Kinder Morgan, Inc. · NYSE:KMI

Kinder Morgan — Morgan Stanley 2006 Electricity & Energy Conference

26 slides from Kinder Morgan's conference presentation, Mar 16, 2006

  1. Slide 1: Morgan Stanley 2006 Electricity & Energy Conference

    Morgan Stanley 2006 Electricity & Energy Conference March 16, 2006

  2. 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 Section 21E of the Exchange Act of 1934, as amended. Forward looking statements are not guarantees guarantees of

  3. Slide 3: Kinder Morgan Assets

    Kinder Morgan Assets NGPL (KMI) NGPL GAS STORAGE (KMI) Trans RETAIL GAS DISTRIBUTION (KMI) Mountain Corridor GAS­FIRED POWER PLANTS (KMI) PRODUCTS PIPELINES (KMP) 2 PRODUCTS PIPELINES TERMINALS (KMP) TRANSMIX FACILITIES (KMP) NATURAL GAS 2 PIPELINES (KMI­KMP) Express Cochin NATURAL GAS Pacific STORA

  4. Slide 4: Kinder Morgan: Three Securities

    Kinder Morgan: Three Securities Kinder Morgan Energy Partners Kinder Morgan, Inc. Market Equity (a) $10.2 Incentive Market Equity (b) $12.7 Debt (a) 5.2 Distribution Debt (b) 7.1 Enterprise Value $15.4 B Enterprise Value $19.8 B 2006E EBITDA $1,802 mm 2006E EBITDA $1,739 mm 2006E Dist. CF $1,290 mm

  5. Slide 5: Consistent Track Record

    Consistent Track Record Total Distributions (GP + LP) ($mm) KMP Distribution Per Unit (b) $1,400 $1,281 $4.00 GP (a) $1,162 $3.32­$3.36 $1,200 $3.20 LP $978 $3.00 = 18 % $2.96 $2.72 $1,000 4% GR =5 $827 CA $2.20 $2.50 $800 GR CA $701 $2.00 $1.90 $600 $548 $1.45 $1.13 $1.30 $400 $333 $1.00 $0.63 $200

  6. Slide 6: The Kinder Morgan Strategy

    The Kinder Morgan Strategy Same Strategy Since Inception n Focus on stable, fee­ fee­based based assets which are core to the energy infrastructure of growing markets n Increase utilization of assets while controlling costs ¾ Classic fixed cost businesses with little variable costs ¾ Improve product

  7. Slide 7: KMP: Solid Asset Base Generates Stable Fee Income

    KMP: Solid Asset Base Generates Stable Fee Income CO2 KMP Products Pipelines 2006 DCF (a) n 30% CO2 transport and sales n Refinery hub to population n 70% oil production related center strategy n Expected production hedged (b): n 68% Pipelines Products 2006=88% CO2 n 27% Associated Terminals (c) Pip

  8. Slide 8: KMI: Solid Asset Base Generates Stable Fee Income

    KMI: Solid Asset Base Generates Stable Fee Income Investment in KMP (b) KMI NGPL 2006 Segment Income (a) n General partner interest n FERC regulated with 3­3­year year earns incentive distributions average contract life n Owns 13% of total limited n Primary customers are partner units Chicago local

  9. Slide 9: Vision: Where We're Going

    Vision: Where We’re Going Trend KM Opportunity n Growing Rockies Natural Gas Production Rockies Express, Entrega n Increased Supply of LNG on Gulf Coast Kinder Morgan Louisiana Pipeline n Canadian Oilsands Trans Mountain, Corridor expansions, Edmonton terminal n Increased Use of Heavy Crude Petcoke

  10. Slide 10: Rockies Express

    D D Jj a 1) a Montana, North Dakota Sry Entrega RockiespExpresseipe lines roject: Canada a | ent s fii ‘s r Zone}! Zone)2) csc ae | A [ (Certificaye 11D, f CIG J Souther Star eo. National Fuel] taano | Burlington tek \ N a ge Fenn | yaar Echo Springs ro Wisconsin} ransee Lost Creek Whee = { X Michig

  11. Slide 11: LNG: Increased Supply on Gulf Coast

    LNG: Increased Supply on Gulf Coast Gulf Coast LNG Projects Under Construction ") ! ") ") Henry ") Katy ") ") ") ­ & ~8­11 Bcf/d of terminal ­") & *# ! ! ") ") kj capacity under ExxonMobil – Golden Pass Sempra – Cameron LNG 1­2") Bcf/d, projected in­svc *# 2008­09 ! 1.5­2.65! Bcf/d, est in­svc 2008­

  12. Slide 12: Kinder Morgan Louisiana Pipeline LLC

    Kinder Morgan Louisiana Pipeline LLC Provides key link Texas Louisiana CGT Delivery Point between Sabine 340 Pass Transco Delivery Point ( ( TETCO Delivery Point LNG Terminal to ( ANR Delivery Point ( ( ( ( interstate pipeline grid Texas Gas Delivery Point FGT Delivery Point Cypress Delivery Point (

  13. Slide 13: Canadian Oilsands: Supply

    Canadian Oilsands: Supply Canadian Crude Production by Type (a) World Oil & Bitumen Reserves – Top 10 (b) (MBbl/d) (reserves (billions of barrels) 4,000 Oilsands 350 345 315 Pentanes/Condensate 300 3,500 5 270 Conventional Heavy GR ‘05­‘1 Bitumen % CA 250 3,000 Conventional Light/Med nd s ~10 Oil Oi

  14. Slide 14: Canadian Oilsands: PADDs II and IV Have the Most Access to Canada

    Canadian Oilsands: PADDs II and IV Have the Most Access to Canada Major Canadian Oilsands Takeaway into the U.S. Bb R ) 0 M IDO l/d AIN Fort McMurray Trunkline NT ( 2 2 RR U MO l/d) (MMBbl/d) Capacity CO NS MBb Cold Lake A in to U.S. TR ( 225 Edmonton Hardisty R­ PADD II 2.0 /d ) BOWR IV E CEN EX RA

  15. Slide 15: Canadian Oilsands: U.S. a Significant Importer of Crude

    Canadian Oilsands: U.S. a Significant Importer of Crude U.S. Crude Refinery Inputs by PADD – 2004 (a) Alaskan North Slope Production Declining (b) 2,000 Canadian ANS Crude Oil Production Total Imports as (MBbl/d) Refinery % % of Total 1,500 (MBbl/d) Inputs Imports Imports 1,000 PADD I (E. Coast) 1,5

  16. Slide 16: Trans Mountain Expansion

    Trans Mountain Expansion n TMX1 – C$595 million ⇒ additional 75 MBbl/d ¾ Pump Station Expansion, C$230 million, 35 MBbl/d, in­ in­svc svc by April 2007 ¾ Anchor Loop, C$365 million, 40 1,100 MBbl/d MBbl/d, in­ in­svc svc at end of 2008 n TMX2 – Loop between Valemont & Kamloops and back to Edmonton,

  17. Slide 17: Identified Future Growth Opportunities

    Identified Future Growth Opportunities Nearly $8 billion in identified growth opportunities over next 5 years Estimated Total Project Expected Entity Project Cost ($B) Completion KMP Louisiana Pipeline (LNG) $0.5 2009 KMP Rockies Express 2.9 (a) 2007­2009 KMP CO2 1.1 (b) 2006­2010 KMP East Line expa

  18. Slide 18: $10 Billion in Capital Invested at KMP

    $10 Billion in Capital Invested at KMP ($ billions) Total Invested by Type $8.0 Total Invested by Year $6.0 $2.0 $1.9 Expansion $4.0 $7.5 $1.6 Acquisition $1.6 $2.0 $1.3 $1.3 $2.7 $1.2 $1.1 $1.1 $0.0 Acquisitions Expansions $1.0 $0.9 $0.8 Total Invested by Segment $4.0 $3.5 $0.4 $3.1 $3.0 $0.0 $2.0

  19. Slide 19: Attractive Return on Capital (KMP)

    Attractive Return on Capital KMP Return on Investment (a): 2000 2001 2002 2003 2004 2005 Products Pipelines 11.9% 11.8% 12.8% 12.9% 12.4% 11.3% Natural Gas Pipelines 13.3 15.5 12.9 13.5 14.0 15.5 CO2 27.5 24.6 22.0 21.9 23.8 25.7 Terminals 19.1 18.2 17.7 18.4 17.8 16.9 KMP Return on Investment 12.3%

  20. Slide 20: Attractive Return on Capital (KMI)

    Attractive Return on Capital KMI Return on Investment (a,b,c): 2000 2001 2002 2003 2004 2005 Investment in KMP 11.2% 16.9% 21.4% 25.0% 29.6% 37.9% NGPL 11.4 11.1 10.9 11.4 12.1 12.6 Retail 13.0 11.7 15.0 14.5 13.1 10.6 Power 14.3 20.2 9.7 5.6 4.7 5.8 KMI Return on Investment 10.5% 11.7% 12.4% 13.3%

  21. Slide 21: KMI & KMP Have Solid Balance Sheets

    KMI & KMP Have Solid Balance Sheets ($ millions) Credit Summary KMP (a) KMI L­T Debt Rating Baa1/BBB+ Baa2/BBB Net Debt / Total Capital (b,c) 52% 56% 2006 Budget Estimates: Debt / EBITDA 3.1x 4.2x EBITDA / Interest 5.6x 4.0x CP Capacity (c) Long­ Long­term term Debt Maturities (c) KMP KMI KMP KMI To

  22. Slide 22: KMP Has Returned Nearly $5 Billion in Cash to Partners, 1996-2005

    KMP Has Returned Nearly $5 Billion in Cash to Partners, 1996­2005 ($ millions) KMP $1,400 $1,281 GP (a) $1,162 $1,200 LP $978 $546 $1,000 $827 $492 $800 $701 $406 $336 $600 $548 $278 $400 $333 $208 $670 $735 $572 $153 $198 $113 $491 $200 $423 $38 $58 $340 $17 $30 $115 $140 $220 $0 1996 1997 1998 199

  23. Slide 23: KMI Has Returned Over $3 Billion in Cash to Investors, 2000-2005

    KMI Has Returned Over $3 Billion in Cash to Investors, 2000­2005 ($ millions) KMI $4,000 $3,566 $3,500 $473 2000­2005 2006E $3,000 $2,500 $2,000 $1,500 $1,324 $1,369 $3,093 $1,000 $473 $873 $500 $851 $0 Dividends Share Change in Net Total Repurchase Debt __________________________ Note: All amounts

  24. Slide 24: Risks

    Risks n Regulatory ¾ Pacific Products Pipeline FERC/CPUC case ¾ Periodic rate reviews ¾ Unexpected FERC, NEB, BCUC policy changes n Environmental n Terrorism n Interest Rates ¾ 50% of debt is floating rate ¾ Budget assumes an increase based on the forward curve ¾ The full­ full­year year impact of a

  25. Slide 25: Summary

    Summary n Stable Cash Flow ¾ Own assets core to energy infrastructure KMP/KMR: n Internal Growth Opportunities 6­7% Yield and ¾ Critical Mass 8% ¾ Well­located assets/favorable demographics Long­Term n Fixed Cost Business Growth ¾ Drop growth to bottom line n Unique Structure ¾ Tax Efficient KMI: 3.

  26. Slide 26: KINDER’ MORGAN

    KINDER’ MORGAN

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