Kinder Morgan Energy Partners Increases Quarterly Distribution to $1.05, Annualized Rate of $4.20; Reports Record Quarterly Earnings

Apr 18, 2001, 01:00 ET from Kinder Morgan Energy Partners, L.P.

    HOUSTON, April 18 /PRNewswire/ -- Kinder Morgan Energy Partners, L.P.
 (NYSE:   KMP) today announced an increase in its first quarter distribution to
 $1.05 (an annualized rate of $4.20) per unit payable on May 15, 2001 to
 unitholders of record as of April 30, 2001.  The distribution increase is
 35 percent higher than the distribution of $0.775 per unit paid for the first
 quarter of 2000, and 11 percent higher than the $0.95 per unit paid in
 February of 2001.  KMP has increased the distribution 10 times in the 17
 quarters since its formation in February of 1997.
     KMP reported first quarter net income of $101.7 million, or $0.89 per
 unit, 71 percent higher than the $59.6 million, or $0.63 per unit, recorded in
 the same period a year ago.
     "KMP had a truly remarkable first quarter," said Richard D. Kinder,
 chairman and CEO of KMP.  "We are delighted that our strong financial
 performance has enabled us to increase the distribution to an annualized rate
 of $4.20, allowing us to hit our year-end distribution target in the first
 quarter.  Our results reflect both excellent internal growth and outstanding
 performance by recently acquired pipeline and terminal assets.  In the first
 quarter, our fee-based portfolio of midstream assets continued to demonstrate
 its capability of delivering superb financial results even in a slowing U.S.
 economy."
     KMP experienced strong cash flow growth in each of its business segments.
     The Product Pipelines segment -- comprised of more than 10,000 miles of
 pipe that transport gasoline, jet fuel, diesel fuel and natural gas liquids --
 delivered a 32 percent increase in earnings before DD&A of $85.8 million in
 the first quarter, compared to $64.8 million during the same period a year
 ago.  Segment earnings were aided by the additions of the West Coast liquids
 terminals and the Central Florida Pipeline Company, which were part of the
 recent GATX transaction, and KMP's 32.5 percent interest in the Cochin
 Pipeline System.  The two largest product pipelines in this segment --
 Pacific, which transports refined petroleum products on the West Coast, and
 Plantation Pipe Line Company, which transports products throughout the
 Southeast -- each realized delivery volume growth of 5 percent.  In addition,
 KMP began to achieve cost savings from assuming the operations of Plantation
 (owned 51 percent by KMP and 49 percent by ExxonMobil).  Beginning in the
 second quarter, earnings from the recently acquired CALNEV Pipe Line Company -
 - which transports gasoline, jet fuel and diesel fuel from the Los Angeles
 area to the rapidly growing Las Vegas, Nev. market -- will contribute to this
 business segment.
     The Natural Gas Pipelines segment, which now includes an additional
 $300 million in assets that KMP acquired at year-end from Kinder Morgan, Inc.
 (NYSE:   KMI), had an excellent first quarter.  Segment income before DD&A was
 $66.3 million, an 84 percent increase over the $36.1 million reported in the
 first quarter of 2000.  The addition of Kinder Morgan Texas Pipeline (KMTP), a
 large intrastate pipeline, significantly boosted earnings in this segment.
 Additionally, Kinder Morgan Interstate Gas Transmission (KMIGT), Trailblazer
 Pipeline (KMP owns 67 percent), and Red Cedar Gathering Company (KMP owns 49
 percent) all demonstrated improved performance and delivered strong results.
     The CO2 segment delivered first quarter earnings before DD&A of
 $27.6 million, 668 percent higher than the $3.6 million reported in the same
 period a year ago.  "Granted, our increase in ownership in the former Shell
 CO2 Company, Ltd. to 100 percent and additional acquisitions in this segment
 over the past year are the primary reasons for growth," Kinder said.
 "However, it's important to note that this segment has also experienced solid
 internal growth, as evidenced by a 5 percent increase in volumes.  There has
 been an increased interest in CO2 flooding, and we are continuing to execute
 new contracts by aggressively marketing our expertise and educating potential
 customers."
     Bulk Terminals, comprised of 29 terminals that transload coal, petroleum
 coke and other aggregates, reported a 30 percent increase in segment income
 before DD&A to $15.3 million, compared to $11.8 million in the first quarter
 of 2000.  Earnings growth in this segment was attributable to both KMP's
 ongoing acquisition strategy, as KMP has added three terminals to this segment
 since the first quarter of 2000, and to particularly strong performances by
 the Cora, Illinois and Grand Rivers, Kentucky coal terminals.
     KMP's new business segment, Liquids Terminals, includes five larger
 terminals acquired from GATX that are not associated with KMP's existing
 product pipelines.  Located in New York harbor, Chicago, Philadelphia and
 Houston, these terminals store and transfer both petroleum products and
 chemicals.  First quarter earnings before DD&A were $20.4 million, higher than
 planned.
     "Looking ahead, we expect additional growth during the year, both
 internally and through acquisitions," Kinder said.  "As a result, we have
 raised our annualized distribution target to between $4.30 and $4.40 per unit
 by year-end.  Although KMP is more focused on cash flow than earnings, we
 expect $3.00 to $3.10 of earnings per unit in 2001."
 
     The following were among KMP's accomplishments during the first quarter.
     --  Entered into a 10-year processing agreement with Duke Energy Merchants
         at three of KMP's transmix processing facilities located in Indianola,
         Pa., Hartford, Ill. and Richmond, Va.  KMP receives a fee for
         processing the transmix, and Duke Energy Merchants markets the
         product, virtually eliminating all of KMP's commodity price exposure.
 
     --  Purchased the Pinney Dock & Transport Company terminal for
         approximately $41.5 million in cash.  The facility, which handles iron
         ore and other aggregates, is located in Ashtabula, Ohio on Lake Erie.
         This acquisition added another stable, fee-based terminal to KMP's
         Bulk Terminals business segment in a new geographic region.  The
         transaction was immediately accretive to cash available for
         distribution to KMP unitholders.
 
     --  Entered into two new carbon dioxide (CO2) contracts with Oxy Permian.
         Oxy plans to begin tertiary CO2 injection at the Cogdell Canyon Reef
         Unit later this year to extend the life of the field and produce
         approximately 10 million barrels of oil that would otherwise be
         unrecoverable.  Cogdell, which is near the end of its economic life as
         a water flood, is located on the eastern portion of the Permian Basin
         north of Snyder, Texas.  These long-term contracts will increase
         utilization of KMP's CO2 assets.
 
     Kinder Morgan Energy Partners, L. P. is the nation's largest pipeline
 master limited partnership with an enterprise value of approximately
 $7 billion.  It owns and operates one of the largest product pipeline and
 terminal systems in the country.  In addition, it is a major transporter of
 natural gas, operating more than 10,000 miles of pipeline; is the nation's
 leading provider of CO2 for use in enhanced oil recovery projects; and is one
 of the largest operators of bulk terminals, with 29 facilities that transload
 more than 40 million tons of coal, petroleum coke and other products annually.
     The general partner of KMP is owned by Kinder Morgan, Inc., one of the
 largest midstream energy companies in America, operating more than 30,000
 miles of natural gas and product pipelines.  KMI also has significant retail
 distribution, electric generation and terminal assets.  Combined, the two
 companies have an enterprise value of approximately $17 billion.
     Please join us at 5 p.m. Eastern Time on Wednesday, April 18, at
 www.kindermorgan.com for a LIVE webcast conference call.
     This news release includes forward-looking statements within the meaning
 of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
 Exchange Act of 1934.  Although Kinder Morgan believes that its expectations
 are based on reasonable assumptions, it can give no assurance that such
 assumptions will materialize.  Important factors that could cause actual
 results to differ materially from those in the forward-looking statements
 herein are enumerated in Kinder Morgan's Form 10-K and 10-Q as filed with the
 Securities and Exchange Commission.
 
 
              Kinder Morgan Energy Partners, L.P. and Subsidiaries
                        Consolidated Statement of Income
                                  (Unaudited)
                     (in thousands except per unit amounts)
 
                                                      Three Mos. Ended March 31
                                                           2001          2000
 
     Revenues                                        $  1,028,645    $  157,358
 
     Costs and Expenses
       Operating Expenses                                 817,961       55,032
       Depreciation and amortization                       30,075       18,845
       General and administrative                          28,585       14,323
       Taxes, other than income taxes                      13,673        6,097
                                                          890,294       94,297
     Operating Income                                     138,351       63,061
 
     Other Income/(Expense)
      Earnings from equity investments                      21,203      14,817
      Amortization of excess cost of equity investments     (2,253)     (1,673)
      Interest expense                                     (51,037)    (21,092)
      Other                                                  1,504       8,885
     Minority interest                                      (3,002)     (1,678)
     Income before income taxes                            104,766      62,320
     Income tax expense                                     (3,099)     (2,761)
     Net Income                                      $     101,667   $  59,559
 
     Calculation of Limited Partners' Interest in Net Income:
      Net Income                                     $     101,667   $  59,559
       Less:  General Partner's interest in Net Income     (41,622)    (22,257)
     Limited Partners' Net Income                    $      60,045   $  37,302
 
     Calculation per Limited Partner Unit (Fully Diluted):
      Net Income per unit                            $        0.89   $    0.63
 
      Number of Units Used in Computation                   67,611      59,549
 
     Additional per unit information:
 
      Depreciation and amortization                          $0.48
      Sustaining capital expenditures                        $0.24
 
 
              Kinder Morgan Energy Partners, L.P. and Subsidiaries
                   Earnings Contribution by Business Segment
                                  (Unaudited)
                                 (in thousands)
 
                                                  Three Mos. Ended March 31
                                                 2001                   2000
     Segment Earnings Before DD&A:
      Product Pipelines                         $85,793               $64,761
      Natural Gas Pipelines                      66,274                36,074
      CO2 Pipelines                              27,588                 3,590
      Bulk Terminals                             15,334                11,771
      Liquids Terminals                          20,400                   ---
 
     Segment Earnings Contribution:
      Product Pipelines                         $69,848                $53,407
      Natural Gas Pipelines                      58,672                 29,139
      CO2 Pipelines                              23,462                  3,587
      Bulk Terminals                             12,248                  9,545
      Liquids Terminals                          18,831                    ---
 
      General and Administrative                (28,585)               (14,323)
      Net Debt Costs (Includes Interest
      Income)                                   (49,807)               (20,118)
      Less: Minority Interest                    (3,002)                (1,678)
     Net Income                                $101,667                $59,559
 
 
                               Volume Highlights
                                                  Three Mos. Ended March 31
                                                  2001                  2000
     Product Pipelines
          Delivery Volumes (MBbl) (A)           171,970                164,636
 
     Natural Gas Pipelines
          Transport Volumes (Bcf) (B)             109.1                  107.8
 
     CO2 Pipelines
          Delivery Volumes (Bcf) (C)               98.7                   94.3
 
     Bulk Terminals
          Transload Tonnage (Mtons) (D)          11,680                 11,041
 
     Liquids Terminals
          Throughput Volumes (MBbl) (E)             108                    103
 
 
     (A) Includes Pacific, Plantation, North System, Central Florida, Cypress
         and Heartland.  2000 information for comparative purposes only.
     (B) Includes KMIGT and Trailblazer.
     (C) Includes Cortez, Central Basin and CRC pipeline volumes.  2000
         information for comparative purposes only.
     (D) Includes Cora, Grand Rivers and KMBT aggregate terminals.
     (E) Includes 5 terminals in Houston, New Jersey, Chicago and Philadelphia.
         2000 information for comparative purposes only.
 
 

SOURCE Kinder Morgan Energy Partners, L.P.
    HOUSTON, April 18 /PRNewswire/ -- Kinder Morgan Energy Partners, L.P.
 (NYSE:   KMP) today announced an increase in its first quarter distribution to
 $1.05 (an annualized rate of $4.20) per unit payable on May 15, 2001 to
 unitholders of record as of April 30, 2001.  The distribution increase is
 35 percent higher than the distribution of $0.775 per unit paid for the first
 quarter of 2000, and 11 percent higher than the $0.95 per unit paid in
 February of 2001.  KMP has increased the distribution 10 times in the 17
 quarters since its formation in February of 1997.
     KMP reported first quarter net income of $101.7 million, or $0.89 per
 unit, 71 percent higher than the $59.6 million, or $0.63 per unit, recorded in
 the same period a year ago.
     "KMP had a truly remarkable first quarter," said Richard D. Kinder,
 chairman and CEO of KMP.  "We are delighted that our strong financial
 performance has enabled us to increase the distribution to an annualized rate
 of $4.20, allowing us to hit our year-end distribution target in the first
 quarter.  Our results reflect both excellent internal growth and outstanding
 performance by recently acquired pipeline and terminal assets.  In the first
 quarter, our fee-based portfolio of midstream assets continued to demonstrate
 its capability of delivering superb financial results even in a slowing U.S.
 economy."
     KMP experienced strong cash flow growth in each of its business segments.
     The Product Pipelines segment -- comprised of more than 10,000 miles of
 pipe that transport gasoline, jet fuel, diesel fuel and natural gas liquids --
 delivered a 32 percent increase in earnings before DD&A of $85.8 million in
 the first quarter, compared to $64.8 million during the same period a year
 ago.  Segment earnings were aided by the additions of the West Coast liquids
 terminals and the Central Florida Pipeline Company, which were part of the
 recent GATX transaction, and KMP's 32.5 percent interest in the Cochin
 Pipeline System.  The two largest product pipelines in this segment --
 Pacific, which transports refined petroleum products on the West Coast, and
 Plantation Pipe Line Company, which transports products throughout the
 Southeast -- each realized delivery volume growth of 5 percent.  In addition,
 KMP began to achieve cost savings from assuming the operations of Plantation
 (owned 51 percent by KMP and 49 percent by ExxonMobil).  Beginning in the
 second quarter, earnings from the recently acquired CALNEV Pipe Line Company -
 - which transports gasoline, jet fuel and diesel fuel from the Los Angeles
 area to the rapidly growing Las Vegas, Nev. market -- will contribute to this
 business segment.
     The Natural Gas Pipelines segment, which now includes an additional
 $300 million in assets that KMP acquired at year-end from Kinder Morgan, Inc.
 (NYSE:   KMI), had an excellent first quarter.  Segment income before DD&A was
 $66.3 million, an 84 percent increase over the $36.1 million reported in the
 first quarter of 2000.  The addition of Kinder Morgan Texas Pipeline (KMTP), a
 large intrastate pipeline, significantly boosted earnings in this segment.
 Additionally, Kinder Morgan Interstate Gas Transmission (KMIGT), Trailblazer
 Pipeline (KMP owns 67 percent), and Red Cedar Gathering Company (KMP owns 49
 percent) all demonstrated improved performance and delivered strong results.
     The CO2 segment delivered first quarter earnings before DD&A of
 $27.6 million, 668 percent higher than the $3.6 million reported in the same
 period a year ago.  "Granted, our increase in ownership in the former Shell
 CO2 Company, Ltd. to 100 percent and additional acquisitions in this segment
 over the past year are the primary reasons for growth," Kinder said.
 "However, it's important to note that this segment has also experienced solid
 internal growth, as evidenced by a 5 percent increase in volumes.  There has
 been an increased interest in CO2 flooding, and we are continuing to execute
 new contracts by aggressively marketing our expertise and educating potential
 customers."
     Bulk Terminals, comprised of 29 terminals that transload coal, petroleum
 coke and other aggregates, reported a 30 percent increase in segment income
 before DD&A to $15.3 million, compared to $11.8 million in the first quarter
 of 2000.  Earnings growth in this segment was attributable to both KMP's
 ongoing acquisition strategy, as KMP has added three terminals to this segment
 since the first quarter of 2000, and to particularly strong performances by
 the Cora, Illinois and Grand Rivers, Kentucky coal terminals.
     KMP's new business segment, Liquids Terminals, includes five larger
 terminals acquired from GATX that are not associated with KMP's existing
 product pipelines.  Located in New York harbor, Chicago, Philadelphia and
 Houston, these terminals store and transfer both petroleum products and
 chemicals.  First quarter earnings before DD&A were $20.4 million, higher than
 planned.
     "Looking ahead, we expect additional growth during the year, both
 internally and through acquisitions," Kinder said.  "As a result, we have
 raised our annualized distribution target to between $4.30 and $4.40 per unit
 by year-end.  Although KMP is more focused on cash flow than earnings, we
 expect $3.00 to $3.10 of earnings per unit in 2001."
 
     The following were among KMP's accomplishments during the first quarter.
     --  Entered into a 10-year processing agreement with Duke Energy Merchants
         at three of KMP's transmix processing facilities located in Indianola,
         Pa., Hartford, Ill. and Richmond, Va.  KMP receives a fee for
         processing the transmix, and Duke Energy Merchants markets the
         product, virtually eliminating all of KMP's commodity price exposure.
 
     --  Purchased the Pinney Dock & Transport Company terminal for
         approximately $41.5 million in cash.  The facility, which handles iron
         ore and other aggregates, is located in Ashtabula, Ohio on Lake Erie.
         This acquisition added another stable, fee-based terminal to KMP's
         Bulk Terminals business segment in a new geographic region.  The
         transaction was immediately accretive to cash available for
         distribution to KMP unitholders.
 
     --  Entered into two new carbon dioxide (CO2) contracts with Oxy Permian.
         Oxy plans to begin tertiary CO2 injection at the Cogdell Canyon Reef
         Unit later this year to extend the life of the field and produce
         approximately 10 million barrels of oil that would otherwise be
         unrecoverable.  Cogdell, which is near the end of its economic life as
         a water flood, is located on the eastern portion of the Permian Basin
         north of Snyder, Texas.  These long-term contracts will increase
         utilization of KMP's CO2 assets.
 
     Kinder Morgan Energy Partners, L. P. is the nation's largest pipeline
 master limited partnership with an enterprise value of approximately
 $7 billion.  It owns and operates one of the largest product pipeline and
 terminal systems in the country.  In addition, it is a major transporter of
 natural gas, operating more than 10,000 miles of pipeline; is the nation's
 leading provider of CO2 for use in enhanced oil recovery projects; and is one
 of the largest operators of bulk terminals, with 29 facilities that transload
 more than 40 million tons of coal, petroleum coke and other products annually.
     The general partner of KMP is owned by Kinder Morgan, Inc., one of the
 largest midstream energy companies in America, operating more than 30,000
 miles of natural gas and product pipelines.  KMI also has significant retail
 distribution, electric generation and terminal assets.  Combined, the two
 companies have an enterprise value of approximately $17 billion.
     Please join us at 5 p.m. Eastern Time on Wednesday, April 18, at
 www.kindermorgan.com for a LIVE webcast conference call.
     This news release includes forward-looking statements within the meaning
 of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
 Exchange Act of 1934.  Although Kinder Morgan believes that its expectations
 are based on reasonable assumptions, it can give no assurance that such
 assumptions will materialize.  Important factors that could cause actual
 results to differ materially from those in the forward-looking statements
 herein are enumerated in Kinder Morgan's Form 10-K and 10-Q as filed with the
 Securities and Exchange Commission.
 
 
              Kinder Morgan Energy Partners, L.P. and Subsidiaries
                        Consolidated Statement of Income
                                  (Unaudited)
                     (in thousands except per unit amounts)
 
                                                      Three Mos. Ended March 31
                                                           2001          2000
 
     Revenues                                        $  1,028,645    $  157,358
 
     Costs and Expenses
       Operating Expenses                                 817,961       55,032
       Depreciation and amortization                       30,075       18,845
       General and administrative                          28,585       14,323
       Taxes, other than income taxes                      13,673        6,097
                                                          890,294       94,297
     Operating Income                                     138,351       63,061
 
     Other Income/(Expense)
      Earnings from equity investments                      21,203      14,817
      Amortization of excess cost of equity investments     (2,253)     (1,673)
      Interest expense                                     (51,037)    (21,092)
      Other                                                  1,504       8,885
     Minority interest                                      (3,002)     (1,678)
     Income before income taxes                            104,766      62,320
     Income tax expense                                     (3,099)     (2,761)
     Net Income                                      $     101,667   $  59,559
 
     Calculation of Limited Partners' Interest in Net Income:
      Net Income                                     $     101,667   $  59,559
       Less:  General Partner's interest in Net Income     (41,622)    (22,257)
     Limited Partners' Net Income                    $      60,045   $  37,302
 
     Calculation per Limited Partner Unit (Fully Diluted):
      Net Income per unit                            $        0.89   $    0.63
 
      Number of Units Used in Computation                   67,611      59,549
 
     Additional per unit information:
 
      Depreciation and amortization                          $0.48
      Sustaining capital expenditures                        $0.24
 
 
              Kinder Morgan Energy Partners, L.P. and Subsidiaries
                   Earnings Contribution by Business Segment
                                  (Unaudited)
                                 (in thousands)
 
                                                  Three Mos. Ended March 31
                                                 2001                   2000
     Segment Earnings Before DD&A:
      Product Pipelines                         $85,793               $64,761
      Natural Gas Pipelines                      66,274                36,074
      CO2 Pipelines                              27,588                 3,590
      Bulk Terminals                             15,334                11,771
      Liquids Terminals                          20,400                   ---
 
     Segment Earnings Contribution:
      Product Pipelines                         $69,848                $53,407
      Natural Gas Pipelines                      58,672                 29,139
      CO2 Pipelines                              23,462                  3,587
      Bulk Terminals                             12,248                  9,545
      Liquids Terminals                          18,831                    ---
 
      General and Administrative                (28,585)               (14,323)
      Net Debt Costs (Includes Interest
      Income)                                   (49,807)               (20,118)
      Less: Minority Interest                    (3,002)                (1,678)
     Net Income                                $101,667                $59,559
 
 
                               Volume Highlights
                                                  Three Mos. Ended March 31
                                                  2001                  2000
     Product Pipelines
          Delivery Volumes (MBbl) (A)           171,970                164,636
 
     Natural Gas Pipelines
          Transport Volumes (Bcf) (B)             109.1                  107.8
 
     CO2 Pipelines
          Delivery Volumes (Bcf) (C)               98.7                   94.3
 
     Bulk Terminals
          Transload Tonnage (Mtons) (D)          11,680                 11,041
 
     Liquids Terminals
          Throughput Volumes (MBbl) (E)             108                    103
 
 
     (A) Includes Pacific, Plantation, North System, Central Florida, Cypress
         and Heartland.  2000 information for comparative purposes only.
     (B) Includes KMIGT and Trailblazer.
     (C) Includes Cortez, Central Basin and CRC pipeline volumes.  2000
         information for comparative purposes only.
     (D) Includes Cora, Grand Rivers and KMBT aggregate terminals.
     (E) Includes 5 terminals in Houston, New Jersey, Chicago and Philadelphia.
         2000 information for comparative purposes only.
 
 SOURCE  Kinder Morgan Energy Partners, L.P.