Kinder Morgan, Inc. · NYSE:KMI

Kinder Morgan — Kinder Morgan Energy Partners — Barclays 2009 CEO Energy/Power Conference

23 slides from Kinder Morgan's conference presentation, Sep 9, 2009

  1. Slide 1: The Time of the Hedgehog

    ENERGY PARTNERS, L.P. The Time of the Hedgehog Barclays 2009 CEO Energy/Power Conference September 9, 2009

  2. 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

  3. 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, segment distributable cash flow before certain items, and earnings before interest, taxes and DD&A ("EBITDA") bef

  4. Slide 4: Capital Structure

    ENERGY PARTNERS, L.P. Capital Structure Kinder Morgan Energy Partners, L.P. Market Equity (a) $14.7B Debt (b) 9.3B Enterprise Value $24.0B 2009E EBITDA (c) $2.7B 2009E DCF (d) $2.1B Additional Cash Incentive Shares Distribution Distribution KMR (NYSE) KMP (NYSE) (LLC) (Partnership) 84 million i- i-u

  5. 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  Impr

  6. Slide 6: Unmatched Footprint

    ENERGY PARTNERS, L.P. Unmatched Trans Jet Mountain Fuel Pipeline Footprint 2 Cochin  Largest independent transporter of petroleum products in the U.S. Pacific Express  Transport nearly 2 million barrels per day (Bbl/d) 2  2nd largest transporter of natural Trailblazer gas in U.S. (a) REX 4 2 KMIG

  7. Slide 7: Well-diversified Asset Base

    ENERGY PARTNERS, L.P. Well-diversified Asset Base KMP CO2 2009 DCF Natural Gas Pipelines  32% CO2 transport and sales Profile (b)  58% Interstate (c)  68% oil production related  42% Texas Intrastate  Production hedged (a): 2009=71% ($49/Bbl) CO2 Natural Gas 2010=65% ($57) 27% Pipelines 2011=56

  8. Slide 8: Twelve Years of Consistent Growth

    ENERGY PARTNERS, L.P. Twelve Years of Consistent Growth Total Distributions (GP + LP) ($MM) Annual LP Distribution Per Unit (b) $2,250 $2,112 $4.50 $4.20 GP (a) $4.02 $2,000 $1,854 $4.00 = 16% LP 5% GR $3.48 $1,750 =4 $3.50 9C A $3.13 $3.26 GR $1,469 200 $2.87 $1,500 CA $1,265 $3.00 6- $2.63 $1,250

  9. Slide 9: Significant Historical Returns

    ENERGY PARTNERS, L.P. Significant Historical Returns (a) KMP: 26% CAGR (b) KMR: 11% CAGR (c) Dollars Dollars $2,000 $300 KMP = $1,807 $1,750 $270 AMZ = $245 $1,500 $240 KMR = $243 $1,250 $210 $1,000 $180 $750 $150 Alerian = $530 $500 $120 $250 $90 S&P 500 = $172 S&P 500 = $96 $0 $60 14-May-2001 Dec-

  10. Slide 10: 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

  11. Slide 11: 2009 Partnership Goals

    ENERGY PARTNERS, L.P. 2009 Partnership Goals  2009 Budgeted Distribution Target  $4.20 per unit (4.5% growth)  Excess coverage of ~$14 million  Maintain Solid Balance Sheet  Expansions / acquisitions financed 50% equity, 50% debt  Deliver Projects on Current Schedule and Cost Forecast 11

  12. Slide 12: Recent Trends

    ENERGY PARTNERS, L.P. Recent Trends Impact Offset / Response  Decline in product demand – Impacts volumes on product pipelines – Annual PPI adjustment – Ethanol  Lower oil prices – Impacts unhedged crude oil and NGL – Lower cost environment; e.g. drilling, volumes in CO2 segment equipment, capital

  13. Slide 13: Newbuild Natural Gas Pipelines

    ENERGY PARTNERS, L.P. Newbuild Natural Gas Pipelines N NEE O OHH IL IN IN IL CO CO KS KS MO MO OK OK AR AR ROCKIES EXPRESS PIPELINE IN-SVC MS AL AL ROCKIES EXPRESS PIPELINE MS FAYETTEVILLE EXPRESS PIPELINE TX TX MIDCONTINENT EXPRESS PIPELINE IN-SVC LA LA KM LOUISIANA PIPELINE IN-SVC KM HEADQUARTERS

  14. Slide 14: Increased Use of Renewable Fuels

    ENERGY PARTNERS, L.P. Increased Use of Renewable Fuels EPA guidelines require significant Renewable Fuels Standard (RFS) (a) ethanol/biodiesel blending in 2009 40 Incremental Impact R 36.0 and beyond 35 of EISA - 2007 % CAG 10.4 22 30 EPACT - 2005 8-20 Leverage Existing Assets to be Most Efficient,

  15. Slide 15: Current Major Projects

    ENERGY PARTNERS, L.P. Current Major Projects $6.3 Billion In Current Projects 2009-2011 (a) Estimated Est. Remaining Project Cost Project Cost KM-Share KM-Share Expected Project ($MM) ($MM) (b) Completion Rockies Express-East $2,034 (a,c) $447 (a,c) 2009 (d) Midcontinent Express 1,148 (a,e) 194 (a,e

  16. Slide 16: ~$17 Billion in Capital Invested 1998-2008

    ENERGY PARTNERS, L.P. ~$17 Billion in Capital Invested 1998-2008 (a,b) (billions) Total Invested by Type (a,b) Total Invested by Year (a) $9 $0.5 $3.5 $6 JV Contributions $3.2(c) Expansion $7.7 $8.4 $3.0 $2.9 $3 Acquisition $2.7 $2.5 $0 Expansions Acquisitions $2.0 $1.9 $1.6 Total Invested by Segmen

  17. Slide 17: Returns on Capital

    ENERGY PARTNERS, L.P. Returns on Capital 2000 2001 2002 2003 2004 2005 2006 2007 2008 Segment ROI (a): Products Pipelines 11.9% 11.8% 12.8% 12.9% 12.4% 11.6% 11.8% 13.2% 12.5% Natural Gas Pipelines 13.3 15.5 12.9 13.5 14.0 15.5 16.7 17.6 16.9 CO2 27.5 24.6 22.0 21.9 23.8 25.7 23.1 21.8 25.9 Terminal

  18. Slide 18: Balance Sheet Has Remained Solid

    ENERGY PARTNERS, L.P. Balance Sheet Has Remained Solid (millions) Credit Summary Forecast 2Q 2009 Yr-end 2009 Credit Metrics Debt / EBITDA (a,b) 3.7x 3.9x EBITDA / Interest (b) 6.3x 6.4x L-T Debt Rating Baa2/BBB Revolver Liquidity (c,d) c,d) Long-term Debt Maturities (c,e) c,e) Total Bank Credit $1,

  19. Slide 19: Will We Distribute $4.20 in 2009?

    ENERGY PARTNERS, L.P. Will We Distribute $4.20 in 2009?  Vast majority of $2.1 billion 2009 budgeted DCF is very secure  Full-year impact of oil price at $59/Bbl (vs. $68 in budget) = ~$55 million  2.5% of total DCF  Sensitivity is ~$6 million per $1/Bbl change in crude price  YTD realized pric

  20. Slide 20: 2009 Growth Capital Sources and Uses

    ENERGY PARTNERS, L.P. 2009 Growth Capital Sources and Uses (millions) Uses Sources Growth Expenditures Sources Expansion Capex $1,134 Dec‘08 Debt Issue $500 Contributions to JVs 1,888 (a) Dec‘08/Jan‘09 Swap Unwinds 339 (b) Acquisitions 130 1H‘09 KMP Equity Issues 747 (c) Total Growth Capital 3,152 M

  21. Slide 21: 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 $68/Bbl realized price on unhedged barrels  2009 Sensitivity is ~$6 million DCF per $1/Bbl chang

  22. Slide 22: Summary

    ENERGY PARTNERS, L.P. Summary KMP’s model works  Stable Cash Flow  Own assets core to energy infrastructure  Fixed Cost Business  Drop growth to bottom line  Available Internal/External Growth Opportunities  Critical mass  Well-located assets/favorable demographics  At attractive returns  W

  23. Slide 23: ENERGY PARTNERS, L.P.

    ENERGY PARTNERS, L.P. KINDER/MORGAN

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