Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — Kinder Morgan Energy Partners — UBS 2008 MLP Conference
24 slides from Kinder Morgan's conference presentation, Sep 18, 2008
Slide 1: UBS 2008 MLP Conference
UBS 2008 MLP Conference September 18-19, 2008
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward looking statements, including these, within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Exchange Act of 1934, as amended. Forward looking statements are not guarantees of performance. They i
Slide 3: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures This presentation utilizes the non- non-generally accepted accounting principles financial measures of segment segment distributable cash flow, KMP distributable cash flow, and earnings before interest, taxes and DD&A (“(“EBITDA” EBITDA”). For KMP overall, we defin
Slide 4: Capital Structure
Capital Structure Kinder Morgan Energy Partners, L.P. Market Equity (a) $13.6B Debt (b) 8.0B Enterprise Value $21.6B 2008E EBITDA (c) $2.5B 2008E DCF (d) $1.8B Additional Cash Incentive Shares Distribution Distribution KMR KMP (LLC) (Partnership) 76 million i- i-units (a) 184 million units (a) 65M 1
Slide 5: The Kinder Morgan Strategy
The Kinder Morgan Strategy Same Strategy Since Inception Focus on stable, fee-based assets which are core to the energy infrastructure of growing markets Increase utilization of assets while controlling costs Classic fixed cost businesses with little variable costs Improve productivity to dr
Slide 6: Unmatched Footprint
Unmatched Trans Jet Mountain Footprint Fuel Pipeline 2 Cochin Largest independent transporter of petroleum products in the U.S. 2 Pacific Express Transport more than 2 million barrels per day (Bbl/d) 2nd largest transporter of natural Trailblazer 2 gas in U.S. (a) REX 3 2 Approximately 22,00
Slide 7: Well-diversified Asset Base
Well-diversified Asset Base KMP CO2 2008 DCF Natural Gas Pipelines 32% CO2 transport and sales Profile (b) 47% Texas Intrastate 68% oil production related 53% Rockies Production hedged (a): Little incidental commodity risk CO2 Natural Gas 2008=83% ($44/Bbl) 28% Pipelines 2009=73% ($49) 2
Slide 8: Eleven Years of Consistent Growth
Eleven Years of Consistent Growth Total Distributions (GP + LP) ($mm) LP Distribution Per Unit (b) $2,000 $1,843 $4.50 $4.24-$4.32 GP (a) $1,750 $4.00 $3.68 % $1,500 LP $1,469 $3.50 R = 17 $3.20 $3.32 8% $1,265 CAG $2.96 =4 $1,162 $3.00 $2.72 GR $1,250 $2.50 $1,000 CA $827 $978 $2.50 $1.90 $2.20 $70
Slide 9: Significant Historical Returns
Significant Historical Returns (a) KMP: 27% CAGR (b) KMR: 12% CAGR (c) Dollars Dollars $2,000 $300 $1,684 Alerian KMR $1,750 $270 MLP Index $230 $1,500 $240 KMR $223 KMP AMZ $1,250 $210 $1,000 $180 $750 $150 Alerian $481 $109 S&P 500 $500 MLP Index $120 $250 $195 $90 S&P 500 $0 $60 Dec- Dec- Dec- De
Slide 10: Promises Made, Promises Kept
Promises Made, Promises Kept Promises Made Promises Kept Budgeted Actual Distribution per unit: Distribution per unit: 2000: $1.60 2000: $1.71 2001: $1.95 2001: $2.15 2002: $2.40 2002: $2.435 2003: $2.63 2003: $2.63 2004: $2.84 2004: $2.87 2005: $3.13 2005: $3.13 2006: $3.28 2006: $3.26 2007: $3.44
Slide 11: 2008 Partnership Goals
2008 Partnership Goals Distribution Target $4.02 per unit (16% growth) Excess coverage of ~$12 million Maintain Solid Balance Sheet Expansions / acquisitions financed 50% equity, 50% debt Deliver Projects on Time and on Budget 11
Slide 12: Growth Opportunities
Growth Opportunities Current Projects (2008-2011) Additional Opportunities REX Northeast Express extension, Shifting Natural Gas Supply Sources REX/NGPL Chicago Express project, — Rockies Rockies Express pipeline MEP expansion, KMLP expansion, — LNG KM Louisiana pipeline storage, incremental shipp
Slide 13: Shifting Natural Gas Supply Sources
Shifting Natural Gas Supply Sources Natural Gas Supply % Production Volumes (Bcf/d) 2007E 2013 Change Change Rockies (a) 8.6 11.4 2.8 33% Barnett Shale (b) 2.1 6.4 4.3 200% Rockies Haynesville Shale (c) 0.0 2.8 (c) 2.8 (c) n/m (c) production Fayetteville Shale (c) 0.4 2.9 2.5 625% expected to Gulf C
Slide 14: Newbuild Natural Gas Pipelines
Newbuild Natural Gas Pipelines Wyoming Nebraska Indiana Ohio Illinois Colorado Kansas Missouri Oklahoma ROCKIES EXPRESS PIPELINE IN-SERVICE Mississippi ROCKIES EXPRESS PIPELINE Alabama MIDCONTINENT EXPRESS PIPELINE Texas Louisiana Texas KM LOUISIANA PIPELINE KM HEADQUARTERS Rockies Midcontinent KM E
Slide 15: Increased Use of Renewable Fuels
Increased Use of Renewable Fuels Renewable Fuels Standard (a) New legislation approximately doubles required use of 40 36.0 renewable fuels over next several years; increases Incremental Impact of EISA - 2007 35 EPACT - 2005 even more dramatically long-term 30 AGR (billion Gal/yr) 25 .5 % C 22 14 20
Slide 16: Growing Crude Production from Canadian Oilsands
Growing Crude Production from Canadian Oilsands WCSB Crude Production by Type (a) Heavy/Light Crude Differential (b) WTI vs. Mayan Crude Spot Price 4 $20 5 Oilsands 07-‘1 Condensate C A GR ‘ ~11% 3 Conventional Heavy nds $15 Oilsa (MMBbl/d) Conventional Light ($/Bbl) 2.8 MMBbl/d 2 1.2 MMBbl/d $10 Oi
Slide 17: High Oil Prices Mean Opportunities for Enhanced Oil Recovery
High Oil Prices Mean Opportunities for Enhanced Oil Recovery CO2 Deliveries McElmo Dome 1,500 Premiere Source of CO2 in U.S. Other ~22 years remaining deliverability 45% KM working interest (37% net revenue (MMcf/d) 1,000 Sheep Mtn interest) 9.5 Tcf of remaining reserves (30 Tcf OGIP) Brav
Slide 18: Increased Production and Use of Heavy Crude
Increased Production and Use of Heavy Crude North American Petcoke Production (a) Refiners are converting to handle 120 Rest of N. America 102 heavier crude; Oilsands, South -‘1 GR America… (mm dry short tons) 100 U.S. Gulf Coast ‘07 CA 5 % 80 8.5 66 … Heavier, sour crude produces 60 52 53 43 45
Slide 19: Coal Imports/Exports
Coal Imports/Exports Our terminals are well-positioned on coasts and inland waterways to handle either export or import coal U.S. Coal Imports/Exports (a) Coal Imports 120 U.S. Coal Imports U.S. Coal Exports 111 Appalachian coal production declining, 100 93 affecting Eastern Utilities 86 (millions
Slide 20: Current Projects
Current Projects Approximately $8 Billion In Current Projects Estimated Project Expected Project Cost ($mm) Completion Rockies Express $2,800 (a) 2007-2009 Midcontinent Express 821 (a,b) a,b) 2009 (c) KM Louisiana Pipeline 594 2009 CALNEV expansion 426 2011 Trans Mountain – Anchor Loop expansion 518
Slide 21: ~$15 Billion in Capital Invested To Date
~$15 Billion in Capital Invested To Date (a,b) ($ billions) Total Invested by Type (a,b) $9.0 $8.2 Total Invested by Year (a) $6.5 $3.5 $6.0 REX/MEP $3.3 $3.3 Expansion $3.0 $3.0 Acquisition $2.5 $0.0 Acquisitions Expansions $2.0 $1.9 $1.6 Total Invested by Segment (a,b) $1.5 $1.3 $1.3 $1.3 $5.0 $1.
Slide 22: Returns on Capital
Returns on Capital 2000 2001 2002 2003 2004 2005 2006 2007 Segment ROI (a): Products Pipelines 11.9% 11.8% 12.8% 12.9% 12.4% 11.6% 11.8% 13.2% Natural Gas Pipelines 13.3 15.5 12.9 13.5 14.0 15.5 16.7 17.6 CO2 27.5 24.6 22.0 21.9 23.8 25.7 23.1 21.8 Terminals 19.1 18.2 17.7 18.4 17.8 16.9 17.1 15.8 T
Slide 23: Risks
Risks Regulatory Pacific Products Pipeline FERC/CPUC case Periodic rate reviews Unexpected policy changes CO2 Crude Oil Production Volumes Construction Cost Overruns Environmental Terrorism Interest Rates Approximately 50% floating rate debt Budget assumes flat rates at a level
Slide 24: Summary
Summary Stable Cash Flow Own assets core to energy infrastructure Internal Growth Opportunities Critical Mass Well-located assets/favorable demographics KMP/KMR: Fixed Cost Business 6-7% Yield Drop growth to bottom line and Unique Structure 8% Tax Efficient Long-Term Incentive Fe
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