Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — JPMorgan Energy Infrastructure / MLP Corporate Access Day 2013
33 slides from Kinder Morgan's conference presentation, Jun 13, 2013
Slide 1: Companies Run By Shareholders, For Shareholders
Companies Run By Shareholders, For Shareholders David Michels VP Finance & Investor Relations CFO of EPB June 13, 2013
Slide 2: Forward-Looking Statements / Non-GAAP Financial Measures
Forward-Looking Statements / Non-GAAP Financial Measures 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 fut
Slide 3: Four Ways to Invest: KMI, KMP, KMR & EPB
Kinder Morgan Four Ways to Invest: KMI, KMP, KMR & EPB 672MM Public Kinder Morgan, Inc. (65%) Float Market Equity $43.4B (a) Cash Debt 9.4B (b) dividends to KMI 295MM (d) Management/ shareholders (C-corp) (28%) Original S/H Enterprise Value $52.8B 1,036 MM shares (a) 2013E Dividend per Share $1.60 (
Slide 4: KMR 101
KMR 101 KMR is KMP KMR Discount to KMP (b) — KMR shares are pari passu with KMP units 10% — KMR dividend equal to KMP cash distribution, but paid in additional shares; effectively a dividend reinvestment 5% program (a) 0% — Like KMP units, KMR shares are tax efficient - but with simplified tax rep
Slide 5: Our Strategy
Our Strategy Stay the Course Same Strategy Since Inception Focus on stable fee-based assets that are core to North American energy infrastructure — Market leader in each of our business segments Control costs — It’s the investors’ money, not management’s – treat it that way Leverage asset foot
Slide 6: Unparalleled Asset Footprint
Kinder Morgan Unparalleled Asset Footprint 3rd largest energy company in North America with combined enterprise value of approximately $115 billion (a) Largest natural gas network in U.S. — Own an interest in / operate almost 70,000 miles of natural gas pipeline — Connected to every important U.
Slide 7: 17 Years of Consistent Growth at KMP
17 Years of Consistent Growth at KMP KMP Total Distributions (GP + LP) ($MM) KMP Annual LP Distribution per Unit (c) $3,997(a) $6.00 $4,000 $5.33 (a) GP LP $4.98 $3,500 $3,230 $4.61 $5.00 $4.40 $3,000 $2,737 $4.20 $4.02 $2,450(b) $4.00 $3.48 $2,500 $2,171 $3.13$3.26 $1,877 $2.87 $3.00 $2.63 $2,000 $
Slide 8: Significant Historical Returns
Significant Historical Returns (a) KMP: 24% CATR Since ‘96 (b) KMI: 17% CATR Since Inception (e) $4,000 KMP = $3,634 $150 KMI = $143 Dollars Dollars RMZ = $132 $3,500 $125 $3,000 $100 S&P 500 = $131 $2,500 UTY= $127 $2,000 $75 $1,500 AMZ (d) = $1,256 $50 $1,000 $25 $500 ⇐ IPO 2/10/2011 S&P 500 = $29
Slide 9: Budget Guidance: Promises Made, Promises Kept
Budget Guidance Promises Made, Promises Kept Promises Made Promises Kept KMI Budgeted KMI Actual Dividend: Dividend: 2011: $1.16 (a) 2011: $1.20 (a) 2012: $1.35 2012: $1.40 KMP Budgeted KMP Actual LP Distribution: LP Distribution: 2000: $1.60 2000: $1.71 KMP achieved 2001: $1.95 2001: $2.15 LP distr
Slide 10: 2013 Guidance
2013 Guidance Supported by Diversified Cash Flow CO2 S&T CO2 Oil Production 5% KMI Forecast: Natural Gas 14% Pipelines KMI 2013 dividend: $1.60/sh (14.3% growth) Terminals 11% 56% Fully-consolidated year-end 2013 debt / EBITDA = 5.0x (a) B 3% 11% KM Canada Products U Pipelines S CO2 S&T I 7% CO2
Slide 11: Toll Road-like, Fee-based Business Model
Toll Road-like, Fee-based Business Model Natural Gas Products Kinder Morgan Terminals CO2 Pipelines Pipelines Canada (KMP) (KMP) (KMP/EPB/KMI) (KMP) (KMP) – Interstate & LNG: take or pay – Take or pay, minimum – S&T: primarily minimum – Intrastate: ~75% take or pay (a) – Essentially no Volume Secu
Slide 12: 5-year Project Backlog
5-year Project Backlog Over $13 Billion of Identified Organic Growth Projects Tremendous footprint provides over $13B of growth opportunities over next 5 years (a) Approximate Growth Capex (a) ($B) Natural Gas Pipelines $3.5 Products Pipelines 0.9 Terminals 1.7 CO2 – S&T 1.1 CO2 – EOR (b) Oil Produc
Slide 13: Vast Opportunity Set
Vast Opportunity Set Leverages Diverse Energy Themes Pipeline / terminal expansions for Oilsands export to Asia Canadian natural Cochin conversion/ gas demand reversal for leading to expansion Oilsands diluent opportunities Northeast power demand growth Pipeline to be fueled by conversion / natural
Slide 14: KMP / KMR
KINDER/MORGAN KINDER MORGAN ENERGY PARTNERS, L.P. KMP /KMR
Slide 15: KMP's Diversified Cash Flow
KMP’s Diversified Cash Flow Natural Gas Pipelines 2013E KMP Segment 55% interstate pipelines Earnings before DD&A 31% gathering, processing & treating = $5.7 billion (a) 14% intrastate pipelines & storage Products Pipelines CO2 S&T 56% pipelines 44% associated terminals & transmix Natural
Slide 16: KMP 2013 Growth Expenditure Forecast
KMP 2013 Growth Expenditure Forecast Without dropdown & CPNO With acquisitions acquisition = $3.4 billion (a) = $10.0 billion CO2 CO2 S&T Oil S&T Terminals 3% 3% Natural Gas Natural Gas CO2 Oil Pipelines Pipelines Production 8% Products 10% Pipelines (b) 9% 36% 7% 26% Terminals 20% 78% Products Pipe
Slide 17: $40B of Growth Capital Invested at KMP
$40B of Growth Capital Invested at KMP (a,b,c) ($ in billions) Total Invested by Type Total Invested by Year $24 $11.0 $20 JV Contributions $3.5 $10.0 $16 $10.0 Expansion $12 $21.8 $9.0 Acquisition $8 $14.8 $8.0 $4 $7.0 $- Expansions Acquisitions $6.0 (c) $5.1 $5.0 Total Invested by Segment $4.0 $3.
Slide 18: How We Have Done: KMP Returns on Capital
How We Have Done: KMP Returns on Capital 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Segment ROI (a): Natural Gas Pipelines 13.3% 15.5% 12.9% 13.5% 14.0% 15.5% 16.7% 17.5% 16.9% 14.0% 11.9% 11.9% 11.9% Products Pipelines 11.9 11.8 12.8 12.9 12.4 11.6 11.8 13.2 12.5 13.4 13.7 12.
Slide 19: EPB
KINDER/MORGAN EL PASO PIPELINE PARTNERS j EPB
Slide 20: EPB System Map
EPB System Map Pipelines: 100% Wyoming Interstate Co. (WIC) 100% Colorado Interstate Gas (CIG) 100% Cheyenne Plains (CP) 100% Southern Natural Gas (SNG) 100% Elba Express (EEC) LNG: 100% Southern LNG (SLNG) 20
Slide 21: EPB Focused on Natural Gas Pipelines
EPB Focused on Natural Gas Pipelines 2013E EPB Segment Natural Gas Earnings before DD&A Highly stable cash flow stream = $1.2 billion (a) — 89% interstate pipelines • Average contract life = ~7 years — 11% LNG • Average contract life = ~19 years (b) — Minimal throughput and commodity exposure Natu
Slide 22: KMI
KINDER/MORGAN INC. KINDER MORGAN KMI
Slide 23: KMI Remaining Assets Available For Dropdown
KMI Remaining Assets Available For Dropdown Plan to move all assets to KMP / EPB over time, except NGPL 23
Slide 24: KMI Overview
KMI Overview KMI pays regular c-corp dividend with attractive combination of yield plus growth KMI Investments / Assets: — Investment in MLPs • KMP: – General Partner (GP) interest receives incentive distributions from KMP – KMI owns ~10% of total limited partner (LP) interests • EPB: – GP inter
Slide 25: Risks
Risks Regulatory (KMP/EPB/KMI) — Pacific Products Pipeline FERC / CPUC cases — Periodic rate reviews — Unexpected policy changes Crude oil production volumes (KMP) Crude oil prices (KMP) — 2013 budget assumes $91.68/Bbl realized price on unhedged barrels — 2013 sensitivity is ~$5.9 million DCF
Slide 26: Summary
Summary KMI, KMP, KMR & EPB: Attractive Value Proposition Unparalleled asset footprint Highly visible, attractive dropdown inventory Long-term Growth Targets (a) Significant, identified growth Next 3 to 5 Years (2012+) opportunities KMP = ~5-6% Attractive returns driven by EPB = ~5-6% co
Slide 27: Appendix
KINDER/MORGAN Appendix
Slide 28: Natural Gas Pipelines
Natural Gas Pipelines Segment Outlook Well-positioned connecting key natural gas resource plays with major demand centers Project Backlog: $3.5 billion of identified growth projects over next five years (a), including: — TGP Northeast upgrade — LNG liquefaction (FTA @ Gulf & Elba Island) — Eagle F
Slide 29: Products Pipelines
Products Pipelines Segment Outlook Opportunities for growth from increased liquids production Project Backlog: $0.9 billion of identified growth projects over next two years (a), including: — Cochin reversal & diluent conversion — Condensate processing — Sweeney lateral — Parkway — Double Eagle Lo
Slide 30: Terminals
Terminals Segment Outlook Well-located in refinery / port hubs and inland waterways Project Backlog: $1.7 billion of identified growth projects over next three years (a), including: — Liquids • Edmonton Phase I / II expansions • BOSTCO project • Houston terminal network expansion — Bulk • Deepwate
Slide 31: CO2 Segment Outlook
CO2 Segment Outlook Own and operate best source of CO2 for EOR (a) Project Backlog: Identified growth projects totaling $1.1 billion and $1.0 billion in S&T and EOR (a), respectively, over next five years (b), including: — S&T • McElmo / Doe Canyon expansion • St. Johns build-out — Oil Production
Slide 32: Kinder Morgan Canada
Kinder Morgan Canada Segment Outlook Sole oil pipeline from Oilsands to West Coast / export markets Project Backlog: $5.4 billion expansion of TMPL Long-term Growth Drivers: Expand Oilsands export capacity to West Coast and Asia — Following successful open season, major expansion plans under way
Slide 33: Kinder Morgan
KINDER/MORGAN
Kinder Morgan — JPMorgan Energy Infrastructure / MLP Corporate Access Day 2013 on 6ix