; (ii) $50 million for an initial preferred equity interest in Watco Companies, LLC; and (iii) $43 million for a newly constructed petroleum coke terminal.

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a $2.6 billion net increase in debt related to the May 2012 EP acquisition consisting of: (i) the issuance of $5.3 billion in debt (net of $87 million of debt issuance costs) used to finance a portion of the cash consideration and related fees and expenses paid in connection with the acquisition and (ii) $2.7 billion decrease due to repayments made on the acquisition debt primarily funded by the cash portion of the drop-down transaction (as discussed further below). Further information

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a $2.2 billion net increase in other debt financing activities primarily resulting from (i) a $2.2 billion increase in short-term net borrowings under KMP's commercial paper program (largely related to the portion of the drop-down transaction that it funded in cash); (ii) a $265 million increase associated with other net short-term borrowings under our credit facility; and (iii) a $223 million decrease due to higher net repayments of our senior notes. Further information regarding debt issuances and repayments is discussed in Note 3 "Debt" to our consolidated financial statements included elsewhere in this report;

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a $587 million increase in contributions provided by noncontrolling interests, primarily reflecting the $1.1 billion proceeds KMP received, after commissions and underwriting expenses, from the sales of additional KMP common units in the first nine months of 2012 (discussed in Note 4 “Stockholders' Equity—Noncontrolling Interests—KMP—Contributions” to our consolidated financial statements included elsewhere in this report), versus the $813 million it received from the sales of additional KMP common units in the comparable 2011 period, and the $272 million of proceeds EPB received from its issuance of additional common units in the third quarter of 2012;

▪	a $253 million decrease in cash due to higher dividend payments;

▪	a $146 million decrease in cash associated with distributions to noncontrolling interests, primarily reflecting the increased distributions to common unit owners by KMP and EPB. Further information regarding KMP's and EPB's distributions are discussed following in “—KMP” and “—EPB,” respectively; and

▪	a $136 million decrease in cash due to the repurchase of warrants in 2012.

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•	our ability to successfully integrate EP's operations and to realize synergies from the acquisition;

•	the additional conflicts of interest that may arise because we own indirectly the general partners of both KMP and EPB;

•	price trends and overall demand for natural gas liquids, refined petroleum products, oil, carbon dioxide, natural gas, electricity, coal, steel 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 tax laws, principally related to KMP and EPB;

•	indebtedness, not only at the our level, but also at the EP, KMP and EPB levels, which could make each vulnerable to general adverse economic and industry conditions, limit their ability to borrow additional funds, and/or place them and us at competitive disadvantages compared to competitors that have less debt or have other adverse consequences;

•	possible changes in credit ratings, particularly as a result of our acquisition of EP, including effects on our borrowing costs;

•	capital and credit markets conditions, inflation and interest rates;

•	changes in laws or regulations, third-party relations and approvals and decisions of courts, regulators and governmental bodies that may adversely affect our business or our ability to compete;

•	changes in the tariff rates charged by our pipeline subsidiaries implemented by the FERC, the CPUC, Canada's National Energy Board or another regulatory agency;

•	the ability to acquire new businesses and assets and integrate those operations into existing operations, as well as the ability to expand facilities;

•	difficulties or delays experienced by railroads, barges, trucks, ships or pipelines in delivering products to or from terminals or pipelines;

•	the ability to successfully identify and close acquisitions and dispositions and make cost-saving changes in operations;

•	the ability to achieve cost savings and revenue growth;

•	the ability to complete expansion projects on time and on budget;

•	shut-downs or cutbacks at major refineries, petrochemical or chemical plants, ports, utilities, military bases or other businesses that use our services or provide services or products to us;

•	changes in crude oil and natural gas production from exploration and production areas that we serve, such as the Permian Basin area of West Texas, the U.S. Rocky Mountains, areas of shale gas formations and the Alberta oil sands;

•	changes in accounting standards 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;

•	the ability to offer and sell equity securities and debt securities or obtain debt financing in sufficient amounts and on acceptable terms to implement that portion of the business plan that contemplates growth through acquisitions of operating businesses and assets and expansions of facilities;

•	interruptions of electric power supply to our facilities due to natural disasters, power shortages, strikes, riots, terrorism (including cyber-attacks), war or other causes;

•	the ability to obtain insurance coverage without significant levels of self-retention of risk;

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•	acts of nature, accidents, sabotage, terrorism (including cyber-attacks) or other similar acts causing damage greater than insurance coverage limits;

•	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;

•	foreign exchange fluctuations;

•	the timing and extent of changes in commodity prices for oil, natural gas, electricity and certain agricultural products;

•	the extent of our success in discovering, developing and producing oil and gas reserves, including the risks inherent in exploration and development drilling, well completion and other development activities;

•	engineering and mechanical or technological difficulties that we may experience with operational equipment, in well completions and workovers, and in drilling new wells;

•	the uncertainty inherent in estimating future oil and natural gas production or reserves;

•	the timing and success of business development efforts;

•	unfavorable results of litigation and the fruition of contingencies referred to in the notes to the financial statements included in our exchange act filings;

•	our dependence on cash distributions from our subsidiaries;

•	our ability to pay the anticipated level of dividends;

•	the impact of our and our subsidiaries' financial results on our ability to pay dividends;

•	the effect of steps taken to support KMP and EPB that reduce cash distributions received from those partnerships;

•	changes in our dividend policy implemented by our board of directors or resulting from restrictions under Delaware law or the terms of any future indebtedness, including indebtedness incurred in connection with the proposed acquisition of EP; and

•	those other factors discussed in the sections entitled “Risk Factors” in this document and our 2011 Form 10-K, including the risks relating to KMP, which apply equally to EPB.

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