Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — Barclays 2011 Investment Grade Energy & Pipeline Conference
26 slides from Kinder Morgan's conference presentation, Mar 10, 2011
Slide 1: Barclays 2011 Investment Grade Energy & Pipeline Conference
Barclays 2011 Investment Grade Energy & Pipeline Conference David Kinder VP Corporate Development & Treasurer March 10, 2011
Slide 2: Forward-Looking Statements
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 actions, conditions or eve
Slide 3: Use of Non-GAAP Financial Measures
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 amortization of excess cost of e
Slide 4: Use of Non-GAAP Financial Measures – Cont’d
Use of Non-GAAP Financial Measures – Cont’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 example, goodwill impairments, allocated compensation for which we will never be responsible, and results from assets
Slide 5: Kinder Morgan: Three Securities
Kinder Morgan: Three Securities 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 $4.60 (c) 2011E Divide
Slide 6: The Kinder Morgan Strategy
The Kinder Morgan Strategy Same Strategy Since Inception Focus on stable fee-based assets that are core to North American energy infrastructure — Market leader in each of our businesses Control costs — It’s the investors’ money, not management’s – treat it that way Leverage asset footprint to
Slide 7: Kinder Morgan Asset Footprint
Kinder Morgan Trans Mountain Asset Footprint 2 Cochin Puget Largest independent transporter of petroleum products in the U.S. Pacific Express — Transport ~1.9MMBbl/d (a) 2nd largest transporter of natural gas in the U.S. Horizon — Own an interest in / operate over 24,000 Trailblazer 2 2 miles of
Slide 8: Delivering 14 Years of Consistent Growth
Delivering 14 Years of Consistent Growth KMP Total Distributions (GP + LP) ($MM) KMP Annual LP Distribution Per Unit (b) $3,000 $5.00 $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 $2.44 $1,500 $1,265 $2.15 $1,162 $978 $2.00 $
Slide 9: Promises Made, Promises Kept
Promises Made, Promises Kept Promises Made Promises Kept 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: $3.13 2006: $3.28 2006: $3.26 2007
Slide 10: Kinder Morgan 2011 Goals
Kinder Morgan 2011 Goals KMP KMI Distribution Target Dividend Target — $4.60 per unit (4.5% growth) — $1.16 per share (a) — Excess coverage of ~$37 million — $820MM in total 2011 dividends Maintain Solid Balance Sheet Maintain Solid Balance Sheet — Yr-end 2011 debt / EBITDA = 3.6x — Yr-end 2
Slide 11: KMP
KMP KINDER/MORGAN
Slide 12: Well-Diversified Cash Flow
Well-Diversified Cash Flow KMP Segment Earnings before DD&A CO2 2011E = $3.8 billion (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% Intrastate (e) — Production hedged (b): 2011=79
Slide 13: Stable Asset Base
Stable Asset Base Natural Gas Products Kinder Morgan CO2 Terminals Pipelines Pipelines 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 guarantee, guarante
Slide 14: $1.4 Billion 2011 Growth Expenditures Planned
$1.4 Billion 2011 Growth Expenditures Planned KMP Growth Expenditures 2011E = $1.4 billion (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) Includes acquisitions; $174 milli
Slide 15: 2011 Financing Plans
2011 Financing Plans ($ 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 capital 15
Slide 16: Sources Of Future Growth
Sources Of Future Growth KM Opportunity – Growth Drivers Leverage Footprint – 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) – Shifting supply from multipl
Slide 17: Over $22B Of Growth Capital Invested
Over $22B Of Growth Capital Invested (a,b) ($ in billions) Total Invested by Type (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 $2.5 $3 $2.5 $2.4 $0 Expansions Acquisitions $2.0 $1.5 $1.4 Total Invested by
Slide 18: Balance Sheet Remains Solid
Balance Sheet Remains Solid (a) ($ in millions) Credit Summary Debt / EBITDA (b,c) 3.7x (d) EBITDA / Interest (c) 6.1x L-T Debt Rating Baa2 / BBB / BBB (e) Revolver Capacity Long-Term Debt Maturities (f) Total Bank Credit $2,000 2011 $707 Less: 2012 $957(g) Borrowings Outstanding (522) 2013 $507 Let
Slide 19: Focused on Distribution Growth
Focused on Distribution Growth 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-year growth = 7.0% $1.42 $1.71 $1.24 $0.94 $0.63 1996 1997 1998 1999
Slide 20: KMI
KINDER/MORGAN KMI
Slide 21: Overview
Overview KMI Total Cash Receipts Interests in KMP (b) 2011E = $1.36 billion (a) NGPL General Partner interest receives A major interstate natural gas incentive distributions from KMP pipeline and one of the largest GP natural gas storage operators in KMI owns ~11% of total limited Interest the
Slide 22: Liquidity Summary
Liquidity Summary (a) ($ in millions) Credit Summary Net Debt $3,195 (a) Net Debt / Distributions Received Less G&A 2.4x (b) L-T Debt Rating Ba1 / BB / BB+ (c) Revolver Capacity Long-Term Debt Maturities (a) (e) Total Bank Credit $1,000 2011 --- Less: 2012 $839 (d) Revolver Drawn (377) 2013 --- Lett
Slide 23: KMP Drives KMI Growth
KMP Drives KMI Growth KMP Cash Distributions Received by KMI $1,330 Substantial cash flow GP $1,202 Minimal capital expenditures at LP Units Owned $1,079 KMI level $902 Strong balance sheet $682 $1,169 $632 $1,054 $574 $940 Growing distributions and $477 $783 $406 $333 $582 investment at KMP
Slide 24: KMP Risks
KMP Risks 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 sensitivity is ~$5.5 million DCF per $1/Bbl change in crude
Slide 25: KMI, KMP & KMR: Attractive Value Proposition
KMI, KMP & KMR: 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 growth 25
Slide 26: Kinder Morgan
KINDER/MORGAN
Kinder Morgan — Barclays 2011 Investment Grade Energy & Pipeline Conference on 6ix