Barclays Investment Banking Pitch Book
KMI Has-Gets
Increased Dividend
Increased Coverage
Higher Distribution/
Dividend Growth
Lower Cost of Capital
Growth Vehicle
Status Quo
• Current KMI dividend of $1.72 /share;
projected KMI dividend of $1.84 / share
in 2015
Investment Grade
Ratings
• Status Quo management has stated
distribution dividend growth of 8% at
KMI, 5% at KMP/KMR and 1% at EPB
(from 2013-2016E)
• Status Quo KMI, KMP and EPB operate Pro forma KMI coverage averages -1.1x
at 1.0x coverage
through 2020 with cumulative coverage
of over $2.7 billion
Fairness Opinion Analysis
• KMP acts as primary acquisition vehicle.
•
KMP current yield of 6.95% (¹) plus GP
take of 46% (12.86% grossed up yield)
Pro Forma
Pro forma KMI dividend increases to
$2.00/share in 2015; 16.3% increase
over 2014 dividend and 8.7% increase
over projected 2015 dividend
5
• Pro forma KMI dividend growth is 10% a
year through 2020
• High grade rating at KMP, split rating at Pro forma KMI expected to have
EPB
• High yield rating at KMI
Source: Data per KMI management
1. Based on KMP's current trading price of $80.34 and 2014E dividend of $5.58 per unit.
BARCLAYS
Pro forma, KMI's ability to make
acquisitions is more favorable due to
removal of GP take and a single
acquisition currency (KMI's pro C-corp
shares)
Assumed yield of 4.50%
investment grade ratings, less equity
issuance requiredView entire presentation