Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — Investor Day (January 2018)
160 slides from Kinder Morgan's investor day presentation, Jan 24, 2018
Slide 1: Poised for Success
Poised for Success Same Reliable Assets; Improved Financial Profile January 24, 2018 2018 Analyst Day
Slide 2: Disclosure
Disclosure Forward Looking Statements / Non-GAAP Financial Measures General – The information contained in this presentation does not purport to be all‐inclusive or to contain all information that prospective investors may require. Prospective investors are encouraged to conduct their own analysis a
Slide 3: Disclosure
Disclosure Forward Looking Statements / Non-GAAP Financial Measures KML FLS – Forward-looking statements in this presentation include statements, express or implied, concerning: (i) the Trans Mountain Expansion Project ("TMEP") and Base Line Terminal project, including completion of such projects, c
Slide 4: Kinder Morgan 2018 Analyst Day Management and Agenda
Kinder Morgan 2018 Analyst Day Management and Agenda Time Discussion Presenter 8:00 – 8:20 Vision Rich Kinder Executive Chairman 8:20 – 9:30 Operational Excellence Steve Kean President & CEO 9:30 – 9:45 Break 9:45 – 10:30 KMI: Financial Excellence Kim Dang Vice President & CFO 10:30 – 10:45 KML: Fin
Slide 5: A. Vision
A. Vision Rich Kinder Executive Chairman 5
Slide 6: The Need for Hydrocarbons
The Need for Hydrocarbons Hydrocarbons Are Essential To Our Way Of Life Hydrocarbon fuels are affordable, dependable, and plentiful — And given advancements in technology, hydrocarbon fuels are becoming even more affordable, plentiful, and environmentally sustainable — Hydrocarbons are supported b
Slide 7: Hydrocarbon Fuels Remain Resilient
Hydrocarbon Fuels Remain Resilient Reports of the Hydrocarbon Industry Death Have Been Greatly Exaggerated These charts exclude coal, which is only a small portion of Kinder Morgan’s business Both domestic and global projections illustrate consistent growth of natural gas, crude oil, and NGLs fo
Slide 8: Hydrocarbons Are Critical To Daily Life
Hydrocarbons Are Critical To Daily Life Multiple Domestic Uses and Growing Exports U.S. demand is varied and growing Exports are expanding U.S. Demand by Sector, 2017 and 2046(a) U.S. Import / Export of Oil, Liquids and Nat. Gas(a) 30 Industrial 27% 25 Transport 43% 2017E Demand 20 by Sector: Qu
Slide 9: Why Do Hydrocarbon Fuels Remain Resilient?
Why Do Hydrocarbon Fuels Remain Resilient? Substantial Embedded Global Infrastructure and Boundaries of Physics Global Energy Demand(a) Hydrocarbon Fuel Resiliency(b) Hydrocarbons meet >75% of The world’s transition from basic fuels (like wood) to hydrocarbons has enabled the 800 global energy dem
Slide 10: Recent Market Trends
Recent Market Trends Hydrocarbon Fuel Demand Remains Strong U.S. Natural Gas Demand, 2015-2019(a) U.S. Refined Product Demand, 2015-2019(b) NET U.S. LNG EXPORTS Continued steady, modest volume growth 18.0 18.1 18.2 16.9 17.3 5.6 Bcfd 3.5 3.9 3.9 4.0 4.0 2.0 4.0 mmbbld 0.4 1.6 1.7 1.7 1.7 1.5 (0.1)
Slide 11: Natural Gas is Positioned for Continued Growth
Natural Gas is Positioned for Continued Growth Critical to Supporting Climate Goals and Meeting Demand Total Demand w/ Net LNG Exports Industrial(a) 30 Natural gas and its derivatives U.S. Natural Gas Demand (Bcfd) 25 are used for clothing, plastics, 20 Industrial 15 agriculture, medicine, Net LNG
Slide 12: KMI Positioned to Support Future of Natural Gas
KMI Positioned to Support Future of Natural Gas Kinder Morgan Transports ~40% of all Natural Gas Consumed in the U.S. Utica/Marc. Supply (Bcfd) Net LNG Export Demand (Bcfd) INCREASED U.S. VOLUMES = INCREASED NEED FOR KINDER MORGAN INFRASTRUCTURE 8.4 38.5 7.2 33.4 30.0 5.6 27.4 2.0 23.7 22.0 0.4 3.5
Slide 13: KMI Natural Gas Assets Are Critical to Many Needs
KMI Natural Gas Assets Are Critical to Many Needs Kinder Morgan Transports ~40% of all Natural Gas Consumed in the U.S. KM’s Natural Gas Assets Provide: Building blocks for critical, every-day products Backstop to enable renewable power generation Reliable energy source to supply growing elect
Slide 14: Financial Philosophy
Financial Philosophy Enormous Cash Flow Provides Substantial Strength and Flexibility Generate and grow cash flow — 2017 results and projected budget for 2018 illustrate KMI’s enormous and growing cash flow Live within that cash flow — Substantial cash flow provides strength and flexibility — No
Slide 15: B. KMI: Operational Excellence
B. KMI: Operational Excellence Steve Kean President & CEO 15
Slide 16: Kinder Morgan's 2018 Goals
Kinder Morgan’s 2018 Goals Operational and Financial Excellence Operational Excellence Continue to maintain and operate our assets safely, reliably, and efficiently Cash Flow Growth Grow 2018 DCF to $2.05 per share Grow 2018 EBITDA to $7.5 billion Dividend Increase Increase dividends declare
Slide 17: Questions You've Asked
Questions You’ve Asked: Answers to Frequently Asked Questions Q1. What is management’s — Our first priority is a healthy balance sheet: Long-term target for Debt / EBITDA is 5.0x or below; capital allocation Year-end 2018 budget is 5.1x philosophy? — We believe in investing in projects with positive
Slide 18: Unparalleled Asset Footprint
Unparalleled Asset Footprint One of the Largest Energy Infrastructure Companies in North America Natural Gas Pipelines Largest natural gas transmission network in North America Own or operate ~70,000 miles of natural gas pipeline Connected to every important U.S. natural gas resource play Prod
Slide 19: KMI & KML Overview
KMI & KML Overview Management is Aligned with Investors 14% MANAGEMENT STAKE IN KMI MANAGEMENT IS ALIGNED WITH INVESTOR INTERESTS Management & Public Public Directors(a) Float Float ~321mm (14%) ~1,907mm (86%) ~103mm (30%) C-corp, NYSE: KMI C-corp, TSX: KML Market Equity $43.1B(b) Market Equity C$6.
Slide 20: Kinder Morgan's Strategy
Kinder Morgan’s Strategy Focus on stable, fee-based assets that are core to North American energy infrastructure Core Fee-Based Market leader in each of our business segments Assets Fees largely independent of commodity prices and substantially secured by take-or-pay contracts Our primary in
Slide 21: 2018 Budgeted EBDA by Business Segment
2018 Budgeted EBDA by Business Segment 93% of 2018B EBDA is Generated from Pipelines and Terminals Kinder Morgan Canada 100% petroleum pipelines CO2 66% oil production related 34% source & transportation 4% 3% 7% Terminals Natural Gas Pipelines 80% liquids 73% interstate pipelines — 64% terminals 15
Slide 22: Contracts & Asset Footprint Protect KM Cash Flow
Contracts & Asset Footprint Protect KM Cash Flow 96% of 2018B Cash Flow is Independent of Commodity Price 2018B Segment EBDA of $8.1 Billion(a) Stability of Cash Flows Hedged (6%): disciplined approach to managing price volatility — CO2 actual oil volumes produced have been within 1.5% of budget 4%
Slide 23: KMI's Evolution
KMI’s Evolution Adjusted Course in Early Response to Industry Catalysts Industry Catalysts KMI Actions and Achievements Oil prices declined from over $100/bbl in KMI became a pure C-corp and eliminated 2014 to below $30/bbl in 2016 2014 IDRs in acquisition of its MLPs Reduced dividend in 2015;
Slide 24: KMI's Evolution Was Ahead of the Curve
KMI’s Evolution Was Ahead of the Curve But Stock Has Been Impacted as Sector Continues to Adjust Stock Price Dislocation from Business Performance Announced 60% dividend 2018 C$1.75 billion guidance in- KMI achieved consistent, positive increase for 2018 and $2 $30 IPO of KML line or better perfor
Slide 25: KMI's Compelling Investment Thesis
KMI’s Compelling Investment Thesis Attractive Relative Value, Best-in-Class Dividend Growth and Coverage Price / 2018E DCFPS(a) EV / 2018E EBITDA(b) ATTRACTIVE RELATIVE VALUE UNDERVALUED RELATIVE TO PEERS 16.4x 14.8x Med: 12.1x Med: 12.5x 14.5x 13.4x 13.4x 13.2x 12.1x 11.7x 12.5x 12.1x 11.3x 11.6x 1
Slide 26: KMI's Compelling Investment Thesis (Cont'd)
KMI’s Compelling Investment Thesis (Cont’d) Returning Significant Value to Shareholders 60% dividend increase for 2018 to $0.80 per share from $0.50 per share in 2017 25% dividend growth annually for 2019 and 2020: $1.00 in 2019 and $1.25 in 2020 $2 billion share buyback ~5% of KMI’s current market
Slide 27: KMI Business Risks
KMI Business Risks Summary Business Risks Regulatory — FERC rate cases (Products Pipelines and Natural Gas Pipelines) — Provincial, state, and local permitting issues CO2 crude oil production volumes Throughput on our volume-based assets Commodity prices — 2018 budget average strip price ass
Slide 28: Well Positioned for Long-Term Success
Well Positioned for Long-Term Success Disciplined Capital Allocation and Operational Excellence Poised for Success Best is Yet to Come Cornerstone of management philosophy since inception: World class midstream assets deliver value to shareholders Fee-based cash flows Excess cash flow will be us
Slide 29: C. KMI: Overview of Business Segments
C. KMI: Overview of Business Segments Steve Kean President & CEO 29
Slide 30: Natural Gas Pipelines Segment Outlook and Asset Overview
Natural Gas Pipelines Segment Outlook and Asset Overview Well-Positioned: Connecting Key Natural Gas Resources with Major Demand Centers Long-Term Growth Drivers Asset Summary Natural Gas Pipelines: 70,000 Miles Shale-driven expansions / U.S Nat Gas Moved by KM: ~40% extensions Working Gas Storage
Slide 31: Project Highlight: Gulf Coast Express (GCX)
Natural Gas Pipelines Project Highlight: Gulf Coast Express (GCX) Joint Venture Project Satisfying Multiple Growth Drivers Project Overview Project Drivers / Asset Overview Project Scope Project Drivers Mainline: 82 miles of 36” pipeline and 365 miles of 42” Producer push project to transport pr
Slide 32: Growth Driver: Exports – Liquefied Natural Gas
Natural Gas Pipelines Growth Driver: Exports – Liquefied Natural Gas Kinder Morgan Leverages Asset Footprint to Facilitate Booming U.S. LNG Exports Global Demand Drives Opportunity for U.S. to Export KM Plans to Participate 18.5 Bcfd of FERC-approved projects for U.S. LNG export Eight active tra
Slide 33: Growth Driver: Exports – Mexico
Natural Gas Pipelines Growth Driver: Exports – Mexico Kinder Morgan Delivers ~71% of U.S. Exports to Mexico (2017 YTD through October) Mexico Natural Gas Market KM Plans to Participate U.S. Exports to Mexico are expected to grow by ~2 Bcfd to 6.1 KM’s extensive footprint with access to numerous
Slide 34: Products Pipelines Segment Outlook and Asset Overview
Products Pipelines Segment Outlook and Asset Overview Products Pipelines: Stable, Strategic Assets Long-Term Stability Asset Summary Pipelines: ~10,000 Miles Steady demand for refined 2017 Throughput: ~2.1 mmbbld products volumes on strategically Condensate Processing Capability: 100 mbbld located
Slide 35: Project Highlight: Utopia Pipeline Project
Products Pipelines Project Highlight: Utopia Pipeline Project Supported by Long-Term, Volume Commitment Transportation Agreement Project Overview Asset Overview Project Scope 50/50 JV with Riverstone Holdings 267-mile12” pipeline Will transport ethane from points in Harrison County, Ohio to Wi
Slide 36: Stability and Growth
Products Pipelines Stability and Growth Stable Underlying Demand, Growing Footprint Volumes Handled (mbbld)(a) Market Trends Refined Products 273 323 327 323 — Products Pipelines volume CAGR is 1.2% 2015-2018 106 108 112 121 — Growth exceeds historical domestic refined products demand growth per E
Slide 37: Stability: U.S. Refined Product Demand
Products Pipelines Stability: U.S. Refined Product Demand(a) KM’s Refined Products Business Continues to Enjoy Stable Conditions Stable U.S. Refined Products Consumption(a) Stable Conditions Expected in Medium Term(b) 16.00 16.00 U.S. Refined Products Consumption 14.00 14.00 U.S. Refined Products Co
Slide 38: Terminals Segment Outlook and Asset Overview
Terminals Segment Outlook and Asset Overview A Diversified System Across Liquid and Bulk Hubs and Services Long-Term Growth Drivers Asset Summary North American Logistics Bulk 35 Solutions Liquids 51 — Crude and NGL growth Total KMT: 86 Terminals — Refining and petrochemical KMPP: 66 growth Total
Slide 39: Terminals' Fee-Based Business
Terminals Terminals’ Fee-Based Business Earnings Predicated on Stable, Fee-Based Business Other 1% Take-or-Pay Term leased tank capacity (monthly) Term tanker charters (monthly) Other Fee- 74% Term volumes (per bbl or ton) Based 17% 2018B Requirements EBDA Fixed Take-or- Pay Requirements(a)
Slide 40: Liquids Terminals
Terminals Liquids Terminals ~$5.8 Billion Invested Capital since 2010 – Houston, Edmonton & Jones Act Tankers Edmonton North 40 Alberta Edmonton South Alberta Crude Terminal Rail Edmonton South Rail Terminal Base Line Tank Terminal Van Wharves Hub Terminals New York Houston Ship New York Edmonton Ha
Slide 41: Terminals' Core Business Values
Terminals Terminals’ Core Business Values Infrastructure and Service Solutions – “Much More than Storage” Hub Market clearing point between global buyers and sellers Multimodal connectivity and value added services Terminals Critical to our customers and their business Logistics Services 53%
Slide 42: CO2 Segment Outlook and Asset Overview
CO2 Segment Outlook and Asset Overview Own and Operate CO2 for Enhanced Oil Recovery (EOR) Long-Term Growth Drivers Asset Summary Demand for scarce supply of CO2 drives volume and price Production: Gross 2018 CO2 SW Colorado 1.3 bcfpd 2018 Oil 57 mbopd Trillions of cubic feet of recoverable CO2
Slide 43: CO2 Segment Significant Returns and FCF
CO2 CO2 Segment Significant Returns and FCF Generating High Returns and ~$6 Billion in Cumulative Free Cash Flow IRR% 2000-2017 Cumulative FCF Generation $bn $5.8 30.0% $5.3 $4.9 25.0% $4.2 20.0% $3.7 $3.1 15.0% $2.7 10.0% 5.0% – O&G Total CO2 Segment 2012 2013 2014 2015 2016 2017 2018B (incl. S&T)
Slide 44: Continued Focus on High-Return Projects
CO2 Continued Focus on High-Return Projects 2018 Project Returns at Various Flat Pricing Levels Yates HZ Drain Hole Program SACROC Conventional 80% 75% 80% 65% Long Lateral Bullseye Phase 2 60% 60% 48% 46% ATIRR% ATIRR% 40% 40% 40% 28% 40% 33% 20% 20% 20% – – $50 $56.50 $60 $50 $56.50 $60 Flat WTI (
Slide 45: Big Fields Get Bigger
CO2 Big Fields Get Bigger Successful Track Record of Extending SACROC Production Life Big Fields SACROC Net Oil Production Forecasts SACROC – 2.8 billion barrels of original oil in 35,000 place Yates – 5.0 billion barrels of original oil in place 30,000 SACROC Strategy Long track record of exp
Slide 46: Kinder Morgan Canada Segment Outlook and Asset Overview
Kinder Morgan Canada Segment Outlook and Asset Overview Sole Oil Pipeline Providing Oilsands Production Access to West Coast / Export Markets Long-Term Growth Drivers Asset Summary Pipeline Miles 2017 Throughput Constrained pipeline capacity Trans Mountain ~715 ~0.3 mmbbld — Trans Mountain only pi
Slide 47: D. KML: Operational Excellence
D. KML: Operational Excellence Steve Kean Chairman & CEO of KML 47
Slide 48: KML Overview
KML Overview Integrated Network of Strategically Located Assets KML Summary KML Assets(b) A premier integrated network of pipeline systems Asset Summary and terminal facilities serving Western Canada Miles of Pipe: ~1,435 Miles Initial Public Offering on TSX in May 2017 2017 Throughput ~0.4 mmbb
Slide 49: KML Overview (Continued)
KML Overview (Continued) Significant Canadian Midstream Entity; Unparalleled Growth Potential TRANS MOUNTAIN EXPANSION PROJECT COULD GROW ADJUSTED EBITDA BY C$1.1 BILLION(b) C$474 C$395 C$388 Adjusted EBITDA C$mm(a) C$369 C$260 C$211 C$201 C$257 C$214 C$178 C$214 C$184 C$187 C$155 C$79 2014 2015 201
Slide 50: Project Highlight: Trans Mountain Expansion
Project Highlight: Trans Mountain Expansion Only Crude Oil Pipeline Serving Canadian West Coast Trans Mountain Expansion Project (TMEP) TMEP Overview Project Scope Expansion to 890 mbbld from 300 mbbld today 615 miles new pipe; 12 new pump stations 630 mbbld tanker export capacity; 3 new berth
Slide 51: Trans Mountain Expansion Project Status
Trans Mountain Expansion Project Status Actively Evaluating Mitigation Efforts Current TMEP Status Original estimated in-service date of December 2019 Slower than expected permitting process thus far could result in a delay estimated at up to 12 months (to Dec. 2020) — We continue to evaluate mi
Slide 52: Trans Mountain Expansion Project Status (Cont'd)
Trans Mountain Expansion Project Status (Cont’d) Milestones Along the Way to Clarity That We Can “Finish What We Start” Favorable outcome on NEB motion for an efficient, fair and timely process for resolving provincial and local permits and approvals – received January 18, 2018 Experience with P
Slide 53: E. KMI: Financial Excellence
E. KMI: Financial Excellence Kim Dang Vice President & CFO 53
Slide 54: KMI's Recent Evolution: Corner Has Been Turned
KMI’s Recent Evolution: Corner Has Been Turned Results in Strong Financial Profile that Matches Portfolio of Stable Assets Year-End Net Debt / Adjusted EBITDA Dividend Coverage 5.6x 4.0x 4.0x 5.3x 2.6x 5.1x 5.1x 1.3x 2015 2016 2017 2018B 2015 2016 2017 2018B Equity Issuance ($mm) DCF Less Dividend L
Slide 55: KMI: Self-Reliant Funding
KMI: Self-Reliant Funding No Need to Access Capital Markets During 2018 Disciplined Capital Allocation 2018 STRATEGY: LONGER-TERM STRATEGY: DCF fully funds dividends and growth capital Continue living within cash flow needs in 2018 Longer-term leverage target at, or below, 5.0x — No need to ac
Slide 56: Tax Reform
Tax Reform Not Expected to Pay Significant Cash Taxes Until After 2024 Primary provisions that impact KMI: — Lower corporate tax rate (21% vs. 35%) — Interest limitation equal to 30% of EBITDA for four years, 2018-2021 (no expected impact to KMI) and then 30% of EBIT thereafter (limitation may imp
Slide 57: 5-Year Growth Project Backlog
5-Year Growth Project Backlog ~$12 Billion of Attractive, Substantially Fee-Based Projects High-Quality Growth Projects Driving Value Cumulative Adjusted EBITDA $1.6 billion World-class asset footprint has driven attractive growth opportunities, secured by long-term, fee- based contracts with cred
Slide 58: KMI's Limited Counterparty Exposure
KMI’s Limited Counterparty Exposure Strong Customer Credit, Valuable Services Limit KMI’s Risk High-Quality, Diversified Customer Base Top 25 Customers(a) In 2017, KMI’s budgeted DCF had $0 impact due B- or Below to bankruptcies BB+ to BB 4% 3% — Also, KMI’s budgeted 2016 DCF impact from oil and A
Slide 59: Deployed Over $60 Billion of Capital
Deployed Over $60 Billion of Capital Asset Investment & Acquisitions Since Inception Total Invested by Year(b,c,d) $8.0 $70 $6.8 $6.7 Expansion / Acq. $bn $7.0 $60 Cumulative $bn $6.0 $50 $5.0 $3.4 $3.4 $40 $3.3 $3.2 $3.2 $3.0 $4.0 $2.7 $2.4 $2.3 $30 $2.2 $3.0 $1.7 $1.7 $1.7 $1.6 $1.4 $1.4 $1.2 $1.1
Slide 60: Returns on Invested Capital
Returns on Invested Capital Targeted Returns for New Capital Investment Are Substantially Above Cost of Capital Commentary Segment ROI(a,b) Items leading to decline in 30% Nat Gas returns since 2012: Products Natural Gas Segment 25% Terminals – EPB included since 2013 CO2 (primarily a drop-down 20
Slide 61: Attractive Results on Recent Expansion Projects
Attractive Results on Recent Expansion Projects Capital Invested / Year-2 EBITDA(a) THE CAPEX MULTIPLE FOR PROJECTS COMPLETED DURING 2015 – 2017 HAS SLIGHTLY EXCEEDED OUR EXPECTATIONS 0x $15 $9.0 bn 7.9x 0x 7.6x $10 $4.6 bn 0x $1.5 bn $5.0 6.0x 6.1x 6.0x 0x 5.5x $3.0 bn – 4.9x 0x 4.5x ($5. 0x ($10 0
Slide 62: Capital Allocation Philosophy
Capital Allocation Philosophy Disciplined Approach GENERALLY, DCF AVAILABLE IN EXCESS OF OUR DIVIDEND AND DISCRETIONARY CAPEX WILL BE ALLOCATED FIRST TO NEW PROJECTS THAT MEET OUR CURRENT RETURN HURDLES, WITH ANY REMAINING CAPITAL ALLOCATED TO SHARE REPURCHASE AND/OR DEBT REDUCTION. New Projects C
Slide 63: KMI 2018 Guidance: Published Budget
KMI 2018 Guidance: Published Budget Supported by Diversified, Fee-Based Cash Flow KMI 2018 Budget Commentary 2018 ∆ from After dividend and Capex, excess cash flow Budget 2017 will be invested in: — Additional high-return projects Adjusted EBITDA $7,485 million 4% — Additional share repurchases —
Slide 64: KMI: 2018B Distributable Cash Flow (DCF)
KMI: 2018B Distributable Cash Flow (DCF) $ Millions, Except Per Share 2018 2017 Change Distributable Cash Flow Budget Actual $ % Net Income available to common stockholders before Certain Items $ 1,853 $ 1,472 $ 381 26% (a) DD&A and amortization of excess investments 2,759 2,684 75 3% Book taxes(b)
Slide 65: KMI: 2018B Segment EBDA before Certain Items
KMI: 2018B Segment EBDA before Certain Items $ Millions, Except Per Share 2018 2017 Change Budget Actual $ % Natural Gas Pipelines $ 4,117 $ 3,879 $ 238 6% CO2 915 887 28 3% Terminals 1,249 1,214 35 3% Products Pipelines 1,216 1,193 23 2% Kinder Morgan Canada(a) 210 186 24 13% Segment EBDA before Ce
Slide 66: KMI: 2018B Adjusted EBITDA
KMI: 2018B Adjusted EBITDA $ Millions 2018 2017 Change Adjusted EBITDA Budget Actual $ % Segment EBDA before Certain Items $ 7,707 $ 7,359 $ 348 5% Natural Gas Pipelines JV DD&A (a) 375 378 (3) -1% CO2 JV DD&A 8 8 0 0% Products Pipelines JV DD&A (a) 8 2 6 300% Terminals JV DD&A (a) (5) (6) 1 -17% Se
Slide 67: KMI: 2018B Sources and Uses
KMI: 2018B Sources and Uses $ Millions 2018 2018 Sources Budget Uses Budget DCF $ 4,567 Dividends declared $ 1,784 LT Debt Issuance 2,000 Growth capital 2,215 ST Borrowing (net of cash)(a) 322 Debt maturities 2,322 Discretionary free cash flow(b) 568 Total Sources $ 6,889 Total Uses $ 6,889 Uses exc
Slide 68: KMI: 2018B Quarterly Profile
KMI: 2018B Quarterly Profile $ Millions, Except Per Share Segment EBDA before Certain Items plus JV DD&A Q1 Q2 Q3 Q4 Total 2018 Budget 25% 24% 24% 27% $ 8,093 2017 Actual 26% 24% 24% 26% $ 7,741 Adjusted EBITDA 2018 Budget 25% 24% 24% 27% $ 7,485 2017 Actual 25% 24% 25% 26% $ 7,198 Distributable Cas
Slide 69: KMI: 2018B Assumptions and Highlights
KMI: 2018B Assumptions and Highlights Our Budget Estimates EBDA Growth Across Business Segments YoY ∆ in EBDA(a) Business Segment Commentary Natural +6% Contributions from Elba Liquefaction expansion project Gas Increased Haynesville volumes on KinderHawk system Pipelines Increased Bakken volu
Slide 70: KMI: 2018B Cash Tax Calculation Detail
KMI: 2018B Cash Tax Calculation Detail $ Millions 2018 Budget Segment EBDA before Certain Items $ 7,707 Noncontrolling interests (120) JV earnings from c-corps (214) JV distributions from c-corps (net of 65% DRD) 67 JV book DD&A (pass-thru entities) 256 General and administrative and corporate charg
Slide 71: KMI: 2018B Sustaining Capital
KMI: 2018B Sustaining Capital $ Millions 2018 2017 Sustaining Capital Expenditures(a) Budget Actual Change Natural Gas Pipelines $ 316 $ 269 $ 47 CO2 17 13 4 Products Pipelines(b) 74 76 (2) Terminals(b) 211 194 17 Kinder Morgan Canada(b) 23 15 8 Corporate / other 23 21 2 Total sustaining capital exp
Slide 72: KMI: 2018B Growth Capital
KMI: 2018B Growth Capital $ Millions 2018 2017 Growth capital Budget (a) Actual Natural Gas Pipelines $ 1,633 $ 1,602 CO2 - S&T 32 19 CO2 - EOR 420 410 Products Pipelines 86 267 Terminals 44 629 Kinder Morgan Canada - 55 Total growth capital $ 2,215 $ 2,982 FULLY FUNDED BY INTERNALLY GENERATED CASH
Slide 73: KMI: Credit Ratios and Liquidity
KMI: Credit Ratios and Liquidity(a) $ Millions 2018 Consolidated leverage metrics 2014 2015 2016 2017 Budget Net debt(b) to Adjusted EBITDA 5.5x 5.6x 5.3x 5.1x 5.1x KMI revolver capacity(c) KMI long-term debt maturities(d) Committed revolving credit facility $ 5,000 2018 $ 2,322 Less: 2019 2,813 CP
Slide 74: Well Positioned for Long-Term Success
Well Positioned for Long-Term Success Demonstrating Financial Excellence Improved Financial Profile Self-Funding Disciplined Capital Allocation Attractive Return on Investments Hedge Direct Commodity Exposure Maintain Strong Balance Sheet — Committed to achieving or beating long-term Debt/EBITDA tar
Slide 75: F. KML: Financial Excellence
F. KML: Financial Excellence Dax Sanders KML CFO and VP of KMI Corporate Development 75
Slide 76: KML: 2018 Published Budget
KML: 2018 Published Budget Supported by Fee-Based Cash Flow KML 2018 Budget (C$) 2018 Budget Highlights ∆ from YoY ∆ in Business Segment 2018 Budget 2017 EBDA Commentary Adjusted EBITDA(a) C$474 million 22% Additional capitalized equity Distributable Cash Flow(a) C$349 million 8% Pipelines +27% fi
Slide 77: KML: TMEP Funding
KML: TMEP Funding Visibility Toward Meeting TMEP Capital Needs TMEP Summary Funding Expectations We previously announced a potential unmitigated project delay to Dec. 2020 Construction delays typically entail increased costs, but those are highly uncertain at this stage of the project Therefor
Slide 78: KML: 2018B Sources and Uses
KML: 2018B Sources and Uses $ in Millions of CAD 2018 2018 Sources Budget Uses Budget DCF $ 349 Dividends declared, net of DRIP $ 170 KML equity issuances / preferred equity issuances 750 Growth capital 1,899 ST borrowing (net of cash)(a) 970 Total Sources $ 2,069 Total Uses $ 2,069 2018 equity issu
Slide 79: KML: 2018B Distributable Cash Flow (DCF)
KML: 2018B Distributable Cash Flow (DCF) $ in Millions of CAD, Except Per Share 2018 2017 Change Distributable Cash Flow Budget Actual $ % Net Income after tax before Certain Items(a) $ 242 $ 164 $ 78 48% DD&A 154 142 12 8% Book taxes 88 66 22 33% Cash taxes (32) (0) (32) n/a Preferred dividends (39
Slide 80: KML: 2018B Segment EBDA before Certain Items
KML: 2018B Segment EBDA before Certain Items $ in Millions of CAD, Except Per Share 2018 2017 Change Budget Actual $ % Pipelines $ 299 $ 235 $ 64 27% Terminals 246 219 27 12% Total Segment EBDA before Certain Items 545 454 91 20% General and administrative and corporate charges (a) (71) (66) (5) 8%
Slide 81: KML: 2018B Capital
KML: 2018B Capital $ in Millions of CAD 2018B KML Sustaining Capital(a) (C$ Millions) 2018 2017 Sustaining Capital Expenditures Budget Actual Change Pipelines $ 45 $ 26 $ 19 Terminals 19 17 2 Total Sustaining Capital Expenditures $ 64 $ 43 $ 21 2018B KML Growth Capital (C$ Millions) 2018 2017 Growth
Slide 82: KML: Credit Ratios and Liquidity
KML: Credit Ratios and Liquidity(a) $ in Millions of CAD 2017 2018 Leverage Metrics Actual Budget Net debt(b) to Adjusted EBITDA 0.1x 2.7x Revolver Capacity(c) Long-term Debt Maturities(d) Committed revolving credit facility $ 5,500 2018 $ - Less: 2019 - CP / revolver borrowing - 2020 - Letters of c
Slide 83: G. Natural Gas Pipelines Segment Presentation
G. Natural Gas Pipelines Segment Presentation 83
Slide 84: Natural Gas Pipelines Segment Outlook and Asset Overview
Natural Gas Pipelines Segment Outlook and Asset Overview Well-Positioned: Connecting Key Natural Gas Resources with Major Demand Centers Long-Term Growth Drivers Asset Summary Natural Gas Pipelines: 70,000 Miles Shale-driven expansions / U.S Nat Gas Moved by KM: ~40% extensions Working Gas Storage
Slide 85: Long-Term Growth Drivers: Natural Gas Pipelines
Natural Gas Pipelines Long-Term Growth Drivers: Natural Gas Pipelines Kinder Morgan Capitalizes on Industry Trends Shale-Driven Expansions/ Greenfield projects providing outlets for increasing supply to growing markets Debottlenecking, expansions and extensions off our existing footprint to broa
Slide 86: Growth Driver: Exports – Liquefied Natural Gas
Natural Gas Pipelines Growth Driver: Exports – Liquefied Natural Gas Kinder Morgan Leverages Asset Footprint to Facilitate Booming U.S. LNG Exports Global Demand Drives Opportunity for U.S. to Export KM Plans to Participate 18.5 Bcfd of FERC-approved projects for U.S. LNG export Eight active tra
Slide 87: Project Highlight: Liquefaction at Elba Island
Natural Gas Pipelines Project Highlight: Liquefaction at Elba Island Elba Liquefaction Company (ELC)(a) / SLNG Project Overview Asset Overview Project Scope Facilities for liquefaction (10 modular units) Ship loading facilities; boil-off gas compression Project Statistics LNG output capacity e
Slide 88: Growth Driver: Exports – Mexico
Natural Gas Pipelines Growth Driver: Exports – Mexico Kinder Morgan Delivers ~71% of U.S. Exports to Mexico (2017 YTD through October) Mexico Natural Gas Market KM Plans to Participate U.S. Exports to Mexico are expected to grow by ~2 Bcfd to 6.1 KM’s extensive footprint with access to numerous
Slide 89: Project Highlight: Gulf Coast Express (GCX)
Natural Gas Pipelines Project Highlight: Gulf Coast Express (GCX) Joint Venture Project Satisfying Multiple Growth Drivers Project Overview Project Drivers / Asset Overview Project Scope Project Drivers Mainline: 82 miles of 36” pipeline and 365 miles of 42” Producer push project to transport pr
Slide 90: North Region Assets
Natural Gas Pipelines North Region Assets Extensive Footprint Serving Major Domestic Markets and Gulf Coast Exports Relevant Growth Drivers New infrastructure to support existing and future LNG plants 8 Bcfd(a) of additional demand accessible LNG from 6 approved LNG facilities near TGP, Exports
Slide 91: South Region Assets
Natural Gas Pipelines South Region Assets Transporter to Growing Southeast Markets; Elba LNG Liquefaction Begins Service in 2018 Relevant Growth Drivers KM participation in LNG liquefaction LNG infrastructure Exports Elba Island terminal liquefaction facilities under construction New infrastru
Slide 92: West Region Assets
Natural Gas Pipelines West Region Assets Transporter from Rockies and Permian Basins to Western Markets and Mexico Relevant Growth Drivers Significant connectivity for incremental supply to Mexico 6.1 Bcfd of exports to Mexico forecast by Mexico 2022(a) Exports 2017 deliveries to Mexico: West
Slide 93: Midstream Assets
Natural Gas Pipelines Midstream Assets TX Intrastate Systems Serving Growing Demand; G&P in Growing Basins Relevant Growth Drivers KM participating in new infrastructure for growing Shale-Driven Permian basin supply to reach growing demand Exp. markets Approximately 3.0 Bcfd of additional demand
Slide 94: Contracted Capacity and Term by Region
Natural Gas Pipelines Contracted Capacity and Term by Region Contracted Average Term Region Capacity Remaining Storage 326 Bcf 2 yr, 11 mo NORTH Transport 19.3 Bcfd 6 yr, 3 mo Storage 52 Bcf 1 yr, 8 mo Interstate SOUTH Transport 13.2 Bcfd 7 yr, 2 mo Transport Contracts LNG 18 Bcf 14 yr, 5 mo Avg. =
Slide 95: New Firm Transport Capacity
Natural Gas Pipelines New Firm Transport Capacity Tracking FT Capacity Commitments Since 2013 FT Capacity Commitments by Capacity Type New Existing Committed Total Capital, Wtd Avg. Capacity Capacity Capacity KM Share (a) Contract Dec. 1, 2013 to Present (mDthd) (mDthd) (mDthd) ($mm) Term (Yrs) NORT
Slide 96: Projects Placed Into Service During 2017
Natural Gas Pipelines Projects Placed Into Service During 2017 New Projects Expected to Generate $88 Million of EBITDA Annually Capital, In-service Capacity KM Share EBITDA Region Asset Project Date (mDthd) ($mm) ($mm) Susquehanna West Sept 2017 145 $115 TGP Connecticut Expansion Nov 2017 72 $104 No
Slide 97: Project Backlog: Natural Gas Segment
Natural Gas Pipelines Project Backlog: Natural Gas Segment North and South Regions Capital, KM Share Capacity In-service Asset Project ($mm) (mDthd) Date Project Status Project facilities placed in service (Nov 2017). Customer Triad $57 180 6/2018 contracts to begin 6/1/2018, as planned. Broad Run E
Slide 98: Project Backlog: Natural Gas Segment
Natural Gas Pipelines Project Backlog: Natural Gas Segment West and Midstream Regions Capital, KM Share Capacity In-service Asset Project ($mm) (mDthd) Date Project Status Wink Station Expansion $3 71 2/2018 Modifications commissioned Nov 2017. EPNG FERC filing expected 1Q 2018. Project provides 9.3
Slide 99: KM Projects / Long-Term Commitments to LNG
Natural Gas Pipelines KM Projects / Long-Term Commitments to LNG Kinder Morgan Leverages Asset Footprint to Facilitate Booming U.S. LNG Exports Contracted In-Service Project / Capacity KM Capital Date KM Asset Transportation Terminal (mDthd) ($mm) In Service NGPL Firm Transport Sabine Pass 550 NA SW
Slide 100: KM Projects & Long-Term Commitments for Exports to Mexico
Natural Gas Pipelines KM Projects & Long-Term Commitments for Exports to Mexico (Since 2013) Contracted In-Service Project / Capacity KM Capital Date KM Asset Transportation Shipper (mDthd) ($mm) Oct-14 Sierrita Sierrita Gas PL CFE 200 $61 Oct-14 to EPNG S. Mainline Exp. CFE 471 $135 Jul-20 MexGas /
Slide 101: H. Products Pipelines Segment Presentation
H. Products Pipelines Segment Presentation 101
Slide 102: Products Pipelines Segment Outlook and Asset Overview
Products Pipelines Segment Outlook and Asset Overview Products Pipelines: Stable, Strategic Assets Long-Term Stability Asset Summary Pipelines: ~10,000 Miles Steady demand for refined 2017 Throughput: ~2.1 mmbbld products volumes on strategically Condensate Processing Capability: 100 mbbld located
Slide 103: Stability and Growth
Products Pipelines Stability and Growth Stable Underlying Demand, Growing Footprint Volumes Handled (mbbld)(a) Market Trends Refined Products 273 323 327 323 — Products Pipelines volume CAGR is 1.2% 2015-2018 106 108 112 121 — Growth exceeds historical domestic refined products demand growth per E
Slide 104: Stability: U.S. Refined Product Demand
Products Pipelines Stability: U.S. Refined Product Demand(a) KM’s Refined Products Business Continues to Enjoy Stable Conditions Stable U.S. Refined Products Consumption(a) Stable Conditions Expected in Medium Term(b) 16.00 16.00 U.S. Refined Products Consumption 14.00 14.00 U.S. Refined Products Co
Slide 105: Project Highlight: Utopia Pipeline Project
Products Pipelines Project Highlight: Utopia Pipeline Project Supported by Long-Term, Volume Commitment Transportation Agreement Project Overview Asset Overview Project Scope 50/50 JV with Riverstone Holdings 267-mile12” pipeline Will transport ethane from points in Harrison County, Ohio to Wi
Slide 106: West Coast Region Assets: Refined Products
Products Pipelines West Coast Region Assets: Refined Products Pacific Operation: KM Operates ~3,449 Miles of Refined Products Pipe Serving 7 States Asset Detail & Plan Discussion Statistics Origin Destination SFPP Pipeline 2,845 miles System: San Fran Bay Northern North Line area refineries CA and N
Slide 107: Central Region Assets: Crude, Condensate & NGLs
Products Pipelines Central Region Assets: Crude, Condensate & NGLs Focused on Appalachia, Gulf Coast, and Bakken Asset Detail & Plan Discussion Statistics Origin Destination NGL Pipelines: Fort Saskatchewan, Cochin 1,810 miles Kankakee, IL Alberta Fulton County, OH / Utopia 267 miles Harrison County
Slide 108: East Coast Region Assets: Refined Products
Products Pipelines East Coast Region Assets: Refined Products Southeast Operations Providing Services Beyond Transportation Asset Detail & Plan Discussion Statistics Origin Destination from Mississippi Plantation Pipeline Louisiana & 3,182 miles through Virginia Company: Mississippi including Tennes
Slide 109: I. Terminals Segment Presentation
I. Terminals Segment Presentation 109
Slide 110: Terminals Segment Outlook and Asset Overview
Terminals Segment Outlook and Asset Overview A Diversified System Across Liquid and Bulk Hubs and Services Long-Term Growth Drivers Asset Summary North American Logistics Bulk 35 Solutions Liquids 51 — Crude and NGL growth Total KMT: 86 Terminals — Refining and petrochemical KMPP: 66 growth Total
Slide 111: Transformative Growth
Terminals Transformative Growth Strategic Growth Creating a More Efficient and Advantaged Terminals Business Evolution of Kinder Morgan Terminals (KMT) Variance Executed Growth: 2010 2018B Actual % CAGR Liquids focused capital expansions and strategic acquisitions Revenues $1.2 bn $2.0 bn $0.8 bn
Slide 112: Long-Term Growth Drivers
Terminals Long-Term Growth Drivers We Serve the World’s Most Advantaged Upstream / Downstream Industries Refined KM’s Houston Ship Channel position is the largest single refined products and renewable terminaling system worldwide Bulk Products / Houston’s refinery and petrochemical complex is a
Slide 113: Project Highlights: Placed into Service
Terminals Project Highlights: Placed into Service Near-Term Growth: ~$1.1 Billion in Capital Projects Completed in 2017 KMET Pit 11 / Other HSC American Petroleum Tankers Greenfield, 1.5 mmbbls Houston 2.0 mmbbls of tankage added at 4 New Jones Act Vessels delivered Export Terminal Pasadena, T
Slide 114: Historical Growth: Strategic Development
Terminals Historical Growth: Strategic Development ~$5.8 Billion Invested Capital since 2010 – Houston, Edmonton & Jones Act Tankers Houston Ship Channel Edmonton Merchant Terminal American Petroleum Tankers Irreplicable refined product Canada’s premier merchant Largest and most modern fleet o
Slide 115: Terminals' Core Business Values
Terminals Terminals’ Core Business Values Infrastructure and Service Solutions – “Much More than Storage” Hub Market clearing point between global buyers and sellers Multimodal connectivity and value added services Terminals Critical to our customers and their business Logistics Services 53%
Slide 116: Hub Terminals – Houston Ship Channel
Terminals Hub Terminals – Houston Ship Channel Premier Refined Product Aggregation and Market-Clearing Hub HSC Overview Houston Ship Channel Asset Overview Largest independent refined product terminaling system — Matches market supply and demand — Intermodal inbound/outbound — Pipeline, rail, barg
Slide 117: Hub Terminals – Edmonton
Terminals Hub Terminals – Edmonton Increasingly Advantaged Canadian Crude Market-Clearing Hub Edmonton Overview Edmonton Asset Overview Industry’s preferred Canadian crude oil terminal solution — Matches Oilsands production with Canadian, U.S. and worldwide markets — Inbound connections to a vast
Slide 118: Hub Terminals – New York Harbor
Terminals Hub Terminals – New York Harbor Refined Product Terminals Serving a Globally-Supplied NYH Market NYH Overview New York Harbor Asset Overview Multi-product terminaling system and preferred gasoline market clearing hub — Refined product supply through U.S. domestic refiners and internation
Slide 119: Market Terminals
Terminals Market Terminals Targeted Toward Long-Term Product Demand Markets Renewable Fuels KM Phoenix Vancouver Wharves KM handles ~30% of U.S. 75:25 KM BP Joint Venture in An export point for multiple renewable fuels product distribution terminals Canadian commodities — Argo, IL terminal is
Slide 120: Logistics Services
Terminals Logistics Services Leveraging Multiple Competencies to Solve Customer Needs Petroleum Coke Nucor Methanex One of the nation’s largest In-plant bulk handling and In-plant methanol logistics handlers of petroleum coke logistics services services — ~40% of Midcontinent and Gulf — Servic
Slide 121: Jones Act Tankers
Terminals Jones Act Tankers Largest, Most modern and Efficient Fleet in the United States APT Overview Jones Act Tankers: Contract Schedule American Petroleum Tankers (APT) Vessel 0 2018 12 2019 24 2020 36 2021 48 2022 60 — Final 4 vessels delivered in 2017 — Largest Jones Act tanker fleet Palmett
Slide 122: Terminals' Fee-Based Business
Terminals Terminals’ Fee-Based Business Earnings Predicated on Stable, Fee-Based Business Other 1% Take-or-Pay Term leased tank capacity (monthly) Term tanker charters (monthly) Other Fee- 74% Term volumes (per bbl or ton) Based 17% 2018B Requirements EBDA Fixed Take-or- Pay Requirements(a)
Slide 123: Liquids Terminals
Terminals Liquids Terminals High Demand Assets Based on Key Industry and Market Hubs Edmonton North 40 Alberta Edmonton South Alberta Crude Terminal Rail Edmonton South Rail Terminal Base Line Tank Terminal Van Wharves Hub Terminals New York Houston Ship New York Edmonton Harbor Carteret Harbor Albe
Slide 124: Bulk Terminals
Terminals Bulk Terminals Providing Import/Export Logistics and Value-Added Services Van Wharves Portland Vancouver WA Dakota Milwaukee Milwaukee Bagging Key Businesses Whiting Fairless Hills Pinney Dock Petroleum Nucor Van Coke Services Wharves Money Point Elizabeth River Pier IX % of 2018B 31% 12%
Slide 125: Throughput and Tonnage Statistics
Terminals Throughput and Tonnage Statistics 2017A vs. 2018B Liquids Throughput Bulk Tonnage Refined product growth from export-oriented Petroleum coke demand is up with expected Houston Ship Channel expansions refinery utilization and turnaround schedules Growth across renewables, chemicals an
Slide 126: J. CO2 Segment Presentation
J. CO2 Segment Presentation 126
Slide 127: CO2 Segment Outlook and Asset Overview
CO2 Segment Outlook and Asset Overview Own and Operate CO2 for Enhanced Oil Recovery (EOR) Long-Term Growth Drivers Asset Summary Demand for scarce supply of CO2 drives volume and price Production: Gross 2018 CO2 SW Colorado 1.3 bcfpd 2018 Oil 57 mbopd Trillions of cubic feet of recoverable CO2
Slide 128: CO2 Segment Significant Returns and FCF
CO2 CO2 Segment Significant Returns and FCF Generating High Returns and ~$6 Billion in Cumulative Free Cash Flow IRR% 2000–2017 Cumulative FCF Generation ($bn) $5.8 30.0% $5.3 $4.9 25.0% $4.2 20.0% $3.7 $3.1 15.0% $2.7 10.0% 5.0% – O&G Total CO2 Segment 2012 2013 2014 2015 2016 2017 2018B (incl. S&T
Slide 129: Continued Focus on High-Return Projects
CO2 Continued Focus on High-Return Projects 2018 Project Returns at Various Flat Pricing Levels Yates HZ Drain Hole Program SACROC Conventional 80% 75% 80% 65% Long Lateral Bullseye Phase 2 60% 60% 48% 46% ATIRR% ATIRR% 40% 40% 40% 28% 40% 33% 20% 20% 20% – – $50 $56.50 $60 $50 $56.50 $60 Flat WTI (
Slide 130: CO2 Segment Outlook
CO2 CO2 Segment Outlook Tall Cotton and SACROC Development Will Drive Growth Development Plans: 2018-2027 Key Takeaways KM Share S&T delivers steady DCF with modest capital Net CAPEX (b) expenditures Asset mmboe(a) ($mm) Development Plans Transition Zone partially offsets production declines Tal
Slide 131: CO2 Segment Overview
CO2 CO2 Segment Overview Kinder Morgan is the Largest Supplier of CO2 for Permian EOR 2018B DCF of $906 million Source & Transportation Tall GLSAU KM share of EOR demand consumes ~40% of our Cotton 2% 6% entitled production in 2018 Katz CO2 S&T 100% of CO2 production is contracted in 2018, of 4%
Slide 132: 2018 Expansion Program Summary
CO2 2018 Expansion Program Summary $452 Million Capex Program Capex % of Total CO2 Purchased Net Oil Produced ($mm) Capex Commentary (mmcfd) (mbopd) $233mm Capex includes $79mm Cap OH and Cap CO2 Activate 11 conventional patterns in Hawaii/project area 22.8 oil(a) SACROC $233 52% Continue BE R
Slide 133: CO2 Segment's Asset Summary
CO2 CO2 Segment’s Asset Summary Fully Integrated Asset Base in the Permian S&T Asset Summary Supplying CO2 to the Permian, Permian EOR Prod. KMI Remaining OGIP CO2 Reserves Interest NRI Location Deliverability (tcf) McElmo Dome 45% 37% SW Colorado 20+ years 22.0 Doe Canyon 87% 68% SW Colorado 10+ ye
Slide 134: CO2 Oil Production and Hedge Profiles
CO2 CO2 Oil Production and Hedge Profiles Disciplined Approach to Managing Capital and Price Volatility Limited Volume Risk: Actuals vs. Plan Limited Near-Term Price Risk: Hedge Profile Actual oil production within 1.4% of Plan over past Targeted net equity production minimum hedge 10 years perc
Slide 135: Big Fields Get Bigger
CO2 Big Fields Get Bigger Successful Track Record of Extending SACROC Production Life Big Fields SACROC Net Oil Production Forecasts SACROC – 2.8 billion barrels of original oil in 35,000 place Yates – 5.0 billion barrels of original oil in place 30,000 SACROC Strategy Long track record of exp
Slide 136: Outlook – Tall Cotton
CO2 Outlook – Tall Cotton Tall Cotton Development Project Update Project Totals through Phase 3 San Andres Residual Oil Zone (ROZ) oil 18,000 saturation similar to water-flooded main pay San 15,000 Andres 12,000 bopd 9,000 Several significant San Andres ROZ projects 6,000 underway in the Permian
Slide 137: Oil & Gas Production Group's Forecasts
CO2 Oil & Gas Production Group’s Forecasts Production Continues to Exceed Reserve Report Commentary Evolution of Forecasted 2017 Net Production(a) The top right chart demonstrates how the production 2010 2011 2012 2013 2014 2015 2016 2017 2018 forecast for 2018 has generally increased over the 50
Slide 138: Oil & Gas Production Group: Margins and Costs
CO2 Oil & Gas Production Group: Margins and Costs Success Maintaining Cost Structure in Rising Commodity Price Market Oil & Gas Cash Cost Structure(a) Commentary $100 O&G cost structure has strong correlation to energy prices $90 $80 Power is tied to gas prices $70 Purchased CO2 and TOTI(b) ar
Slide 139: K. Kinder Morgan Canada Segment Presentation
K. Kinder Morgan Canada Segment Presentation 139
Slide 140: Kinder Morgan Canada Segment Outlook and Asset Overview
Kinder Morgan Canada Segment Outlook and Asset Overview Sole Oil Pipeline Providing Oilsands Production Access to West Coast / Export Markets Long-Term Growth Drivers Asset Summary Pipeline Miles 2017 Throughput Constrained pipeline capacity Trans Mountain ~715 ~0.3 mmbbld — Trans Mountain only pi
Slide 141: Trans Mountain Pipeline (TMPL)
Kinder Morgan Canada Trans Mountain Pipeline (TMPL) Overview of KMC’s Primary Asset TMPL Overview TMPL Map Current Capacity — 300 mbbld (based on 80% light, 20% heavy) — 241 mbbld to Puget Sound — Very high, consistent demand; system has been on apportionment since 2009 Markets — British Columbi
Slide 142: Market Access Drivers
Kinder Morgan Canada Market Access Drivers Oilsands Producers Are Committed to TMEP; Desire to Access Global Markets Commentary Western Canada Supply vs. Takeaway Capacity(a) TMPL is the only crude oil pipeline that provides 6.0 Takeaway Capacity (mmbbld) Oilsands producers with access to global e
Slide 143: Project Highlight: Trans Mountain Expansion
Kinder Morgan Canada Project Highlight: Trans Mountain Expansion Only Crude Oil Pipeline Serving Canadian West Coast Trans Mountain Expansion Project (TMEP) TMEP Overview Project Scope Expansion to 890 mbbld from 300 mbbld today 615 miles new pipe; 12 new pump stations 630 mbbld tanker export
Slide 144: Trans Mountain Expansion Project Status
Kinder Morgan Canada Trans Mountain Expansion Project Status Actively Evaluating Mitigation Efforts Current TMEP Status Original estimated in-service date of December 2019 Slower than expected permitting process thus far could result in a delay estimated at up to 12 months (to Dec. 2020) — We co
Slide 145: Trans Mountain Expansion Project Status (Cont'd)
Kinder Morgan Canada Trans Mountain Expansion Project Status (Cont’d) Legal and Regulatory Updates Regulatory Update Dec. 7, 2017: NEB granted relief related to certain Burnaby construction approvals Jan. 18, 2018: NEB granted our request to establish an efficient, fair and timely process for si
Slide 146: L. Other
KINDER/MORGAN L. Other 146
Slide 147: Energy Toll Road
Energy Toll Road Cash Flow Security Natural Gas Products Kinder Morgan Terminals CO2 Pipelines Pipelines Canada Interstate & LNG: take-or-pay Liquids & Jones Act: Refined products: S&T: primarily Intrastate: ~76% take-or-pay(a,b) primarily take-or-pay Volume primarily volume-based minimum
Slide 148: Compliance is Important to Kinder Morgan
Compliance is Important to Kinder Morgan Kinder Morgan’s On-Time Compliance Metrics are Consistently High Operate in Compliance Kinder Morgan’s On-Time Compliance Performance On-time compliance is a critical leading indicator for In 2017, we tracked 540,000 compliance activities to the performan
Slide 149: Asset Integrity and Safety are Top Priorities
Asset Integrity and Safety are Top Priorities Kinder Morgan’s EHS Metrics Consistently Outperform the Industry Operate Safely & Efficiently Kinder Morgan’s Safety Performance vs. Industry(a) Safe operation of our assets is mission critical to our We track 36+ safety metrics and post monthly long
Slide 150: Incidents & Releases: Liquids Pipelines
Incidents & Releases: Liquids Pipelines Liquids Pipeline Right-of-Way Incidents per 1,000 Miles(a,b) Release Rate(a,b) 0.57 17.96 Bbls per billion bbl miles Incidents per 1,000 miles 0.47 15.5 0.45 13.05 0.39 11.49 0.29 0.27 0.24 0.21 6.0 0.16 0.67 0.08 0.08 0.08 2.50 0.11 0.05 0.01 0.01 0.04 - 2006
Slide 151: Incidents & Releases: Natural Gas Pipelines
Incidents & Releases: Natural Gas Pipelines Natural Gas Pipeline Right-of-Way Incidents Rate All Reportable Incidents(a,b) Incidents Rate Onshore Ruptures Only(b,c,d) 0.16 Incidents per 1,000 miles Incidents per 1,000 miles 0.52 0.41 0.45 0.37 0.37 0.32 0.30 0.27 0.27 0.26 0.06 0.02 0.02 0.02 0.04 0
Slide 152: Employee Safety Statistics
Employee Safety Statistics(a) KM Lost-Time Incident Rate (DART) OSHA Recordable Incident Rate 6.0 OSHA recordable incidents Lost-time injuries per 200k per 200k hours worked 3.6 hours worked 0.6 0.9 0.5 0.5 1.8 0.8 0.9 1.4 1.2 1.1 1.3 1.4 1.3 0.6 0.6 0.6 0.7 0.9 0.9 0.4 0.5 0.4 0.5 0.7 0.7 0.8 0.6 0
Slide 153: KML Business Risks and Key Assumptions
KML Business Risks and Key Assumptions Summary Business Risks Project cost overruns and in-service delays Regulatory — Legislative and regulatory changes — Federal, provincial, state and local — Regulatory cost and indexing approvals Non-governmental individuals and organizations could impact
Slide 154: KML Business Risks and Key Assumptions
KML Business Risks and Key Assumptions Base Business – Our base business is expected to be relatively stable, though it is subject to re-contracting and other risks 2018 Adjusted EBITDA — Includes $71 million of capitalized equity financing costs (AEDC) related to TMEP based on prior capital spe
Slide 155: M. Definitions and GAAP Reconciliations
M. Definitions and GAAP Reconciliations 155
Slide 156: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures The non-GAAP financial measures of distributable cash flow (DCF), both in the aggregate and per share, Segment EBDA before Certain Items (in the case of KMI only), Adjusted EBITDA, and Adjusted Earnings, both in the aggregate and per share, are presented herein. Ou
Slide 157: Use of Non-GAAP Financial Measures (Cont'd)
Use of Non-GAAP Financial Measures (Cont’d) Adjusted EBITDA is calculated by adjusting net income before interest expense, taxes, and DD&A (EBITDA) for Certain Items, and for KMI, by also adjusting net income before Certain Items for noncontrolling interests before Certain Items, and our share, if a
Slide 158: KMI GAAP Reconciliation
KMI GAAP Reconciliation $ in Millions Yr. Ended Yr. Ended Reconciliation of DCF 12/31/17 Reconciliation of Adjusted EBITDA 12/31/17 Net Income $ 223 Net Income $ 223 Certain Items 1,445 Certain Items 1,445 Net Income before Certain Items (Adjusted Earnings) 1,668 Net Income before Certain Items (Adj
Slide 159: KML GAAP Reconciliation
KML GAAP Reconciliation $ in Millions of CAD Yr. Ended Yr. Ended Reconciliation of DCF 12/31/17 Reconciliation of Adjusted EBITDA 12/31/17 Net Income $ 160 Net Income $ 160 Certain Items 4 Certain Items 4 Net Income before Certain Items (Adjusted Earnings) 164 Net Income before Certain Items (Adjust
Slide 160: Explanation of Return Calculations
Explanation of Return Calculations Formula Notes Formula Notes Segment EBDA before Certain Gross PP&E Segment (a) Items less sustaining capex Equity Investments (JVs) (f) Return on Goodwill Investment (b) Average Total Investment Gross intangibles (excluding amortization) Plus: Return on DCF before