Run By Shareholders, For Shareholders Steve Kean President & Chief Operating Officer September 3, 2014
Transaction Overview Consolidating All Kinder Morgan Assets Under One Public Company KMI will acquire all of the outstanding common units of KMP and EPB and all outstanding shares of KMR KMP KMR EPB (a) Acquisition Consideration…
Value Enhancing Combination Significant Upfront 2015E KMI dividend per share expected to be 2.00 with significant coverage Dividend Increase 16% dividend increase from 2014 guidance of 1.72 Enhances Future 10% annual growth rate…
Simplified Organizational Structure Current Public Structure Simplified Public Structure Kinder Morgan, Inc. (NYSE: KMI) 13% Listed Shares BB / Ba2 / BB+ 100% Voting Shares One publicly traded company vs. four results in: Kinder…
Summary Transaction Timeline Expect KMI and KMR shareholder meetings and unitholder meetings for KMP and EPB in 4Q 2014 Preliminary proxy filed 8/27/2014 Subject to customary regulatory approvals HSR early termination received…
Unparalleled Asset Footprint Largest Energy Infrastructure Company in North America 3rd largest energy company in North America with estimated combined pro forma enterprise value of 140 billion(a) 17 billion of currently identified…
Strategy Remains the Same 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 Its the investors money,…
18 Years of Growth at KMP Strategy Has Led to Consistent, Growing Results KMP Total Distributions (GP + LP) (MM) KMP Annual LP Distribution per Unit(c) (a) 5,000 (a) 6.00 5.58 4,499 5.33 4,500 GP LP 4.98 4,017 5.00 4.61 4,000…
Financial Rigor Promises Made, Promises Kept Promises Made Promises Kept KMI Budgeted KMI Actual Dividend: Dividend: KMI has exceeded 2011: 1.16(a) 2011: 1.20(a) its dividend target 2012: 1.35 2012: 1.40 in each of past 3 yrs.…
Tremendous Natural Gas Footprint and Market Opportunity Set U.S. Natural Gas Projected Supply & Demand(a) (Bcf/d) Demand 2014 2019 2024 KM Natural Gas Infrastructure Footprint LNG exports -0.3 4.7 9.8 Mexican net exports 2.1 3.8…
Generate Real-time, Long-term Benefits 641B of investment in midstream energy infrastructure needed through 2035, implying 29B per year annual spend(a) compared to 18B annual spend by MLPs(b) over past five years Kinder Morgans…
5-year Project Backlog(a) 17 Billion of Currently Identified Organic Growth Projects Tremendous footprint provides 17B of currently identified growth projects over next 5 years 5-year Growth Capex Backlog (B) 2H 2014 2015 2016…
Business Risks Regulatory (KMP/EPB/KMI) Products Pipeline FERC / CPUC cases Natural Gas FERC rate cases Legislative and regulatory changes Crude oil production volumes (KMP) Commodity prices (KMP) CO2 oil production 2014 budget…
Summary KMI, KMP, KMR & EPB: Attractive Value Proposition Unparalleled asset footprint Diversified midstream energy platform provides stable, fee-based cash flow Continued focus on strong balance sheet and de-levering at KMI Highly…
Appendix
KMI Pro Forma Compares Favorably to its Midstream Energy Peers and S&P 500 High-dividend Companies LQA Dividend Dividend Growth Company Name Industry Market Cap Yield Rates PF KMI(a) Oil & Gas Pipelines 100,000 10.0% 2015-2020…
Benefits of a C-corp Simplifies structure; creates one public equity class Lowers cost of capital and creates a more competitive acquisition currency Significant income tax savings from the acquisition amounting to 20 billion over…
How the Math Works Primary 2015-2020 Asset Level Assumptions(b) Status Quo Expected Pro-Forma Expected Dividend / Distribution 9% average annual EBITDA growth Dividend Growth Rate(a,b) 3.6B/yr average growth capex (excl. TMX) Growth…
Significantly Lower Hurdle for Growth Same Level of Capex Generates Double the Growth at Pro Forma KMI vs Status Quo KMP ( in millions, except per unit / share) Status Quo Pro Forma KMP KMI Hypothetical New Project Capex 1,000…
Substantial Value Uplift for KMP Unitholders KMP Pre-Tax Benefit per Unit Post Transaction 8/29/2014 Implied Prices Prices 2015E 2016E 2017E 2018E 2019E 2020E KMP Pro Forma (Value) KMP Expected Distributions 5.83 6.18 6.46 6.96 7.09…
Substantial Value Uplift for KMR Shareholders KMR Benefit per Share Post Tax-free Transaction 8/29/2014 Implied Prices Prices 2015E 2016E 2017E 2018E 2019E 2020E KMR Pro Forma (Value) KMR Expected Distributions 5.83 6.18 6.46 6.96…
Substantial Value Uplift for EPB Unitholders EPB Pre-Tax Benefit per Unit Post Transaction 8/29/2014 Implied Prices Prices 2015E 2016E 2017E 2018E 2019E 2020E EPB Pro Forma (Value) EPB Expected Distributions 2.60 2.60 2.73 2.78 2.87…
Cross-guarantees Overview KMI will consolidate its subsidiaries under a single C-corp as follows: Acquire public shares of KMR and public units of KMP and EPB EPB is acquired by KMP Execute cross guarantees among KMI, KMP and…
Investor Total Returns Significant Historical Returns Since Inception(a) KMP: 24% CATR Since 96(b) KMI: 13% CATR Since Inception(e) 5,000 175 Dollars KMP = 4,499 Dollars 4,000 140 3,000 105 S&P 500 = 164 KMI = 155 RMZ = 152…
KMP Capital Investment 46.5B Invested Since Inception(a,b) ( in billions) Total Invested by Type(a,b) Total Invested by Year 25 11 20 Expansion 10.0 10 Acquisition 15 22.0 24.5 9 10 8 5 7 6.6 (b) - Expansions Acquisitions…
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…
Natural Gas Pipelines Segment Outlook Well-positioned connecting key natural gas resource plays with major demand centers Project Backlog: 4.6 billion of identified growth projects over next seven years(a), including: LNG…
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…
Terminals Segment Outlook Well-located in refinery / port hubs and inland waterways Project Backlog: 2.2 billion of identified growth projects over next five years(a), including: Liquids BOSTCO Phases 2, & 3 Alberta crude by rail…
CO2 Segment Outlook Own and operate best source of CO2 for EOR(a) Project Backlog: Identified growth projects totaling 1.8 billion and 2.0 billion in S&T and EOR(a), respectively, over next five years(b), including: S&T…
Kinder Morgan Canada Segment Outlook Sole oil pipeline from Oilsands to West Coast / export markets Project Backlog: 5.4 billion expansion of Trans Mountain Pipeline Long-term Growth Drivers: Expand Oilsands export capacity to…
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