Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — BAML Global Energy Conference 2013
36 slides from Kinder Morgan's conference presentation, Nov 22, 2013
Slide 1: Companies Run By Shareholders, For Shareholders
Companies Run By Shareholders, For Shareholders Dax Sanders VP Corporate Development November 22, 2013
Slide 2: Forward-Looking Statements / Non-GAAP Financial Measures
Forward-Looking Statements / Non-GAAP Financial Measures 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 fut
Slide 3: Kinder Morgan: Four Ways to Invest: KMI, KMP, KMR & EPB
Kinder Morgan Four Ways to Invest: KMI, KMP, KMR & EPB 671MM Public Kinder Morgan, Inc. (65%) Float Market Equity $38.2B (a) Cash Debt 9.8B (b) dividends to KMI 296MM (d) Management/ shareholders (C-corp) (28%) Original S/H Enterprise Value $48.0B 1,036 MM shares (a) 2013E Dividend per Share $1.60 (
Slide 4: KMR 101
KMR 101 KMR is KMP KMR Discount to KMP — KMR shares are pari passu with KMP units 10% — KMR dividend equal to KMP cash distribution, but paid in additional shares; effectively a dividend reinvestment 5% program (a) 0% — Like KMP units, KMR shares are tax efficient - but with simplified tax reporti
Slide 5: Our Strategy
Our Strategy Stay the Course Same Strategy Since Inception Focus on stable fee-based assets that are core to North American energy infrastructure — Market leader in each of our business segments Control costs — It’s the investors’ money, not management’s – treat it that way Leverage asset foot
Slide 6: Unparalleled Asset Footprint
Kinder Morgan Unparalleled Asset Footprint 4th largest energy company in North America with combined enterprise value of approximately $105 billion (a) Largest natural gas network in U.S. — Own an interest in / operate almost 70,000 miles of natural gas pipeline — Connected to every important U.
Slide 7: 17 Years of Consistent Growth at KMP
17 Years of Consistent Growth at KMP KMP Total Distributions (GP + LP) ($MM) KMP Annual LP Distribution per Unit (c) $3,997(a) $6.00 $4,000 $5.33 (a) GP LP $4.98 $3,500 $3,230 $5.00 $4.61 $4.40 $3,000 $2,737 $4.20 $4.02 $2,450 (b) $4.00 $3.48 $2,171 $3.13 $3.26 $2,500 $1,877 $2.87 $2,000 $3.00 $2.63
Slide 8: Significant Historical Returns
Significant Historical Returns (a) KMP: 24% CATR Since ‘96 (b) KMI: 10% CATR Since Inception (e) $4,000 ━ KMP = $3,633 $150 Dollars Dollars $3,500 $125 $3,000 ━ S&P 500 = $145 $100 ━ UTY = $133 $2,500 ━ KMI = $131 $2,000 $75 ━ RMZ = $129 $1,500 ━ AMZ (d) = $1,307 $50 $1,000 $25 $500 ⇐ IPO 2/10/2011
Slide 9: Budget Guidance: Promises Made, Promises Kept
Budget Guidance Promises Made, Promises Kept Promises Made Promises Kept KMI Budgeted KMI Actual Dividend: Dividend: 2011: $1.16 (a) 2011: $1.20 (a) 2012: $1.35 2012: $1.40 KMP Budgeted KMP Actual LP Distribution: LP Distribution: 2000: $1.60 2000: $1.71 KMP achieved 2001: $1.95 2001: $2.15 LP distr
Slide 10: 2013 Guidance
2013 Guidance Supported by Diversified Cash Flow CO2 S&T CO2 Oil Production 5% KMI Forecast: Natural Gas 14% Pipelines KMI 2013 dividend: $1.60/sh (14.3% growth over 2012) Terminals 11% 56% — Original budgeted 2013 dividend was $1.57 B 3% 11% Fully-consolidated year-end 2013 debt / EBITDA = 5.1x
Slide 11: Toll Road-like Assets
Toll Road-like Assets: Predominantly Fee-based with Limited Commodity Exposure Significantly stable cash flow Over 80% of 2013 cash flow is fee-based (a) Almost 93% of 2013 cash flow is fee-based or hedged (a) Modest sensitivity to commodity prices and interest rates Commodity prices — CO2 EOR
Slide 12: 5-year Project Backlog
5-year Project Backlog (a) Over $14 Billion of Currently Identified Organic Growth Projects Tremendous footprint provides over $14B of currently identified growth projects over next 5 years 5-year Growth Capex Backlog ($B) 4Q 2013 2014 2015 2016+ Total Natural Gas Pipelines $0.6 $0.7 $0.2 $1.3 $2.9
Slide 13: Vast Opportunity Set
Vast Opportunity Set Leverages Diverse Energy Themes Pipeline / terminal expansions for Oilsands export to Asia Cochin conversion/ Canadian reversal for natural gas Oilsands diluent demand Northeast power demand growth to be fueled by natural gas Pipeline Terminals export conversion / coal handling
Slide 14: KMP / KMR
KINDER/MORGAN KINDER MORGAN ENERGY PARTNERS, L.P. KMP /KMR
Slide 15: KMP's Diversified Cash Flow
KMP’s Diversified Cash Flow Natural Gas Pipelines 2013E KMP Segment 55% interstate pipelines Earnings before DD&A 31% gathering, processing & treating = $5.7 billion (a) 14% intrastate pipelines & storage Products Pipelines CO2 S&T 56% pipelines 44% associated terminals & transmix Natural
Slide 16: KMP 2013 Growth Expenditure Forecast
KMP 2013 Growth Expenditure Forecast Without dropdown & CPNO With acquisitions acquisition = $3.8 billion (a) = $10.3 billion CO2 CO2 S&T S&T 2% Natural Gas Oil Natural Gas Terminals 7% Pipelines CO2 Oil Pipelines Production 7% 19% 31% Products 10% Pipelines (b) 6% 26% 17% Terminals 75% Products Pip
Slide 17: Over $40B of Growth Capital Invested at KMP
Over $40B of Growth Capital Invested at KMP (a,b,c) ($ in billions) Total Invested by Type Total Invested by Year $24 $11.0 $20 JV Contributions $10.3 $16 $3.5 $10.0 Expansion $12 $21.9 $9.0 Acquisition $8 $15.0 $8.0 $4 $7.0 $- Expansions Acquisitions $6.0 (c) $5.1 $5.0 Total Invested by Segment $4.
Slide 18: How We Have Done: KMP Returns on Capital
How We Have Done: KMP Returns on Capital 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Segment ROI (a): Natural Gas Pipelines 13.3% 15.5% 12.9% 13.5% 14.0% 15.5% 16.7% 17.5% 16.9% 14.0% 11.9% 11.9% 11.9% Products Pipelines 11.9 11.8 12.8 12.9 12.4 11.6 11.8 13.2 12.5 13.4 13.7 12.
Slide 19: EPB
KINDER/MORGAN EL PASO PIPELINE PARTNERS j EPB
Slide 20: EPB System Map
EPB System Map Pipelines: 100% Wyoming Interstate Co. (WIC) 100% Colorado Interstate Gas (CIG) 100% Cheyenne Plains (CP) 100% Southern Natural Gas (SNG) 100% Elba Express (EEC) LNG: 100% Southern LNG (SLNG) 20
Slide 21: EPB Focused on Natural Gas Pipelines
EPB Focused on Natural Gas Pipelines 2013E EPB Segment Natural Gas Earnings before DD&A Highly stable cash flow stream = $1.2 billion (a) — 89% interstate pipelines • Average contract life = ~7 years — 11% LNG • Average contract life = ~19 years (b) Natural Gas — Minimal throughput and commodity P
Slide 22: KMI
KINDER/MORGAN INC. KINDER MORGAN KMI
Slide 23: KMI Remaining Assets
KMI Remaining Assets Plan to Complete Dropdown Program by End of 2014 23
Slide 24: KMI Overview
KMI Overview KMI pays regular c-corp dividend with attractive combination of yield plus growth KMI Investments / Assets: — Investment in MLPs • KMP: – General Partner (GP) interest receives incentive distributions from KMP – KMI owns ~10% of total limited partner (LP) interests • EPB: – GP inter
Slide 25: Risks
Risks Regulatory (KMP/EPB/KMI) — Pacific Products Pipeline FERC / CPUC cases — Periodic rate reviews — Legislative and regulatory changes Crude oil production volumes (KMP) Commodity prices (KMP) — CO2 oil production • 2013 budget assumes $91.68/Bbl realized price on unhedged barrels • 2013 bu
Slide 26: Summary
Summary KMI, KMP, KMR & EPB: Attractive Value Proposition Unparalleled asset footprint Attractive dropdown inventory Long-term Growth Targets (a) Significant, identified growth Next 3 to 5 Years (2012+) opportunities KMP = ~5-6% Established track record EPB = ~5-6% KMI = ~9-10% Indus
Slide 27: Appendix
KINDER/MORGAN Appendix
Slide 28: Toll Road-like, Fee-based Business Model
Toll Road-like, Fee-based Business Model Natural Gas Products Kinder Morgan Terminals CO2 Pipelines Pipelines Canada (KMP) (KMP) (KMP/EPB/KMI) (KMP) (KMP) – Interstate & LNG: take or pay – Take or pay, minimum – S&T: primarily minimum – Intrastate: ~75% take or pay (a) – Essentially no Volume Secu
Slide 29: Natural Gas Pipelines
Natural Gas Pipelines Segment Outlook Well-positioned connecting key natural gas resource plays with major demand centers Project Backlog: $2.9 billion of identified growth projects over next five years (a), including: — TGP Northeast upgrade — LNG liquefaction (FTA @ Elba Island) — Eagle Ford gat
Slide 30: Products Pipelines
Products Pipelines Segment Outlook Opportunities for growth from increased liquids production Project Backlog: $1.0 billion of identified growth projects over next two years (a), including: — Cochin reversal / conversion — Eagle Ford condensate processing — KMCC extensions — KMCC-Double Eagle inte
Slide 31: Terminals
Terminals Segment Outlook Well-located in refinery / port hubs and inland waterways Project Backlog: $2.1 billion of identified growth projects over next three years (a), including: — Liquids • Edmonton Phase I / II expansions • BOSTCO • Houston terminals network expansion — Bulk • Deepwater coal
Slide 32: CO2 Segment Outlook
CO2 Segment Outlook Own and operate best source of CO2 for EOR (a) Project Backlog: Identified growth projects totaling $1.8 billion and $1.2 billion in S&T and EOR (a), respectively, over next five years (b), including: — S&T • McElmo / Doe Canyon expansion • St. Johns build-out — Oil Production
Slide 33: Kinder Morgan Canada
Kinder Morgan Canada Segment Outlook Sole oil pipeline from Oilsands to West Coast / export markets Project Backlog: $5.4 billion expansion of TMPL TMX $5.4 Billion Expansion Long-term Growth Drivers: Expand Oilsands export capacity to West Coast and Asia — Following successful open season, majo
Slide 34: Liquids Pipeline ROW Incident & Release Record
Liquids Pipeline ROW Incident & Release Record Consistent, Better-than-industry Performance Liquids Pipeline Incidents per 1,000 Miles (a) Liquids Pipeline Release Rate (a) 1.0 50 Barrels per billion barrel miles 0.8 40 Incidents per 1,000 Miles 0.6 30 0.4 20 0.2 0.45 10 0.39 0.29 15.5 13.1 0.21 0.2
Slide 35: Natural Gas Pipeline ROW Incident & Release Record
Natural Gas Pipeline ROW Incident & Release Record Consistent, Better-than-industry Performance Natural Gas Pipeline Incidents Rate (a) 1.0 Incidents per 1,000 Miles 0.8 0.6 0.4 0.2 0.32 0.27 0.27 0.30 0.26 0.13 0.04 0.10 - (b) 2006 2007 2008 2009 2010 2011 2012 LTM KM Incidents Current Industry Avg
Slide 36: KINDER/MORGAN
KINDER/MORGAN