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Salient Partners MLP Investor Conference
| C. Park Shaper | Page 7 of 11 |
March 11, 2014
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KMR Discount to KMP Management Purchases of KMR / KMP (c) - 20% - 15% - 10% - 5% 0% 5% 10% Dec - 00 Dec - 01 Dec - 02 Dec - 03 Dec - 04 Dec - 05 Dec - 06 Dec - 07 Dec - 08 Dec - 09 Dec - 10 Dec - 11 IPO 5/14/2001 $8.1 $4.5 $0 $2 $4 $6 $8 $10 KMR KMP (millions) __________________________ (a) All figures through / as of 4/6/2012; see footnotes on slide 11 for explanation of total return calculations (b) Calculation of share dividend: KMP quarterly cash distribution per unit divided by KMR 10- day average price prior to x - date = fractional share paid for every KMR share owned, e.g. $1.16 / $78.046 = 0.014863 share; example reflects actual KMR share dividend calculated for 4Q 2011 paid on 2/14/2012; refer to KMP 2011 10- K for more information (c) Purchase of KMR shares and KMP units by directors and officers of KMR/KMP since the KMR IPO in 2001, as reported in SEC Form 4 f ilings; 7:1 ratio excludes one open market purchase of KMP units relating to an arrangement requiring cash distributions for payment of interest 7 KMR is KMP KMR shares are pari passu with KMP units KMR dividend equal to KMP cash distribution, but paid in additional shares; effectively a dividend reinvestment program (b) Like KMP units, KMR shares are tax efficient 227 but with simplified tax reporting (no K - 1s, UBTI) KMR is a significant entity KMR market cap = $7.5 billion, ~30% of total KMP capitalization ~$20 million in daily liquidity KMR has generated a 15.0% compound annual total return since 22101 IPO, vs. 15.5% for KMP Although the KMR trading discount to KMP has narrowed, at 9.3% it still leaves substantial room for improvement EP transaction expected to lead to more KMR issuance Highlighting the security and further improving liquidity Potential for KMP to become self - funding through KMR dividend Possibility of KMR share buybacks if quarterly dividends exceed equity funding needs Insiders prefer KMR Management has purchased KMR at a rate of about 2:1 vs. KMP, or almost 7:1 excluding one transaction (c) KMR 101 (a)