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MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P.

Inergy, L.P. · Mar 9, 2012 · 28 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 1
    Morgan Stanley MLP and Diversified Natural Gas Corporate Access Event March 8, 2012
  2. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 2
    3 Investment Highlights Diversified Operating Model ? Among the Largest Independent Natural Gas Storage Providers in the U.S. ? A Leading National Propane Franchise Strong Historical Financial Performance Track Record Midstream…
  3. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 3
    4 Inergy Snapshot Inergy is a geographically diverse retail propane and midstream energy business - ~$4.5 billion consolidated partnership enterprise value with ~$345 million TTM Adj. EBITDA(a) Propane Operations Consolidated…
  4. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 4
    5 Inergy Strategy Significant Service Provider in Core Midstream Markets ? Midstream operations primarily fee-based; long-term contract driven cash flow ? Dual energy storage hubs in the Northeast and Texas which are adjacent to…
  5. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 5
    Recent Events: NRGM IPO December 2011 ? Completed IPO of Inergy Midstream, L.P. (NYSE:NRGM) ? Sold 18.4 million units representing ~24.8% ownership to the public ? NRGY retains ownership of remaining 75.2% of outstanding L.P. units and…
  6. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 6
    Transaction Rationale Aligns investor base: - Growth ? NRGM - Income ? NRGY First step to achieving pure play business models that can unlock embedded value Improves cost of capital and financial flexibility of growth business…
  7. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 7
    9 Midstream Business Characteristics Stable, fee-based cash flow profile with little commodity price exposure Natural gas storage and transportation assets predominantly contracted with firm agreements Growing business representing…
  8. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 8
    10 Integrated Storage and Transportation Platform Expansion potential to ~100 Bcf of fee-based, highly flexible gas storage capacity near demand markets Marc I and North-South projects in Northeast add deliverability and flexibility…
  9. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 9
    11 Northeast Natural Gas Storage and Transportation Platform Potential for 51 Bcf(a) natural gas storage capacity within 200 miles of New York City Rockies Northeast storage & transportation hub uniquely positioned with access to…
  10. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 10
    Tres Palacios Overview Located ~100 miles southwest of Houston in Matagorda County, TX 38.4 Bcf of working gas capacity with planned expansion to 47.9 Bcf ? Situated near the Eagle Ford Shale which is currently producing gas volumes…
  11. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 11
    Firm transportation and wheeling services between TGP, Millennium and all points in between - North-South phase one capacity of 325,000 dth/day, placed into service on December 1, 2011 - North-South 100% contracted with 5 year terms…
  12. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 12
    NGL Storage Overview Bath Facility Watkins Glen Project 14 NGL Storage Facilities Positions Inergy as a key NGL storage provider in the Marcellus Shale Provides value to our customers with significant storage capacity and multiple…
  13. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 13
    16 Propane Value Chain Propane represents about 4% of household energy consumption in the US.(a) Fundamental Supply Fundamental Demand Propane is a basic necessity to many consumers ? Propane is clean burning and generally…
  14. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 14
    1717 Propane Operations A leading national retail business ? Quality geographic footprint ? profitable markets ? 3rd largest national retailer based on retail gallons sold ? Residential customer focus ? ~67% ? ~90% tank control ?…
  15. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 15
    18 Comparable Operating Metrics Business model and focus on retail margin lends itself to better pricing and operational decision-making = Key Profit Driver Intense focus on operating expense rationalization drives non-volume cash…
  16. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 16
    19 Top 10 Propane Retailers Control ~40% of Market Share (b) Domestic Retail Market for LPG is Approximately 9.2 Billion Gallons (a) __________________ (a) Source: December 2011 American Petroleum Institute Report. (b) Source:…
  17. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 17
    20 NGL Supply, Transportation & Logistics Coast to coast NGL capabilities enhance both propane and midstream operations Aggregates >700 million gallons of LPG demand - Supplies retail propane operations reducing cost, enhancing…
  18. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 18
    21 Positioned for Future Opportunity - Finger Lakes LPG Storage - North-South (in-service) - Marc I Pipeline - Tres Palacios Header Extension - Tres Palacios Storage Expansion - US Salt Gas Storage Expansion Inergy?s diversified…
  19. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 19
    23 Demonstrated Financial Discipline Disciplined balance sheet management ? Balanced funding objectives with proven access to debt and equity capital markets ? Long-term targeted debt-to-EBITDA of approximately: - NRGM ? 3.0x - 3.5x…
  20. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 20
    24 28% $296 34% $324 43% $372 46% $345 $0.0 $100.0 $200.0 $300.0 $400.0 EBITDA ($ millions) FY 2009 FY 2010 FY 2011 TTM 12/31/11 Adjusted EBITDA(a)(b) Financial Performance $574 $620 $678 $654 $500.0 $550.0 $600.0…
  21. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 21
    Capitalization 25 __________________ (a) Calculated in accordance with revolving credit facility. As of December 31, 2011 NRGY Standalone NRGM Standalone Cash ??????????????????????????.. $ 0.1 18.7 $ Revolving credit facility…
  22. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 22
    Manageable Expansion Projects High-return midstream expansion projects generate substantial cash flow growth Current expansion projects supported by long-term contracts Projects are manageable size and leverage NRGM?s existing asset…
  23. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 23
    27 Investment Highlights Diversified Operating Model ? Among the Largest Independent Natural Gas Storage Providers in the U.S. ? A Leading National Propane Franchise Strong Historical Financial Performance Track Record Midstream…
  24. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 24
    Gas Storage Facility Overview Stagecoach Thomas Corners Steuben Seneca Lake Palacios Tres 26.3 Bcf working gas capacity 5.7 Bcf operational working gas capacity (certificated for 7 Bcf) 6.2 Bcf working gas capacity 1.5 Bcf…
  25. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 25
    30 Storage & Transportation Contract Characteristics Strong demand for our services drives long-term contracted revenues Highly creditworthy customers create further cash flow stability Confidential Information Transportation…
  26. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 26
    Tres Palacios Facilities Map 31 Enterprise Texas Proposed TPS Pipeline Extension Tennessee Transco NOPL Tres Palacios Pipeline Header Permitted KM Texas Permitted Gulf South and Crosstex Florida Gas and KM Tejas Tres…
  27. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 27
    32 $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 $1.80 2003 2004 2005 2006 2007 2008 2009 2010 2011 TTM 12/31/11 Management has demonstrated its ability to achieve consistent margin performance in distinctly…
  28. MORGAN STANLEY MLP AND DIVERSIFIED NATURAL GAS CORPORATE ACCESS EVENT – Inergy, L.P. – slide 28
    33 Historical Financial Overview & Non-GAAP Reconciliations(a) (a) Prior period financial information of Inergy has been adjusted to reflect the simplification transaction between Inergy, L.P. and Inergy Holdings, L.P. which was…

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