Skip to main content KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. Investor Presentation | Shale Experts
Loading...
Pm

KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P.

KINDER MORGAN ENERGY PARTNERS, L.P. · Aug 10, 2014 · 32 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. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 1
    Run By Shareholders, For Shareholders KMI to Acquire KMP, KMR, and EPB August 10, 2014
  2. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 2
    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 Acquisition Consideration KMI…
  3. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 3
    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…
  4. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 4
    Simplified Organizational Structure Current Public Structure Simplified Public Structure Kinder Morgan, Inc. One publicly traded company (NYSE: KMI) 13% Listed Shares vs. four results in: 100% Voting Shares One equity holder base…
  5. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 5
    One Easy Way to Invest in North Americas Largest Energy Infrastructure Company 3rd largest energy company in North America with estimated combined pro forma enterprise value of 140 billion (a) 17 billion of currently identified…
  6. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 6
    PF KMI 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 Large Cap…
  7. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 7
    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…
  8. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 8
    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) 3.6 bn/yr average growth capex (excl. TMX)…
  9. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 9
    Significantly Lower Hurdle for Growth Same Level of Capex Generates Double the Growth at Pro Forma KMI vs Status Quo KMP ( in millions, expect per unit / share) Status Quo Pro Forma KMP KMI Hypothetical New Project Capex 1,000)…
  10. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 10
    Substantial Value Uplift for KMP Unitholders KMP Pre-Tax Benefit per Unit Post Transaction 8/8/2014 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…
  11. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 11
    Substantial Value Uplift for KMR Shareholders KMR Benefit per Share Post Tax-Free Transaction 8/8/2014 Implied Prices Prices 2015E 2016E 2017E 2018E 2019E 2020E KMR Pro Forma (Value) KMR Expected Distributions 5.83 6.18 6.46 6.96…
  12. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 12
    Substantial Value Uplift for EPB Unitholders EPB Pre-Tax Benefit per Unit Post Transaction 8/8/2014 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…
  13. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 13
    Significant Historical Returns (a) KMP: 24% CATR Since 96 (b) KMR: 15% CATR Since Inception (c) 4,500 KMP = 4,201 800 Dollars Dollars AMZ (d) = 684 4,000 KMR = 648 700 3,500 600 3,000 500 2,500 400 2,000 AMZ (d) = 1,477 300…
  14. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 14
    Combined KMI 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…
  15. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 15
    Summary Transaction Timeline Expect KMI and KMR shareholder meetings and unitholder meetings for KMP and EPB in Q4 2014 Expect closing in Q4 2014 Subject to customary regulatory approvals no regulatory delays expected 16
  16. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 16
    Appendix
  17. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 17
    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…
  18. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 18
    18 Years of Consistent Growth at KMP 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 4.40 4.20 3,500 3,230 4.02 4.00…
  19. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 19
    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…
  20. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 20
    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…
  21. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 21
    How We Have Done: KMP Returns on Capital 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 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% 11.6%…
  22. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 22
    46.5B of Growth Capital Invested at KMP (a,b) ( in billions) Total Invested by Type (a,b) Total Invested by Year 25 11 20 Expansion 10.0 10 15 Acquisition 22.0 24.5 9 10 8 5 7 6.6 (b) - Expansions Acquisitions 6 5 4.9…
  23. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 23
    Tremendous Natural Gas Market Opportunities U.S. Natural Gas Projected Supply & Demand (a) (Bcf/d) KM Natural Gas Footprint Demand 2014 2019 2024 LNG exports -0.3 4.7 9.8 Mexican net exports 2.1 3.8 4.6 Power 21.3 23.9 28.5…
  24. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 24
    Generating 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…
  25. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 25
    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…
  26. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 26
    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…
  27. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 27
    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…
  28. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 28
    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…
  29. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 29
    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 West…
  30. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 30
    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…
  31. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 31
    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 assumes…
  32. KMI to Acquire KMP KMR and EPB – KINDER MORGAN ENERGY PARTNERS, L.P. – slide 32

From the store

Browse maps, data & reports in the Shale Experts store