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EXHIBIT 99(a)
[KINDER MORGAN ENERGY PARTNERS, L.P. LETTERHEAD]
Larry Pierce Irene Twardowski
Media Relations Investor Relations
(713) 369-9497 (713) 369-9490
KINDER MORGAN ENERGY PARTNERS TO ACQUIRE
U.S. PIPELINES/TERMINALS OF GATX FOR $1.15 BILLION;
Increases Expectations for 2001
HOUSTON, Nov. 30, 2000 - Kinder Morgan Energy Partners, L.P. (NYSE:
KMP), today announced that it has signed a definitive agreement with GATX
Corporation to purchase its U.S. pipeline and terminal businesses for
approximately $1.15 billion, consisting of cash and assumed debt. Primary assets
included in the transaction are the CALNEV Pipe Line Company and the Central
Florida Pipeline Company (CFPL), which transport petroleum products to
high-growth markets in Nevada and Florida, along with 12 terminals that store
petroleum products and chemicals. Upon closing this transaction, KMP will become
the second largest independent petroleum storage operator in the U.S. and the
second largest independent chemical terminal operator in the U.S., based on
capacity. GATX's international operations and its 50 percent ownership in the
GPS trading arm, which are also being marketed, are not being sold to KMP.
"This is a terrific acquisition of premier, fee-based businesses that
have significant cost synergies with our existing operations and outstanding
growth prospects," said Richard D. Kinder, chairman and CEO of KMP. "The
transaction is expected to be immediately accretive to cash available for
distribution to KMP unitholders by between 10 to 15 cents annually.
Additionally, it is expected to be substantially accretive to Kinder Morgan,
Inc. shareholders (NYSE: KMI) by 15 to 20 cents per share annually." KMI,
through its general partner interest, operates KMP and shares in the cash
distributions generated by KMP. The transaction is subject to standard closing
conditions and is expected to close in the first quarter of 2001.
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For the year 2001, following the closing of the GATX acquisition,
Kinder Morgan management is targeting:
o $0.30 to $0.50 of growth in KMP distributions per unit
o $0.15 to $0.25 of growth in KMP earnings per unit
o 30 to 40 percent growth in KMI earnings per share (between $1.62 and
$1.75 earnings per share) compared to previous expectations of 20 to
30 percent growth (between $1.50 and $1.62 earnings per share)
"We are comfortable with the lower end of these ranges even if we
assume no additional acquisitions in 2001, and we are targeting the higher end
of these ranges assuming that we make a reasonable amount of acquisitions in
2001," Kinder said.
Initially, KMP intends to fund the transaction with a commercial-paper
facility. This interim financing will be reduced within six to nine months of
closing through proceeds from potential follow-on asset sales, permanent debt
financing and equity financings. "We expect most of the equity to be raised
through a new structure that will allow KMP to access institutional markets for
its common units," Kinder said. "In addition, KMI intends to maintain its
pro-rata share of KMP common units by purchasing additional KMP common units for
cash. Long-term, KMP intends to keep its overall debt to total capital ratio
near its current 40 percent level."
CALNEV is a 550-mile refined petroleum products pipeline system
originating in Colton, Calif. and extending to the growing Las Vegas, Nev.
market. It transported an average of 112,000 barrels of gasoline, diesel and jet
fuel per day in 1999. CALNEV interconnects in Colton with KMP's Pacific
operations, a 3,300-mile refined petroleum products pipeline system that
transports more than one million barrels per day of gasoline, diesel and jet
fuel to destination markets in Arizona, California, Nevada, New Mexico and
Oregon.
"CALNEV is an ideal fit with our existing operations in the West,"
Kinder said. "We believe rapid population growth in Las Vegas and other western
markets will continue to drive consumption of refined petroleum products. As a
result, we project volumes on Pacific and CALNEV to grow more than 3 percent
annually."
CFPL is a 195-mile refined petroleum products pipeline system
consisting of a 16-inch gasoline pipeline and a 10-inch jet fuel and diesel
pipeline transporting product from Tampa to the growing Orlando, Fla. market. It
transported an average of 85,000 barrels of gasoline, diesel
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and jet fuel per day in 1999. "CFPL fits perfectly into KMP's strategy of
acquiring fee-based assets in high-growth markets," Kinder said.
KMP is also acquiring 12 terminals from GATX, which have a storage
capacity of 35.6 million barrels for both petroleum products and chemicals. The
largest of these terminals are located in Houston, New York, Los Angeles and
Chicago, with a total capacity of approximately 31.2 million barrels. The other
terminals are located in Philadelphia, Portland, Ore., San Francisco and
Seattle. In addition, KMP is acquiring six other terminals from GATX with a
capacity of 3.6 million barrels that are part of the CALNEV and CFPL pipeline
systems.
"These fee-based terminals are ideally situated across the United
States and are essential to the distribution of petroleum products and chemicals
in the U.S.," Kinder said. "They also are a good match for our existing assets,
as KMP pipelines currently receive petroleum products from or inject them into
three of the terminals that we are acquiring on the West Coast."
Kinder Morgan Energy Partners, L.P. is the nation's largest pipeline
master limited partnership with an enterprise value of approximately $4.5
billion. It owns and operates one of the largest product pipeline systems in the
country, serving customers across the United States with more than 8,000 miles
of pipeline and over 20 associated terminals. Additional assets include 7,000
miles of natural gas transportation pipelines, plus natural gas gathering and
storage facilities; 25 bulk terminal facilities, which transload more than 40
million tons of coal, petroleum coke and other products annually; and Kinder
Morgan CO2 Company, L.P.
The general partner of KMP is owned by Kinder Morgan, Inc. (NYSE: KMI),
one of the largest midstream energy companies in America, operating more than
30,000 miles of natural gas and product pipelines in 26 states. KMI also has
significant retail distribution, electric generation and terminal assets.
Combined, the two companies have an enterprise value of more than $12 billion.
PLEASE JOIN US AT 9 A.M. EASTERN STANDARD TIME ON FRIDAY, DEC. 1, AT
www.kindermorgan.com FOR A LIVE WEBCAST CONFERENCE CALL.
This news release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Although Kinder Morgan believes that its
expectations are based on reasonable assumptions, it can give no assurance that
such assumptions will materialize. Important factors that could cause actual
results to differ materially from those in the forward-looking statements herein
are enumerated in Kinder Morgan's Form 10-k and 10-Q as filed with the
Securities and Exchange Commission.
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