Kinder Morgan, Inc. · NYSE:KMI

Kinder Morgan — Kinder Morgan Energy Partners — 2010 Morgan Keegan MLP Conference

21 slides from Kinder Morgan's conference presentation, May 18, 2010

  1. Slide 1: 2010 Morgan Keegan MLP Conference

    ENERGY PARTNERS, L.P. 2010 Morgan Keegan MLP Conference David Kinder VP, Corporate Development and Treasurer May 18, 2010

  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 (both in the aggregate and per unit), segment earnings before depreciation, depletion, amortization and amortizati

  4. Slide 4: Capital Structure

    ENERGY PARTNERS, L.P. Capital Structure Kinder Morgan Energy Partners, L.P. Market Equity (a) $19.4B Debt (b) 10.9B Enterprise Value $30.3B 2010E EBITDA (c) $3.2B (e) 2010E DCF (d) $2.4B (e) Additional Cash Incentive Shares Distribution Distribution KMR (NYSE) KMP (NYSE) (LLC) (Partnership) i-units

  5. Slide 5: KMR 101

    ENERGY PARTNERS, L.P. KMR 101 (a) KMR is KMP KMR Discount to KMP 10%  KMR shares are pari passu with KMP units  KMR dividend equal to KMP cash distribution, but paid in additional additional 5% ~7% avg discount since 2001 IPO shares; effectively a dividend reinvestment program (b)  Share dividend

  6. Slide 6: 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

  7. Slide 7: 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 ~1.9 million barrels per day (Bbl/d)  2nd largest transporter of natural gas in U.S. (a) 2 Trailblazer 2  Own an inter

  8. Slide 8: Well-diversified Cash Flow

    ENERGY PARTNERS, L.P. Well-diversified Cash Flow KMP 2010E CO2 Segment DCF Natural Gas Pipelines  28% CO2 transport and sales Profile (b)  59% Interstate (c)  72% oil production related  41% Texas Intrastate  Production hedged (a): 2010=75% ($58/Bbl) 2011=69% ($63) 30% 28% 2012=47% ($82) 2013=3

  9. Slide 9: Stable Asset Base

    ENERGY PARTNERS, L.P. Stable Asset Base Natural Gas Products Kinder Morgan CO2 Terminals Pipelines Pipelines Canada – Interstate: virtually all – Liquids: take or pay take or pay – S&T: minimum – Bulk: minimum  Volume Security – volume based – No volume risk – Intrastate: ~78% volume guarantee volu

  10. Slide 10: Delivering 13 Years Of Consistent Growth

    ENERGY PARTNERS, L.P. Delivering 13 Years Of Consistent Growth Total Distributions (GP + LP) ($MM) (a) Annual LP Distribution Per Unit (a,d) a,d) $2,500 $2,416 $4.40 $4.50 $4.20 GP (b) 15% $2,132 $4.02 $4.00 = $2,000 LP = 43% $1,854 $3.50 CA GR $3.13 $3.26 $3.48 R 0 CA G $1,469 $3.00 6- 201 $2.87 19

  11. Slide 11: Significant Historical Returns

    ENERGY PARTNERS, L.P. Significant Historical Returns (a) KMP: 27% CAGR Since ‘96 (b) KMR: 13% CAGR Since ‘01 (c) Dollars Dollars $2,500 $350 AMZ (d) KMP = $2,326 $2,250 $315 = $330 KMR $2,000 $280 = $308 $1,750 $245 $1,500 $210 $1,250 $175 $1,000 $140 $750 AMZ (d) = $712 $105 $100 $500 $70 S&P 500 =

  12. Slide 12: 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

  13. Slide 13: Sources of Future Growth

    ENERGY PARTNERS, L.P. Sources of Future Growth Growth Drivers KM Opportunity – Leverage Footprint – Cheap, abundant, domestic energy source – Full-year impact of REX, MEP, KMLA – Shifting supply from multiple basins – Completion of construction of FEP in 2010 – U.S. demand for natural gas expected t

  14. Slide 14: Kinder Morgan is Connected to Major New Natural Gas Basins

    ENERGY PARTNERS, L.P. Kinder Morgan is Connected to Major New Natural Gas Basins Through KM’s existing natural gas footprint and current projects we are connected to virtually every major natural gas basin in the U.S.:  Rocky Mountains (REX)  Barnett shale (MEP)  Fayetteville shale (FEP)  Haynes

  15. Slide 15: Proposed KinderHawk Haynesville JV

    ENERGY PARTNERS, L.P. Proposed KinderHawk Haynesville JV On April 13, 2010 KMP announced it would acquire a 50% joint venture interest in PetroHawk’ PetroHawk’s (HK) Haynesville gathering and treating assets  Acquisition gives KMP a preeminent position in the Haynesville shale, one of the largest o

  16. Slide 16: ~$20 Billion in Capital Invested 1998-2009

    ENERGY PARTNERS, L.P. ~$20 Billion in Capital Invested 1998-2009 (a,b) (billions) Total Invested by Type (a,b) a,b) Total Invested by Year (a) $12 $2.4 $9 $3.5 $3.3 JV Contributions $6 Expansion $3.0 $2.9 $8.7 $8.8 Acquisition $2.7 $3 $2.5 $0 Expansions Acquisitions $2.0 $1.9 $1.6 Total Invested by

  17. Slide 17: Returns on Capital

    ENERGY PARTNERS, L.P. Returns on Capital 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Segment ROI (a): Products Pipelines 11.9% 11.8% 12.8% 12.9% 12.4% 11.6% 11.8% 13.2% 12.5% 13.4% Natural Gas Pipelines 13.3 15.5 12.9 13.5 14.0 15.5 16.7 17.5 16.9 14.0 CO2 27.5 24.6 22.0 21.9 23.8 25.7 23.1 21

  18. Slide 18: Balance Sheet Remains Solid

    ENERGY PARTNERS, L.P. Balance Sheet Remains Solid (a) (millions) Credit Summary Budgeted FY 2009 FY 2010 Credit Metrics Debt / EBITDA (b,c) b,c) 3.8x 3.6x EBITDA / Interest (c) 6.4x 6.1x (d) L-T Debt Rating Baa2/BBB/BBB Revolver Liquidity (e) Maturities of Long-term Debt (f) Total Bank Credit $1,787

  19. Slide 19: 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 $84/Bbl realized price on unhedged barrels  2010 Sensitivity is ~$5.5 million DCF per $1/Bbl cha

  20. Slide 20: Attractive Value Proposition

    ENERGY PARTNERS, L.P. Attractive Value Proposition  Unparalleled asset footprint  Established track record  Industry leader in all business segments  Experienced management team  Supportive general partner  Transparency to investors  Attractive returns driven by combination of yield plus grow

  21. Slide 21: Kinder Morgan Energy Partners, L.P.

    KINDER/MORGAN ENERGY PARTNERS, L.P.

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