Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — Debt Investor Presentation (March 2015)
31 slides from Kinder Morgan's debt investor presentation, Mar 5, 2015
Slide 1: Fixed Income Investor Presentation
Fixed Income Investor Presentation March 5, 2015
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: KMI: Unparalleled Asset Footprint
KMI: Unparalleled Asset Footprint Largest Energy Infrastructure Company in North America 3rd largest energy company in N. America with an enterprise value of ~$130 billion Largest natural gas network in N. America — Own an interest in / operate ~67,000 miles of natural gas pipeline — Connected t
Slide 4: KMI Acquisition of KMP, KMR & EPB
KMI Acquisition of KMP, KMR & EPB Simplicity is Bliss Value enhancing combination paves way for enhanced growth and simplifies structure $77 billion transaction closed November 26, 2014 New, simplified, investment grade public c-corp structure — One debt rating — No structural subordination — No
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 Maintaining strong balance sheet is paramount — Accessed capital markets for approximately $46 billio
Slide 6: 18 Years of Stable Growth
18 Years of Stable Growth Strategy Has Led to Consistent, Growing Results KMP Annual LP Distribution per Unit(a) KMI Annual Dividend per Share(c) $6.00 $5.58 $2.50 $5.33 $4.98 $2.00 $5.00 $4.61 $2.00 $4.40 $4.20 $1.74 $4.02 $1.57 $4.00 $3.48 $3.13$3.26 $1.50 $1.35 $2.87 $1.16 $3.00 $2.44 $2.63 $2.15
Slide 7: Natural Gas Pipelines
Natural Gas Pipelines Segment Outlook Well-positioned connecting key natural gas resource plays with major demand centers Project Backlog: $4.6 billion of identified growth projects over next seven years(a), including: — LNG liquefaction (Elba Island) — Pipe projects supporting LNG liquefaction pr
Slide 8: Natural Gas Megatrend
Natural Gas Megatrend Strong Natural Gas Footprint & Market Opportunity Set U.S. Natural Gas Projected Supply & Demand(a) Real- time, Long-term Benefits of Footprint Demand (Bcf/d) 2015 2020 2025 LNG exports 0.0 7.3 10.8 Natural Gas Segment Asset Footprint $641 billion of investment in Mexican net
Slide 9: Products Pipelines
Products Pipelines Segment Outlook Opportunities for growth from increased liquids production Project Backlog: $1.9 billion of identified growth projects over next two years(a), including: — UTOPIA — Eagle Ford condensate processing — KMCC extensions — KMCC-Double Eagle interconnect — Palmetto Lon
Slide 10: Terminals
Terminals Segment Outlook Well-located in refinery / port hubs and inland waterways Project Backlog: $2.1 billion of identified growth projects over next five years(a), including: — BOSTCO Phase 3 — Alberta crude by rail projects — Chemical terminal development — Jones Act tanker builds — Houston
Slide 11: CO2 Segment Outlook
CO2 Segment Outlook Own and operate best source of CO2 for EOR(a) Project Backlog: Identified growth projects totaling $1.8 billion and $1.8 billion in S&T and EOR, respectively, over next five years(b), including: — S&T • Southwest Colorado CO2 production • St. Johns build-out • Cortez and Lobos
Slide 12: 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 Trans Mountain Pipeline (TMEP) Long-term Growth Drivers: Expand Oilsands export capacity to West Coast and Asia — Following successful open season, major
Slide 13: Energy Toll Road
Energy Toll Road Diversified, Fee-based Business Model Natural Gas Products Kinder Morgan Terminals CO2 Pipelines Pipelines Canada – Interstate & LNG: take or pay – Intrastate: ~75% take or pay(a) – Take or pay, minimum – S&T: primarily minimum – Essentially no Volume Security – G&P: ~77% fee-base
Slide 14: Set to Weather the Storm
Set to Weather the Storm Low commodity price sensitivity KMI Bond Trading Since Oil was last $90(b) — 2015 budgeted EBDA is ~85% fee-based, ~94% fee- October 6, 2014 February 20, 2015 Change based or hedged KMI 24s UST+189bps UST+161bps -28bps — $1/Bbl change in oil price = $10 million DCF impact;
Slide 15: Insulated from Market Headwinds
Insulated from Market Headwinds Best-in-class scale and diversified cash flow — Limited commodity price exposure — Significant positions across multiple energy infrastructure industries with diverse market dynamics Investment grade rating and significant liquidity — Our investing entity has been
Slide 16: 2015 Budgeted Segment Profile
2015 Budgeted Segment Profile 2015 Budgeted Segment Natural Gas Pipelines EBDA = $8.2 billion(a) 71% interstate pipelines 21% gathering, processing & treating 8% intrastate pipelines & storage CO2 S&T Products Pipelines CO2 Oil 61% pipelines Production 5% 39% associated terminals & transmi
Slide 17: 2015 Budget Guidance
2015 Budget Guidance Supported by Diversified, Fee-based Cash Flow 2015 Budget Commodity Price Sensitivity Growth capex of ~$4.4 billion in expansions 2015 budgeted cash coverage over declared (including JV contributions) and small dividend of $654 million (assumes $70/Bbl acquisitions oil price
Slide 18: Strong Balance Sheet and Liquidity Profile
Strong Balance Sheet and Liquidity Profile(a) Commitment to investment grade ratings: Baa3 / BBB- / BBB- (stable / stable / stable) Targeted Net Debt / EBITDA range of 5.0x to 5.5x — Expect to be on the lower end of this range at latter end of 5 year time horizon as long-term capital projects co
Slide 19: 5-year Project Backlog
5-year Project Backlog(a) Nearly $18 Billion of Currently Identified Organic Growth Projects Tremendous footprint provides $17.6B of currently identified growth projects over next 5 years 5-year Growth Capex Backlog ($B) 2015 2016 2017 2017+ Total Natural Gas Pipelines $0.6 $0.5 $1.9 $1.6 $4.6 Produ
Slide 20: Business Risks
Business Risks Regulatory — Products Pipeline FERC rate cases — Natural Gas FERC rate cases — Legislative and regulatory changes Crude oil production volumes Commodity prices Project cost overruns / in-service delays Economically sensitive businesses (e.g., steel terminals) Environmental
Slide 21: KMI: Key Investment Highlights
KMI: Key Investment Highlights Industry Leader KMI is the third largest Energy company in North America and the largest Energy Infrastructure company Operates primarily as a Toll Road with stable, fee-based cash flows and limited exposure to commodity prices Unparalleled Asset Footprint with Vis
Slide 22: Appendix
KINDERMORGAN Appendix
Slide 23: Cross-Guarantee Overview
Cross-Guarantee Overview Purpose of cross-guarantees is to achieve a single senior unsecured credit class throughout Kinder Morgan and eliminate structural subordination Cross-guarantees are necessary because it is not possible to move or refinance existing KMP debt due to certain tax considerat
Slide 24: 2015 Financing Plan & Growth Capital Budgets
2015 Financing Plan & Growth Capital Budgets ($ in millions) Financing Plan Budget Growth Capital Budget(b) 2015 CO2 S&T Budget Equity $ 1,400 16% CO2 Oil Debt Production Natural Gas 12% 46% Pipelines Long-term debt issuance $ 4,000 (a) Increase in revolver 297 17% Maturities (1,316) 7% Incremental
Slide 25: Access to Capital
Access to Capital Issued ~$45.6 billion of capital in public markets since inception in 1997(a) — ~$23.4 billion in equity raised(a) — ~$22.2 billion in long-term debt (~$41.6 billion net of refinancing)(a) Accessed in difficult markets — Sep‘01 to Sep‘02 ~$1.9 billion in equity and debt issued(
Slide 26: Capital Invested
Capital Invested ~$48 Billion of Asset Investment & Acquisitions Since Inception(a,b) ($ in billions) Total Invested by Type Total Invested by Year $30 $25.7 $11 $25 $21.8 Expansion $10.1 $20 $10 Acquisition $15 $9 $10 $8 $5 $7 (b) $- $6.6 Expansions Acquisitions $6 $5.8 $5 $4.4(c) Total Invested by
Slide 27: Returns on Invested Capital
Returns on Invested Capital Consistent Returns Demonstrate Asset Performance, Management Discipline 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Segment ROI(a): Natural Gas Pipes–KMP 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% 11.6%(b)
Slide 28: Incidents & Releases: Liquids Pipeline
Incidents & Releases Liquids Pipeline Right-of-way Liquids Pipeline Incidents per 1,000 Miles(a) Liquids Pipeline Release Rate(a) 0.8 50 Barrels per billion barrel miles Incidents per 1,000 Miles 40 0.6 30 0.4 20 0.57 0.45 0.2 0.39 0.29 10 17.96 0.24 15.50 0.21 13.05 - 0.08 0.08 6.00 - 0.01 0.11 0.6
Slide 29: Incidents & Releases: Natural Gas Pipeline
Incidents & Releases Natural Gas Pipeline Right-of-way Natural Gas Pipeline Incidents Rate Natural Gas Pipeline Incidents Rate All Reportable Incidents(a) Onshore Ruptures-only(c) 0.8 0.8 Incidents per 1,000 Miles Incidents per 1,000 Miles 0.6 0.6 0.4 0.4 0.2 0.37 0.2 0.32 0.30 0.27 0.27 0.26 (d) 0.
Slide 30: Employee Safety Statistics
Employee Safety Statistics(a) KMI Lost-time Incident Rate (DART) OSHA Recordable Incident Rate Lost-time injuries per 200k hours worked 6 7 5.20 6.35 6 OSHA Recordable Incidents per 5 5.70 5 200k Hours Worked 4 4 3 3 2.50 2.60 2.50 2.50 2 2 2.10 2.10 2.10 1 0.70 0.88 0.80 0.70 1.70 1 1.88 0.70 0.60
Slide 31: Kinder Morgan
KINDER/MORGAN
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