Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — Kinder Morgan Energy Partners — IPAA Oil & Gas Investment Symposium – MLP 2008
25 slides from Kinder Morgan's conference presentation, Jan 17, 2008
Slide 1: IPAA Oil & Gas Investment Symposium – MLP
ENERGY PARTNERS, L.P. IPAA Oil & Gas Investment Symposium – MLP January 17, 2008
Slide 2: Forward Looking Statements
ENERGY PARTNERS, L.P. 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
Slide 3: Use of Non-GAAP Financial Measures
ENERGY PARTNERS, L.P. Use of Non-GAAP Financial Measures This presentation utilizes the non-generally accepted accounting principles (non-GAAP) financial measures of distributable cash flow (DCF), EBITDA, and segment earnings before depletion, depreciation and amortization (DD&A). For KMP overall, w
Slide 4: Capital Structure
ENERGY PARTNERS, L.P. Capital Structure Kinder Morgan Energy Partners, L.P. Market Equity (a) $13.3B Debt (b) 7.0B Enterprise Value $20.3B 2007 EBITDA $2.0B 2007 DCF $1.5B Additional Cash Incentive Shares Distribution Distribution KMR KMP (LLC) (Partnership) 72 million i- i-units (a) 176 million uni
Slide 5: The Kinder Morgan Strategy
ENERGY PARTNERS, L.P. 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
Slide 6: System Map
ENERGY PARTNERS, L.P. System Map Trans PRODUCTS PIPELINES Mountain PRODUCTS PIPELINES TERMINALS 2 Cochin TRANSMIX FACILITIES NATURAL GAS PIPELINES NATURAL GAS STORAGE 2 NATURAL GAS Pacific PROCESSING ROCKIES EXPRESS PIPELINE IN-SERVICE ROCKIES EXPRESS PIPELINE 2 KM LOUISIANA PIPELINE Trailblazer 3 M
Slide 7: Well-diversified Asset Base
ENERGY PARTNERS, L.P. Well-diversified Asset Base KMP CO2 2007 DCF Natural Gas Pipelines 33% CO2 transport and sales Profile (b) 58% Texas Intrastate 67% oil production related 42% Rockies Production hedged (a): Natural Little incidental commodity risk 2007=85% ($35/Bbl) CO2 Gas 2008=83% ($44) 25% P
Slide 8: Consistent Track Record
ENERGY PARTNERS, L.P. Consistent Track Record Total Distributions (GP + LP) ($mm) LP Distribution Per Unit (b) $2,000 $4.50 GP (a) $1,750 $4.00 $3.68 LP $1,451 % $3.20 $3.32 = 17 $1,500 $3.50 $2.96 $1,256 R $1,250 =5 0% $1,162 $3.00 CAG $2.50 $2.72 GR $978 $2.50 $2.20 $1,000 CA $827 $1.90 $701 $2.00
Slide 9: Powerful Combination
ENERGY PARTNERS, L.P. Powerful Combination 1. Large asset base 2. Well-located 3. Diversified 4. Proven strategy 5. Efficient structure 6. Consistently well-managed Stable Cash Flow with Visible Growth 9
Slide 10: Significant Historical Returns
ENERGY PARTNERS, L.P. Significant Historical Returns (a) KMP: 29% CAGR (b) KMR: 14% CAGR (c) Dollars Dollars $1,800 $300 $1,619 Alerian $269 MLP Index $1,500 $260 KMP $235 KMR $1,200 $220 $900 $180 $581 $600 $140 $132 Alerian MLP Index $300 $237 $100 S&P 500 S&P 500 $0 $60 1996 1997 1998 1999 2000 2
Slide 11: Promises Made, Promises Kept
ENERGY PARTNERS, L.P. 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 20
Slide 12: 2008 Partnership Goals
ENERGY PARTNERS, L.P. 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 12
Slide 13: Growth Opportunities
ENERGY PARTNERS, L.P. Growth Opportunities Current Projects (2008-2011) Additional Opportunities Shifting Natural Gas Supply Sources — Rockies Rockies Express pipeline REX Northeast extension, storage, — LNG KM Louisiana pipeline further pipeline expansion, incremental — Barnett Shale Midcontinent E
Slide 14: Shifting Natural Gas Supply Sources
ENERGY PARTNERS, L.P. Shifting Natural Gas Supply Sources Natural Gas Supply % Production Volumes (Bcf/d) 2007E 2013 Change Change Rockies Natural Gas (a) 8.6 11.4 2.8 33% Rockies Barnett Shale Natural Gas (b) 2.1 6.4 4.3 200% production Gulf Coast LNG Imports (a) 0.7 2.8 2.1 300% expected to increa
Slide 15: Newbuild Natural Gas Pipelines
ENERGY PARTNERS, L.P. 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 Roc
Slide 16: Increased Use of Renewable Fuels
ENERGY PARTNERS, L.P. Increased Use of Renewable Fuels Renewable Fuels Standard (a) New legislation approximately doubles required 40 Incremental Impact of EISA - 2007 36.0 use of renewable fuels over next several years; 35 EPACT - 2005 increases even more dramatically long-term 30 R CAG (billion Ga
Slide 17: Growing Crude Production from Canadian Oilsands
ENERGY PARTNERS, L.P. 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 Oilsands ‘15 3.5 Condensate AG R ‘06- 3 Conventional Heavy ds ~ 11% C $15 Conventional Light Oilsan (MMBbl/d) Oilsands - LC
Slide 18: High Oil Prices Mean Opportunities for Enhanced Oil Recovery
ENERGY PARTNERS, L.P. High Oil Prices Mean Opportunities for Enhanced Oil Recovery CO2 Deliveries McElmo Dome 1,500 Premiere Source of CO2 in U.S. Other ~30 years remaining deliverability (MMcf/d) 1,000 Sheep Mtn 45% KM working interest (37% net revenue interest) Bravo Dome 9 Tcf of reserves
Slide 19: Increased Production and Use of Heavy Crude
ENERGY PARTNERS, L.P. 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, -‘1 GR 100 U.S. Gulf Coast Venezuela… (mm dry short tons) ‘07 CA 5 % 80 … Heavier, sour crude produces 8.5 66
Slide 20: Coal Imports/Exports
ENERGY PARTNERS, L.P. Coal Imports/Exports Our terminals are well-positioned on coasts and waterways to handle either export or import coal U.S. Coal Imports/Exports (a) Coal Imports Appalachian coal production declining, 120 111 affecting Eastern Utilities U.S. Coal Imports U.S. Coal Exports 100 93
Slide 21: Current Projects
ENERGY PARTNERS, L.P. Current Projects $6.5 Billion In Projects Over Next 4 Years Estimated Project Expected Project Cost ($mm) Completion Rockies Express $2,200 (a) 2007-2009 Midcontinent Express 625 (a) 2009 KM Louisiana Pipeline 517 2009 CALNEV expansion 425 2010 East Line expansion 155 2007 Tran
Slide 22: Balance Sheet Has Remained Solid
ENERGY PARTNERS, L.P. Balance Sheet Has Remained Solid (a) Credit Summary L-T Debt Rating Baa2/BBB Net Debt / Total Capital (b) 54.9% Debt / EBITDA (b) 3.4x EBITDA / Interest 5.2x CP Capacity Long-term Debt Maturities Total Bank Credit $1,850 2008 $5 Less: 2009 $250 Outstanding CP 589 2010 $250 Lett
Slide 23: Risks
ENERGY PARTNERS, L.P. 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
Slide 24: Summary
ENERGY PARTNERS, L.P. 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
Slide 25: ENERGY PARTNERS, L.P.
KINDER/MORGAN ENERGY PARTNERS, L.P.
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