Kinder Morgan, Inc. · NYSE:KMI

Kinder Morgan — Kinder Morgan Energy Partners — Wells Fargo Pipeline & MLP Symposium 2009

23 slides from Kinder Morgan's conference presentation, Dec 8, 2009

  1. Slide 1: Wells Fargo Pipeline & MLP Symposium

    ENERGY PARTNERS, L.P. Wells Fargo Pipeline & MLP Symposium December 8, 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) $16.4B Debt (b) 10.2B Enterprise Value $26.6B 2009E EBITDA (c) $2.7B 2009E DCF (d) $2.1B Additional Cash Incentive Shares Distribution Distribution KMR (NYSE) KMP (NYSE) (LLC) (Partnership) i-units (a) 86 m

  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 Jet Trans Fuel Mountain 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)  2nd largest transporter of natural 2 gas in U.S. (a) Trailblazer REX 4 2  Ow

  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=72% ($49/Bbl) CO2 Natural Gas 2010=69% ($57) 27% Pipelines 2011=65

  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: 12% CAGR (c) Dollars Dollars $2,100 $320 KMP = $1,985 AMZ = $280 $1,800 $280 KMR = $263 $1,500 $240 $1,200 $200 $900 $160 Alerian = $605 $600 $120 $300 $80 S&P 500 = $186 S&P 500 = $104 $0 $40 14-May-2001 Dec-96 Dec-98 D

  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: 2009-2010 Guidance

    ENERGY PARTNERS, L.P. 2009-2010 Guidance 2009  LP distributions of $4.20 per unit (4.5% growth) 2010  LP distributions of $4.40 per unit (4.8% growth)  Total segment earnings before DD&A of $3.4 billion  ~70% of crude oil production hedged at $57/Bbl  Assumes WTI crude oil price of $84/Bbl on u

  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: Continued Growth Opportunities

    ENERGY PARTNERS, L.P. Continued Growth Opportunities Current Projects (2009-2011) Additional Opportunities  Shifting Natural Gas Supply Sources — Rockies – Rockies Express pipeline – Expansions, extensions and added service on current projects and — Shale Plays – Midcontinent Express pipeline exist

  14. Slide 14: Newbuild Natural Gas Pipelines

    ENERGY PARTNERS, L.P. Newbuild Natural Gas Pipelines Wyoming Nebraska Illinois Indiana Ohio Colorado Kansas Missouri Oklahoma Arkansas Texas Mississippi Alabama ROCKIES EXPRESS PIPELINE Louisiana FAYETTEVILLE EXPRESS PIPELINE MIDCONTINENT EXPRESS PIPELINE KM LOUISIANA PIPELINE KM HEADQUARTERS Rockie

  15. Slide 15: Current Major Projects

    ENERGY PARTNERS, L.P. Current Major Projects $6.4 Billion In Current Projects 2009-2011 (a) Estimated Est. Remaining Project Cost Project Cost KM-Share KM-Share Project ($MM) ($MM) (b) In-service Rockies Express-East $2,055 (a) $133 (a,c) Nov-2009 (d) Midcontinent Express 1,150 (a,e) 81 (a,e) Aug-20

  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) a,b) Total Invested by Year (a) $9 $0.5 $3.5 $3.4 $6 JV Contributions 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 Segm

  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  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 price + forwar

  20. Slide 20: 2009 Growth Capital Sources and Uses

    ENERGY PARTNERS, L.P. 2009 Growth Capital Sources and Uses (millions) 2009 Capital Uses 2009 Capital Sources Growth Expenditures Sources Expansion Capex $1,106 YTD 2009 KMP Equity Issues $1,200 (b) Contributions to JVs 1,919 (a) YTD 2009 Debt Issues 2,000 Acquisitions 329 FY 2009 KMR Dividend 350 To

  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: Kinder Morgan Energy Partners, L.P.

    ENERGY PARTNERS, L.P. KINDER/MORGAN

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