Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — Kinder Morgan Energy Partners — Platts 2nd E&P MLP Symposium (June 2008)
19 slides from Kinder Morgan's conference presentation, Jun 12, 2008
Slide 1: Platts 2nd E&P MLP Symposium
Platts 2nd E&P MLP Symposium June 12, 2008
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
Slide 3: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures This presentation utilizes the non- non-generally accepted accounting principles financial measures of segment segment distributable cash flow, KMP distributable cash flow, and earnings before interest, taxes and DD&A (“(“EBITDA” EBITDA”). For KMP overall, we defin
Slide 4: Capital Structure
Capital Structure Kinder Morgan Energy Partners, L.P. Market Equity (a) $14.8B Debt (b) 7.6B Enterprise Value $22.4B 2008E EBITDA (c) $2.5B 2008E DCF (d) $1.8B Additional Cash Incentive Shares Distribution Distribution KMR KMP (LLC) (Partnership) 75 million i- i-units (a) 182 million units (a) 65M 1
Slide 5: 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 dr
Slide 6: Unmatched Footprint
Unmatched Trans Mountain Footprint 2 Cochin Largest independent transporter 2 of petroleum products in the U.S. Pacific ⎯ Transport more than 2 million barrels per day (Bbl/d) 2nd largest transporter of natural Trailblazer 2 gas in U.S. (a) REX 3 2 ⎯ Approximately 22,000 miles of Northern REX in
Slide 7: Well-diversified Asset Base
Well-diversified Asset Base KMP CO2 2008 DCF Natural Gas Pipelines 32% CO2 transport and sales Profile (b) 47% Texas Intrastate 68% oil production related 53% Rockies Production hedged (a): Little incidental commodity risk CO2 Natural Gas 2008=83% ($44/Bbl) 28% Pipelines 2009=73% ($49) 2
Slide 8: Eleven Years of Consistent Growth
Eleven Years of Consistent Growth Total Distributions (GP + LP) ($mm) LP Distribution Per Unit (b) $2,000 $1,843 $4.50 $4.24-$4.32 GP (a) $1,750 $4.00 $3.68 % $1,500 LP $1,469 $3.50 R = 17 $3.20 $3.32 8% $1,265 CAG $2.96 =4 $1,162 $3.00 $2.72 GR $1,250 $2.50 $1,000 CA $827 $978 $2.50 $1.90 $2.20 $70
Slide 9: Significant Historical Returns
Significant Historical Returns (a) KMP: 29% CAGR (b) KMR: 14% CAGR (c) Dollars Dollars $2,000 $300 $1,809 Alerian $268 $1,750 $270 MLP Index KMR $255 $1,500 $240 KMP $1,250 $210 $1,000 $180 $750 $150 Alerian $579 $123 S&P 500 $500 MLP Index $120 $250 $221 $90 S&P 500 $0 $60 Dec- Dec- Dec- Dec- Dec-
Slide 10: Promises Made, Promises Kept
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 2006: $3.26 2007: $3.44
Slide 11: 2008 Partnership Goals
2008 Partnership Goals Distribution Target ⎯ $4.02 per unit (16% growth) ⎯ Excess coverage of ~$12 million Maintain Solid Balance Sheet ⎯ Expansions / acquisitions financed 50% equity, 50% debt Deliver Projects on Time and on Budget 11
Slide 12: KMP CO2 Operations
KMP CO2 Operations Company Remaining CO2 Pipelines CO2 Reserves Ownership Location Deliverability Operator Utah CO Reserves Doe Canyon Kansas 2 McElmo Dome 45% SW Colorado 22 yrs KMP McElmo Dome Crude Oil Production Doe Canyon 88% SW Colorado 30 yrs KMP Colorado Crude Oil Pipelines Bravo Dome 11% NE
Slide 13: CO2: How It Works
CO2: How It Works CO2 mixes with oil much like turpentine cleans paint from a brush Inter-phase mass transfer typically yields NGL rich gas production Chase water injection helps control mobility and gas recycle 13
Slide 14: CO2: How it Fits in the MLP
CO2: How it Fits in the MLP CO2 Transport – typical MLP pipeline business CO2 Sales – long-term contracts CO2 Flooding Investment Characteristics: Asset Heavy - Pipelines, Compression Equipment, Wells Operating Cost Structure: Predictable – Driven by fluid handling, purchased power Revenue Str
Slide 15: Growth Opportunities
Growth Opportunities Current Projects (2008-2011) Additional Opportunities REX Northeast Express extension, Shifting Natural Gas Supply Sources REX/NGPL Chicago Express project, — Rockies Rockies Express pipeline MEP expansion, KMLP expansion, — LNG KM Louisiana pipeline storage, incremental shipp
Slide 16: Current Projects
Current Projects Over $7.0 Billion In Current Projects Estimated Project Expected Project Cost ($mm) Completion Rockies Express $2,445 (a) 2007-2009 Midcontinent Express 660 (a) 2009 KM Louisiana Pipeline 550 2009 CALNEV expansion 425 2011 Trans Mountain – Anchor Loop expansion 485 2008 CO2 – SACROC
Slide 17: Risks
Risks Regulatory ⎯ Pacific Products Pipeline FERC/CPUC case ⎯ Periodic rate reviews ⎯ Unexpected policy changes CO2 Crude Oil Production Volumes ⎯ Commodity price risk largely hedged Construction Cost Overruns Environmental Terrorism Interest Rates ⎯ Approximately 50% floating rate debt
Slide 18: Summary
Summary Stable Cash Flow ⎯ Own assets core to energy infrastructure Internal Growth Opportunities ⎯ Critical Mass ⎯ Well-located assets/favorable demographics KMP/KMR: Fixed Cost Business 6-7% Yield ⎯ Drop growth to bottom line and Unique Structure 8% ⎯ Tax Efficient Long-Term ⎯ Incentive Fe
Slide 19: Kinder Morgan Energy Partners, L.P.
KINDER 7 MORGAN ENERGY PARTNERS, L.P.
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