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ENERGY PARTNERS, L.P.
Credit Suisse Energy SummitCredit Suisse Energy Summit
Park Shaper, PresidentPark Shaper, President
February 2, 2010February 2, 2010
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ENERGY PARTNERS, L .P.
22
Forward Looking StatementsForward Looking Statements
This presentation contains forward looking statements. These forward-looking statements are identifiedas any statement that does not relate strictly to historical or current facts. In particular, statements,
express or implied, concerning future actions, conditions or events, future operating results or the ability togenerate revenues, income or cash flow or to make distributions are forward-looking statements. Forwardlooking statements are not guarantees of performance. They involve risks, uncertainties andassumptions. Future actions, conditions or events and future results of operations of Kinder MorganEnergy Partners, L.P. and Kinder Morgan Management, LLC may differ materially from those expressed inthese forward-looking statements. Many of the factors that will determine these results are beyond KinderMorgan's ability to control or predict. These statements are necessarily based upon various assumptionsinvolving judgments with respect to the future, including, among others, the ability to achieve synergiesand revenue growth; national, international, regional and local economic, competitive and regulatoryconditions and developments; technological developments; capital and credit markets conditions; inflationrates; interest rates; the political and economic stability of oil producing nations; energy markets; weatherconditions; environmental conditions; business and regulatory or legal decisions; the pace of deregulationof retail natural gas and electricity and certain agricultural products; the timing and success of business
development efforts; terrorism; and other uncertainties. There is no assurance that any of the actions,events or results of the forward-looking statements will occur, or if any of them do, what impact they willhave on our results of operations or financial condition. Because of these uncertainties, you are cautionednot to put undue reliance on any forward-looking statement.
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ENERGY PARTNERS, L .P.
55
Size Does MatterSize Does Matter
Growth opportunitiesGrowth opportunities
Access to capi talAccess to capi tal
Stable cash flowStable cash flow
Since 1997, ~$20 bill ion in growthSince 1997, ~$20 bill ion in growthcapital investedcapital invested
~$11 billion in organic expansion /~$11 billion in organic expansion /greenfield projectsgreenfield projects
~$9 billion in acquisitions~$9 billion in acquisitions
Successful ly raised capital, in goodSuccessful ly raised capital, in good
times and badtimes and bad
~$9 billion in public equity~$9 billion in public equity (a)(a)
~$11 billion in public long~$11 billion in public long--term debtterm debt(~$10B net of refinancing)(~$10B net of refinancing)
Five diverse business segmentsFive diverse business segments Reduced exposure to sectorReduced exposure to sector-- specificspecific
risksrisks
Majority of cash flow not sensitive toMajority of cash flow not sensitive tocommodity pricescommodity prices
__________________________(a) Includes KMR share dividends
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77
Delivering 13 Years Of Consistent GrowthDelivering 13 Years Of Consistent Growth
$0.63$0.94
$1.24$1.43
$1.71
$2.15$2.44
$2.63$2.87
$3.13$3.26$3.48
$4.40$4.20
$4.02
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50$4.00
$4.50
19 9 6 19 9 7 19 9 8 19 9 9 2 0 00 2 0 01 2 0 02 2 0 03 2 0 04 2 0 05 2 0 0 6 2 0 07 2 0 08 2 0 09 2 0 10 E
$17 $30
$153$198$333
$548$701
$827$978
$1,162$1,265
$1,469
$1,854
$2,132
$2,416
$0
$500
$1,000
$1,500
$2,000
$2,500
1996 1997 1998 1999 2 000 2001 20 02 2003 2004 2005 2006 2007 2008 2009 20 10E
GP (a)
LP
1996-2
010CA
GR=15%
Total Distributions (GP + LP) ($MM)Total Distributions (GP + LP) ($MM)
1996-2
010C
AGR=
43%
3.5x3.2x
3.9x 3.9x
3.5x 3.7x 3.8x
3.5x3.2x 3.3x
3.4x 3.4x
3.8x3.6x
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
3.5x
4.0x
4.5x
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010E
__________________________(a) Includes 2% GP interest(b) Annual LP distribution, rounded to 2 decimals where applicable(c) Debt is net of cash and excludes fair value of interest rate swaps
Net Debt to EBITDANet Debt to EBITDA (c)(c)
Annual LP Distribution Per UnitAnnual LP Distribution Per Unit (b)(b)
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ENERGY PARTNERS, L .P.
88
Significant Historical ReturnsSignificant Historical Returns (a)(a)
$0
$250
$500
$750
$1,000
$1,250
$1,500
$1,750
$2,000
$2,250
Dec-96 Dec-98 Dec-00 Dec-02 Dec-04 Dec-06 Dec-08
KMP: 27% CAGR SinceKMP: 27% CAGR Since 9696 (b)(b) KMR: 13% CAGR SinceKMR: 13% CAGR Since 0101 (c)(c)
$50
$80
$110
$140
$170
$200
$230
$260
$290
$320
Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09
AMZ (d) = $662
KMP = $2,181KMR
= $291
Dollars Dollars
S&P 500 = $184 S&P 500 = $102
$100
AMZ (d)
= $306
__________________________Source: Bloomberg(a) All returns calculated on daily basis through 28-Jan-2010 except the 2009 return, which is through 31-Dec-2009; assume dividends/distributions reinvested in index/stock/unit(b) Start date 31-Dec-1996(c) Start date 14-May-2001; KMR Initial public offering; KMP CAGR over same period is 14%(d) Alerian MLP index(e) Start dates for 2-year, 3-year and 5-year return calculations are 31-Dec-2007, 29-Dec-2006 and 31-Dec-2004, respectively
$100
-1%72%98%
100%5-year(e)
Total Return 2009 2-year(e)
3-year(e)
KMP 45% 35% 62%KMR 50% 24% 53%
AMZ (d) 76% 14% 28%S&P 500 26% -22% -18%
14-May-2001
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ENERGY PARTNERS, L .P.
99
Promises Made, Promises KeptPromises Made, Promises Kept
BudgetedBudgeted
Distribution per unit:Distribution per unit :
2000: $1.60
2001: $1.95
2002: $2.402003: $2.63
2004: $2.84
2005: $3.13
2006: $3.28
2007: $3.44
2008: $4.022009: $4.202010E: $4.40
Promises MadePromises Made Promises KeptPromises Kept
ActualActual
Distribution per unit :Distribution per unit:
2000: $1.71
2001: $2.15
2002: $2.4352003: $2.63
2004: $2.87
2005: $3.13
2006: $3.26
2007: $3.48
2008: $4.022009: $4.20
Missed LP distribution target 1 time in past 10 years
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ENERGY PARTNERS, L .P.
1010
Terasen
Hall Buck
Shell CO2
KN Energy
SFPP
LaunchLaunch
PadPadIndustryIndustry
RankRank (a)(a)Led to:Led to:
Acquis it ionsAcquis it ions (b)(b)Led to:Led to:
Internal GrowthInternal Growth (b)(b)
ProductsPipelines
1st CFPL, CALNEV, Charter Triad,Cochin
multiple terminal acquisitions frommajors
Carson terminal, East Line & Northlineexpansions
Ethanol buildout in Southeast/Westcoast
Natural GasPipelines
2nd
Rockies and Texas intrastatedropdowns, Tejas, TransColoradodropdown, Dayton storage,
Crosstex treating, GMX
REX, MEP, KMLA & FEP greenfieldprojects
Texas Intrastate storage expansions
Trailblazer & TransColorado expansions
CO2 1st SACROC, Yates, Claytonville &
Katz fields, Wink pipeline
SACROC & Yates development
Southwest Colorado expansion
Katz EOR greenfield project
Terminals 1st
GATX, TGS, Vancouver Wharves,US Development, Slay
on average, acquired ~$125MM peryear over last 5 years
Pasadena, Galena Park, Perth Amboy,Carteret, Pier IX & Geismer expansions
Edmonton North 40 greenfield project
Kinder MorganCanada
TMPL dropdown 75MBbl/d expansion of TMPL
On average, KMP has invested ~$1.5 billion inOn average, KMP has invested ~$1.5 billion ingrowth capital per year in i ts business segmentsgrowth capital per year in i ts business segments (c)(c)
__________________________(a) See slide 12 for explanation of basis for industry rankings(b) Not an exhaustive list of acquisitions or internal growth projects(c) Since the beginning of 1997
Asset Footprint And Management ExpertiseAsset Footprint And Management Expertise
Have Led To Growth OpportunitiesHave Led To Growth Opportunities
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ENERGY PARTNERS, L .P.
1616
Green Energy Creates OpportunitiesGreen Energy Creates Opportunities
Renewable Fuels Expect to handle ~250 MBbl/d
of renewable fuels in 2010(a)
(25-30% of U.S. market)
Continue to utilize and expand
refined products pipelines andterminals to handle ethanol,biofuels and changing / increasingfuel specifications
Natural Gas ~5 Tcf of natural gastransported in 2009 over 24,000
miles of pipeline (b)(~20% of U.S. market)
Pipeline system directly connectsto over 20 producing basins
Continue to utilize and expandfootprint
Carbon Sequestration(Clean Coal)
Transport ~1.3 Bcf/d of CO2 Industry leader in CO2 handling
Continue to look for the rightopportunities
Wind and Solar Power ~5 Tcf of natural gastransported in 2009 over 24,000miles of pipeline (b)
(~20% of U.S. market)
Natural gas-fired power plantsbackstop renewable power
__________________________(a) Expected total volumes handled including the recently announced terminal acquisition from USD(b) Includes NGPL
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ENERGY PARTNERS, L .P.
1717
Sources of Future GrowthSources of Future GrowthGrowth DriversGrowth Drivers KM OpportunityKM Opportunity Leverage FootprintLeverage Footprint
Natural Gas Pipelines
Cheap, abundant, domestic energy source
Shifting supply from multiple basins
U.S. demand for natural gas expected toincrease by ~17 Bcf/d 2009-2030 (a)
Over $100 billion of new pipeline infrastructureestimated between 2010 and 2030 (b)
Natural gas is the logical fuel of choice foreconomical clean burning electricity
Full-year impact of REX, MEP, KMLA
Completion of construction of FEP in 2010 Leverage KMs pipeline connectivity and
expertise into pipeline/storage expansionsand acquisitions in current and new basins
Expand services to customers (i.e. Treating,G&P, etc)
Products Pipelines /Terminals Segments
Diversity of product specs RFS requires a nearly two-fold increase in use of
renewable fuels through 2022 (c)
Customers desire for optionality at terminallocations (export and import capabilities andmultiple modes of inbound and outboundtransportation, e.g. water, rail, truck access)
Committed ~$500MM to handle renewable
fuels to date and continue to expand acrossour asset base
Location of facilities and ability to provideflexibility to customers keeps customers atterminals and provides for expansions
Consolidate mom and pop bulk terminals
Look for acquisitions from the majors
CO2
Billions of barrels of domestic oil still in place
Continuing technology improvements
Development of new basins
Fragmented ownership of oilfields
Continue buildout of SACROC and Yates
Katz expansion project
Utilize CO2 expertise to evaluate oilfieldacquisitions and new pipeline projects
Kinder Morgan Canada Continued need to move Canadian crude and
refined products to Westcoast Flexibility for staged expansions or one
large expansion to Westcoast__________________________
(a) Source: Wood Mackenzie long-term outlook, Dec-2009(b) Source: INGAA natural gas infrastructure study, Oct-2009(c) RFS (U.S. Renewable Fuels Standard) requires increase from 13 Bgal/yr in 2010 to 36 Bgal/yr in 2022)
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ENERGY PARTNERS, L .P.
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~$20 Billion in Capital Invested 1998~$20 Billion in Capital Invested 1998--20092009 (a,b)(a,b)
__________________________(a) For joint-ventures, reflects our equity contributions(b) 1998 2009, does not include 2010 budget
(billions)(billions)
Total Invested by YearTotal Invested by Year (a)(a)
Total Invested by TypeTotal Invested by Type (a,b)(a,b)
Total Invested by SegmentTotal Invested by Segment (a,b)(a,b)
$5.0 $4.3 $3.5 $3.4
$1.3
$2.4
$0
$2
$4
$6
$8
Natural Gas
Pipelines
Products
Pipelines
CO2 Terminals Kinder
Morgan
Canada
$8.7 $8.8
$2.4
$0
$3
$6
$9
$12
Expansions Acquisitions
$3.3
$2.9$2.7
$0.9
$1.2$1.3
$0.9
$1.3
$1.9
$0.8
$1.1
$1.6$1.5
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010E
JV Contributions
Expansion
Acquisition
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ENERGY PARTNERS, L .P.
1919
$1.5 Billion in Growth Expenditures Planned for 2010$1.5 Billion in Growth Expenditures Planned for 2010
(millions)(millions)
__________________________(a) Includes equity contributions to joint ventures(b) $195 million ethanol terminal acquisition from U.S. Development Group (USD) and $95 million Slay bulk terminal acquisition
2010 Budgeted Growth Expenditures2010 Budgeted Growth Expenditures
Products Pipelines
KM Canada
Natural GasPipelines (a)
CO2
IdentifiedAcquisitions
Terminals
AnnouncedAcquisitions (b)
22%
7%0.2%
11%
19%
13%
28%
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ENERGY PARTNERS, L .P.
2020
Balance Sheet Has Remained SolidBalance Sheet Has Remained Solid (a)(a)
$501$50120142014$507$50720132013
(f)(f)$957$95720122012
$707$70720112011$262$262NovNov--20102010
(283)(283)Letters of CreditLetters of Credit
Less:Less:
(300)(300)BorrowingsBorrowings
$1,204$1,204
$1,787$1,787
LiquidityLiquidity
Total Bank CreditTotal Bank Credit
Baa2/BBBBaa2/BBBLL--T Debt RatingT Debt Rating
BudgetedBudgetedYrYr--end 2010end 2010FY 2009FY 2009
Credit MetricsCredit Metrics
6.1x6.1x3.6x3.6x3.8x3.8xDebt / EBITDADebt / EBITDA ((b,cb,c ))
6.4x6.4xEBITDA / InterestEBITDA / Interest (c)(c)
Credit SummaryCredit Summary
Revolver LiquidityRevolver Liquidity (d)(d) LongLong--term Debt Maturit iesterm Debt Maturit ies (e)(e)
__________________________(a) Figures as of 31-Dec-2009, except where noted(b) Debt balance excludes fair value of interest rate swaps and is net of cash(c) EBITDA and interest are trailing 12 months, includes our proportionate share of REX/MEP DD&A
(d) Existing KMP revolver matures Aug-2010(e) Maturities of long-term debt; excludes borrowings under its revolving credit facility(f) Excludes 10-yr bond with optional 3-yr put (stated maturity 2019)
(millions)(millions)
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2121
2010 Partnership Goals2010 Partnership Goals
Distribution TargetDistr ibution Target
$4.40 per unit (4.8% growth)$4.40 per unit (4.8% growth)
Excess coverage of ~$32 millionExcess coverage of ~$32 million
Maintain Solid Balance SheetMaintain Solid Balance Sheet
YearYear--end 2010 Debt / EBITDA of 3.6xend 2010 Debt / EBITDA of 3.6x Expansions / acquisitionsExpansions / acquisitions
financed 50% equity, 50% debtfinanced 50% equity, 50% debt
Operate all of our assets in a safe, compliantOperate all of our assets in a safe, compliantand environmentally sound mannerand environmentally sound manner
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2222
KMR: The BasicsKMR: The Basics
__________________________(a) KMR market equity based on 86 million KMR shares outstanding at 31-Dec-2009 and share price of $55.50 as of 28-Jan-2010
(b) Calculation of share dividend: KMP quarterly cash distribution per unit KMR 10-day avg price prior to x-date = fractional share paid for every KMR share owned, e.g.$1.05 $46.315 = 0.021292; example reflects actual KMR share dividend calculated for 3Q 2009, paid on 13-Nov-2009; refer to third quarter 10-Q
(c) Can be held directly; in-kind dividends not subject to ECI rules and branch profits withholdings, no FIRPTA issues
KMR is KMPKMR is KMP
KMR sharesKMR shares
Pari passu with KMP unitholders; represent limited liability intPari passu with KMP unitholders; represent limited liability interests in Kinder Morganerests in Kinder MorganManagement LLC, whose only investment is iManagement LLC, whose only investment is i--units of KMPunits of KMP
IPO in MayIPO in May--2001; trades on NYSE under symbol KMR2001; trades on NYSE under symbol KMR
Market value = $4.7 billion (~1/4 of total KMP capitalization)Market value = $4.7 billion (~1/4 of total KMP capitalization) (a)(a)
KMR dividend equal to KMP cash distribution, but paid in additioKMR dividend equal to KMP cash distribution, but paid in additional shares (innal shares (in--kind)kind) (b)(b)
Effectively a dividend reinvestment programEffectively a dividend reinvestment program
Share dividend reduces KMPShare dividend reduces KMPs external capital funding needss external capital funding needs
KMP generates the cash flow to pay cash dividend, but pays in adKMP generates the cash flow to pay cash dividend, but pays in additional shares andditional shares andreinvests that cash into new growth projectsreinvests that cash into new growth projects
but simplified (institutional investorbut simplified (institutional investor--friendly)friendly)
Relative to MLP units, KMR shares are tax efficient and with simRelative to MLP units, KMR shares are tax efficient and with simplif ied tax reportingplif ied tax reporting
Capital gains treatmentCapital gains treatment No KNo K--1 (1099 if you sell shares, otherwise no tax documents)1 (1099 if you sell shares, otherwise no tax documents)
IRAIRA--friendlyfriendly -- no UBTI or state tax filingsno UBTI or state tax filings
Offshore investors can more easily ownOffshore investors can more easily own (c)(c)
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ENERGY PARTNERS, L .P.
2323
KMR: Compelling Investment PropositionKMR: Compelling Investment Proposition (a)(a)
KMR Discount to KMP
-20%
-15%
-10%
-5%
0%
5%
10%
Dec-
00
Dec-
01
Dec-
02
Dec-
03
Dec-
04
Dec-
05
Dec-
06
Dec-
07
Dec-
08
Dec-
09
7% avg discount
since 2001 IPO (a)
12.3% avg discountsince Nov08 (a)
KMR has generated strong returns forKMR has generated strong returns forinvestorsinvestors (b)(b)
50% total return in 200950% total return in 2009
13.0% compound annual total return13.0% compound annual total returnsince 2001 IPO vs. 14.1% for KMP,since 2001 IPO vs. 14.1% for KMP,13.7% for the Alerian MLP index and13.7% for the Alerian MLP index and0.3% for the S&P 5000.3% for the S&P 500
and trades at a significant discount to KMPand trades at a significant discount to KMP Historical 7% discount since IPOHistorical 7% discount since IPO
Currently at ~11% discountCurrently at ~11% discount
Discount increased during 4QDiscount increased during 4Q 08 and08 andhas not returned to prior levelshas not returned to prior levels
__________________________(a) All figures through / as of 28-Jan-2010, except 2009 total return which is through 31-Dec-2009
(b) See footnotes on slide 8 for explanation of total return calculations(c) See preceding slide for calculation of market cap(d) 2009 average dollar volume traded
Market cap of $4.7 bill ionMarket cap of $4.7 bill ion (c)(c) and liquidity ofand liquidity of$15 mil lion per day$15 mil lion per day (d)(d) (360k shares per day)(360k shares per day)
14-May-2001
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ENERGY PARTNERS, L .P.
2424__________________________(a) Purchase of KMR shares and KMP units by directors and officers of KMR/KMP since the KMR IPO in 2001, as reported in SEC Form 4 filings
Management PurchasesManagement Purchasesof KMR & KMPof KMR & KMP (a)(a)
$8.0
$4.5
$0
$2
$4
$6
$8
$10
KMR KMP
(millions)
Insiders Prefer KMRInsiders Prefer KMR
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ENERGY PARTNERS, L .P.
2525
RisksRisks
RegulatoryRegulatory
Pacific Products Pipeline FERC/CPUC casePacific Products Pipeline FERC/CPUC case
Periodic rate reviewsPeriodic rate reviews
Unexpected policy changesUnexpected policy changes
Crude Oil Production VolumesCrude Oil Production Volumes
Crude Oil PricesCrude Oil Prices
Budget assumes $84/Bbl realized price on unhedged barrelsBudget assumes $84/Bbl realized price on unhedged barrels
2010 Sensitivity is ~$6 million DCF per $1/Bbl change in crude o2010 Sensitivity is ~$6 million DCF per $1/Bbl change in crude oil pricesil prices
Economically Sensitive Businesses (e.g., steel terminals)Economically Sensitive Businesses (e.g., steel terminals)
EnvironmentalEnvironmental
TerrorismTerrorism
Interest RatesInterest Rates
~50% floating rate debt~50% floating rate debt
The fullThe full--year impact of a 100year impact of a 100--bp increase in rates equates to an approximate $55 millionbp increase in rates equates to an approximate $55 millionincrease in interest expenseincrease in interest expense
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ENERGY PARTNERS, L .P.
2626
Attractive Value PropositionAttractive Value Proposition
Unparalleled asset footprintUnparalleled asset footprint
Established track recordEstablished track record Industry leader in all business segmentsIndustry leader in all business segments
Experienced management teamExperienced management team
Supportive general partnerSupportive general partner
Transparency to investorsTransparency to investors
Attractive returns driven by combination of yield plus growthAttractive returns driven by combination of yield plus growth
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ENERGY PARTNERS, L.P.
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