Questions for Kinder Morgan (Edition 2)

The Kinder Morgan complex (KMI, KMP, and EPB) is scheduled to release 4Q13 results at 4:05pm EST TODAY, closely followed by its quarterly conference call at 4:30pm EST.  Here are some questions that we hope the management team will address:

1.  What are KM's long-term distribution/dividend growth targets for KMP, EPB, and KMI?

2.  Why not amend KMP’s Partnership Agreement to include sustaining/replacement CapEx for E&P, coal royalty, G&P, and shipping businesses?  This seems appropriate given that these businesses were not in KMP when the Partnership Agreement was put in place, and it will protect the LPs from dilution.

3.  Is KMP seeing cost creep on the growth CapEx side?  KMP’s 2014 growth CapEx guidance of $3.6 billion was higher than we were expecting.  What is this attributable to?

4.  With respect to the recently acquired Jones Act tankers, how will KMP account for sustaining CapEx on those assets?  Will there be a replacement CapEx reserve to reflect the fact that the tankers will one day need to be replaced?  Why or why not?

5.  Discuss KM's appetite for additional shipping acquisitions/investments.

6.  In KMP’s Natural Gas segment, how much CapEx was spent on midstream (gathering and processing) in 4Q13?

7.  Over the long-term, how much capital would KMP need to spend on an annual basis to keep gathering throughput and NGL production flat (including CPNO)?

8.  Given the cost cuts (O&M expenses and maintenance CapEx) on the major El Paso systems since the acquisition, do you expect that those savings will be passed on to the consumer via rate reductions at EPNG and TGP?  When are those pipelines up for rate cases?

9.  Discuss contract renewal risk on KMP’s major natural gas transmission systems.

10.  How does KMP define "capacity" in its E&P operations?

11.  How much CapEx does KMP need to spend in its E&P operations in 2014 to “keep production flat” with the 2013 exit rate?

12.  How is the St. John's Dome project (CO2) going?  How much capital has been put into the project to date?  Discuss the well results.

13.  Discuss KM's intentions with respect to investing in “coal / other natural resources.”  How much capital will be dedicated to this effort?  What has been done so far?

14.  More importantly, how will KM define sustaining CapEx for this business?  Will there be a replacement reserve to reflect the fact that these will be depleting assets? 

Kevin Kaiser

Managing Director