Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — Kinder Morgan Energy Partners — 2007 UBS MLP Conference
21 slides from Kinder Morgan's conference presentation, Sep 19, 2007
Slide 1: 2007 UBS MLP Conference
ENERGY PARTNERS, L.P. 2007 UBS MLP Conference September 19, 2007
Slide 2: Forward Looking Statements
ENERGY PARTNERS, L.P. 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
Slide 3: System Map
ENERGY PARTNERS, L.P. System Map Trans Mountain PRODUCTS PIPELINES PRODUCTS PIPELINES TERMINALS 2 Cochin TRANSMIX FACILITIES NATURAL GAS PIPELINES NATURAL GAS STORAGE 2 NATURAL GAS Pacific PROCESSING ROCKIES EXPRESS PIPELINE IN-SERVICE ROCKIES EXPRESS PIPELINE Trailblazer 2 KM LOUISIANA PIPELINE REX
Slide 4: Capital Structure
ENERGY PARTNERS, L.P. Capital Structure Kinder Morgan Energy Partners Market Equity (a) $11.9B Debt (b) 6.6B Enterprise Value $18.5B 2007E EBITDA (b) $2.0B 2007E DCF (b) $1.4B Additional Cash Incentive Shares Distribution Distribution KMR KMP (LLC) (Partnership) 71 million i-units 168 million units
Slide 5: Solid Asset Base Generates Stable Fee Income
ENERGY PARTNERS, L.P. Solid Asset Base Generates Stable Fee Income KMP CO2 2007 DCF Products Pipelines 28% CO2 transport and sales Profile (b) Refinery hub to population 72% oil production related center strategy Production hedged (a): 68% Pipelines Products 2007=85% ($35/Bbl) CO2 27% Associated Ter
Slide 6: Consistent Track Record
ENERGY PARTNERS, L.P. Consistent Track Record Total Distributions (GP + LP) ($mm) LP Distribution Per Unit (b) $1,600 $1,436 $4.00 $3.60-$3.68 GP (a) $3.32 $1,400 $1,256 $3.50 $3.20 LP $1,162 = 17% $2.96 $1,200 % $3.00 GR $2.72 = 50 $978 CA $2.50 $1,000 G R $827 $2.50 $2.20 $800 CA $701 $2.00 $1.90
Slide 7: Significant Historical Returns
ENERGY PARTNERS, L.P. Significant Historical Returns Total Returns, Dec-1996 to Aug-2007 (a) $1,800 KMP 29% annual return $1,600 KMP has returned 1,382% since 31-Dec-1996, compared to 481% Dollars $1,400 and 137% for the Alerian MLP and S&P 500 indices, respectively. $1,200 $1,000 $800 Alerian 18% a
Slide 8: 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 Improve
Slide 9: Growth Opportunities
ENERGY PARTNERS, L.P. Growth Opportunities Current Projects (2007-2010) Additional Opportunities Shifting Natural Gas Supply Sources — Rockies Rockies Express pipeline Storage, further pipeline expansions, — LNG KM Louisiana pipeline extensions, incremental shipper services — Barnett Shale Midcontin
Slide 10: Shifting Natural Gas Supply Sources
ENERGY PARTNERS, L.P. Shifting Natural Gas Supply Sources Natural Gas Supply % Production Volumes (a) 2006 2010 Change Change Rockies Rockies Natural Gas 7.7 9.6 1.9 25% production Barnett Shale Natural Gas 1.5 2.0 0.5 33% expected to Gulf Coast LNG Imports 0.3 3.1 2.8 933% increase 25% 2006-2010 (a
Slide 11: Newbuild Natural Gas Pipelines
ENERGY PARTNERS, L.P. Newbuild Natural Gas Pipelines Wyoming Nebraska Indiana Ohio Illinois Colorado Kansas Missouri Oklahoma ROCKIES EXPRESS PIPELINE IN-SERVICE Mississippi ROCKIES EXPRESS PIPELINE Alabama MIDCONTINENT EXPRESS PIPELINE Texas Louisiana Texas KM LOUISIANA PIPELINE KM HEADQUARTERS Roc
Slide 12: Growing Crude Production from Canadian Oilsands
ENERGY PARTNERS, L.P. Growing Crude Production from Canadian Oilsands WCSB Crude Production by Type (a) Heavy/Light Crude Differential (b) WTI vs. Mayan Crude Spot Price 4 $20 Oilsands ‘15 3.5 Condensate CAG R ‘06- % Conventional Heavy ds ~11 3 Conventional Light Oilsan $15 Oilsands - LC (MBbl/d) 2.
Slide 13: Increased Use of Heavy Crude
ENERGY PARTNERS, L.P. Increased Use of Heavy Crude North American Petcoke Production (a) 100 Rest of N. America 87 ‘1 R Crude supply is heavier, 5- G ‘0 C A (mm dry short tons) U.S. Gulf Coast 5 80 % more sour ~5 57 60 51 52 51 49 43 45 Heavier, sour crude 40 produces more residue 20 — Petcoke 0 200
Slide 14: Current Projects
ENERGY PARTNERS, L.P. Current Projects $6.5 Billion In Projects Over Next 4 Years Estimated Project Expected Project Cost ($mm) Completion Rockies Express $2,200 (a) 2007-2009 Midcontinent Express 625 (a) 2009 KM Louisiana Pipeline 500 2009 CALNEV expansion 425 2010 East Line expansion 155 2007 Tran
Slide 15: Future Opportunities
ENERGY PARTNERS, L.P. Future Opportunities Natural Gas: Shifting Supply Basins and Gas Price Volatility — Storage, Extensions, Expansions, Incremental Services Canadian Oilsands — TMX2, TMX3, TMX North, CO2, Terminals Increased Use of Heavy Crude and Increased Coal Imports, Renewable Fuels, Imported
Slide 16: $11 Billion in Capital Invested, 1998-2006
ENERGY PARTNERS, L.P. $11 Billion in Capital Invested, 1998-2006 ($ billions) Total Invested by Type Total Invested by Year $9.0 $0.7 ∗ $3.4 $6.0 $2.7 ∗ Expansion $7.5 $3.0 $3.0 Acquisition $3.5 $2.5 $0.0 $1.9 Acquisitions Expansions $2.0 $1.6 Total Invested by Segment $1.5 $1.3 $1.3 $1.2 $1.1 $5.0
Slide 17: Attractive Returns on Capital
ENERGY PARTNERS, L.P. Attractive Returns on Capital 2000 2001 2002 2003 2004 2005 2006 Segment ROI (a): Products Pipelines 11.9% 11.8% 12.8% 12.9% 12.4% 11.6% 11.8% Natural Gas Pipelines 13.3 15.5 12.9 13.5 14.0 15.5 16.5 CO2 27.5 24.6 22.0 21.9 23.8 25.7 23.1 Terminals 19.1 18.2 17.7 18.4 17.8 16.9
Slide 18: Solid Balance Sheet
ENERGY PARTNERS, L.P. Solid Balance Sheet ($ millions) Credit Summary L-T Debt Rating Baa2/BBB Current Net Debt / Total Capital (a,b) 54.3% 2007 Budget Estimates: Debt / EBITDA 3.6x EBITDA / Interest 5.1x CP Capacity (b) Long-term Debt Maturities (c) Total Bank Credit $1,850 2007 $0 Less: 2008 $5 Ou
Slide 19: Risks
ENERGY PARTNERS, L.P. Risks Regulatory Pacific Products Pipeline FERC/CPUC case Periodic rate reviews Unexpected policy changes CO2 Crude Oil Production Volumes Construction Cost Overruns Environmental Terrorism Interest Rates Approximately 50% floating rate debt Budget assumes flat rates
Slide 20: Summary
ENERGY PARTNERS, L.P. 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% Long-Term Tax Efficient
Slide 21: ENERGY PARTNERS, L.P.
KINDER’ “MORGAN ENERGY PARTNERS, L.P.
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