Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — Kinder Morgan Energy Partners — UBS Natural Gas, Electric Power & Coal Conference 2010
22 slides from Kinder Morgan's conference presentation, Mar 4, 2010
Slide 1: UBS Natural Gas, Electric Power & Coal Conference
ENERGY PARTNERS, L.P. UBS Natural Gas, Electric Power & Coal Conference David Kinder VP Corporate Development & Treasurer March 4, 2010
Slide 2: Forward Looking Statements
ENERGY PARTNERS, L.P. Forward Looking Statements This presentation contains forward looking statements. These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts. In particular, statements, express or implied, concerning future acti
Slide 3: Use Of Non-GAAP Financial Measures
ENERGY PARTNERS, L.P. Use Of Non-GAAP Financial Measures The non-generally accepted accounting principles ("non-GAAP") financial measures of distributable cash flow before certain items (both in the aggregate and per unit), segment earnings before depreciation, depletion, amortization and amortizati
Slide 4: Size Does Matter
ENERGY PARTNERS, L.P. Size Does Matter Growth opportunities Since 1997, ~$20 billion in growth capital invested ~$11 billion in organic expansion / greenfield projects ~$9 billion in acquisitions Access to capital Successfully raised capital, in good times and bad ~$9 billion in public
Slide 5: Current Capital Structure
ENERGY PARTNERS, L.P. Current Capital Structure Kinder Morgan Energy Partners, L.P. Market Equity (a) $18.7B Debt (b) 10.4B Enterprise Value $29.1B 2010E EBITDA (c) $3.2B 2010E DCF (d) $2.4B Additional Cash Incentive Shares Distribution Distribution KMR (NYSE) KMP (NYSE) (LLC) (Partnership) i-units
Slide 6: 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 Impr
Slide 7: Unmatched Footprint
ENERGY PARTNERS, L.P. Unmatched Jet Trans Fuel Mountain Pipeline Footprint 2 Cochin Largest independent transporter of petroleum products in the U.S. Pacific Express Transport ~1.9 million barrels per day (Bbl/d) 2nd largest transporter of natural gas in U.S. (a) 2 Trailblazer Own an interes
Slide 8: Well-diversified Cash Flow
ENERGY PARTNERS, L.P. Well-diversified Cash Flow KMP 2010E CO2 Segment DCF Natural Gas Pipelines 28% CO2 transport and sales Profile (b) 59% Interstate (c) 72% oil production related 41% Texas Intrastate Production hedged (a): 2010=73% ($57/Bbl) 2011=60% ($63) 30% 28% 2012=32% ($82) 2013=1
Slide 9: Delivering 13 Years Of Consistent Growth
ENERGY PARTNERS, L.P. Delivering 13 Years Of Consistent Growth Total Distributions (GP + LP) ($MM) (a) Annual LP Distribution Per Unit (a,c) a,c) $2,500 $2,416 $4.40 $4.50 $4.20 GP (b) 15% $2,132 $4.02 $4.00 = $2,000 LP = 43% $1,854 $3.50 C A GR $3.13 $3.26 $3.48 GR 10 CA $1,469 $3.00 96-20 $2.63 $2
Slide 10: Significant Historical Returns
ENERGY PARTNERS, L.P. Significant Historical Returns (a) KMP: 27% CAGR Since ‘96 (b) KMR: 13% CAGR Since ‘01 (c) Dollars Dollars $2,500 $350 AMZ (d) KMP = $2,240 $2,250 $315 = $315 KMR $2,000 $280 = $301 $1,750 $245 $1,500 $210 $1,250 $175 $1,000 $140 AMZ (d) = $681 $750 $105 $100 $500 $70 $250 $35
Slide 11: KMR 101
ENERGY PARTNERS, L.P. KMR 101 (a) KMR is KMP KMR Discount to KMP 10% KMR shares are pari passu with KMP units KMR dividend equal to KMP cash distribution, but paid in additional additional 5% 7% avg discount since 2001 IPO shares; effectively a dividend reinvestment program (b) Share dividend
Slide 12: 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 13: Stable Asset Base
ENERGY PARTNERS, L.P. Stable Asset Base Natural Gas Products Kinder Morgan CO2 Terminals Pipelines Pipelines Canada – Interstate: virtually all – Liquids: take or pay take or pay – S&T: minimum – Bulk: minimum Volume Security – volume based – No volume risk – Intrastate: ~78% volume guarantee volu
Slide 14: Asset Footprint And Management Expertise Have Led To Growth Opportunities
ENERGY PARTNERS, L.P. Asset Footprint And Management Expertise Have Led To Growth Opportunities Industry Launch Led to: Led to: Rank (a) Pad Acquisitions (b) Internal Growth (b) – CFPL, CALNEV, Charter Triad, – Carson terminal, East Line & Northline Products st Cochin 1 – SFPP expansions Pipelines
Slide 15: Sources of Future Growth
ENERGY PARTNERS, L.P. Sources of Future Growth Growth Drivers KM Opportunity – Leverage Footprint – Cheap, abundant, domestic energy source – Full-year impact of REX, MEP, KMLA – Shifting supply from multiple basins – Completion of construction of FEP in 2010 – U.S. demand for natural gas expected t
Slide 16: ~$20 Billion in Capital Invested 1998-2009
ENERGY PARTNERS, L.P. ~$20 Billion in Capital Invested 1998-2009 (a,b) (billions) Total Invested by Type (a,b) Total Invested by Year (a) $12 $2.4 $9 $3.5 $3.3 JV Contributions $6 Expansion $3.0 $2.9 $8.7 $8.8 Acquisition $2.7 $3 $2.5 $0 Expansions Acquisitions $2.0 $1.9 $1.6 Total Invested by Segme
Slide 17: $1.5 Billion in Growth Expenditures Planned for 2010
ENERGY PARTNERS, L.P. $1.5 Billion in Growth Expenditures Planned for 2010 (millions) 2010 Budgeted Growth Expenditures CO2 Natural Gas Pipelines (a) 28% 22% 7% Products Pipelines 0.2% KM Canada 13% 11% Terminals 19% Identified Acquisitions Announced Acquisitions (b) __________________________ (a) I
Slide 18: Returns on Capital
ENERGY PARTNERS, L.P. Returns on Capital 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Segment ROI (a): Products Pipelines 11.9% 11.8% 12.8% 12.9% 12.4% 11.6% 11.8% 13.2% 12.5% 13.4% Natural Gas Pipelines 13.3 15.5 12.9 13.5 14.0 15.5 16.7 17.5 16.9 14.0 CO2 27.5 24.6 22.0 21.9 23.8 25.7 23.1 21
Slide 19: Balance Sheet Remains Solid
ENERGY PARTNERS, L.P. Balance Sheet Remains Solid (a) (millions) Credit Summary Budgeted FY 2009 Yr-end 2010 Credit Metrics Debt / EBITDA (b,c) b,c) 3.8x 3.6x EBITDA / Interest (c) 6.4x 6.1x L-T Debt Rating Baa2/BBB Revolver Liquidity (d) Long-term Debt Maturities (e) Total Bank Credit $1,787 Nov-20
Slide 20: Risks
ENERGY PARTNERS, L.P. Risks Regulatory Pacific Products Pipeline FERC/CPUC case Periodic rate reviews Unexpected policy changes Crude Oil Production Volumes Crude Oil Prices Budget assumes $84/Bbl realized price on unhedged barrels 2010 Sensitivity is ~$6 million DCF per $1/Bbl chang
Slide 21: Attractive Value Proposition
ENERGY PARTNERS, L.P. Attractive Value Proposition Unparalleled asset footprint Established track record Industry leader in all business segments Experienced management team Supportive general partner Transparency to investors Attractive returns driven by combination of yield plus grow
Slide 22: Kinder Morgan Energy Partners, L.P.
KINDER/MORGAN ENERGY PARTNERS, L.P.
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