Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — Morgan Stanley 2011 MLP & Diversified Natural Gas Corporate Access Day
28 slides from Kinder Morgan's conference presentation, Mar 15, 2011
Slide 1: Morgan Stanley 2011 MLP & Diversified Natural Gas Corporate Access Day
Morgan Stanley 2011 MLP & Diversified Natural Gas Corporate Access Day Kimberly Dang Chief Financial Officer March 15, 2011
Slide 2: Forward-Looking Statements
F Forward Forward- d-Looking L ki Statements St t t 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 facts. In particular particular, statements statements, express or
Slide 3: Use of Non-GAAP Financial Measures
U off N Use Non-GAAP Financial Non- Fi i l Measures M The non-generally accepted accounting principles ("non-GAAP") financial measures of distributable cash flow before certain items ((both in the aggregate gg g and pper unit), ), segment g earnings g before depreciation, p , depletion, p , amortiza
Slide 4: Use of Non-GAAP Financial Measures – Cont'd
U off N Use Non-GAAP Financial Non- Fi i l Measures M – Cont’d C t’d "Certain items" are items that are required by GAAP to be reflected in net income, but typically either (1) do not have a cash impact, for p ,g example, goodwill impairments, p , allocated compensation p for which we will never be
Slide 5: Kinder Morgan: Three Securities
Ki d Morgan: Kinder M Th Three S Securities iti Kinder Morgan Energy Partners, L.P. Kinder Morgan, Inc. Market Equity $22.7B (a) LP & GP Market Equity $21.6B (f) Debt 11.4B (b) Distributions (e) Debt 3.2B (g) Enterprise Value $34.1B $1.3B Enterprise Value $24.8B 2011E LP Distribution per Unit $4.60
Slide 6: KMR 101
KMR 101 (a) ( ) KMR is KMP KMR Discount to KMP KMR shares are pari passu with KMP units 10% KMR dividend equal to KMP cash distribution, but paid in 5% additional shares; effectively a dividend reinvestment 0% program (b) -5% Like KMP units, KMR shares are tax efficient — but with -10% 10% sim
Slide 7: The Kinder Morgan Strategy
The Th Ki Kinder d M Morgan St Strategy t Same Strategy Since Inception Focus on stable fee- fee-based assets that are core to North American energy infrastructure — Market leader in each of our businesses Control costs — It’s the investors’ money, not management’s – treat it that way L Levera
Slide 8: Kinder Morgan Asset Footprint
Kinder Morgan Trans Mountain Asset Footprint 2 Cochin Puget Largest independent transporter of petroleum products in the U.S. Pacific Express — Transport ~1.9MMBbl/d (a) 2nd largest transporter of natural gas in the U.S. Horizon — Own an interest in / operate over 24,000 Trailblazer 2 2 miles of
Slide 9: Delivering 14 Years of Consistent Growth
D li i 14 Years Delivering Y off Consistent C i t t Growth G th KMP Total Distributions (GP + LP) ($MM) (a) KMP Annual LP Distribution Per Unit (b) $3 000 $3,000 $5.00 $ $4 60 $4.60 $2,648 $4.40 GP LP $4.20 $2,420 $4.02 $2,500 $4.00 $2,132 $3.48 $1,854 $3.13 $3.26 $2,000 $2.87 $3.00 $2.63 $1,469 $2.
Slide 10: Significant Historical Returns
Si ifi Significant t Historical Hi t i l Returns R t (a) ( ) KMP: 26% CAGR Since ‘96 (b) KMR: 14% CAGR Since ‘01 (c) Dollars Dollars $3,000 $450 AMZ (d) KMP = $2,781 = $404 $2,500 $375 KMR = $376 $2,000 $300 $1,500 $225 AMZ (d) = $938 $1,000 $150 $500 $75 S&P 500 = $128 S&P 500 = $230 IPO 5/14/200
Slide 11: Promises Made, Promises Kept
P Promises i Made, M d Promises P i Kept K t P Promises i Made M d Promises P i Kept K t KMP Budgeted KMP 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
Slide 12: Kinder Morgan 2011 Goals
Ki d Morgan Kinder M 2011 Goals G l KMP KMI Distribution Target Dividend Target — $4.60 per unit (4.5% growth) — $1.16 per share (a) — Excess coverage of ~$37 $37 million — $820MM in total 2011 dividends Maintain Solid Balance Sheet Maintain Solid Balance Sheet — Yr- Yr-eend d 2011 0 debt /
Slide 13: KMP
KINDERJMORGAN KMP
Slide 14: Well-Diversified Cash Flow
W Well Well- ll-Diversified Di ifi d Cash C h Flow Fl KMP Segment E Earnings i before b f DD&A CO2 2011E = $3.8 billion (a,d a,d)) Natural Gas Pipelines $1,098MM segment EBDA (a) $1,079MM segment EBDA (a,d) — 28% CO2 transport and sales — 50% Interstate — 72% oil production related — 50% Intrast
Slide 15: A Stable Asset Base
St bl A Stable Assett B Base Natural Gas Products Kinder Morgan CO2 Terminals Pipelines p Pipelines p Canada – Interstate: virtually all – Liquids: take or pay – S&T: primarily take or pay – Bulk: minimum Volume Security – Volume based minimum volume – No volume risk – Intrastate: ~75% volume guar
Slide 16: $1.4 Billion 2011 Growth Expenditures Planned
$1.4 $1 4 Billi Billion 2011 G Growth th Expenditures E dit Planned Pl d KMP Growth Expenditures 2011E = $1.4 billion (a,b,c) a,b,c) CO2 Natural Gas Pipelines (a) 34% 31% 11% 24% Products Pipelines (b,c) Terminals (b) __________________________ (a) Includes equity contributions to joint ventures (b)
Slide 17: 2011 Financing Plans
2011 Fi Financing i Plans Pl ($ in millions) 2011 Budget Equity Secondary offerings / ATM $270 KMR 432 Total equity $702 Debt Long-term debt issuance $1,700 Decrease in revolver (a) ( (325) ) Debt maturity (700) Incremental debt $675 __________________________ (a) Excludes any changes in working cap
Slide 18: Sources Of Future Growth
S Sources Of Future F t Growth G th KM Opportunity – Growth Drivers Leverage L Footprint F t i t – Pipeline / storage expansions and – Cheap, abundant, domestic and clean – extensions (e.g. Eagle Ford) Natural Gas natural gas is the logical fuel of choice – Acquisitions (e.g. KinderHawk) – Shiftin
Slide 19: Over $22B Of Growth Capital Invested
O Over $22B Of G Growth th C Capital t d (a,b it l Invested I a,b) b) ($ in billions) Total Invested by Type (a,b) (a b) Over $11 Billion Invested in Last 4 Years (a) $15 $12 $3.5 JV Contributions $3.3 $2.7 $9 Expansion $3.0 Acquisition $2.9 $6 $9.3 $10.4 $2.4 $2.5 $3 $2.5 $0 E Expansions i A Acquis
Slide 20: Balance Sheet Remains Solid
B l Balance Sheet Sh t Remains R S lid (a) i Solid ( ) ($ in millions) Credit Summary Debt / EBITDA (b,c b,c)) 3.7x (d) EBITDA / Interest (c) 6.1x L-T Debt Rating Baa2 / BBB / BBB (e) Re ol er Capacit Revolver Capacity Long--Term Debt Maturities Long Mat rities Total Bank Credit $2,000 2011 $7(f) Le
Slide 21: Focused on Distribution Growth
Focused F d on Distribution Di t ib ti Growth G th Annual LP Distribution Per Unit (b) History of Delivering Distribution $4.60 $4.40 Growth (a): $4.02 $4.20 — 1-year growth = 4.8% $3.13 $3.26 $3.48 $2.87 — 3-year growth = 8.1% $2.44 $2.63 $2.15 — 5-yyear growth g = 7.0% $1 42 $1.42 $1.71 $1.24 $0
Slide 22: KMI
KINDERJMORGAN KMI
Slide 23: Overview
O Overview i KMI Total C hR Cash Receipts i t Interests in KMP (b) 2011E = $1.36 billion (a) NGPL General Partner interest receives A major interstate natural gas incentive distributions from KMP pipeline and one of the largest GP natural gas storage operators in KMI owns ~11% of total limited
Slide 24: Liquidity Summary
Li idit Summary Liquidity S (a) ( ) ($ in millions) Credit Summary Net Debt $3,195 (b) Net Debt / Distributions Received Less G&A 2.4x (c) L-T Debt Rating Ba1 / BB / BB+ (d) Re ol er Capacity Revolver Capacit Long--Term Debt Mat Long Maturities rities (f) Total Bank Credit $1,000 2011 --- Less: 2012
Slide 25: KMP Drives KMI Growth
KMP D Drives i KMI Growth G th KMP Cash Distributions Received by KMI $1,330 Substantial cash flow GP $1,202 LP Units Owned $1,079 Minimal capital expenditures at KMI level $902 $1,169 Strong balance sheet $682 $632 $1,054 $574 $940 $477 Growingg distributions and $406 $582 $783 $333 $536 $4
Slide 26: KMP Risks
KMP Risks Ri k Regulatory — Pacific Products Pipeline FERC/CPUC cases — Periodic rate reviews — Unexpected policy changes Crude Oil Production Volumes Crude Oil Prices — 2011 budget assumes $89/Bbl realized price on unhedged barrels — 2011 sensitivityy is ~$5 million DCF p per $1/Bbl change g
Slide 27: KMI, KMP & KMR: Attractive Value Proposition
KMI KMP & KMR: KMI, KMR Attractive A i Value V l Proposition P ii Unparalleled asset footprint Established track record Industry leader in all business segments Experienced management team Supportive S ti generall partner t Transparency to investors Attractive returns driven by combina
Slide 28: Kinder Morgan
KINDERJMORGAN
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