Project Fusion w BARCLAYS Fairness Opinion Analysis ‘August 9, 2014Disclaimer {he tao poe can aa pov Dar Dns ong Wagan ne Conan oy Sean a Ine ry) ra Us Sat wvemebareng nen os na AT teseanng win wees pe ‘Sta tno enon yh om eta tytn So drs pert ae ‘heromatan covenant rasan nares fon re Cory ney we sosas ad Soa as et sts woman ‘west naapne rear unt Tare Prana berger come oon enapei rahe dt ‘Syn rt mesh cy weap sg roa ota re oko yee ner coana ana De pe nepeat te Cangny ew carat sabe mat ti tnedcan chess ones The peer oan en a eb i een ee ced ee {Stan say send moja’ te mpeoianon suse) pres nes nese enometoarany ona | ‘Merten nrg snared owatee meh pn = spine orepeemaen wave’ area Tesh Seer morse tno oon omnes cbpponn pect Buca ae mat va op ni open Gas, te mat engi et ann 8 ‘al encore nom oorgonct Boca, hasta tone ange rant sara toe Cong na Staerytar poe kp roams sama #7 were) ‘penny cognate taf. aa Sherman Sat These aa ee eno ‘etasonc popns anna opus tan a omen a oe ued ous nab ctedons serene Shitwpetioheneenesormcen Sco stn nm rea ain mn oy nana an wana ote mn apt ie tere ty tp Sr PLC Bacay SAP ote ye Pei epson Ay ‘ee oy rare cna uray sre Past gear Pay rama Sane’ he 1) hee ge opment te Rehnaa Chas Pace Lananee SP Capea bam ee eal parse’, BARCLAYS 1Overview of the Proposed Transaction ‘Summary Terms + Mage mortars monn nrc in wt BES Ee heron ne haere et inna 4 enh oe enor ecard ote 1 Sctmsereermpw sneer ad Sanna te mene ese comer BARCLAYS aSimplified Organizational Structure SINT al structur MTS BARCLAYS aStrategic Rationale wih Prospects ‘trough ne meds jae anes 10% aden groven"bestincass' anon age cap Com peas + Lovers comport fants oval cst of apa + Provides mare valuable scmustincurency + ies parentage of prosucen connor 1+ rem ~174in KUP,t0 1% pr foe KA BARCLAYS ‘KMI Has-Gets == + Caren Nien $1.72 share; + Proforma Ml iden creases eer roped KA avdend of Si 84/share $200, share n 2015 163% ease ‘n2018, 2014 send ard 87s erase er proctes 2015 end + Stes Quo Kil KMP and EPB operate + Proforra Kil coverage averages 1 x ery B11 Oc cove ‘tough 2020 wih cama avenge tovers2 lien + Stas Gio mananementna stitas + Proform Kl vce row e105 a Siinouon cons row of at” yeartough 2020, FO, 585 KM a 152 EPS (rom aoi3.20%8e) Higher Distribution / «HP acs a pray acuonveheie » Profoma, Ks aby o mate seismans more ore sao + torr ment ieserssn suse Saasone gman morte tae a (2a ossedn vat) ences Cron as petco on) + Aseumodyielsot4 som erry rotor K expected hve lnvesent ae args ess uty Investment Grade + ign rae rang ate, et ang ie ee Hone at at BARCLAYS :Relative Price Performance @ BARCLAYS 5KMI Yields Over Time Kil yields have weakened over the past two years as compared to peersApproach to Analysis Key considerations 1+ Tee proposed ratactons represen a unigue vai proposion er Ks sharehoiers ‘+ Relate auton ote varous countparies andre pb sed equ secunes sss rwevart ns wansacton esse fa aeraay bana the GP interes (cra an age LP nares n te ret eompanes + Curent, KM sated Rasa on fhe ctrouons Kl eave fom is GP and LP restin PRM an EP, oth efunchare inthe hig ots of er cenve detonate (DRS) +The unde proto of ast et KMPIKMR and EPB wl be untected byfewansacton + Protoma rhe ransaton Kl ilo 100% a he KUPIKMR ana Peay. ans KA wl acure Sonicare este franca atirbutes (pug a ax bass tepupof te assets at XM an EPB onthe pecaiage hal rat Seen ow by KM) + Furor, MUP and EP (as MLPS) have hictraly boon valued ona pre-tax ba, whereas KM has boan valued onan ‘+ esorongy, Baroy he rat eran rete valaton ani ot KM vreu KMPIKUIR and EP ‘+ ntact tarassacn pues, Bays has 3r}z86 ho vale of erancacton 0 KMIy compan he change in ‘ertaconeh fe o R! + Ths meteclogyis costo nth he wayin when KMS management and Boa vw he versactors ‘+ Teolouing mehadoogs and terimpct KM! shareholders were arte + Premise pilaf preceded LP rangers + Aezrton alton ide per ae) + Discounts cas ow vend dstbuton) unde eats qu vers po fora forte Wansacons BARCLAYS aPremiums to Historical KMP, KMR and EPB Prices Soph) | mmm amt ae somaiias sok State OD mmm BARCLAYS .Summary Pro Forma Assumptions eqn Pn Ke a 9876.87 lees Se — utc sa0 ore @ tpt oes nen pew al gh 0 Jahn cnt nae ah monn nthe i pe ci Sse arepue ovencns tat vaya) BARCLAYS 0Key Transaction TermsKMI Accretion / Dilution Analysis BARCLAYS wComparison of KMI Pro Forma for the Transaction (BARCLAYS %Summary Reference Valuation : = = BARCLAYS “Cost of Capital Improvement ‘isen Punts ‘©. Yt ase 8 Bos 08 estat gay “ao ro me ae y(t +E) a ‘om oe es reap com ft” a7 08 ar ane 8 a a oat ot capt oN ry some see BARCLAYS 6Appendices eset aking matin wane eco,Cost of CapitalDFR Goat Ey Baten = frosts oe = = = (PF na Conc Cap Raton Range a = BARCLAYS © or mare inset banking matin wane ea co,BEC BARCLAYS ”KMI Reference Valuation AnalysisKMI - Summary Financial Projections Status Quo KMI Detaled Projections” santos Tart mde hare “Tot igi Ded (SM) sas se soe Steg BARCLAYS 6Status Quo KMI Discounted Cash Flows Analysis + Disibaedcash ow eens hte 2018p a Kl managerer gee aa Oarim escane ate te aera any “ts + Terma vous 2206) serbian teed or manager guaree” [ore hte + propcesasiscrsascxmestacto at & a aan Set can rei os wee a ashe + Tema ie st 201201@cakated OME Sinan sured ys tnge tases Sore ten San + Asumed ytd eae gon tne fcr ot pees eee i fe eee ace BARCLAYS 1°Pro Forma KMI Discounted Cash Flows Analysis a 20\¢ perf mmagenet guar + Terma vous 2206) serbian betesenmaasonen gues Tom 4a + Prpcesasbaeesascxmeasacto Yan & ‘_— re TErscanrmaen 6187 stk ate reel + Tera aie 12012018 cakulted ren ibe inanssared yates to ordland Fn Gk s 3 Sacate Seve + Asumed yt eae oth te ig, um tan tan eon wo = FF iss sss BARCLAYS 5KMI Equity Research Analyst Estimates Equity Research Analyst Price Targets and Recommendations: (Simson ny oa oro} Dimer Tet Fm ‘ntyst___Recmmendston estates Price setae cer Sort ats sco 2500 Deagmaanes faba Greta aks craana 3100 bc Cop oe en Sots ‘iy mov S00 Dre en se Pate Coe By mz 320 Cetin team mat Fura $4100 Brie fer oes 7 Taos 000 Fyre somes Sane owes omemme Tazo S800 oom Sey fran Lan cet TATIOM S700 Stora Company meat et cnn commigt tna 5100 Tor Pracrgton co raieyceen va Tio $3700 ss. ‘Sew Zcounet ‘7 cuno Sno Pilon sero Tt menage snare S800 ean sis sat Medan Estate| su waa son tw sin BARCLAYS aComparablesMLP Transactions Analysis Public MLP mergers greater than $1 ilion over the past ten years BARCLAYS 2Comparable Midstream Companies reteset Captatten som | suas | ssesro | setae roles tno ete maa | stom amuse | sams stato ure Vala mut of ELTA: ma see Soe Soe Prog rs ovse Facute Cons ° oe a " pecan roe 20152017 a8 nes ta am 00% BARCLAYS 2OtherPrice Performance Cd he 2 BARCLAYS PyKMP / EPB Has-Gets Analysis BARCLAYS 2KMR Has-Gets Analysis