LETTER TO UNITHOLDERS FOR 2013

LETTER TO UNITHOLDERS FOR 2013 We had a very successful 2013 at Kinder Morgan Energy Partners, L.P. (NYSE: KMP). KMP declared distributions of $5.33 per unit, up 7 percent from 2012, and exceeded our annual budget of $5.28 per unit. Growth was led by dropdowns from Kinder Morgan, Inc. associated with its acquisition of El Paso Corporation in 2012, contributions from the midstream assets KMP acquired in the Copano Energy transaction in May of 2013, increased oil production in our CO 2 segment and good results at our Products Pipelines and Terminals businesses. KMP also reported distributable cash flow before certain items of $2.244 billion ($5.39 per unit), up 26 percent from 2012. This means we had coverage in excess of our distributions of $22 million. 23% AVERAGE ANNUAL RETURN TO UNITHOLDERS $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 KMP Alerian MLP Index S&P 500 $3,574 $1,319 $500 $341 $100 $0 Dec-96 Dec-98 Dec-00 Dec-02 Dec-04 Dec-06 Dec-08 Dec-10 Dec-12 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Bloomberg. Total returns calculated on a daily basis through Dec. 31, 2013, assuming dividends/distributions reinvested in index/stock/unit. Act marine transportation tankers for $962 million to move crude oil, condensate and refined products around the United States. We believe this is a strategic and complementary extension of our existing crude oil and refined products transportation business, as the United States is producing significantly more fossil fuels as a result of numerous shale plays. Although our financial and operational results were strong in 2013, our performance wasn t fully recognized in the marketplace and KMP s returns were lower than the Alerian MLP Index. While disappointing, we have always believed that markets respond rationally in the long-term. We are going to continue to manage KMP the right way, with the objective of creating real long-term value. For 2014, we expect KMP to distribute $5.58 per unit, which is 5 percent growth over 2013, and we anticipate KMP will distribute $2.5 billion to its limited partners. While past performance doesn t guarantee future results, KMP and its management team have a superior track record with proven execution. Produced compound average total returns of 23 percent for unitholders since 1996. Increased the distribution 50 times since current management took over in February 1997. Met or exceeded our annual budget every year except one, in all types of market conditions. KMP s 2013 highlights: We made $10 billion in capital investments, including the Copano acquisition, which gave us access to significant natural gas gathering, processing, treating and fractionation assets, particularly in the Eagle Ford Shale play in south Texas. We completed and placed in service $2 billion in growth projects, including the $500 million Northeast Upgrade to move more natural gas on our Tennessee Gas Pipeline, the $260 million Parkway Pipeline (a joint venture with Valero) to move more refined products in Louisiana and Mississippi, the $255 million Doe Canyon expansion to increase CO 2 supplies in southwestern Colorado for use in enhanced oil recovery in West Texas, and approximately $88 million in upgrades at our IMT facility in Louisiana to export additional coal. We announced a definitive agreement (and closed the transaction in January of 2014) to acquire Jones DECLARED DISTRIBUTIONS TO UNITHOLDERS ($ per unit) $1.71 $2.15 $3.48 $3.13 $3.26 $2.87 $2.63 $2.44 $4.61 $4.40 $4.02 $4.20 $4.98 $5.33 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Looking Ahead Looking ahead, KMP is extremely well positioned for future growth, as revolutionary changes in oil and gas supply and demand across North America are creating the need for additional midstream infrastructure to move and store energy products. As the largest midstream energy company in North America, this fits right into our wheel house. We will continue to work closely with our customers to expand and extend our existing assets to help them move energy from where it s produced into the marketplace. We began 2014 with $13.5 billion in expansion and joint venture investments in our five-year project backlog that we are confident will come to fruition and drive future growth at KMP, and we are pursuing customer commitments for many more projects. At KMP: We own and operate an unmatched and diversified group of assets (about 52,000 miles of pipelines and 180 terminals) which provide us with tremendous opportunities for future growth. We are a market leader in all five of our business segments and produce substantial, stable, primarily fee-based cash flow. For 2014, we project $6.4 billion in segment earnings before DD&A and certain items. We are a safe and efficient asset operator, and we continue to outperform the industry averages in almost all environmental, health and safety measures. In 2014, we plan to spend approximately $438 million in sustaining capital expenditures to maintain our assets. We are connected to nearly every prolific shale play in the United States and we have key pipeline and terminal assets in Alberta and British Columbia serving the oilsands. We operate like a giant toll road and focus primarily on stable, fee-based assets. Double Eagle, a joint venture, includes pipelines and storage facilities We believe we have the management expertise, the size and scope of assets, and the financial wherewithal necessary to produce consistent cash flow growth and an attractive yield year in and year out. Historically, we have delivered consistent growth through precise execution, and we are confident that continued growth is sustainable for many years to come. In closing, we pledge to continue our pursuit of financial and operational excellence and to meet our customers needs. Our focus will continue to be on producing incremental cash and distributing that cash to you, our unitholders. We plan to invest approximately $3.6 billion in expansions (including contributions to joint ventures) and small acquisitions in 2014. Thanks for your ongoing support. We truly believe the best is yet to come! Sincerely, Richard D. Kinder Chairman and CEO Steven J. Kean President and COO

Kinder Morgan Energy Partners, L.P. (NYSE: KMP) is a leading pipeline transportation and energy storage company and one of the largest publicly traded pipeline limited partnerships in America. It owns an interest in or operates approximately 52,000 miles of pipelines and 180 terminals. The general partner of KMP is owned by Kinder Morgan, Inc. (NYSE: KMI). Kinder Morgan is the largest midstream and the third largest energy company in North America with a combined enterprise value of approximately $110 billion. It owns an interest in or operates approximately 80,000 miles of pipelines and 180 terminals. Its pipelines transport natural gas, gasoline, crude oil, CO 2 and other products, and its terminals store petroleum products and chemicals and handle such products as ethanol, coal, petroleum coke and steel. KMI owns the general partner interests of KMP and El Paso Pipeline Partners, L.P. (NYSE: EPB), along with limited partner interests in KMP and EPB and shares in Kinder Morgan Management, LLC (NYSE: KMR). For more information please visit www. kindermorgan.com. BUSINESS SEGMENTS KMP s Natural Gas Pipelines produced 2013 segment earnings before DD&A and certain items of $2.336 billion, up 70 percent from 2012. Growth in the segment was driven by the midstream assets KMP acquired from Copano in May of 2013, dropdowns from KMI (Tennessee Gas Pipeline and El Paso Natural Gas) following the El Paso acquisition in March of 2012, and strong results from TGP. TGP benefited from a number of completed expansion projects, including the $500 million Northeast Upgrade Project. Our Copano acquisition significantly increased KMP s midstream footprint. It expanded our reach into the Eagle Ford Shale in south Texas, gave us entry into other rich gas plays and significantly expanded our midstream services in areas such as gas processing. We believe natural gas is the future play for America because it s domestic, clean, abundant and reasonably priced, and our extensive pipeline network sources gas from nearly all of the important resource plays across the country. Future growth in our Natural Gas Pipelines business segment will be driven by shale expansions and extensions, gas demand for power generation and exports to Mexico. We anticipate approximately 43 percent of KMP s projected cash flow for 2014 will come from our Natural Gas Pipelines business segment. Our budget projects $2.673 billion in segment earnings before DD&A and certain items for this segment in 2014, which would be a 14 percent increase over 2013. This growth will be driven by a full year of contributions from the Copano transaction, TGP expansions, improved midstream volumes and EPNG contract extensions. TGP s approximately $500 million Northeast Upgrade Project TGP is uniquely positioned in the growing Marcellus and Utica shale plays to provide region-wide access to both the Gulf Coast and Northeast markets. We have three TGP expansions expected to be in service in 2014, including the approximately $155 million Utica Backhaul Transportation project, which will move capacity southbound from the Utica Shale to Gulf Coast markets. In our West Region, the Sierrita Pipeline is expected to begin service in 2014. KMP s share of this joint venture, which will move gas from west of Tucson to the border of Mexico near Sasabe, is approximately $72 million. We also have many other projects in both the East Region and the West Region in various stages of development. Additionally, we are investing approximately $650 million in our Midstream assets on natural gas liquids (NGL) initiatives, connectivity to Mexico, and expansions of gathering, processing and storage facilities projects that will be completed in 2014 and 2015. Our Natural Gas Pipelines segment at KMP currently has approximately $1.4 billion of investments in our project backlog. The CO 2 business produced 2013 segment earnings before DD&A and certain items of $1.432 billion, up 8 percent from 2012. Growth in this segment was led by increased oil and NGL production and higher prices. Combined gross oil production volumes averaged over 57 thousand barrels per day (MBbl/d) for the fourth quarter of 2013, up 7 percent from the same period in 2012. The uptick in oil production volumes was led by significantly increased production at our large SACROC Unit, and also included 1.3 MBbl/d from the Goldsmith Unit that we acquired in June of 2013. Our Snyder Gas Plant also produced superb results and set a record for NGL production with an average of 19.5 MBbl/d for the full year. Approximately 24 percent of KMP s projected 2014 cash flow is expected to be produced by our CO 2 segment 17 percent from oil production and 7 percent from our sales and transport business. Our

CO 2 injection is used for enhanced oil recovery projects budget projects $1.547 billion in segment earnings before DD&A and certain items for CO 2 in 2014, which would be an 8 percent increase over 2013. This growth is expected to be driven by strong demand for CO 2 and increased oil production. Of significant importance, we have pushed out the expected oil production decline in this segment to 2020 from 2017. As a reminder, we use a long-term hedging strategy to mitigate risk and generate more stable prices from our oil production. To grow our business, we are constructing expansion projects and pursuing additional opportunities to increase both the production and transportation of CO 2 for use in enhanced oil recovery projects in the Permian Basin of West Texas. In southwestern Colorado, our $255 million Doe Canyon CO 2 source field expansion was completed in 2013 and the first of four expansions at our Yellow Jacket Facility at McElmo Dome is expected to come online in the fourth quarter of 2014. We currently have $1.8 billion of investments in our project backlog to grow our sales and transport business. Additionally, we currently have $1.5 billion of investments in our project backlog to increase oil production through our enhanced oil recovery efforts. Long term, there are billions of barrels of domestic oil still in place to be recovered at our SACROC, Yates, Katz and Goldsmith fields, as well as Residual Oil Zone opportunities. The Products Pipelines business produced segment earnings before DD&A and certain items of $784 million, up 12 percent from 2012. The increase was due in part to higher NGL volumes on the Cochin and Cypress pipelines, an increase in refined products volumes, higher transmix volumes and a full year of operations on the Kinder Morgan Crude and Condensate Pipeline. Incremental earnings for this segment came from placing the Parkway Pipeline in service in September and contributions from crude and condensate assets we obtained in the Copano transaction. Including joint ventures and other projects, KMP s planned investments related to Eagle Ford Shale crude and condensate opportunities currently total approximately $1 billion. Approximately 15 percent of KMP s projected 2014 cash flow is expected to be produced by our Products Pipelines segment. Our budget projects $928 million in segment earnings before DD&A and certain items for Products Pipelines in 2014, which would be 18 percent growth over 2013. The growth is expected to be driven by building and expanding infrastructure to transport and process liquids from the shale plays, repurposing portions of existing pipelines for different product uses, and ongoing recovery in refined products volumes. Our Products Pipelines business currently has $1.1 billion of investments in the project backlog, including the approximately $310 million Cochin Reversal project which will move light condensate from Kankakee County, Ill., to existing terminal facilities near Fort Saskatchewan, Alberta. We continue to make progress on the reversal project and the 1 million barrel storage capacity Kankakee tank farm, where Cochin will interconnect with two other interstate pipelines. This project is expected to be in service the second quarter of 2014. Construction also continues on our approximately $360 million petroleum condensate processing facility near the Galena Park terminal on the Houston Ship Channel. Supported by a long-term, fee-based agreement with BP North America for all 100,000 barrels per day (bpd) of throughput capacity at the facility, the project includes building two separate units to split condensate into its various components and the construction of storage tanks for the almost 2 million barrels of product that will be split at the facility. The first phase of the splitter is scheduled to be commissioned in the third quarter of 2014 and the second phase is expected to come online in the second quarter of 2015. The Terminals business produced segment earnings before DD&A and certain items of $798 million, up 6 percent from 2012. Growth in this Acquired tankers provide marine transportation for U.S. domestic trade

BOSTCO will have 7.1 million barrels of storage capacity segment was almost all organic and driven by higher earnings from our liquids facilities along the Houston Ship Channel (reflecting new and restructured contracts with higher rates and expansion projects coming online), an increase in export coal revenue (primarily from expansions at our IMT terminal in Louisiana) and incremental earnings from our BP Whiting and Edmonton Terminal expansions. We also continued to handle approximately 30 percent of the ethanol used in the United States. Combined, our Terminals and Products Pipelines segments handled 100.2 million barrels of ethanol for 2013, up 5 percent from 2012. Approximately 15 percent of KMP s 2014 projected cash flow is expected to be produced by our Terminals segment. Our budget anticipates $969 million in segment earnings before DD&A and certain items for our Terminals business in 2014, which would be a 21 percent increase over 2013. This growth is expected to be driven by building and expanding infrastructure that will facilitate liquids exports from the Gulf Coast, export coal, crude deliveries by rail and incremental crude oil storage capacity. Additionally, our January 2014 acquisition of Jones Act tankers which are engaged in U.S. domestic trade will provide marine transportation of crude oil, condensate and refined products and will contribute to this segment s earnings in 2014. Our Terminals segment currently has $2.3 billion of investments in our project backlog. Construction continues on the approximately $500 million BOSTCO Terminal on the Houston Ship Channel, which began service in 2013. When fully completed in the third quarter of 2014, this joint venture and fully subscribed project will have a total storage capacity of 7.1 million barrels for ultra-low sulfur diesel, residual fuels and other black oil terminal services. Another project expected to be completed in 2014 is our approximately $438 million Edmonton Terminal expansion in Alberta. When completed, the project will add 4.6 million barrels of storage capacity at the terminal, which is supported by long-term contracts with major producers and refiners. Kinder Morgan Canada produced segment earnings before DD&A and certain items of $200 million, down from $229 million in 2012. Earnings were impacted by the sale of the Express-Platte pipeline system, which occurred in the second quarter of 2013, and unfavorable book taxes. Overall, the sale of Express- Platte was modestly accretive at KMP. For 2014, Kinder Morgan Canada s budget calls for $193 million in segment earnings before DD&A and certain items, which would be a 4 percent decline compared to 2013. This reflects the sale of our one-third interest in Express-Platte. The largest single investment currently in our project backlog is the $5.4 billion Trans Mountain expansion, which will increase capacity on the pipeline from 300,000 bpd to 890,000 bpd. Thirteen companies in the Canadian producing and oil marketing business have signed firm contracts for approximately 708,000 bpd. We have filed a Facilities Application with the National Energy Board requesting authorization to build and operate the pipeline, which will result in a comprehensive public regulatory review. Subject to approvals, the expansion is expected to be operational by the end of 2017. Trans Mountain moves crude from the oilsands in Alberta to British Columbia and Washington state on the West Coast.