Kinder Morgan Energy Partners L P 10-Q 30 Apr 10 2010 Q1 Quarterly report Financial data

Consolidated Statements of Inco

Consolidated Statements of Income (Unaudited) (USD $)
Share data in Millions, except Per Share data	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Revenues
Natural gas sales	$1,017,500,000	$888,700,000
Services	738,500,000	661,400,000
Product sales and other	373,600,000	236,400,000
Total Revenues	2,129,600,000	1,786,500,000
Operating Costs, Expenses and Other
Gas purchases and other costs of sales	1,016,600,000	865,700,000
Operations and maintenance	452,900,000	250,000,000
Depreciation, depletion and amortization	227,300,000	210,200,000
General and administrative	101,100,000	82,500,000
Taxes, other than income taxes	45,100,000	39,000,000
Other expense (income)	(1,300,000)	(900,000)
Total Operating Costs, Expenses and Other	1,841,700,000	1,446,500,000
Operating Income	287,900,000	340,000,000
Other Income (Expense)
Earnings from equity investments	46,700,000	38,200,000
Amortization of excess cost of equity investments	(1,400,000)	(1,400,000)
Interest, net	(111,500,000)	(97,200,000)
Other, net	6,700,000	10,700,000
Total Other Income (Expense)	(59,500,000)	(49,700,000)
Income from Continuing Operations Before Income Taxes	228,400,000	290,300,000
Income Taxes	(1,000,000)	(23,500,000)
Net Income	227,400,000	266,800,000
Net Income attributable to Noncontrolling Interests	(2,100,000)	(2,900,000)
Net Income attributable to Kinder Morgan Energy Partners, L.P.	225,300,000	263,900,000
Calculation of Limited Partners' interest in Net Income Attributable to Kinder Morgan Energy Partners, L.P.:
Net Income Attributable to Kinder Morgan Energy Partners, L.P.	225,300,000	263,900,000
Less: General Partner's interest	(249,200,000)	(223,700,000)
Limited Partners' interest in Net Income	(23,900,000)	40,200,000
Limited Partners' Net Income (Loss) per Unit	-0.08	0.15
Weighted Average Number of Units Used in Computation of Limited Partners' Net Income per Unit	298.8	269.4
Per unit cash distribution declared	1.07	1.05

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) (USD $)
In Millions	Mar. 31, 2010	Dec. 31, 2009
Current Assets
Cash and cash equivalents	134.4	146.6
Restricted deposits	0	15.2
Accounts, notes and interest receivable, net	819.1	902.1
Inventories	79.6	71.9
Gas in underground storage	51.9	43.5
Fair value of derivative contracts	58.6	20.8
Other current assets	26.9	44.6
Total current assets	1170.5	1244.7
Property, Plant and Equipment, net	14348.3	14153.8
Investments	2928.9	2845.2
Notes receivable	194.3	190.6
Goodwill	1216.2	1149.2
Other intangibles, net	329	218.7
Fair value of derivative contracts	297.3	279.8
Deferred charges and other assets	169	180.2
Total Assets	20653.5	20262.2
Current Liabilities
Current portion of debt	1734.4	594.7
Cash book overdrafts	45.6	34.8
Accounts payable	577.8	614.8
Accrued interest	94.6	222.4
Accrued taxes	64.1	57.8
Deferred revenues	86.9	76
Fair value of derivative contracts	278.2	272
Accrued other current liabilities	142.3	145.1
Total current liabilities	3023.9	2017.6
Long-Term Liabilities and Deferred Credits
Long-term debt Outstanding	9,282	9997.7
Value of interest rate swaps	393.6	332.5
Total Long-term debt	9675.6	10330.2
Deferred income taxes	227.9	216.8
Fair value of derivative contracts	365.3	460.1
Other long-term liabilities and deferred credits	669.5	513.4
Total long term liabilities and deferred credits	10938.3	11520.5
Total Liabilities	13962.2	13538.1
Partners' Capital
Common Units	3906.8	4057.9
Class B Units	72.6	78.6
i-Units	2,675	2681.7
General Partner	224.7	221.1
Accumulated other comprehensive loss	-266.5	-394.8
Total Kinder Morgan Energy Partners, L.P. Partners' Capital	6612.6	6644.5
Noncontrolling interests	78.7	79.6
Total Partners' Capital	6691.3	6724.1
Total Liabilities and Partners' Capital	20653.5	20262.2

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Cash Flows From Operating Activities
Net Income	227.4	266.8
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization	227.3	210.2
Amortization of excess cost of equity investments	1.4	1.4
Income from the allowance for equity funds used during construction	-0.5	-9.3
Income from the sale or casualty of property, plant and equipment and other net assets	-1.3	-0.9
Earnings from equity investments	-46.7	-38.2
Distributions from equity investments	49.8	56.5
Proceeds from termination of interest rate swap agreements	0	144.4
Changes in components of working capital:
Accounts receivable	49	210.6
Other current assets	23.8	3.3
Inventories	-7.5	-4.3
Accounts payable	-9.1	-246.9
Accrued interest	-127.8	-86.5
Accrued liabilities	-12.4	-56.6
Accrued taxes	6.1	16.7
Rate reparations, refunds and other litigation reserve adjustments	158	0
Other, net	-22.7	-14.8
Net Cash Provided by Operating Activities	514.8	452.4
Cash Flows From Investing Activities
Acquisitions of assets and equity investments	-226.3	-0.5
Repayments (Loans) from customers	0	98.1
Payments To Acquire Property Plant And Equipment	-218.8	-420.3
Sale or casualty of property, plant and equipment, and other net assets net of removal costs	13.4	-1.4
Net proceeds from (Investments in) margin deposits	15.9	-5.8
Contributions to investments	-135.6	-173.5
Distributions from equity investments in excess of cumulative earnings	57.3	0
Net Cash Used in Investing Activities	-494.1	-503.4
Cash Flows From Financing Activities
Issuance of debt	957	913.8
Payment of debt	(524)	-725.7
Repayments from related party	0	1.2
Debt issue costs	-0.2	-0.4
Increase (Decrease) in cash book overdrafts	10.8	-2.9
Proceeds from issuance of common units	0	287.9
Contributions from noncontrolling interests	1.7	3.8
Distributions to partners and noncontrolling interests:
Common Units	-217.7	-192.3
Class B units	-5.6	-5.6
General Partner	-245.5	-219.4
Payments Of Dividends Minority Interest	(6)	-5.4
Other, net	0	-0.1
Net Cash Provided by Financing Activities	-29.5	54.9
Effect Of Exchange Rate On Cash And Cash Equivalents	-3.4	-0.9
Increase in Cash and Cash Equivalents	-12.2	3
Cash and Cash Equivalents, beginning of period	146.6
Cash and Cash Equivalents, end of period	134.4
Noncash Investing and Financing Activities
Assets acquired by the assumption or incurrence of liabilities	10.5	0
Assets acquired by the issuance of units	81.7	0
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for interest (net of capitalized interest)	213.5	187.2
Cash paid during the period for income taxes	2.7	3.5

General

General
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
General	1. General Organization Kinder Morgan Energy Partners, L.P. is a leading pipeline transportation and energy storage company in North America, and unless the context requires otherwise, references to we, us, our, KMP or the Partnership are intended to mean Kinder Morgan Energy Partners, L.P. and its consolidated subsidiaries.We own an interest in or operate approximately 28,000 miles of pipelines and 180 terminals, and conduct our business through five reportable business segments (described further in Note 8).Our pipelines transport natural gas, refined petroleum products, crude oil, carbon dioxide and other products, and our terminals store petroleum products and chemicals and handle bulk materials like coal and petroleum coke.We are also the leading provider of carbon dioxide for enhanced oil recovery projects in North America.Our general partner is owned by Kinder Morgan, Inc., discussed following. Kinder Morgan, Inc., Kinder Morgan G.P., Inc. and Kinder Morgan Management, LLC Kinder Morgan, Inc., referred to as KMI in this report, is a Kansas corporation privately owned by investors led by RichardD. Kinder, Chairman and Chief Executive Officer of both Kinder Morgan G.P., Inc. (our general partner) and Kinder Morgan Management, LLC (our general partners delegate).KMI has been privately owned since its merger with Kinder Morgan Holdco LLC on May 30, 2007.This merger is referred to in this report as the going-private transaction and is described more fully in Note 1 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2009, referred to in this report as our 2009 Form 10-K. KMI indirectly owns all the common stock of our general partner.In July 2007, our general partner issued and sold 100,000 shares of Series A fixed-to-floating rate term cumulative preferred stock due 2057.The consent of holders of a majority of these preferred shares is required with respect to a commencement of or a filing of a voluntary bankruptcy proceeding with respect to us or two of our subsidiaries, SFPP, L.P. and Calnev Pipe Line LLC. Kinder Morgan Management, LLC, referred to as KMR in this report, is a Delaware limited liability company. Our general partner owns all of KMRs voting securities and, pursuant to a delegation of control agreement, has delegated to KMR, to the fullest extent permitted under Delaware law and our partnership agreement, all of its power and authority to manage and control our business and affairs, except that KMR cannot take certain specified actions without the approval of our general partner.More information on these entities and the delegation of control agreement is contained in our 2009 Form 10-K. Basis of Presentation We have prepared our accompanying unaudited consolidated financial statements under the rules and regulations of the United States Securities and Exchange Commission.These rules and regulations conform to the accounting principles contained in the Financial Accounting Standards Boards Accounting Standards Codification, the single source of generally accepted accounting principles in the United States of America and referred to in this repo

Acquisitions, Joint Venture Con

Acquisitions, Joint Venture Contributions, and Divestitures
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Acquisitions and Joint Ventures	2. Acquisitions, Joint Venture Contributions, and Divestitures Acquisitions USD Terminal Acquisition On January 15, 2010, we acquired three ethanol handling train terminals from US Development Group LLC for an aggregate consideration of $200.8 million, consisting of $115.7 million in cash, $81.7 million in common units, and$3.4 million in assumed liabilities.The three train terminals are located in Linden, New Jersey; Baltimore, Maryland; and Dallas, Texas.As part of the transaction, we announced the formation of a venture with US Development Group LLC to optimize and coordinate customer access to the three acquired terminals, other ethanol terminal assets we already own and operate, and other terminal projects currently under development by both parties.The acquisition complemented and expanded the ethanol and rail terminal operations we previously owned, and all of the acquired assets are included in our Terminals business segment. Based on our measurement of fair market values for all of the identifiable tangible and intangible assets acquired and liabilities assumed on the acquisition date, we assigned $94.6 million of our combined purchase price to Other intangibles, net (representing customer relationships); $43.1 million to Property, Plant and Equipment, net and a combined $5.1 million to Other current assets and Deferred charges and other assets.The remaining $58.0 million of our purchase price represented the future economic benefits expected to be derived from the acquisition that was not assigned to other identifiable, separately recognizable assets acquired, and we recorded this amount as Goodwill.We believe the primary items that generated the goodwill are the value of the synergies created between the acquired assets and our pre-existing ethanol handling assets, and our expected ability to grow the business by leveraging our pre-existing experience in ethanol handling operations.We expect that the entire amount of goodwill will be deductible for tax purposes. Slay Industries Terminal Acquisition On March 5, 2010, we acquired certain bulk and liquids terminal assets from Slay Industries for an aggregate consideration of $104.0 million, consisting of $97.0 million in cash, assumed liabilities of $1.7 million, and an obligation to pay additional cash consideration in years 2013 through 2019, contingent upon the purchased assets providing us an agreed-upon amount of earnings during the three years following the closing.As of the acquisition date, the contingent consideration had a fair value of $5.3 million, and we expect to pay approximately $4.6 million of this liability in the first half of 2013. The acquired assets include (i) a marine terminal located in Sauget, Illinois; (ii) a transload liquid operation located in Muscatine, Iowa; (iii) a liquid bulk terminal located in St. Louis, Missouri; and (iv) a warehousing distribution center located in St. Louis.All of the acquired terminals have long-term contracts with large creditworthy shippers.As part of the transaction, we and Slay Industries entered into joint venture agreements at both the Kellogg Dock coal bulk terminal, located in Modoc, Illinois, and at the

Intangibles

Intangibles
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Intangibles	3. Intangibles Goodwill We evaluate goodwill for impairment on May 31 of each year.For this purpose, we have six reporting units as follows: (i) Products Pipelines (excluding associated terminals); (ii) Products Pipelines Terminals (evaluated separately from Products Pipelines for goodwill purposes); (iii) Natural Gas Pipelines; (iv) CO2; (v) Terminals; and (vi) Kinder Morgan Canada. There were no impairment charges resulting from our May 31, 2009 impairment testing, and no event indicating an impairment has occurred subsequent to that date.The fair value of each reporting unit was determined from the present value of the expected future cash flows from the applicable reporting unit (inclusive of a terminal value calculated using market multiples between six and ten times cash flows) discounted at a rate of 9.0%.The value of each reporting unit was determined on a stand-alone basis from the perspective of a market participant and represented the price that would be received to sell the unit as a whole in an orderly transaction between market participants at the measurement date. Changes in the gross amounts of our goodwill and accumulated impairment losses for the three months ended March 31, 2010 are summarized as follows (in millions): Products Pipelines Natural Gas Pipelines CO2 Terminals Kinder Morgan Canada Total Balance as of December 31, 2009 Goodwill $ 263.2 $ 337.0 $ 46.1 $ 266.9 $ 613.1 $ 1,526.3 Accumulated impairment losses(a) - - - - (377.1 ) (377.1 ) 263.2 337.0 46.1 266.9 236.0 1,149.2 Acquisitions - - - 58.9 - 58.9 Disposals - - - - - - Impairments - - - - - - Currency translation adjustments - - - - 8.1 8.1 Balance as of March 31, 2010 Goodwill 263.2 337.0 46.1 325.8 621.2 1,593.3 Accumulated impairment losses - - - - (377.1 ) (377.1 ) $ 263.2 $ 337.0 $ 46.1 $ 325.8 $ 244.1 $ 1,216.2 __________ (a) On April 18, 2007, we announced that we would acquire the Trans Mountain pipeline system from KMI, and this transaction was completed April 30, 2007.Following the provisions of generally accepted accounting principles, the consideration of this transaction caused KMI to consider the fair value of the Trans Mountain pipeline system, and to determine whether goodwill related to these assets was impaired.Based on this determination, KMI recorded a goodwill impairment charge of $377.1 million in the first quarter of 2007, and because we have included all of the historical results of Trans Mountain as though the net assets had been transferred to us on January 1, 2006, this impairment is now reflected in our accumulated impairment losses above. In addition, we identify any premium or excess cost we pay over our proportionate share of the underlying fair value of net assets acquired and accounted for as investments under the equity method of accounting.This premium or excess cost is referred to as equity method goodwill and is also not subject to amortization but rather to impairment testing.No event or

Debt

Debt
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Debt	4. Debt We classify our debt based on the contractual maturity dates of the underlying debt instruments or as of the earliest put date available to the holders of the applicable debt.We defer costs associated with debt issuance over the applicable term or to the first put date, in the case of debt with a put feature.These costs are then amortized as interest expense in our consolidated statements of income. The net carrying amount of our debt (including both short-term and long-term amounts and excluding the value of interest rate swap agreements) as of March 31, 2010 and December 31, 2009 was $11,016.4 million and $10,592.4 million, respectively, and the weighted average interest rate on all of our borrowings was approximately4.32% during the first quarter of 2010, and approximately 5.11% during the first quarter of 2009. Our outstanding short-term debt as of March 31, 2010 was $1,734.4 million.The balance consisted of(i) $700.0 million in principal amount of 6.75% senior notes due March 15, 2011 (including discount, the notes had a carrying amount of $699.8 million as of March 31, 2010); (ii) $675.0 million in outstanding borrowings under our unsecured revolving bank credit facility; (iii) $250.0 million in principal amount of 7.50% senior notes due November 1, 2010; (iv) $65.0 million of commercial paper borrowings; (v) $23.7 million in principal amount of tax-exempt bonds that mature on April 1, 2024, but are due on demand pursuant to certain standby purchase agreement provisions contained in the bond indenture (our subsidiary Kinder Morgan Operating L.P. B is the obligor on the bonds); (vi) a $9.0 million portion of a 5.40% long-term note payable (our subsidiaries Kinder Morgan Operating L.P. A and Kinder Morgan Canada Company are the obligors on the note); (vii) a $6.9 million portion of 5.23% senior notes (our subsidiary Kinder Morgan Texas Pipeline, L.P. is the obligor on the notes); and (viii) $5.0 million in principal amount of 6.00% Development Revenue Bonds issued by the Louisiana Community Development Authority, a political subdivision of the state of Louisiana (our subsidiary Kinder Morgan Louisiana Pipeline LLC is the obligor on the bonds). Credit Facility Our $1.79 billion unsecured bank credit facility is with a syndicate of financial institutions, and Wells Fargo Bank, National Association is the administrative agent.The credit facility permits us to obtain bids for fixed rate loans from members of the lending syndicate, and the facility can be amended to allow for borrowings of up to $2.04 billion.Interest on our credit facility accrues at our option at a floating rate equal to either (i) the administrative agents base rate (but not less than the Federal Funds Rate, plus 0.5%); or (ii) LIBOR, plus a margin, which varies depending upon the credit rating of our long-term senior unsecured debt.Borrowings under our credit facility can be used for partnership purposes and as a backup for our commercial paper program. The outstanding balance under our credit facility was $675 million as of March 31, 2010, and the average interest rate on these borrowings was 0.58%.As of December 31, 2009, the outstanding balance und

Partners' Capital

Partners' Capital
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Partners' Capital	5. Partners Capital Limited Partner Units As of March 31, 2010 and December 31, 2009, our partners capital included the following limited partner units: March 31, December 31, 2010 2009 Common units 207,310,563 206,020,826 Class B units 5,313,400 5,313,400 i-units 87,114,733 85,538,263 Total limited partner units 299,738,696 296,872,489 The total limited partner units represent our limited partners interest and an effective 98% interest in us, exclusive of our general partners incentive distribution rights.Our general partner has an effective 2% interest in us, excluding its incentive distribution rights. As of March 31, 2010, our total common units consisted of 190,940,135 units held by third parties, 14,646,428 units held by KMI and its consolidated affiliates (excluding our general partner), and 1,724,000 units held by our general partner.As of December 31, 2009, our total common units consisted of 189,650,398 units held by third parties, 14,646,428 units held by KMI and its consolidated affiliates (excluding our general partner), and 1,724,000 units held by our general partner. As of both March 31, 2010 and December 31, 2009, all of our 5,313,400 Class B units were held by a wholly-owned subsidiary of KMI.The Class B units are similar to our common units except that they are not eligible for trading on the New York Stock Exchange. As of both March 31, 2010 and December 31, 2009, all of our i-units were held by KMR.Our i-units are a separate class of limited partner interests in us and are not publicly traded.The number of i-units we distribute to KMR is based upon the amount of cash we distribute to the owners of our common units.When cash is paid to the holders of our common units, we issue additional i-units to KMR.The fraction of an i-unit paid per i-unit owned by KMR will have a value based on the cash payment on the common units. Changes in Partners Capital For each of the three month periods ended March 31, 2010 and 2009, changes in the carrying amounts of our Partners Capital attributable to both us and our noncontrolling interests, including our comprehensive income (loss) are summarized as follows (in millions): Three Months Ended March 31, 2010 2009 KMP Noncontrolling interests Total KMP Noncontrolling interests Total Beginning Balance $ 6,644.5 $ 79.6 $ 6,724.1 $ 6,045.6 $ 70.7 $ 6,116.3 Units issued as consideration pursuant to common unit compensation plan for non-employee directors 0.2 - 0.2 0.2 - 0.2 Units issued as consideration in the acquisition of assets 81.7 - 81.7 - - - Units issued for cash - - - 287.6 - 287.6 Distributions paid in cash (468.8 ) (6.0 ) (474.8 ) (417.3 ) (5.4 ) (422.7 ) Adjustments to capital resulting from related party acquisitions - - - 2.7 - 2.7 KMI going-private transaction expenses 1.4 - 1.4 1.4 - 1.4 Cash contributions - 1.7 1.7 - 3.8 3.8 Comprehensive income (loss): Net Income 225.3 2.1 227.4 263.9 2.9 266.8 Other comprehens

Risk Management

Risk Management
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Risk Management	6. Risk Management Certain of our business activities expose us to risks associated with unfavorable changes in the market price of natural gas, natural gas liquids and crude oil.We also have exposure to interest rate risk as a result of the issuance of our debt obligations.Pursuant to our managements approved risk management policy, we use derivative contracts to hedge or reduce our exposure to certain of these risks. Energy Commodity Price Risk Management We are exposed to risks associated with changes in the market price of natural gas, natural gas liquids and crude oil as a result of the forecasted purchase or sale of these products.Specifically, these risks are primarily associated with unfavorable price volatility related to (i) pre-existing or anticipated physical natural gas, natural gas liquids and crude oil sales; (ii) natural gas purchases; and (iii) natural gas system use and storage.The unfavorable price changes are often caused by shifts in the supply and demand for these commodities, as well as their locations. Our principal use of energy commodity derivative contracts is to mitigate the risk associated with unfavorable market movements in the price of energy commodities.Our energy commodity derivative contracts act as a hedging (offset) mechanism against the volatility of energy commodity prices by allowing us to transfer this price risk to counterparties who are able and willing to bear it. For derivative contracts that are designated and qualify as cash flow hedges pursuant to generally accepted accounting principles, the portion of the gain or loss on the derivative contract that is effective in offsetting the variable cash flows associated with the hedged forecasted transaction is reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings (e.g., in revenues when the hedged transactions are commodity sales).The remaining gain or loss on the derivative contract in excess of the cumulative change in the present value of future cash flows of the hedged item, if any (i.e., the ineffective portion), is recognized in earnings during the current period.The effectiveness of hedges using an option contract may be assessed based on changes in the options intrinsic value with the change in the time value of the contract being excluded from the assessment of hedge effectiveness.Changes in the excluded component of the change in an options time value are included currently in earnings.In the first quarter of 2010, we recognized a net gain of $6.3 million related to crude oil and natural gas hedges, which resulted from hedge ineffectiveness and amounts excluded from effectiveness testing. Additionally, during the three months ended March 31, 2010 and 2009, we reclassified a loss of $47.5 million and a gain of $17.3 million, respectively, from Accumulated other comprehensive loss into earnings.All amounts reclassified into net income during the first quarter of both years resulted from the hedged forecasted transactions actually affecting earnings (i

Fair Value

Fair Value
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Fair Value	7. Fair Value The Codification emphasizes that fair value is a market-based measurement that should be determined based on assumptions (inputs) that market participants would use in pricing an asset or liability.Inputs may be observable or unobservable, and valuation techniques used to measure fair value should maximize the use of relevant observable inputs and minimize the use of unobservable inputs.Accordingly, the Codification establishes a hierarchal disclosure framework that ranks the quality and reliability of information used to determine fair values.The hierarchy is associated with the level of pricing observability utilized in measuring fair value and defines three levels of inputs to the fair value measurement processquoted prices are the most reliable valuation inputs, whereas model values that include inputs based on unobservable data are the least reliable.Each fair value measurement must be assigned to a level corresponding to the lowest level input that is significant to the fair value measurement in its entirety. The three broad levels of inputs defined by the fair value hierarchy are as follows: Level 1 Inputsquoted 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 Inputsinputs 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 Inputsunobservable inputs for the asset or liability.These unobservable inputs reflect the entitys 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 entitys own data). Fair Value of Derivative Contracts The following two tables summarize the fair value measurements of our (i) energy commodity derivative contracts; and (ii) interest rate swap agreements as of March 31, 2010 and December 31, 2009, based on the three levels established by the Codification (in millions): Asset fair value measurements using Total Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) As of March 31, 2010 Energy commodity derivative contracts(a) $ 112.3 $ - $ 53.5 $ 58.8 Interest rate swap agreements $ 243.6 $ - $ 243.6 $ - As of December 31, 2009 Energy commodity derivative contracts(a) $ 78.1 $ - $ 14.4 $ 63.7 Interest rate swap agreements $ 222.5 $ - $ 222.5 $ - ____________ Liability fair value measurements using Total Quoted prices in active markets for identical liabilities (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) As of March 31, 2010 Energy commodity derivative contracts(b) $ (469.5 ) $ - $ (433.3 ) $ (36.2 ) Int

Reportable Segments

Reportable Segments
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Reportable Segments	8. Reportable Segments We divide our operations into five reportable business segments.These segments and their principal source of revenues are as follows: Products Pipelines the transportation and terminaling of refined petroleum products, including gasoline, diesel fuel, jet fuel and natural gas liquids; Natural Gas Pipelinesthe sale, transport, processing, treating, storage and gathering of natural gas; CO2the 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; Terminalsthe transloading and storing of refined petroleum products and dry and liquid bulk products, including coal, petroleum coke, cement, alumina, salt and other bulk chemicals; and Kinder Morgan Canadathe 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. We evaluate performance principally based on each segments earnings before depreciation, depletion and amortization expenses (including amortization of excess cost of equity investments), which excludes general and administrative expenses, third-party debt costs and interest expense, unallocable interest income, and unallocable income tax expense. Our reportable segments are strategic business units that offer different products and services.Each segment is managed separately because each segment involves different products and marketing strategies. Financial information by segment follows (in millions): Three Months Ended March 31, 2010 2009 Revenues Products Pipelines Revenues from external customers $ 207.5 $ 188.2 Natural Gas Pipelines Revenues from external customers 1,236.7 1,051.7 CO2 Revenues from external customers 321.8 228.9 Terminals Revenues from external customers 303.8 267.7 Intersegment revenues 0.3 0.2 Kinder Morgan Canada Revenues from external customers 59.8 50.0 Total segment revenues 2,129.9 1,786.7 Less: Total intersegment revenues (0.3 ) (0.2 ) Total consolidated revenues $ 2,129.6 $ 1,786.5 Three Months Ended March 31, 2010 2009 Segment earnings before depreciation, depletion, amortization and amortization of excess cost of equity investments(a) Products Pipelines(b) $ 6.4 $ 145.4 Natural Gas Pipelines 220.6 200.8 CO2 253.2 167.4 Terminals 150.5 134.7 Kinder Morgan Canada 45.0 19.5 Total segment earnings before DDA 675.7 667.8 Total segment depreciation, depletion and amortization (227.3 ) (210.2 ) Total segment amortization of excess cost of investments (1.4 ) (1.4 ) General and administrative expenses (101.1 ) (82.5 ) Unallocable interest expense, net of interest income (116.3 ) (104.6 ) Unallocable income tax expense (2.2 ) (2.3 ) Total consolidated net income $ 227.4 $ 266.8 March 31, 2010 December 31, 2009 Assets Produ

Related Party Transactions

Related Party Transactions
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Related Party Transactions	9. Related Party Transactions Notes Receivable Plantation Pipe Line Company We have a long-term note receivable bearing interest at the rate of 4.72% per annum from Plantation Pipe Line Company, our 51.17%-owned equity investee.The note provides for semiannual payments of principal and interest on June 30 and December 31 each year, with a final principal payment due July 20, 2011.The outstanding note receivable balance was $84.8 million as of March 31, 2010 and December 31, 2009.Of these amounts, $2.6 million was included within Accounts, notes and interest receivable, net, on our accompanying consolidated balance sheets as of March 31, 2010 and December 31, 2009, and the remainder was included within Notes receivable at each reporting date. Express US Holdings LP In conjunction with the acquisition of our 33 1/3% equity ownership interest in the Express pipeline system from KMI on August 28, 2008, we acquired a long-term investment in a C$113.6 million debt security issued by Express US Holdings LP (the obligor), the partnership that maintains ownership of the U.S. portion of the Express pipeline system.The debenture is denominated in Canadian dollars, due in full on January 9, 2023, bears interest at the rate of 12.0% per annum, and provides for quarterly payments of interest in Canadian dollars on March 31, June 30, September 30 and December 31 each year.As of March 31, 2010 and December 31, 2009, the outstanding note receivable balance, representing the translated amount included in our consolidated financial statements in U.S. dollars, was $111.8 million and $108.1 million, respectively, and we included these amounts within Notes receivable on our accompanying consolidated balance sheets. Other Receivables and Payables As of March 31, 2010 and December 31, 2009, our related party receivables (other than note receivables discussed above in Notes Receivable) totaled $12.3 million and $13.8 million, respectively.The March 31, 2010 amount consisted of (i) $10.0 million included within Accounts, notes and interest receivable, net and primarily related to receivables due from Plantation Pipe Line Company and from the Express pipeline system; and (ii) $2.3 million of natural gas imbalance receivables, included within Other current assets.Our related party imbalance receivables are primarily due from Natural Gas Pipeline Company of America LLC, a 20%-owned equity investee of KMI and referred to in this report as NGPL.The December 31, 2009 amount consisted of (i) $10.7 million included within Accounts, notes and interest receivable, net and primarily related to receivables due from the Express pipeline system and NGPL; and (ii) $3.1 million of natural gas imbalance receivables, primarily due from NGPL and included within Other current assets. As of March 31, 2010 and December 31, 2009, our related party payables totaled $5.8 million and $13.4 million, respectively.Both liabilities primarily consisted of amounts owed to KMI, and we included these related party payable amounts within Accounts payable on our accompanying balance sheets. Asset Acquisitions In conjunction with our acquisition of (i) certain Natural Gas Pipelines

Litigation, Environmental and O

Litigation, Environmental and Other Contingencies
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Litigation, Environmental and Other Contingencies	10.Litigation, Environmental and Other Contingencies Below is a brief description of our ongoing material legal proceedings, including any material developments that occurred in such proceedings during the three months ended March 31, 2010.Additional information with respect to these proceedings can be found in Note 16 to our consolidated financial statements that were included in our 2009 Form 10-K.This note also contains a description of any material legal proceedings that were initiated against us during the three months ended March 31, 2010, and a description of any material events occurring subsequent to March 31, 2010 but before the filing of this report. In this note, we refer to our subsidiary SFPP, L.P. as SFPP; our subsidiary Calnev Pipe Line LLC as Calnev; Chevron Products Company as Chevron; Navajo Refining Company, L.P. as Navajo; ARCO Products Company as ARCO; BP West Coast Products, LLC as BP; ConocoPhillips Company as ConocoPhillips; Tesoro Refining and Marketing Company as Tesoro; Texaco Refining and Marketing Inc. as Texaco; Western Refining Company, L.P. as Western Refining; ExxonMobil Oil Corporation as ExxonMobil; Tosco Corporation as Tosco; Ultramar Diamond Shamrock Corporation/Ultramar Inc. as Ultramar; Valero Energy Corporation as Valero; Valero Marketing and Supply Company as Valero Marketing; Continental Airlines, Inc., Northwest Airlines, Inc., Southwest Airlines Co. and US Airways, Inc., collectively, as the Airlines; our subsidiaryKinder Morgan CO2 Company, L.P. (the successor to Shell CO2 Company, Ltd.) as Kinder Morgan CO2; the United States Court of Appeals for the District of Columbia Circuit as the D.C. Circuit; the Federal Energy Regulatory Commission as the FERC; the California Public Utilities Commission as the CPUC; the United States Department of the Interior, Minerals Management Service as the MMS; the Union Pacific Railroad Company (the successor to Southern Pacific Transportation Company) as UPRR;the Texas Commission of Environmental Quality as the TCEQ; theUnited States Department of Transportation Pipeline and Hazardous Materials Safety Administration as the PHMSA; the North Carolina Department of Environment and Natural Resources as the NCDENR; the Florida Department of Environmental Protection as the Florida DEP; our subsidiary Kinder Morgan Bulk Terminals, Inc. as KMBT; our subsidiary Kinder Morgan Port Manatee Terminal LLC as KM PMT; Rockies Express Pipeline LLC as Rockies Express; and Plantation Pipe Line Company as Plantation. OR dockets designate complaint proceedings, and IS dockets designate protest proceedings. Federal Energy Regulatory Commission Proceedings FERC Docket Nos. OR92-8, et al.(West and East Line Rates)Complainants: Chevron, Navajo, ARCO, BP, Western Refining, ExxonMobil, Tosco, and TexacoDefendant: SFPPStatus:Appeals pending at the D.C. Circuit; FERC Docket No. OR92-8-025 (Watson Drain-Dry Charge)Complainants:BP; ExxonMobil; Chevron; ConocoPhillips; and UltramarDefendant: SFPPStatus:Appeal denied by the D.C. Circuit; FERC Docket Nos. OR96-2, et al.(All SFPP Rates)Complainants: All shippers except ChevronDefendant: SFPPStatus:Compliance filings pending with F

Regulatory Matters

Regulatory Matters
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Regulatory Matters	11.Regulatory Matters Below is a brief description of our ongoing regulatory matters, including any material developments that occurred during the first three months of 2010.This note also contains a description of any material regulatory matters initiated during the first three months of 2010 in which we are involved. Natural Gas Pipeline Expansion Filings Rockies Express Pipeline LLCMeeker to Cheyenne Expansion Project Pursuant to certain rights exercised by EnCana Gas Marketing USA as a result of its foundation shipper status on the former Entrega Gas Pipeline LLC facilities (now part of the Rockies Express Pipeline), Rockies Express Pipeline LLC requested authorization to construct and operate certain facilities that will comprise its Meeker, Colorado to Cheyenne Hub expansion project.The proposed expansion will add natural gas compression at its Big Hole compressor station located in Moffat County, Colorado, and its Arlington compressor station located in Carbon County, Wyoming.Upon completion, the additional compression will permit the transportation of an additional 200 million cubic feet per day of natural gas from (i) the Meeker Hub located in Rio Blanco County, Colorado northward to the Wamsutter Hub located in Sweetwater County, Wyoming; and (ii) the Wamsutter Hub eastward to the Cheyenne Hub located in Weld County, Colorado. By FERC order issued July 16, 2009, Rockies Express Pipeline LLC was granted authorization to construct and operate this project, and it commenced construction on August 4, 2009.The expansion is fully contracted.The additional compression at the Big Hole compressor station was made available as of December 9, 2009, and the additional compression at the Arlington compressor stationis expected to be operational in August 2010.The total FERC authorized cost for the proposed project is approximately $78 million; however, Rockies Express Pipeline LLC is currently projecting that the final actual cost will be approximately $25 million less. Kinder Morgan Interstate Gas Transmission Pipeline - Huntsman 2009 Expansion Project KMIGT has filed an application with the FERC for authorization to construct and operate certain storage facilities necessary to increase the storage capability of the existing Huntsman Storage Facility, located near Sidney, Nebraska.KMIGT also requested approval of new incremental rates for the project facilities under its currently effective Cheyenne Market Center Service Rate Schedule CMC-2.When fully constructed, the proposed facilities will create incremental firm storage capacity for up to one million dekatherms of natural gas, with an associated injection capability of approximately 6,400 dekatherms per day and an associated deliverability of approximately 10,400 dekatherms per day.As a result of an open season, KMIGT and one shipper executed a firm precedent agreement for 100% of the capacity to be created by the project facilities for a five-year term.By FERC order issued September 30, 2009, KMIGT was granted authorization to construct and operate the project, and construction of the project commenced on October 12, 2009.KMIGT received FERC approval to commence the expande

Recent Accounting Pronouncement

Recent Accounting Pronouncements
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Recent Accounting Pronouncements	12.Recent Accounting Pronouncements Accounting Standards Updates In December 2009, the FASB issued Accounting Standards Update No. 2009-16, Accounting for Transfers of Financial Assets and Accounting Standards Update No. 2009-17, Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities.ASU No. 2009-16 amended the Codifications Transfers and Servicing Topic to include the provisions included within the FASBs previous Statement of Financial Accounting Standards (SFAS) No. 166, Accounting for Transfers of Financial Assetsan amendment of FASB Statement No. 140, issued June 12, 2009.ASU No. 2009-17 amended the Codifications Consolidations Topic to include the provisions included within the FASBs previous SFAS No. 167, Amendments to FASB Interpretation No. 46(R), also issued June 12, 2009.These two Updates change the way entities must account for securitizations and special-purpose entities.ASU No. 2009-16 requires more information about transfers of financial assets, including securitization transactions, and where companies have continuing exposure to the risks related to transferred financial assets.ASU No. 2009-17 changes how a company determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated.For us, both Updates were effective January 1, 2010; however, the adoption of these Updates did not have any impact on our consolidated financial statements. In January 2010, the FASB issued Accounting Standards Update No. 2010-06, Improving Disclosures about Fair Value Measurements.This ASU requires both the gross presentation of activity within the Level 3 fair value measurement roll forward and the details of transfers in and out of Level 1 and 2 fair value measurements.It also clarifies certain disclosure requirements on the level of disaggregation of fair value measurements and disclosures on inputs and valuation techniques.For us, this ASU was effective January 1, 2010 (except for the Level 3 roll forward which is effective for us January 1, 2011); however, because this ASU pertains to disclosure requirements only, the adoption of this ASU did not have a material impact on our consolidated financial statements.

Document Information

Document Information
	3 Months Ended Mar. 31, 2010
Document Information [Text Block]
Document Type	10-Q
Document Period End Date	2010-03-31
Amendment Flag	false

Entity Information

Entity Information (USD $)
	3 Months Ended Mar. 31, 2010	Jun. 30, 2009
Entity [Text Block]
Entity Registrant Name	Kinder Morgan Energy Partners L P
Entity Central Index Key	0000888228
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float		$9,217,003,530
Entity Common Stock, Shares Outstanding	207,310,563
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1