nrgy inergy dec 2009 presentation

8/14/2019 NRGY Inergy Dec 2009 Presentation

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Wells Fargo2009 Pipeline and MLP Symposium

December 8, 2009


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Except for the historical information contained herein, the matters discussed in this presentation (e.g., our growth outlook and forecasted economics) are forward-lookingstatements that involve risks and uncertainties. These risks and uncertainties include,among other things, market conditions, weather risks and other factors discussed in theCompanys filings with the Securities and Exchange Commission including Forms 10-K, 10-Q, and 8-K.

Furthermore, any forward-looking statements presented are expressed in good faith andare believed to have a reasonable basis as of the date of this presentation. Inergyassumes no responsibility to update this information and it may be superceded by laterinformation.

Forward-looking statements are not guarantees of future performance or an assurancethat our current assumptions and projections are valid. Actual results may differmaterially from those projected.

Forward Looking Statements

Nasdaq: NRGY, NRGP


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Inergy Overview


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Investment Highlights

Dual Platform Operating Strategy A Leading National Propane Franchise Fee-based Midstream Business Anchored by Northeast U.S. Gas Storage

Strong Financial Performance Record

Manageable Pipeline of Midstream Expansion ProjectsUnderway

Midstream Energy Storage Platform Rapidly Becoming a LargerComponent of Business

Record of Consistent EBITDA & Distributable Cash FlowGrowthDisciplined Consolidator of Retail Propane Industry

Underlying Businesses Characterized by Recession ResistantStable Cash FlowsStrong Balance Sheet and Distribution CoverageRecent Capital Markets Activity Provides Ample Balance SheetLiquidity to Execute on High-Return Expansion Projects

Income

Growth

Safety


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Delivering Results

Inergy continues to deliver distinguished operational and financial performance despite a challenging economic backdrop

Inergy completesacquisition of U.S.

Salt

Inergy reportsrecord 4Q andannual results

Increases NRGY& NRGP

distributions

Inergy reportsrecord Q2 results


distributions



distributions

NRGY raises$107.0 m in

4.0 mcommon

unitoffering

Inergy announcessuccessful open

seasons for Marc IHub Line &North-SouthExpansion

Projects

Delivered record results in all quartersIncreased Adj. EBITDA ~24% YoY Raised $400 million in debt and equity capital in challenging capital marketsenvironment

Visible growth driven by pipeline of organic expansion opportunities

NRGY raises$198m in private

placement ofsenior unsecured

notes

Inergy announcesStagecoach N.

Lateral in-service

NRGY raises$94.7 m in

4.4 mcommon

unitoffering

Inergys WestCoast expansion

projected placedinto service

Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09


Raises Adj.EBITDA outlook

Increases NRGY &NRGP distributions

Thomas Cornersgas storage

expansion project placed into full

service

Inergy reportsrecord Q4 andannual results


distributions

Inergy closes a$525 million 4

year revolvingcredit facility


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Inergy Snapshot

Inergy, L.P. is a geographically diverse retail propane and midstream energy business ~$4.0 billion combined partnership enterprise value with ~$297 million FY2009 EBITDA (a)

Propane Midstream

(a) FY2009 Adjusted EBITDA as of September 30, 2009. Enterprise value as of December 2, 2009.(b) Forecast run rate 2010 EBITDA.

__________________

Segment EBITDA Mix (b)

Midstream~40%

Propane~60%

5th largest retail propane distributor serving ~700,000customers in 28 statesFootprint located in quality markets with an intense focus ondelivering financial and operational performanceSupported by experienced supply, transportation, and logistics

group based in KC

40 Bcf high-deliverability natural gas storage operations locatedin New York, potentially expandable to over 50 BcfLeading provider of underground LPG storage in theNortheastern U.S.Industry-leading solution mining and salt production company

in upstate New York NGL fractionation, storage, and terminalling operationstrategically located on the West Coast


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Inergy Strategy

Further Enhance the Operation of an OutstandingPropane Franchise Maintain flexible operating model in attractive markets Deliberate focus on residential customer base with

high tank control

Premier Service Provider in Core Midstream Markets Midstream operations primarily fee-based; long-termcontract-driven cash flow

Executing toward an integrated energy storage hub inthe Northeast with access to all major pipelines andover 50 Bcf of gas storage

Continue Growth Through Capital Expansion Projects & Acquisitions Propane - Expand existing retail footprint and establish new footprints with top

regional businesses Midstream - Execute capital expansion projects around existing asset base

Pursue and evaluate complementary midstream opportunities Seek to further strengthen the long-term growth profile with stable, fee-based

cash flow streams

Disciplined Capital Investment

Deliver Operational Excellence


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$1.18

$1.45$1.60

$1.91

$0.90

$2.14

$1.23

$2.28

$1.77

$2.44$2.29

$2.70 $3.40

2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 Run Ra te

Distinguished DistributionPerformance

(a) Annualized paid distributions. __________________

3 2 C o n s e

c u t i v e Q u

a r t e r l y D i s t r i

b u t i o n I n

c r e a s e s

NRGY

NRGP

~ 3 7 %

D i s t r i

b u t i o

n G r o w

t h C A

G R ( a )

Fiscal2002

Fiscal2003

Fiscal2004

Fiscal2005

Fiscal2007

Fiscal2008

Fiscal2006

~ 1 1 % D i s t

r i b u t i o n G

r o w t h C A G R

( a )

RunRate

Two Securities Offer a Compelling Combination of Income & GrowthInergy has consistently grown cash distributions & maintained strong coverage ratios


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__________________

Projected Cash Flow Mix

Mix of Business, Financial Performance Track Record, andDisciplined Balance Sheet Management = Strong Credit Profile

(a) Run rate assumes Thomas Corners, Finger Lakes LPG and Marc I/NS midstream projects are implemented.

EBITDA MIX BY SEGMENT

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010E 2011E 2012E 2013E

Midstream Propane

Run Rate(a)


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Public GP Provides 2 nd

Strategic Source of Equity Capital

OperatingSubsidiaries

100% ownership

26.8%LimitedPartnerInterest



IncentiveDistribution

Rights

0.8%GeneralPartnerInterest

InergyHoldings, L.P.

NASDAQ: NRGP

Enterprise Value~$1.1 B (a)

Inergy, L.P.NASDAQ: NRGY

Enterprise Value~$2.9 B (b)

PublicUnitholders

& Others


__________________(a) Inergy Holdings, L.P. equity market value as of December 2, 2009 and net debt balances as of September 30, 2009.(b) Inergy, L.P. equity market value as of December 2, 2009 and net debt balances as of September 30, 2009. The trading value of Inergy, L.P. units is grossed-up to reflect ~0.8% general partner

interest.

Offers Inergy Access to Both Growth &Income Oriented Investor Bases

NRGP HighlightsManagement aligned with debt and equity investorsthrough ownership of ~73% of NRGP equity and ~27% of

combined NRGY and NRGP equity market capitalizationEquity market capitalization of ~$1.1 billion Modest $31.5 million of debt

NRGP currency can be used strategically as a secondsource of equity capital to fund NRGY growth

NRGY HighlightsDemonstrated access to public equity and debt capitalmarkets

Total Funded Debt / Consolidated EBITDA ~ 3.6 x

PublicUnitholders

& Others

Management& Others


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Propane Operations


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Propane Value Chain

Propane represents about 4% of household energy consumption in the US.

F

me

a

S

y

F

me

a

m

a

Propane is a basic necessity to many consumers Propane is clean burning and generally characterized by a stable demand base Propane is transported to customers beyond the natural gas distribution network Customers use propane to heat homes, cook food, heat water and run appliances Typically propane has a comfort and/or economic advantage to electricity

Inergy competes in the storage, transportation, and distribution areas ofthe value chain

Inergy


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Propane Operations

A leading national retail business Quality geographic footprint profitable markets 5th largest national retailer Consistent financial performance Residential customer focus 70%

90% tank control

Cost + margin service provider with little commodityprice exposure Successful integration of 78 propane acquisitions

Centralized supply, transportation, &logistics business Consolidates buying power & leverages across

North American infrastructure Lowers retail cost, protects margins, reduces risk 200+ transport fleet facilitates linking inefficiencies in

nationwide markets

Superior profitability within peer group


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Superior Operating Performance

Business model and intense focus onretail margin lends itself to better pricingand operational decision-making = KeyProfit Driver

Acquisition integration & elimination ofcost redundancies have driven significant

value to cash flow line over last 4 years 850 (25%) redundant positions eliminated 1,200 (30%) Surplus vehicles eliminated Average fleet age improved by 30%

Strong transportation, supply and procurement business protects margins& creates material 3rd party cash flow

__________________

$0.45

$0.60

$0.75

$0.90

$1.05

$1.20

Inergy (b) Peer Average (c)

Gross Profit/Retail Propane Gallon (a)$0.00

$0.15

$0.30

$0.45

$0.60

$0.75

Inergy (b) Peer Average (c)

EBITDA/Retail Propane Gallon(a)

(a) Source: most recent 10-K & 10-Q filings. Data includes gross profit & EBITDA from propaneoperations.

(b) Inergys EBITDA and gross profit exclude i) non-cash gains or losses on derivative contractsassociated with fixed price sales to retail propane customers, ii) non-cash compensation expenses,and iii) gains or losses on the disposal of assets as disclosed in SEC filings.

(c) Peer average includes: APU, ETP, FGP, and SPH.

(b) (c)

(c)(b)


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Top 10 Propane Retailers Control ~37% of Market Share (b)

Domestic Retail Market for LPG is Approximately 10.2 Billion Gallons (a)

__________________(a) Source: December 2008 American Petroleum Institute Report.

(b) Source: February 2009 LPGas Magazine.(c) Cooperatives.

Over 5,000 IndependentRetailers62.9%

Amerigas9.7%

Ferrellgas7.9%

Liberty 0.8%

MFA Oil Co. (c)0.9%

Suburban Propane3.8%

Energy Transfer5.8%

Cenex (c)1.8%

United Propane Gas0.8%

Growmark (c)

2.4%Inergy, L.P.3.4%

Propane Industry Fragmentation


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Midstream Operations


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Midstream Business

Stable, fee-based cash flow profile with no commodity priceexposureGrowing business representing an increasing percentage of Inergysrun-rate EBITDANE Midstream assets 100% contracted with long-term agreements

Stable Fee-BasedCash Flows

Stable Fee-BasedCash Flows

High Quality Assets

High Quality Assets

High ReturnCapital

ExpansionOpportunities

High ReturnCapital

ExpansionOpportunities

Newly constructed core energy infrastructure in the Northeast inthe heart of the Marcellus ShaleNatural gas and LPG storage assets uniquely positioned with afirst-mover advantage in the infrastructure development of theMarcellus Shale

Assets have capital expansion opportunities which furtherenhance financial returns and support distribution growth

Well positioned to seek additional midstream growth viaacquisition


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West Coast NGL Operations

Strategically located near Bakersfield, CAbetween major West Coast refining centers

Inergys West Coast capabilities: 12,000 bpd fractionator 8,000 bpd butane isomerization unit

24 million gallons NGL storage capacity State-of-the-art rail & truck transport terminals 75 unit transport fleet based in market with significant

logistics constraints

Significantly expanded NGL refinery /

producer services capabilities in California: Provides additional fractionation capacity to producers Leverages seasonality in butane markets via:

Normal butane storage Converting normal to more valuable isobutane

Terminal & large transport fleet a rolling pipeline which facilitates exports/imports of NGLs


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Leading IndependentStorage Provider

Legend Rank Company Location Working

Capacity (bcf)

1 Iberdrola (Caledonia, Freebird, Katy, Waha Hub) Mississippi, Alabama, New Mexico, Texas 50

2 Niska-Riverstone (Wild Goose, Salt Plains) California, Oklahoma 41

3 Inergy (Stagecoach, Steuben, Thomas Corners) New York, Pennsylvania 40

4 Plains All American (Bluewater, Pine Prarie) Michigan, Louisiana 39

5 Arcapita (Falcon Storage) Texas 35

Top 5 U.S. Independent Natural Gas Storage Providers

Inergy is among the largest independentnatural gas storage providers and the largestindependent located in the Northeastdemand market

Abundant pipeline interconnectionsavailable close to storage assets (Millennium,

Tennessee Gas Pipeline, National Fuel, Empire, Transco, Dominion)Inergy is playing a major role in thedevelopment of storage and transportationinfrastructure in the Marcellus Shale


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Premier Energy Storage Platform

4 Assets & 3 Expansion Projects Located Atopthe Marcellus Shale

Opportunity Exists to Operate as an IntegratedStorage HubResults in Increased Commercial Opportunities in Region

Natural Gas Storage & Transportation LPG Storage

Stagecoach (26.3 Bcf capacity) Finger Lakes LPG (7.0 mm bbl capacity)

Steuben Gas Storage (6.2 Bcf capacity) Thomas Corners Gas Storage Development (7.0 Bcf Capacity)

Marc 1 Hub Line (43 mile 30 Bi-directional lateral)

North-South Project (additional compression to provide firm wheeling services between TGP and Millennium pipelines)

US Salt Gas Storage Development (Up to 10.0 Bcf Capacity)

Blue font denotes future expansion opportunities

__________________

U n d e r w

a y

I n - S e r v i

c e


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Integrated Northeast Storage Hub

Potential for over 50Bcf of working gasstorage capacitycontained in an ~40mile radius within 200

miles of New York CityLargest independentnatural gas storageoperator in NE

Abundantinterconnectionsavailable

Enhanced commercialopportunities existfrom leveragingexceptional platformExecuting towards anintegrated NE storagehub

Midstream assets strategically located atop the prolific Marcellus Shale


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Increased Commercial Opportunities:MARC I and North-South Projects

MillenniumMillenniumPipelinePipeline

Tennessee GasTennessee GasPipelinePipeline

Line 300Line 300

Stagecoach ReservoirsStagecoach Reservoirs

Marcellus ShaleMarcellus ShaleTransco PipelineTransco Pipeline

Line 500Line 500

CS 319

Compression

Marc I Hub line(Proposed)

Gathering

Marc I Hub Line / North-South Project 43 mile 30 inch bi-directional gas pipeline located atop the Marcellus Shale provides FIRM wheeling

opportunities between TGP, Millennium, Transco and all points in between North-South Project includes additional compression and measurement facilities to serve shippers seeking

to wheel gas on a firm basis through Inergy's existing North and/or South Laterals of Stagecoach Total Capital Investment of ~$350 - $375 million Expected in-service Fall 2011

Stagecoach Existing +Stagecoach Existing +Expansion Compression (CS)Expansion Compression (CS)

Pipe to PipePipe to PipeSC to MarketsSC to Markets

Prod to MarketsProd to MarketsPipe to SCPipe to SCProd to SCProd to SC

CS 517

NS Project(Utilize Existing NS Laterals

w/ Additional CS) (Proposed) 20 North

Lateral

30 SouthLateral


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US Salt Operations

Stable, recession resistant cash flow businessProduces >300k tons of high-quality, high-margin food,

pharmaceutical, and chemical feedstock grade salt

Predominantly contracted pricing-strong customer base

Strategically located 25 miles east of Inergys Bath LPGstorage facility; complimentary to existing midstream

platform

Provides significant sustained source of growth inenergy storage platform

Provides immediate storage expansion capabilityLPG storage expansion underwayGeophysical work on gas storage expansion in progress

Stable Economic ReturnStable Economic Return

High Quality AssetsHigh Quality Assets

Continued Strategic Growth OpportunitiesContinued Strategic Growth Opportunities

In August 2008, Inergy purchased US Salt located in Watkins Glen, NY.


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Storage & TransportationExpansion Opportunities

Thomas Corners Natural Gas Storage Developing 7.0 Bcf working gas storage capacity Connections to TGP, Millennium, and Corning Natural Gas pipelines 100% contracted with 5 year term agreements Placed into service November 20095 months ahead of schedule

and under budget

Finger Lakes LPG Storage (Watkins Glen) Developing up to 5 million barrels of LPG storage Readily connected to Teppco pipeline, rail and truck access Long-term contract signed with an investment-grade anchor tenant Expected in-service mid-2010

Marc I Hub Line / North-South Project 43 mile 30-36 inch bi-directional gas pipeline located atop the Marcellus Shale provides wheeling

opportunities between TGP, Millennium, Transco and all points in between North-South Project includes additional compression and measurement facilities to serve shippers seeking

to wheel gas on a firm basis through Inergy's existing North and/or South Laterals of Stagecoach Expected in-service Fall 2011

US Salt Gas Storage Geotechnical work underway on 5 Bcf working natural gas storage available for development with

additional ~5 Bcf of potential capacity on the same property Regular solution mining operations add ~1 Bcf of capacity annually

F u t u r e

P r o

j e c t s

2 0 1 0 & 2 0 1 1 P r o

j e c t s


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Manageable Expansion Projects

High-return midstream expansion projects generate substantial diversification ofcash flow Projects are manageable size and leverage Inergys existing asset base andexpertise in the Northeast

__________________(a) The above figures regarding growth potential are based on various forward-looking assumptions made by the management of Inergy. While Inergy believes that these assumptions are

reasonable, it can give no assurance that such results will materialize.(b) Thomas Corners total capital investment is expected to be ~10% under the original budgeted $95 million. Remaining capital investment as of September 30, 2009.

$70 m

$350 - $375 m

$37.5 m

$8.8 m

Remaining

CapitalInvestment

TBD

Fall 2011

Mid-2010

ExpectedIn-Service

$79 m

$350 - $375 m

$52 m

Marc I Hub Line / North-South Project

$85 m Thomas Corners (b)

US Salt LPG Expansion

US Salt Gas Expansion

Total CapitalInvestmentPlanned Expansion Projects

(a)

F u t u r e

P r o

j e c t s

2 0 1 0 & 2 0 1 1

P r o

j e c t s

I n - S e r v ic e


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Financial Overview


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Demonstrated Financial Discipline

Balanced funding objectives Long-term targeted debt-to-EBITDA of approximately 3.5 to 4.0x Proven access to debt and equity capital markets Diverse balance sheet:

Bank facility represents essentially only secured debt on balance sheet$1.05 billion of senior unsecured notes maturities 2014 2016

Corporate family credit ratings from Moodys/S&P of Ba3/BB- (Stable Outlook)

Rigorous capital investment review process All acquisitions & expansion projects must be accretive to Distributable Cash

Flow per LP unit

Conservative approach to risk management Cost-plus service provider in propane and primarily fee-based in midstream No speculative commodity positions taken Credit risk management predominately centralized in KC and managed on a

daily basis


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Credit Facility Renewal

On November 24, 2009, Inergy closed a new $525 million 4 year seniorsecured revolving credit facility

Inergy received strong demand for the credit facility which wasoversubscribed with investors further recognizing the significant creditquality of our combined platform and execution

Facility was led by J.P. Morgan Securities Inc., Banc of America SecuritiesLLC and Wells Fargo Securities, LLC

Facility matures November 2013 and Inergy has no debt maturities until 2013

Facility contains leverage-based pricing grid with LIBOR margins rangingfrom 250-375 bps

The credit facility contains the following financial covenants: (a) Maximum Total Leverage Ratio (Debt / EBITDA) of 4.75x Maximum Senior Secured Leverage Ratio (Senior Secured Debt / EBITDA) of 3.0x Minimum Interest Coverage Ratio (EBITDA / Consolidated Interest Expense) of 2.5x

(a) Working capital borrowings under Tranche B excluded for covenant test purposes if Borrower complies with annual clean-down provision to $10 million or less. The calculation of EBITDAfor covenant and pricing purposes will include pro forma credit for acquisitions and identified material projects.

__________________


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17%

$175

22%

$211

32%

$239

28%

$297

$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

E B I T D A ( $ m

i l l i o n s )

FY 2006 FY 2007 FY 2008 FY 2009

Adjusted EBITDA (a)

Financial Performance

360 362332

310

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

G a l

l o n s

( m i l l i o n s )

FY 2006 FY 2007 FY 2008 FY 2009

Retail Propane Gallon Sales

$397$457

$502$575

$0.0$100.0

$200.0

$300.0

$400.0

$500.0

$600.0

T o t a l

G r o s s

P r o

f i t

( $ m

i l l i o n s

)

FY 2006 FY 2007 FY 2008 FY 2009

Total Gross Profit

(a) Adjusted EBITDA represents EBITDA excluding the gain or loss on derivative contracts associated with retail propane fixed price sales contracts, the gain or loss on the disposal of fixed assetsand long-term incentive and equity compensation expenses. Item 6 to the Partnerships Annual Report on Form 10-K provides a historical reconciliation of net income to EBITDA and

adjusted EBITDA.

__________________ % Midstream EBITDA Contribution

Midstream EBITDAcontribution ~40% of2010 run-rate


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Strong Balance Sheet

($ in millions)September 30,

2009

Cash ...................................................................................................................................... 11.6$

Revolving working capital tranche .............................................................. 27.2$Revolving general partnership tranche ........................................................ - 6 7/8% senior unsecured notes due 2014 .................................................. 425.0

8 1/4% senior unsecured notes due 2016 ..................................................

400.0 8 3/4% senior unsecured notes due 2015 .................................................. 225.0 Fair value adjustment on sr. unsecured notes ............................................ 5.6 Bond premium/(discount) ............................................................................ (16.4)

ASC credit agreement .................................................................................... 8.3 Other debt ....................................................................................................... 18.6

Total Debt ......................................................................................................................... 1,093.3$

Total Partners Capital ................................................................................................ 799.4$

Total Capitalization ......................................................................................................... 1,892.7$

FY 2009 Adjusted EBITDA @ September 30, 2009 296.8$

Total Funded Debt / Consolidated EBITDA 3.6 x


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FY 2010 Guidance

(a) Earnings guidance is based upon various forward-looking assumptions made by the management of Inergy. While Inergy believes that these assumptions are reasonable, it can give noassurance that such results will materialize. Estimates exclude any one-time or non-recurring charges that may occur. Adjusted EBITDA is defined as income (loss) before taxes, plus netinterest expense and depreciation and amortization and excludes (i) non-cash gains or losses on derivatives associated with fixed price sales to retail propane customers, (ii) long-term incentiveand equity compensation charges, and (iii) gains or losses on disposals of assets as disclosed in Inergy, L.P.s SEC filings.

(b) Estimate includes approximately $4 million of non-cash interest expense and is based upon our outstanding indebtedness including the indebtedness from all acquisitions to date.(c) Depreciation and amortization are based upon certain preliminary purchase price allocations and may be subject to change.(d) Based upon current limited partnership units outstanding, general partner ownership, and current distribution of $0.675 per quarter.

__________________

Forecast RangeFiscal Year Ended September 30, 2010

($ in Millions) Low High

Net Income (a) 89$ 92$Interest Expense (a)(b) 83 89 Depreciation and amortization (a)(c) 140 150 Income Taxes (a) 1 1

Adjusted EBITDA (a) 313$ 332$

Maintenance Capital Expenditures 7$ 8$

Net Income Allocable to Limited Partners (d) 31$ 34$

Limited Partner Units Outstanding 60 60


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Investment Highlights

Dual Platform Operating Strategy A Leading National Propane Franchise Fee-based Midstream Business Anchored by Northeast U.S. Gas Storage

Strong Financial Performance Record

Manageable Pipeline of Midstream Expansion ProjectsUnderway

Midstream Energy Storage Platform Rapidly Becoming a LargerComponent of Business

Record of Consistent EBITDA & Distributable Cash FlowGrowthDisciplined Consolidator of Retail Propane Industry

Underlying Businesses Characterized by Recession ResistantStable Cash FlowsStrong Balance Sheet and Distribution CoverageRecent Capital Markets Activity Provides Ample Balance SheetLiquidity to Execute on High-Return Expansion Projects

Income

Growth

Safety


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Appendix


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Historical Financial Overview &Non-GAAP Reconciliations

(a) (a)

(a) Includes a $20.0 million, a ($0.6) million, a $0.1 million, and a $1.4 million non-cash FAS 133 charge/(gain) associated with fixed-price propane sales contracts to retailcustomers in FY2006, FY2007, FY2008, and FY2009, respectively.

(b) The financials reflect a reclassification of transportation costs of $2.9 million and $4.4 million for the years ended FY2006 and FY2007, respectively, from a component ofoperating and administrative expense to other cost of product sold.

__________________

(a) (a)

Fiscal Year Ended September 30,2006 2007 2008 2009(in MMs) (audited) (audited) (audited) (audited)

Retail propane gallons 360.3 362.2 331.9 310.0

Statement of Operations Data:Revenues 1,390.2 1,483.1 1,878.9 1,570.6Cost of product sold (b) 993.3 1,026.1 1,376.7 996.9Gross profit 396.9 457.0 502.2 573.7

Expenses:Operating and administrative (b) 245.2 247.8 265.6 279.6Depreciation and amortization 76.7 83.4 98.0 115.8

Loss on disposal of assets 11.5 8.0 11.5 5.2Operating income 63.5 117.8 127.1 173.1

Other income (expense):Interest expense, net (53.8) (52.0) (60.9) (69.7)Other income 0.8 1.9 1.0 0.1ncome e ore ncome taxes an

interest of non-controlling partners in ASC 10.5 67.7 67.2 103.5Provision for income taxes (0.7) (0.7) (0.7) (0.7)Interest of non-controlling partners in ASC's consolidated net income - - (1.4) (1.4)

Net income 9.8 67.0 65.1 101.4


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(a) Adjusted EBITDA excludes i) non-cash gains or losses on derivative contracts associated with fixed price sales to retail propane customers, ii) non-cash compensation expense, and iii) gainsor losses on the disposal of assets as disclosed in Inergy, L.P.s SEC filings.

(b) ITDA Interest, taxes, depreciation and amortization(c) These amounts differ from those previously presented as a result of our adoption of FASB Accounting Standards Codification Subtopic 210-20 on October 1, 2008. In conjunction with the

adoption of this standard, we elected to change our accounting policy for derivative instruments executed with the same counterparty under a master netting agreement. This change in

accounting policy has been presented retroactively.

__________________

Historical Financial Overview &Non-GAAP Reconciliations, (cont.)

Fiscal Year Ended September 30,

2006 2007 2008 2009(in MMs) (audited) (audited) (audited) (audited)EBITDA Reconciliation:Net income 9.8 67.0 65.1 101.4Interest of non-controlling partners in ASC's consolidated ITDA(b) - - (0.8) (0.5)Interest expense, net 53.8 52.0 60.9 69.7Provision for income taxes 0.7 0.7 0.7 0.7Depreciation and amortization 76.7 83.4 98.0 115.8

EBITDA 141.0 203.1 223.9 287.1 Non-cash (gain) loss on derivative contracts 20.0 (0.6) 0.1 1.4Loss on disposal of assets 11.5 8.0 11.5 5.2

Non-cash compensation expense 2.9 0.7 3.5 3.1 Adjusted EBITDA (a 175.4 211.2 239.0 296.8

Balance Sheet Data (end of period):Cash 12.0 7.7 17.3 11.6

Working capital facility 22.7 31.0 65.0 27.2 Acquisition facility - 40.0 182.0 -Senior unsecured notes 625.0 625.0 825.0 1,050.0Fair value hedge adj. on sr. unsecured notes (3.6) (2.6) 1.9 5.6Net bond premium/(discount) - - 3.8 (16.4)

ASC credit agreement - - 10.9 8.3Other debt 15.6 16.8 18.0 18.6

Total debt 659.7 710.2 1,106.6 1,093.3

Net debt 647.7 702.5 1,089.3 1,081.7

Partners' capital 676.1 741.2 637.8 799.4 Total assets (c) 1,606.9 1,722.9 2,077.3 2,133.1


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$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 2009E( 9% Warmer (a) ) (7% Warmer (a) )( 6% Warmer (a) )( 10 % Warmer (a) )( 6% Colder (a) )

Management has demonstrated its ability to achieve consistent margin performance in distinctlydifferent operating environmentsIntense focus on proactively monitoring key performance metricsPropane operations consistently deliver stable, predictable cash flow

(a) Based on NRGY service territory.(b) Retail propane gross profit divided by retail propane gallons. Excludes non-cash gains/losses on derivative contracts.(c) Quarterly average Mt. Belvieu price.

(d) FY 2009 results as of September 30, 2009.

__________________

Gross Margin / Gallon (b) Mt. Belvieu Propane Cost / Gallon (c)

Consistent Margin Performance

( 7 % Warmer (a) ) (0% Colder (a) )(d)


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Gas Storage Facility Overview

Located ~150 milesnorthwest of New York City Closest storage facility to NYC

market

Working gas = 26.25 Bcf

High performance, multi-cycle gas storage (2-3x avg.)

Fully-contracted throughSeptember 2014 with

primarily investment gradecompanies

Connected to TGPs 300Line and MillenniumPipeline Enhanced deliverability at

Stagecoach

Wheeling opportunitiesbetween TGP and Millennium

Stagecoach

Located ~40 miles fromStagecoach in SteubenCounty, NY

Working gas = 6.2 Bcf Facility-owned 12.5 mile

pipeline connected toDominions Woodhull line

Fully-contracted through2011 with investmentgrade counterpartiesOpportunity exists toexpand connectivity to

Thomas Corners, TGP &MillenniumCost of service ratestructure

Steuben Gas Storage

Located ~40 miles fromStagecoach in SteubenCounty, NY Developing 7.0 Bcf

working gas capacity

Connections to TGP,Millennium, and CorningNatural Gas pipelinesFully-contracted with 5

year term agreementsPlaced in interim service;full commercial operationsexpected Nov-2009

Construction completed~10% under budget & 5months ahead of schedule

Thomas Corners


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Finger Lakes LPG Storage Overview

Bath

Located ~40 miles fromStagecoach in SchuylerCounty, NY Developing up to 5.0 mbbl LPG storageReadily connected to

Teppco pipeline, rail andtruck access

Long-term contractsigned with BPExpected in-service

mid-2010

Watkins Glen Expansion LPG Storage

Located ~40 miles fromStagecoachCurrently operating 1.7 mbbl LPG storageSupported by both railand truck terminalfacilitiesFully-contracted in LPGservice with 5 year termcontractExpansion potential with

US Salt as brine outletLong-term 4 Bcf gasconversion option


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Committed to Generating Industry-LeadingReturns to Our Investors

nrgy inergy dec 2009 presentation

Documents