Partners Capital (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Distributions Made to Members or Limited Partners, by Distribution [Table Text Block]

The following table provides information about our distributions for the years ended December 31, 2012, 2011 and 2010 (in millions except per unit and i-Unit distributions amounts):



	Year Ended December 31,
	2012		2011		2010
Per unit cash distribution declared	$	4.98	$	4.61	$	4.40
Per unit cash distribution paid(a)	$	4.85	$	4.58	$	4.32
Cash distributions paid to all partners(b)	$	2,560	$	2,243	$	1,827
i-Unit distributions made to KMR(c)	6,488,946		6,601,402		6,369,724
General Partner’s incentive distribution(d):
Declared	$	1,404	$	1,174	$	881
Paid(a)(e)	$	1,322	$	1,147	$	848

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(a)

Distributions for the fourth quarter of each year are declared and paid during the first quarter of the following year. The year-to-year increases in distributions paid reflect the increase in amounts distributed per unit as well as the issuance of additional units; however, the overall increases in distributions paid in both 2012 versus 2011, and in 2011 versus 2010, were partially offset by decreases in the incentive distribution we paid to our general partner in both 2012 and 2011, as discussed below in note (d).


(b)	Consisting of our common and Class B unitholders, our general partner and noncontrolling interests.

(c)

Under the terms of our partnership agreement, we agreed that we will not, except in liquidation, make a distribution on an i-unit other than in additional i-units or a security that has in all material respects the same rights and privileges as our i-units. 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 will 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. If additional units are distributed to the holders of our common units, we will issue an equivalent amount of i-units to KMR based on the number of i-units it owns. Based on the preceding, the i-units we distributed were based on the $4.85, $4.58 and $4.32 per unit paid to our common unitholders during 2012, 2011 and 2010, respectively.


(d)	Incentive distribution does not include the general partner’s initial 2% distribution of available cash.

(e)

Our general partner’s incentive distribution we paid in 2012, 2011 and 2010 was reduced by waived incentive amounts equal to $27 million, $28 million and $11 million, respectively, related to common units issued to finance a portion of our May 2010 and July 2011 KinderHawk Field Services LLC acquisitions. Beginning with our distribution payments for the quarterly period ended June 30, 2010, and ending with our distribution payments for the quarterly period ended March 31, 2013, our general partner has agreed not to take certain incentive distributions related to our acquisition of KinderHawk Field Services LLC. For more information about our KinderHawk acquisition, see Note 3 “Acquisitions and Divestitures—Business Combinations and Acquisitions of Investments—(3) KinderHawk Field Services LLC (1 of 2)“ and ”—(6) KinderHawk Field Services LLC and EagleHawk Field Services LLC (2 of 2).”

In addition, our general partner’s incentive distribution we paid in 2010 was further affected by a reduced incentive amount of $168 million, due to a portion of our available cash distribution for the second quarter of 2010 being a distribution of cash from interim capital transactions, rather than a distribution of cash from operations (including the general partner’s 2% general partner interest, its total cash distribution was reduced by $170 million). Our distribution of cash for the second quarter of 2010 (which we paid in the third quarter of 2010) from interim capital transactions totaled $177 million (approximately $0.56 per limited partner unit), and pursuant to the provisions of our partnership agreement, our general partner receives no incentive distribution on distributions of cash from interim capital transactions. Accordingly, this distribution from interim capital transactions helped preserve our cumulative excess cash coverage (cumulative excess cash coverage is cash from operations generated since our inception in excess of cash distributions paid).

In addition, there was practically no impact to our limited partners from this distribution of cash from interim capital transactions because (i) the cash distribution to our limited partners for the quarter did not change; (ii) fewer dollars in the aggregate were distributed (because there was no incentive distribution paid to our general partner related to the portion of the quarterly distribution that was a distribution of cash from interim capital transactions); and (iii) our general partner, in this instance, agreed to waive any resetting of the incentive distribution target levels, as would otherwise occur according to our partnership agreement.

Schedule of Limited Partners' Capital Account by Class

As of December 31, 2012 and 2011, our partners’ capital included the following limited partner units:



	December 31,
	2012	2011
Common units:
Held by third parties	231,718,422	216,306,794
Held by KMI and affiliates (excluding our general partner)	19,314,003	14,646,428
Held by our general partner	1,724,000	1,724,000
Total common units	252,756,425	232,677,222
Class B units(a)	5,313,400	5,313,400
i-units(b)	115,118,338	98,509,392
Total limited partner units	373,188,163	336,500,014

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(a)	As of both December 31, 2012 and December 31, 2011, all of our 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

(b)

As of both December 31, 2012 and 2011, 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. In accordance with its limited liability company agreement, KMR’s activities are restricted to being a limited partner in us, and to controlling and managing our business and affairs and the business and affairs of our operating limited partnerships and their subsidiaries. Through the combined effect of the provisions in our partnership agreement and the provisions of KMR’s limited liability company agreement, the number of outstanding KMR shares and the number of our i-units will at all times be equal.

The total limited partner units represent our limited partners’ interest and an effective 98% interest in us, exclusive of our general partner’s incentive distribution rights. Our general partner has an effective 2% interest in us, excluding its right to receive incentive distributions.