Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — Kinder Morgan 2012 Analyst Conference
32 slides from Kinder Morgan's conference presentation, Jan 25, 2012
Slide 1: Terminals
Terminals Jeff Armstrong President Terminals Group
Slide 2: Terminal Locations
Terminal Locations 2 3 3 23 2 2 2 2 2 2 4 2 3 3 2 2 2 4 2 2 KM Terminals Segment Facilities Bulk 88 Terminals Liquids 26 Terminals Legend 4 4 3 3 2 KMMS 35 Transload Operations Dry and/or Break Bulk Locations 3 7 Liquid Locations Product Pipelines Locations Transload Operations 2
Slide 3: Historical Growth
Historical Growth ($ in thousands) 2006 2007 2008 2009 2010 2011 2012 Actual Actual Actual Actual Actual Actual Budget Earnings before DD&A (a) $396,858 $442,330 $538,836 $576,096 $646,608 $701,042 $756,844 Growth from prior year 24.7% 11.5% 21.8% 6.9% 12.2% 8.4% 8.0% Internal 14.2% 2.3% 14.7% 6.0%
Slide 4: Financial Overview
Financial Overview ($ in thousands) 2009 Actual 2010 Actual 2011 Actual 2012 Budget Revenue (net) $1,081,679 $1,244,810 $1,298,507 $1,347,870 Opex $501,175 $591,547 $598,212 $579,863 (b) EBITDA (a) $580,504 $653,263 $700,295 $768,007 Book income tax $4,408 $6,655 (747) $11,163 Earnings before DD&A $
Slide 5: Contract Diversification
Contract Diversification Liquids Revenue Breakout (a) Bulk Revenue Breakout (a) Top-10 Customers (a) 3.9-yr Avg. Contract Life (b) Top-10 Customers $409.9MM Liquids 4.0 Years Total Revenue $1,348MM Bulk 3.8 Years __________________________ (a) 2012 budget (b) 2012 budget weighted average, as of 12/3
Slide 6: Bulk Tonnage
Bulk Tonnage Variance ('12 vs '11) Actual Actual Budget Amt % 2010 2011 2012 Coal 32,571,773 39,041,902 43,759,862 4,717,960 12.1% Petcoke 12,665,891 11,511,349 12,513,856 1,002,507 8.7% Cement (Including Clinker) 607,748 588,084 552,000 (36,084) -6.1% Fertilizers 5,718,218 5,315,357 5,515,568 200,2
Slide 7: Liquids Throughput
Liquids Throughput Variance ('12 vs '11) Actual Actual Budget Amt % 2010 2011 2012 Chemical 21,748,652 24,359,936 32,732,431 8,372,495 34.4% Distillate 163,367,651 154,115,558 145,906,266 (8,209,292) -5.3% Gasoline 333,903,633 330,353,480 341,403,630 11,050,150 3.3% Throughput Fuel Grade Ethanol / B
Slide 8: Major Projects Completed in 2011
Major Projects Completed in 2011 First Full Avg. MODELED Year In Service Contract LIQUIDS PROJECT NAME PRODUCT CAPACITY CAPITAL EBITDA Date Length (a) MMBBLS (MM) (MM) Gateway Project (Carteret, NJ) Distillates 1.0 $62.1 Q3/11 10 Deer Park Ethanol (Deer Park, TX) Ethanol 0.2 $27.3 Q1/12 4.4 Chemical
Slide 9: Major Projects in Progress
Major Projects in Progress First Full Avg. MODELED Year Expected Contract PROJECT NAME PRODUCT CAPACITY CAPITAL EBITDA In Service Length (a) LIQUIDS MMBBLS (MM) Ethanol Pipeline (Linden, NJ) Ethanol N/A $8.8 Q1/12 10 (b) Pipeline Rate Expansion (Edmonton, Alberta) Crude N/A $8.5 Q3/12 15.6 (b) Tank
Slide 10: Petroleum Exports / Imports
KINDER/MORGAN Petroleum Exports / Imports
Slide 11: Distillate
Distillate Distillate Fuel Oil – Export Destination (% of 2011 Daily Average) Europe Distillate Fuel Oil - Net Exports 33% 700 636 Canada 2% 600 South Africa America 3% 500 59% 426 Other Asia 2% 400 362 1% MBbl/d 314 300 Distillate Fuel Oil – U.S. Export Location 200 (% of 2011 Daily Average) 100 PA
Slide 12: Finished Gasoline
Finished Gasoline Finished Motor Gasoline – Export Destination (% of 2011 Daily Average) Europe 5% Finished Motor Gasoline - Net Exports Canada South 4% America 88% Africa 400 2% 338 Other 300 1% Asia 200 161 0% 100 MBbl/d 0 (28) Finished Motor Gasoline – U.S. Export (100) Location (130) (% of 2011
Slide 13: Fuel Oil Exports
Fuel Oil Exports USGC Residual Fuel Import and Export Movements of Residual Fuel Oil (High-Sulfur and Low-Sulfur) from Padd 3 to Other Padds by Barge 16 140 14 118.136 120 109.698 12 Million Barrels 93.169 Million Barrels 100 84.049 10 80 8 60 41.647 6 36.985 37.436 40 28.836 4 20 2 0 0 2007 2008 20
Slide 14: BOSTCO Project
BOSTCO Project 14
Slide 15: World Refinery Capacity Changes
World Refinery Capacity Changes __________________________ Source: Baker O’Brien 15
Slide 16: East Coast Refinery Closures
East Coast Refinery Closures ConocoPhillips announced in late September 2011 the intention to sell or close the Trainer refinery (185 MB/D) and began preparations for idling the plant (plant is now down). In early December 2011, Sunoco announced that it was shutting down Marcus Hook (178 MB/D) a
Slide 17: PADD 1B Demand vs. Refining Capacity in Region
PADD 1B Demand vs. Refining Capacity in Region __________________________ Source: Baker O’Brien 17
Slide 18: Implications of East Coast Refinery Closures
Implications of East Coast Refinery Closures If significant capacity is shutdown in the NY Harbor area, additional barrels will be required from the USGC or longer-haul imports Because the Colonial pipeline system is periodically constrained, supplying more barrels to NY Harbor will require some
Slide 19: Impact of Petroleum Market Shift for KM
Impact of Petroleum Market Shift for KM Maximize Throughput at Three New York Harbor Facilities • Just completed 1 million barrel build-out in Carteret Build-Out US Gulf Export Capacity • BOSTCO 6.6 million barrels in Phase 1 underway • BOSTCO Phase II approximately 3.7 million barrels 19
Slide 20: Ethanol
KINDER/MORGAN Ethanol
Slide 21: RFS2: Four Annual Standards
RFS2: Four Annual Standards __________________________ Source: 2011 Houston BioFuels Consultants LLC 21
Slide 22: US and Global Ethanol S&D
US and Global Ethanol S&D In 2011, the US accounted for 55% of global ethanol demand In 2011, the US and Brazil together accounted for over 80% of global demand, a share that is expected to continue through the forecast period Most of the global growth will be in the US and Brazil as well in t
Slide 23: US Ethanol Imports and Exports
US Ethanol Imports and Exports The RFS2 advanced biofuel requirements can most economically be met with imports of cane ethanol, mainly from Brazil The California LCFS will only determine the share of imports directed to California; the amount of imports is set by the RFS2 advanced biofuel manda
Slide 24: Coal
KINDER/MORGAN Coal
Slide 25: International Metallurgical Coal
International Metallurgical Coal Market Conditions & Drivers Global Met Coal Trade Total Growth In World Steel Consumption (billions of tons of finished steel) Met Coal Imports (MMt) 2009 2010 2011E 2012E Europe 36 45 49 51 Japan 53 58 56 62 China 34 48 52 54 Korea 21 28 31 32 India 25 30 34 40 Braz
Slide 26: International Steam Coal
International Steam Coal Market Conditions & Drivers Coal is forecasted to supply approximately 43% of the World Electricity Generation (Trillion worlds electricity generation in 2035. Kilowatt hours) Thermal coal imports to India’s utilities increased by 70% in 2011 and increasing demand by new
Slide 27: Domestic Coal Markets
Domestic Coal Markets Total Forecasted U.S. Coal Retirements U.S. Coal Consumption Millions short tons 1,060.0 1,040.0 1,020.0 1,000.0 980.0 960.0 940.0 2010 2011 2012 2013 __________________________ Source: EIA and Wood Mackenzie, Fall 2011 Web Call 27
Slide 28: KM Response
KM Response East Coast (1) Fairless Hills Terminal, Fairless Hills PA expected capital outlay = $5.6 mm U.S. Gulf (1) International Marine Terminal, Myrtle Grove LA – Phase 1 expected capital outlay = $70 mm 6 million tons (2) International Marine Terminal, Myrtle Grove LA – Phase 2 expected capital
Slide 29: Canadian Crude Tankage
KINDER/MORGAN Canadian Crude Tankage
Slide 30: Canadian Crude Market Fundamentals
Canadian Crude Market Fundamentals WTI vs Canadian Heavy (Cold Lake) Pricing $160 $140 $120 $100 $80 $60 $40 $20 $0 1-Oct-07 1-Oct-08 1-Oct-09 1-Oct-10 1-Oct-11 1-Jan-07 1-Jul-07 1-Jan-08 1-Jul-08 1-Jan-09 1-Jul-09 1-Jan-10 1-Jul-10 1-Jan-11 1-Jul-11 1-Apr-07 1-Apr-08 1-Apr-09 1-Apr-10 1-Apr-11 Incr
Slide 31: Edmonton, AB – Canada's Primary Crude Hub
Edmonton, AB – Canada’s Primary Crude Hub Kinder Morgan’s Edmonton Terminal: Trans Mountain Operational 2.5 MM Bbls North 40 Merchant 2.1 MM Bbls Edmonton Merchant (2013) 2.4 MM Bbls (under construction) Edmonton Merchant (2014+) 3.6 MM Bbls (future phases) Current and Future Capacity: 10.6
Slide 32: Latest Investment in Watco
Latest Investment in Watco Financial Components: Second $50MM Tranche of Terms similar to initial investment Preferred Equity — Preferred distributions of 13%, — Preferred Investment now paid quarterly totals $100MM Proceeds to Support Following Acquisitions/Investments: Birmingham Southern —
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