Reportable Segments

9 Months Ended

Sep. 30, 2011

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 Pipelines-the sale, transport, processing, treating, storage and gathering of natural gas;

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

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

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

We evaluate performance principally based on each segment's 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, and they are structured based on how our chief operating decision maker organizes their operations for optimal performance and resource allocation. Each segment is managed separately because each segment involves different products and marketing strategies.

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Financial information by segment follows (in millions):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Revenues
Products Pipelines
Revenues from external customers	$	241.6		$	227.7		$	694.6		$	661.5
Natural Gas Pipelines
Revenues from external customers		1,176.4			1,147.6			3,240.1			3,414.0
CO2
Revenues from external customers		372.0			296.0			1,062.8			932.4
Terminals
Revenues from external customers		327.7			321.2			979.4			945.3
Intersegment revenues		0.4			0.3			0.9			0.8
Kinder Morgan Canada
Revenues from external customers		77.4			67.5			230.3			197.9
Total segment revenues		2,195.5			2,060.3			6,208.1			6,151.9
Less: Total intersegment revenues		(0.4	)		(0.3	)		(0.9	)		(0.8	)
Total consolidated revenues	$	2,195.1		$	2,060.0		$	6,207.2		$	6,151.1

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Segment earnings before depreciation, depletion, amortization And amortization of excess cost of equity investments(a)
Products Pipelines(b)	$	102.7		$	167.5		$	303.9		$	339.1
Natural Gas Pipelines(c)		80.8			187.3			484.7			592.9
CO2		294.8			221.5			823.2			724.1
Terminals		179.8			159.2			524.5			475.2
Kinder Morgan Canada		48.5			44.0			150.0			132.9
Total segment earnings before DD&A		706.6			779.5			2,286.3			2,264.2
Total segment depreciation, depletion and amortization		(253.4	)		(224.1	)		(704.6	)		(674.6	)
Total segment amortization of excess cost of investments		(1.8	)		(1.4	)		(4.9	)		(4.3	)
General and administrative expenses(d)		(100.5	)		(93.6	)		(387.1	)		(288.1	)
Interest expense, net of unallocable interest income		(132.5	)		(133.8	)		(393.8	)		(373.9	)
Unallocable income tax expense		(2.1	)		(4.2	)		(6.8	)		(8.4	)
Total consolidated net income	$	216.3		$	322.4		$	789.1		$	914.9

	September 30, 2011		December 31, 2010
Assets
Products Pipelines	$	4,398.3	$	4,369.1
Natural Gas Pipelines		9,711.8		8,809.7
CO2		2,322.1		2,141.2
Terminals		4,376.6		4,138.6
Kinder Morgan Canada		1,804.1		1,870.0
Total segment assets		22,612.9		21,328.6
Corporate assets(e)		965.4		532.5
Total consolidated assets	$	23,578.3	$	21,861.1

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(a)	Includes revenues, earnings from equity investments, allocable interest income, and other, net, less operating expenses, allocable income taxes, and other expense (income).
(b)	Three and nine month 2011 amounts include increases in expense of $69.3 million and $234.3 million, respectively, primarily associated with adjustments to rate case reserves and rights-of-way lease payment obligations. Nine month 2010 amount includes a $158.0 million increase in expense associated with rate case liability adjustments.
(c)	Three and nine month 2011 amounts include a $167.2 million loss from the remeasurement of our previously held 50% equity interest in KinderHawk Field Services LLC to fair value (discussed further in Note 2).
(d)	Nine month 2011 amount includes an $87.1 million increase in expense associated with a one-time special cash bonus payment paid to non-senior management employees in May 2011; however, we do not have any obligation, nor do we expect to pay any amounts related to this expense.
(e)	Includes cash and cash equivalents; margin and restricted deposits; unallocable interest receivable, prepaid assets and deferred charges; and risk management assets related to the fair value of interest rate swaps.