Kinder Morgan, Inc. · NYSE:KMI

Kinder Morgan — Wachovia Pipeline Conference 2004

23 slides from Kinder Morgan's conference presentation, December 2004

  1. Slide 1: Wachovia Pipeline Conference December 2004

    Wachovia Pipeline Conference December 2004

  2. Slide 2: Forward Looking Statements

    Forward Looking Statements This presentation contains forward looking statements, including these, within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Exchange Act of 1934, as amended. Forward looking statements are not guarantees of performance. They i

  3. Slide 3: Kinder Morgan System Map

    Kinder Morgan System Map 2 PACIFIC COCHIN 2 2 NORTH 2 KMIGT 2 2 PACIFIC 2 3 CALNEV 2 KMP 2 4 PACIFIC NGPL CO2 Pipelines KMCO2 CO2 Field PLANTATION Terminals Products Pipelines KM TEJAS KMI 8 Products Pipeline Terminals NGPL 2 KMTP 2 Transmix Facilities NGPL Storage 2 CFPL 4 Natural Gas Pipelines Nat

  4. Slide 4: Kinder Morgan: Three Securities

    Kinder Morgan: Three Securities Kinder Morgan Energy Partners Kinder Morgan, Inc Market Equity (a) $8.9 Incentive Market Equity (b) $8.7 Debt (a) 4.5 Distribution Debt 2.9 Enterprise Value (a) $13.4 Enterprise Value $11.6 2004E EBITDA $1,307 mm 2004E EBITDA $1,033 mm 2004E Dist. CF $968 mm 2004E Dis

  5. Slide 5: Consistent Track Record

    Consistent Track Record Total Distributions (GP + LP) ($mm) KMP Distribution / Unit (a) $1,000 $940 $2.90 - GP $827 $2.94 $3.00 % $2.72 $800 $701 R = 21 $2.50 LP 65% $2.50 CAG $2.20 Net Income = GR $600 CA $548 $2.00 $1.90 $/LP U nit $1.45 $1.50 $1.30 $400 $333 $1.13 $198 $1.00 $153 $0.63 $200 $17 $

  6. Slide 6: The Kinder Morgan Strategy

    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  Improve productivity to drop a

  7. Slide 7: Management Philosophy

    Management Philosophy Low Cost Asset Operator  Senior management limited to $200,000 per year in base salary  No planes, sports tickets, etc. Attention to Detail  Weekly operations and financial assessment  Monthly earnings and accounts receivable review  Quarterly strategic review Risk Managem

  8. Slide 8: Kinder Morgan Energy Partners

    Kinder Morgan Energy Partners KMP and KMR

  9. Slide 9: Solid Asset Base Generates Stable Fee Income

    Solid Asset Base Generates Stable Fee Income Terminals Products Pipelines KMP 59% Liquids, 41% Bulk 2004 DCF (a) Refinery hub to population Geographic and product center strategy diversity 74% Pipelines (b) 3-4 year average contract life Terminals 22% Associated Terminals (b) 17% Product 4% Transmix

  10. Slide 10: KMP is Conservatively Capitalized

    KMP is Conservatively Capitalized Credit Summary CP Capacity Rating Baa1/BBB+ Total Revolver $1,250 Current Net Debt / Total Capital Outstanding CP (b) 167 (a,b) 52% Excess Capacity $1,083 2004 Budget Estimates: Debt / EBITDA 3.5x Comparative Credit Ratings EBITDA / Interest 6.5x Long-Term Debt Matu

  11. Slide 11: Growing KMP/KMR Distribution Coverage

    Growing KMP/KMR Distribution Coverage Published Budget vs. Actual Coverage Internally Generated Cash Flow Budgeted Coverage Actual Coverage Available for Reinvestment ($ mm) 1.10 $172+ (b) 1.04 1.05 KMR Distributions 1.02 1.00 1.00 $150 Coverage 1.00 $136 $108 0.90 $100 2002 2003 2004E $51 Approxima

  12. Slide 12: KMP 2004 Segment Goals

    KMP 2004 Segment Goals Growth in Earnings Top before DD&A Strategic Business Segment ($millions / %) Priority Products Pipelines $41 / 9% SFPP rate case East Line expansion Natural Gas Pipelines $10 / 3% Expand: i) Takeaway capacity from Rockies ii) Texas footprint CO2 $119 / 58% Deliver infrastruct

  13. Slide 13: KMP: Leading Position in Each Major Business

    KMP: Leading Position in Each Major Business Products Pipelines (based on barrels per day) (a) Natural Gas Pipelines (based on pipeline miles) 1. Kinder Morgan (1.9 million bpd) 1. El Paso (54,900 miles) 2. Buckeye Pipeline (1.5 million bpd) 2. Kinder Morgan (25,600 miles) 3. Magellan Midstream (.6

  14. Slide 14: High Return Internal Expansions Add Growth

    High Return Internal Expansions Add Growth KMP 2004 Expansion Capital Budget 2004 Completion Business Segment Budget Major Projects Date Product Pipelines $159 North and East Line, Carson 2004-2006 Natural Gas Pipelines $76 CMC, Austin 2004 CO2 $310 SACROC/Yates 2004 Terminals $64 Carteret, Delta 20

  15. Slide 15: Kinder Morgan Inc.

    Kinder Morgan Inc.

  16. Slide 16: Solid Asset Base Generates Stable Fee Income

    Solid Asset Base Generates Stable Fee Income Investment in KMP (a) KMI NGPL 2004 Segment Income (b) General partner interest earns FERC regulated with 3 year incentive distributions average contract life Owns 17% of total limited Primary customers are Chicago partner units local distribution compani

  17. Slide 17: KMI is Conservatively Capitalized

    KMI is Conservatively Capitalized Credit Summary CP Capacity Rating Total Revolver $800 Baa2/BBB Outstanding CP (a,b) 113 Current Net Debt / Total Capital (a) 41% Excess Capacity $762 2004 Budget Estimates: Debt / EBITDA 2.8x EBITDA / Interest 7.7x Comparative Credit Ratings (c) Long-Term Debt Matur

  18. Slide 18: Targeted KMI Internal Growth

    Targeted KMI Internal Growth Assumptions: 1. Investment in KMP 15% results from 8-10% LP distribution growth 2. NGPL / Other Assets 3 - 5% segment earnings growth 3. Use of Free Cash Flow $100 million in debt reduction $60 million in share repurchase Consistent with 10-12% earnings growth 4. Use of

  19. Slide 19: Over $2 billion Returned to Investors 2000-2004

    Over $2 billion Returned to Investors 2000- 2004 $2,019 $2,100 $1,800 $1,500 $1,200 $900 $511 $637 $556 $440 $600 $300 ($125) $0 -$300 2000 2001 2002 2003 2004E Total Dividends 23 23 37 135 280 497 Share Repurchase 0 266 149 38 60 513 Change in Net Debt 488 348 (311) 383 100 1,009 19

  20. Slide 20: Risks

    Risks Regulatory  Pacific Products Pipeline FERC/CPUC case  Periodic rate reviews  Unexpected FERC policy changes Environmental Terrorism Interest Rates  50% of debt is floating rate  Budget assumes approximately 100 bps increase in floating rates over the year  A full year of a 100 basis poin

  21. Slide 21: Future Opportunities Beyond 2004

    Future Opportunities Beyond 2004 Natural Gas Pipeline Expansions Refined Products Pipeline & Terminal  TransColorado Expansions  Advantage  East Line  Greasewood to Cheyenne  New York Harbor  West Texas  Houston  Silver Canyon  Los Angeles Natural Gas Storage SACROC/Yates Opportunities Acqu

  22. Slide 22: Unique Structure, Stable Assets and Attractive Growth

    Unique Structure, Stable Assets and Attractive Growth Unique Structure Stable Assets, Attractive Growth KMP Stable cash flow from essential  Tax efficient entity infrastructure  Pay-out 100% of available cash Low cost discipline  Structure creates discipline Conservative capital structure KMR Man

  23. Slide 23: Slide 23

Kinder Morgan — Wachovia Pipeline Conference 2004 on 6ix