Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — Wells Fargo Energy Symposium 2014
29 slides from Kinder Morgan's conference presentation, Dec 10, 2014
Slide 1: Run By Shareholders, For Shareholders
Run By Shareholders, For Shareholders Steve Kean President & Chief Operating Officer December 10, 2014
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 Completes Acquisition of KMP, KMR & EPB
KMI Completes Acquisition of KMP, KMR & EPB Transaction closed 11/26/2014 Value Enhancing Combination Paves Way for Significant Growth 2015 dividend expected to be $2.00 (16% growth over Pro Forma Consolidated KMI 2014 budget) 2014B Segment Earnings before DD&A = $8.0 billion(a) 10% annual growt
Slide 4: 2015 Budget Guidance
2015 Budget Guidance Supported by Diversified, Fee-based Cash Flow Large, diversified portfolio of stable, primarily fee-based assets produce substantial cash flow in virtually all types of market conditions, regardless of commodity prices KMI 2015 budgeted dividend: $2.00 per share (16% growth ov
Slide 5: Simplified Structure: All Assets Now In One Equity
Kinder Morgan Simplified Structure: All Assets Now In One Equity Old Structure(a) New, Simplified Public Structure(b) Public Management/ Original S/H Sponsor Float 302MM 665 MM (29%) Kinder Morgan, Inc. (64%) 69 MM (7%) Management / Public Cash dividends to Original S/H Float Market Equity $38.3B sh
Slide 6: Unparalleled Asset Footprint
Unparalleled Asset Footprint Largest Energy Infrastructure Company in North America 3rd largest energy company in North America with an enterprise value of ~$130 billion Nearly $18 billion of currently identified organic growth projects Largest natural gas network in North America — Own an int
Slide 7: Strategy
Strategy Remains the Same Same Strategy Since Inception Focus on stable fee-based assets that are core to North American energy infrastructure — Market leader in each of our business segments Control costs – It’s the investors’ money, not management’s – treat it that way — Dividend policy to rem
Slide 8: 18 Years of Growth
18 Years of Growth Strategy Has Led to Consistent, Growing Results KMP Total Distributions (GP + LP) ($MM) KMP Annual LP Distribution per Unit(c) $5.58 (a) $5,000 $6.00 $5.33 (a) $4,499 $4,500 GP LP $4.98 $4,017 $5.00 $4.61 $4,000 $4.40 $4.20 $3,500 $3,230 $4.02 $4.00 $3.48 $3,000 $2,737 $3.13$3.26
Slide 9: Historical KMP Capital Investment
Historical KMP Capital Investment ~$46.5 Billion Invested Since Inception(a,b) ($ in billions) Total Invested by Type Total Invested by Year $25 $11 $20 Expansion $10.0 $10 Acquisition $15 $21.9 $24.6 $9 $10 $8 $5 $7 $6.6 (b) $- Expansions Acquisitions $6 $5 $4.9 Total Invested by Segment $4 $3.3 $2
Slide 10: Historical KMP Returns on Invested Capital
Historical KMP 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 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%
Slide 11: Financial Rigor
Financial Rigor Promises Made, Promises Kept Promises Made Promises Kept KMI Budgeted KMI Actual Dividend: Dividend: 2011: $1.16(a) 2011: $1.20(a) KMI has exceeded 2012: $1.35 2012: $1.40 its dividend target 2013: $1.57 2013: $1.60 in each of past 3 yrs. KMP Budgeted KMP Actual LP Distribution: LP D
Slide 12: Returns to Investors
Returns to Investors(a) Tremendous Total Returns Spanning 18 Years KMI: 13% CATR 2/10/11 to 12/5/14(b) KMP: 24% CATR 12/31/96 to 11/26/14 $175 $5,000 Dollars Dollars ━ KMP = $4,835 $140 $4,000 $105 $3,000 ━ S&P 500 = $170 ━ KMI = $160 ━ RMZ = $160 $70 ━ UTY = $159 $2,000 ━ AMZ(c) = $1,546 $35 $1,000
Slide 13: KMI's Diversified Cash Flow
KMI’s Diversified Cash Flow Supported by Substantially Fee-based Assets Pro Forma Consolidated KMI Natural Gas Pipelines 2014B Segment Earnings before DD&A 70% interstate pipelines = $8.0 billion(a) 21% gathering, processing & treating 9% intrastate pipelines & storage Products Pipelines CO2 S
Slide 14: 5-year Project Backlog
5-year Project Backlog(a) Nearly $18 Billion of Currently Identified Organic Growth Projects Tremendous footprint provides $17.9B of currently identified growth projects over next 5 years 5-year Growth Capex Backlog ($B) 4Q 2014 2015 2016 2017+ Total Natural Gas Pipelines $0.4 $0.6 $0.4 $3.3 $4.7 Pr
Slide 15: Natural Gas Megatrend
Natural Gas Megatrend Strong Natural Gas Footprint & Market Opportunity Set… U.S. Natural Gas Projected Supply & Demand(a) (Bcf/d) Demand 2014 2019 2024 KM Natural Gas Asset Footprint LNG exports -0.3 4.7 9.8 Mexican net exports 2.1 3.8 4.6 Power 21.3 23.9 28.5 Industrial 21.0 23.9 24.8 Other 29.6 2
Slide 16: Natural Gas Megatrend
Natural Gas Megatrend … Generating Real-time, Long-term Benefits $641B of investment in midstream energy infrastructure needed through 2035, implying $29B per year annual spend(a) compared to $18B annual spend by MLPs(b) over past five years Kinder Morgan’s unparalleled natural gas footprint is we
Slide 17: 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 — CO2 oil production • 2014 budget assumes $96.15/Bbl realized price on unhedged barrels • 2014 commodity price sensiti
Slide 18: Summary
Summary Attractive Value Proposition Unparalleled asset footprint with best-in-class cash flow visibility and dividend growth Diversified midstream energy platform provides stable, fee-based cash flow Industry leader in all business segments Highly visible, attractive growth project backlog
Slide 19: Appendix
KINDERMORGAN Appendix
Slide 20: KMI Compares Favorably to its Midstream Energy Peers and S&P 500 High-dividend Companies
KMI Compares Favorably to its Midstream Energy Peers and S&P 500 High-dividend Companies Market LQA Dividend Cap Dividend Growth Company Industry ($MM) Yield Rates 2015-2020 Kinder Morgan, Inc.(a) Oil & Gas Pipelines $88,849 4.9% 10.0% growth rate Large Cap U.S. Midstream Williams Companies, Inc. Oi
Slide 21: Cross-guarantees Overview
Cross-guarantees Overview KMI consolidated its subsidiaries under a single C-corp as follows: — Acquired public shares of KMR and public units of KMP and EPB — Executed cross guarantees among KMI, KMP, EPB and substantially all wholly-owned operating subsidiaries (including our wholly owned subsid
Slide 22: Additional Transaction Information
Additional Transaction Information Online Resources KMI acquisition of KMP, KMR and EPB closed on November 26, 2014 Certain transaction-related resources are available at kmitxn.kindermorgan.com, including: — Transaction overview from Rich Kinder (audio) — Summary transaction information — KM co
Slide 23: 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 – Take or pay, minimum – S&T: primarily minimum – Intrastate: ~75% take or pay(a) – Essentially no Volume Security – Volume based volum
Slide 24: Natural Gas Pipelines
Natural Gas Pipelines Segment Outlook Well-positioned connecting key natural gas resource plays with major demand centers Project Backlog: $4.7 billion of identified growth projects over next seven years(a), including: — LNG liquefaction (FTA at Elba Island) — Pipe projects supporting LNG liquefac
Slide 25: Products Pipelines
Products Pipelines Segment Outlook Opportunities for growth from increased liquids production Project Backlog: $1.1 billion of identified growth projects over next two years(a), including: — UTOPIA — Eagle Ford condensate processing — KMCC extensions — KMCC-Double Eagle interconnect Long-term Grow
Slide 26: Terminals
Terminals Segment Outlook Well-located in refinery / port hubs and inland waterways Project Backlog: $2.5 billion of identified growth projects over next five years(a), including: — Liquids • BOSTCO Phase 3 • Alberta crude by rail projects • Chemical terminal development • SCT Jones Act tanker bui
Slide 27: CO2 Segment Outlook
CO2 Segment Outlook Own and operate best source of CO2 for EOR(a) Project Backlog: Identified growth projects totaling $2.1 billion and $2.1 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 28: 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 Long-term Growth Drivers: Expand Oilsands export capacity to West Coast and Asia TMEP $5.4 Billion Expansion — Following successf
Slide 29: KINDERJMORGAN
KINDERJMORGAN