Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — Investor Day (January 2019)
148 slides from Kinder Morgan's investor day presentation, Jan 23, 2019
Slide 1: 2019 Investor Day
2019 Investor Day January 23, 2019
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 evaluation of options in order to maximize value to KML shareholders following the Trans Mountain sale including,
Slide 4: Kinder Morgan 2019 Investor Day: Agenda and presenters
Kinder Morgan 2019 Investor Day Agenda and presenters TIME DISCUSSION PRESENTER 8:00 – 8:15 Compelling Investment Opportunity Rich Kinder Executive Chairman 8:15 – 9:15 Strategic Excellence Steve Kean CEO 9:15 – 9:45 Financial Excellence Kim Dang President 9:45 – 10:00 BREAK 10:00 – 10:20 KMI: 2019
Slide 5: Compelling Investment Opportunity
Compelling Investment Opportunity Rich Kinder Executive Chairman 5
Slide 6: Cash Flow Generation Machine
Cash Flow Generation Machine ~$5 billion of 2019B distributable cash flow (DCF) = ~$2 billion for dividends + ~$3 billion to enhance shareholder value $ billions Common Dividends Declared DCF After Dividends 2019B dividend coverage of 2.2x(a) $2.7 $2.9 $3.4 $3.4 $2.3 $1.8 $1.1 $1.1 2016 2017 2018 20
Slide 7: A Core Energy Infrastructure Holding
A Core Energy Infrastructure Holding Significant cash flow generation, significant value to shareholders ~$40 billion market capitalization One of the 10 largest energy companies in the S&P 500 Investment grade rated debt Recent upgrade to BBB / Baa2 by S&P and Moody’s reflects balance sheet strengt
Slide 8: Globally, the Need for Energy is Growing
Globally, the Need for Energy is Growing Natural gas and petroleum demand expected to grow for decades to come STEADY GROWTH IN GLOBAL ENERGY DEMAND DEMAND GROWTH DRIVEN BY DEVELOPING ECONOMIES Billion tons of oil equivalent % of incremental demand from 2017 to 2040 18 Latin Rest of World Projection
Slide 9: U.S. is the Largest Oil and Gas Producer in the World
U.S. is the Largest Oil and Gas Producer in the World Abundant supply enables growing U.S. role as exporter OIL AND GAS PRODUCTION Long runway of expected growth in U.S. oil and gas production Million barrels of oil equivalent per day Current estimates for U.S. proved reserves of oil and natural g
Slide 10: Bright Future for U.S. Natural Gas
Bright Future for U.S. Natural Gas Infrastructure is key to meet demand 2017 – 2018 2018 – 2030 Bcfd % Bcfd % Overall demand 9 12% 29 32% Drivers of Growth: LNG 1 65% 14 496% Power 4 15% 4 15% Industrial 1 4% 4 15% Exports to Mexico 1 10% 2 39% Residential 2 12% 1 4% Our expansive network is positio
Slide 11: Attractive Attributes of Energy Infrastructure
Attractive Attributes of Energy Infrastructure KMI’s long-lived, hard assets support key inputs to the global economy Energy Consumer Infrastructure Real Estate Utilities Industrials Goods Retail Technology Long-lived, tangible assets Multi-year customer contracts Supports key inputs to global econo
Slide 12: Kinder Morgan: Leader in North American Energy Infrastructure
Kinder Morgan: Leader in North American Energy Infrastructure Unparalleled and irreplaceable asset footprint built over decades Largest natural gas transmission network in North America ~70,000 miles of natural gas pipelines Connected to every important U.S. natural gas resource play and key dem
Slide 13: Compelling Investment Opportunity
Compelling Investment Opportunity Returning value to shareholders via significant dividend growth | Attractive valuation DRILL-DOWN OF S&P 500 COMPANIES ENTERPRISE VALUE / 2019E EBITDA(a) Attractive valuation provides upside potential 10.9x 411 2019E Net Debt / 2019E EBITDA <5.0x 9.6x 298 Investment
Slide 14: Strategic Excellence
Strategic Excellence Steve Kean CEO 14
Slide 15: Our Strategy
Our Strategy Stable, fee-based assets Financial flexibility Disciplined capital allocation Enhancing shareholder value Core energy 4.5x 2019B Adjusted Net Conservative Attractive projects infrastructure Debt / Adjusted EBITDA(a) assumptions Dividend growth Safe & efficient operator Low
Slide 16: Simple C-Corp Structure with Highly-Aligned Leadership
Simple C-Corp Structure with Highly-Aligned Leadership 14% of KMI is owned by management and board members Management & Public Public Directors Float Float 14% 86% 30% ~326mm shares ~1,950mm shares ~35mm shares 70% Exchange: NYSE ~81mm shares Exchange: TSX Ticker: KMI Ticker: KML Structure
Slide 17: Positioned to Support Future of Natural Gas
Positioned to Support Future of Natural Gas Kinder Morgan transports ~40% of all natural gas consumed in the U.S. U.S. NATURAL GAS PRODUCTION U.S. NATURAL GAS DEMAND Bcfd Bcfd Growth (a) Sector 2018 2030E Bcfd % Marc./Utica, 26 Net LNG exports 3 17 14 496% Permian, 8 2018 Haynesville, 8 Power 29 33
Slide 18: U.S. Natural Gas Demand Increasingly Export Driven
U.S. Natural Gas Demand Increasingly Export Driven Net LNG exports projected to increase 496% or 14 Bcfd by 2030 Global LNG demand is forecasted to grow from ~40 Bcfd in U.S. NET LNG EXPORTS 2018 to ~75 Bcfd by 2030(a) Bcfd 18 In 2017, China imported 45% more LNG than in 2016, which 15 absorbed almo
Slide 19: U.S. Natural Gas Demand for Power Generation
U.S. Natural Gas Demand for Power Generation Projected to increase 15% or 4 Bcfd by 2030, representing 36% of power generation market share Natural gas demand from the power sector is expected to have U.S. POWER GENERATION BY FUEL set a record in 2018 at ~29 Bcfd TWh 60 GW of coal plant retirement
Slide 20: U.S. Natural Gas Industrial Demand Growth
U.S. Natural Gas Industrial Demand Growth Projected to increase 15% or 4 Bcfd by 2030 Natural gas and its derivatives are used for clothing, plastics, U.S. INDUSTRIAL DEMAND GROWTH FOR NATURAL GAS agriculture, medicine, petrochemicals and more Bcfd 27 Natural gas-intensive industries such as fertili
Slide 21: U.S. Natural Gas Demand is Concentrated in Gulf Coast
U.S. Natural Gas Demand is Concentrated in Gulf Coast >70% of forecasted 2018-2030 demand and export growth occurs in, or transits, Texas and Louisiana Forecasted Texas and Louisiana demand and export growth between 2018 and 2030: Industrial LNG Export Demand +24% Demand +2 Bcfd +404% +13 Bcfd Expor
Slide 22: Our Unmatched Natural Gas Network and Deliverability
Our Unmatched Natural Gas Network and Deliverability Strong fundamentals drive value on existing assets and create investment opportunities U.S. NATURAL GAS DEMAND = Growing supply area Bcfd = Key areas of demand growth Bakken +6% 101 Powder River +6% 96 Power Power DJ 90 +12% Marcellus / Utica 81 P
Slide 23: $5.7bn of Commercially Secured Capital Projects Underway
$5.7bn of Commercially Secured Capital Projects Underway Significant opportunities primarily resulting from expansive natural gas footprint Demand Pull / KMI Capital Estimated Commercially Secured Capital Projects Supply Push ($ billion) In-Service Date Capacity Natural Gas Permian takeaway projects
Slide 24: Beyond the Backlog
Beyond the Backlog Long-term energy fundamentals create value-enhancing opportunities for existing assets and new projects Takeaway for Storage to support Grow crude and significant renewable power Infrastructure to NGL footprints out Marcellus / Utica generation and support U.S. of Bakken and Hayne
Slide 25: 501-G Process Update
501-G Process Update Resolution expected to occur over time with opportunities to mitigate potential financial impact Status: Filed a Form 501-G for 19 assets during Q4 2018(a) SNG and Young Gas Storage have entered into negotiated settlements with their customers Currently in settlement negot
Slide 26: Environmental, Social and Governance (ESG)
Environmental, Social and Governance (ESG) Committed to being a good corporate citizen Prioritizing ESG Every Day ESG-Related Achievements Operations Management System Published first stand-alone ESG Report in October 2018 Intentional, systematic risk management activities established to Guided
Slide 27: Natural Gas Segment Overview
Natural Gas Segment Overview Connecting key natural gas resources with major demand centers Asset Summary Natural Gas Pipelines: ~70,000 Miles NGL Pipelines: ~2,700 Miles U.S. Natural Gas Consumption Moved: ~40% Working Gas Storage Capacity: 657 Bcf 2019B EBDA(a): ~$5.1 billion Project Backlog: $3.9
Slide 28: Growth Driver: Buildout of U.S. LNG Exports
Growth Driver: Buildout of U.S. LNG Exports Multiple liquefaction and natural gas transport opportunities across KM footprint GLOBAL DEMAND DRIVING SIGNIFICANT BUILDOUT OF U.S. LNG KM NETWORK REACHES MULTIPLE EXPORT FACILITIES EXPORT CAPABILITIES Forecasted U.S. Liquefaction Capacity (Bcfd) 16.7 13.
Slide 29: Growth Driver: Surging Permian Production
Growth Driver: Surging Permian Production KM providing additional takeaway capacity for associated natural gas production Existing footprint reaches across Texas and connects into all major KM POSITIONED TO SERVE PERMIAN PRODUCTION demand markets Natural Gas Pipelines Interconnected deliverability
Slide 30: Project Highlight: Gulf Coast Express (GCX)
Project Highlight: Gulf Coast Express (GCX) Permian direct-to-Gulf Coast project satisfying multiple growth drivers Project Scope Mainline: 447.5 miles of 42” pipeline originating at the Waha Hub and terminating near Agua Dulce, Texas Midland lateral: 50 miles of 36” pipeline 214,280 HP of ins
Slide 31: Project Highlight: Permian Highway Pipeline (PHP)
Project Highlight: Permian Highway Pipeline (PHP) PHP provides broad U.S. Gulf Coast market optionality for Permian production Project Scope Mainline: ~430 miles of 42” pipeline from the Waha to Katy, Texas areas with connections to the U.S. Gulf Coast and Mexico markets 300,320 HP of installed
Slide 32: Key Market: Exports to Mexico
Key Market: Exports to Mexico Kinder Morgan delivers ~3.1 Bcfd of U.S. natural gas exports to Mexico(a) Extensive footprint offers diverse supply solutions to multiple Mexico interconnections (12 direct, 4 indirect) U.S. natural gas exports to Mexico are expected to grow by 36%, or ~1.6 Bcfd, to 6
Slide 33: Products Segment Overview
Products Segment Overview Strategic footprint with significant cash flow generation Asset Summary Pipelines (a): ~9,500 Miles 2018 Throughput(a) ~2.3 mmbbld Condensate Processing Capacity 100 mbbld Transmix 5 facilities Terminals: 67 Terminals Terminals Tank Capacity ~39 mmbbls Pipeline Tank Capacit
Slide 34: Stable U.S. Market Demand for Refined Products
Stable U.S. Market Demand for Refined Products Expansive footprint positioned to capture market opportunities U.S. REFINED PRODUCTS CONSUMPTION(a) & KM REFINED PRODUCTS VOLUMES TRANSPORTED(b) Our expansive refined products footprint connects major mmbbld refining centers to major consuming markets
Slide 35: Terminals Segment Overview
Terminals Segment Overview Diversified terminaling network connected to key refining centers and market hubs Asset Summary Total Kinder Morgan Terminals: 157 Terminals Terminals Segment – Bulk 34 Terminals Terminals Segment – Liquids 56 Terminals Products Pipelines Segment Terminals 67 Terminals Jon
Slide 36: Terminals Segment Strategy
Terminals Segment Strategy Critical infrastructure and value-added service solutions Market clearing point between global buyers and sellers Hub Multi-modal connectivity and value-added services Terminals Critical to our customers and their business 49% Logistics KM liquids hubs: Houston, Ed
Slide 37: Strong Liquids Fundamentals
Strong Liquids Fundamentals Attractive opportunities to supply U.S. products to consumers here and abroad GLOBAL LIQUIDS CONSUMPTION EXPECTED TO EXCEED GROWTH LED BY CHINA AND INDIA (2017 – 2019) 100 MILLION BARRELS PER DAY BY 2019 World Petroleum and Other Liquids Consumption (mmbbld) +2.2 Rest of
Slide 38: Positioned to Support U.S. Gulf Coast Exports
Positioned to Support U.S. Gulf Coast Exports Houston’s premier refined products aggregation and market-clearing terminaling hub Our Houston Ship Channel position represents the largest Integrated Houston Ship Channel Terminal Footprint independent refined products terminaling system in U.S. Colonia
Slide 39: CO2 Segment Overview
CO2 Segment Overview World class, fully integrated assets ― CO2 source to crude oil production and takeaway in the Permian Basin 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+ years 3.0 CO2
Slide 40: CO2 Segment Significant Returns and Free Cash Flow
CO2 Segment Significant Returns and Free Cash Flow Long history of generating high returns and ~$6 billion in cumulative free cash flow IRR% 2000-2018 CUMULATIVE FREE CASH FLOW GENERATION $ billions Commodity price $6.2 28% change $5.8 $5.3 $4.9 $4.2 18% $3.7 $3.1 Oil & Gas Total CO2 Segment (incl.
Slide 41: Big Fields Get Bigger
Big Fields Get Bigger Successful track record of extending productive life of mature fields Significant amounts of recoverable oil in place SACROC NET OIL PRODUCTION FORECASTS SACROC – 2.8 billion barrels of original oil in place bopd – Evaluating Transition Zone 35,000 Actual 2019B 2015B 2014B 20
Slide 42: Financial Excellence
Financial Excellence Kimberly Dang President 42
Slide 43: Financial Flexibility from Significant Cash Flow
Financial Flexibility from Significant Cash Flow DCF: A SIGNIFICANT SOURCE OF FUNDING YEAR-END ADJUSTED NET DEBT / ADJUSTED EBITDA $ billions 2019B dividend coverage of 2.2x(a) $2.7 5.3x 5.1x $2.9 4.5x 4.5x $3.4 $3.4 2016 2017 2018 2019 Budget EQUITY ISSUANCE $2.3 $ millions $1.8 $1.1 $1.1 Zero Zilc
Slide 44: Stable, Multi-Year Fee-Based Cash Flow
Stable, Multi-Year Fee-Based Cash Flow ~96% of 2019B segment cash flow is from take-or-pay and other fee-based contracts or hedged(a) 66% Fee-Based Take-or-Pay: highly dependable cash flow under multi-year contracts Entitled to payment regardless of throughput for periods of up to 20+ years 25% Ot
Slide 45: Secure Cash Flows Across Our Segments
Secure Cash Flows Across Our Segments 2019 budgeted segment cash flows by contract type NATURAL GAS SEGMENT: 97% take-or-pay or fee-based PRODUCTS SEGMENT: 96% fee-based or take-or-pay Unhedged, 2% Hedged, 1% Unhedged, 4% Stable fee-based refined Other Fee-Based, 17% products volumes with 1.4% CAGR
Slide 46: High-Quality, Diversified Customer Base
High-Quality, Diversified Customer Base Strong customer credit, valuable services limit KMI’s risk TOP 25 CUSTOMERS Diverse, primarily investment grade customers limit counterparty risk BB+ to BB B- or Below Our average customer represents less than 0.1% of 2019 budgeted net 4% 5% revenue Top 25
Slide 47: Averaged $2.5 Billion of Discretionary Capital since 2008
Averaged $2.5 Billion of Discretionary Capital since 2008 Asset investment & acquisitions over time EXPANSION CAPITAL & CONTRIBUTIONS TO JVs BY YEAR(a,c) TOTAL INVESTED BY TYPE: 1998 – 2018(b,c,d) $ billions Expansion Average $32.8 $28.3 $3.4 $3.3 $3.2 $3.2 $3.1 $3.0 $2.7 $2.5 $2.3 Expansion & Contr
Slide 48: Returns on Invested Capital
Returns on Invested Capital Targeted returns for new capital investment are substantially above cost of capital SEGMENT ROI(a,b) 30% 25% 20% 15% 10% 5% Commodity price change 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 KINDER MORGAN RETURNS ROI ROE 30% 25% 20% 15% 10% 5% Shift to self-
Slide 49: Successfully Achieving Attractive Build Multiples
Successfully Achieving Attractive Build Multiples Disciplined steward of capital Competitive advantages: INVESTMENT MULTIPLES: PROJECTS COMPLETED 2015-2018 Capital invested / year 2 Project EBITDA(a) Expansive asset base ― ability to leverage or repurpose steel already in the ground Natural gas se
Slide 50: Stable Foundation of Cash Flows through Commodity Cycles
Stable Foundation of Cash Flows through Commodity Cycles 5-year change in Adjusted EBITDA $ billions $1.7 $7.8 $7.4 $(0.6) $(0.5) $0.2 $(0.3) $(0.1) Helped to fund $8.3 billion Adjusted Net Debt reduction(b) 2014 Adjusted EBITDA 2014-2017 Asset Divestitures 2014-2017 2015-2016 Other EBITDA from 2019
Slide 51: Financial Discipline is Part of Our Culture
Financial Discipline is Part of Our Culture Rigorous forecasting process enables management to react quickly and make informed decisions Update current Detailed Real-time feedback and monthly Cash is king; we focus year forecast decision making A/R on collecting it weekly meeting Monthly Continuousl
Slide 52: Capital Allocation Priorities
Capital Allocation Priorities Right-sized balance sheet and set dividend target through 2020; continually assessing best use of available capital Balance Capital Share Dividend Sheet Projects Repurchase Target return threshold well in excess of cost of capital Expect to use cash Dividend targets set
Slide 53: Distributable Cash Flow (DCF) versus Net Income
Distributable Cash Flow (DCF) versus Net Income Largest differences easily explainable and more reflective of cash earnings DEPRECIATION EXPENSE VS. SUSTAINING CAPEX(a) BOOK TAX EXPENSE VS. CASH TAXES $ billions $ billions $2.8 $2.8 $2.7 $2.7 $2.6 $2.4 $1.0 $1.0 $1.0 $2.2 $0.8 $0.7 $1.7 $0.7 $0.7 $1
Slide 54: Meaningful Upside Potential
Meaningful Upside Potential Median midstream peer valuation multiples imply ~20-30% share price upside for KMI 2019 DCF MULTIPLE(a) 2019 EBITDA MULTIPLE(b) 13.3x 13.6x 13.1x 11.9x 12.3x Med: 11.2x Med: 9.8x 11.6x 10.3x 11.2x 11.0x 10.2x 9.8x 10.4x 9.3x 9.0x 10.4x 9.6x 8.4x 9.0x 8.0x 7.4x OKE MMP ENB
Slide 55: KMI: A Compelling Investment Opportunity
KMI: A Compelling Investment Opportunity Strategically-positioned assets generating substantial cash flow with significant long-term growth opportunities ~90% take-or-pay or fee-based earnings (a) ~$7.8 billion = 2019B Adjusted EBITDA ~$5.0 billion = 2019B Distributable Cash Flow 25% dividend increa
Slide 56: KMI: 2019 Budget
KMI: 2019 Budget David Michels Vice President & CFO 56
Slide 57: KMI: 2019 Guidance – Published Budget
KMI: 2019 Guidance – Published Budget Strong fundamentals and strategic footprint support steady growth in our diversified, fee-based cash flow Key Metrics 2019 Budget ∆ from 2018 Notes SIGNIFICANT EARNINGS POWER $ billions Adjusted EBITDA $7.8 billion 3% $7.8 $7.6 $7.2 Meaningful increases despite
Slide 58: KMI: 2019B Assumptions and Highlights
KMI: 2019B Assumptions and Highlights EBDA growth primarily from our Natural Gas Pipelines segment YoY ∆ in EBDA(a) Key Developments Contribution from Elba Liquefaction operations starting at the end of Q1 2019 Tennessee Gas (TGP) expansion projects Natural Gas Pipelines +11% Increased Haynesv
Slide 59: KMI: 2019B Segment EBDA before Certain Items
KMI: 2019B Segment EBDA before Certain Items in millions, except per share 2019 2018 Change Budget Actual $ % Natural Gas Pipelines $ 4,682 $ 4,205 $ 477 11% Products Pipelines 1,261 1,227 34 3% Terminals 1,202 1,209 (7) -1% CO2 848 907 (59) -7% Kinder Morgan Canada - 124 (124) -100% Expect nice gro
Slide 60: KMI: 2019B Adjusted EBITDA
KMI: 2019B Adjusted EBITDA $ in millions 2019 2018 Change Budget Actual $ % Segment EBDA before Certain Items $ 7,993 $ 7,672 $ 321 4% Natural Gas Pipelines JV DD&A (a) 378 384 (6) -2% Products Pipelines JV DD&A (a) 5 5 - 0% Terminals JV DD&A (a) (5) (6) 1 -17% CO2 JV DD&A 5 7 (2) -29% Segment EBDA
Slide 61: KMI: 2019B Distributable Cash Flow (DCF)
KMI: 2019B Distributable Cash Flow (DCF) in millions, except per share 2019 2018 Change Budget Actual $ % Net Income available to common stockholders before Certain Items $ 2,252 $ 1,982 $ 270 14% DD&A and amortization of excess investments (a) 2,835 2,752 83 3% Total book taxes (b) 744 710 34 5% Ca
Slide 62: KMI: 2019B Cash Tax Calculation Detail
KMI: 2019B Cash Tax Calculation Detail $ in millions 2019 Budget Segment EBDA before Certain Items $ 7,993 Noncontrolling interests (93) JV earnings from C corps (293) JV distributions from C corps (net of 65% Dividend Received Deduction) 88 JV book DD&A (pass-thru entities) 139 General and administ
Slide 63: KMI: 2019B Sustaining Capital
KMI: 2019B Sustaining Capital $ in millions 2019 2018 Budget Actual Change Natural Gas Pipelines (a) $ 356 $ 316 $ 40 Products Pipelines (a) 79 75 4 Terminals (a) 226 210 16 CO2 30 17 13 Kinder Morgan Canada(b) - 10 (10) Corporate / other 24 24 0 Total sustaining capital expenditures(c) $ 715 $ 652
Slide 64: KMI: 2019B Quarterly Profile
KMI: 2019B Quarterly Profile $ in millions, except per share Segment EBDA before Certain Items Q1 Q2 Q3 Q4 Total 2019 Budget 25% 24% 25% 26% $ 7,993 2018 Actual 25% 25% 25% 25% $ 7,672 Adjusted EBITDA 2019 Budget 25% 24% 24% 27% $ 7,817 2018 Actual 25% 24% 25% 26% $ 7,568 Distributable Cash Flow (DC
Slide 65: KMI: 2019B Discretionary Capital
KMI: 2019B Discretionary Capital $ in millions 2019 2018 2019 budget includes: Budget Actual Natural Gas Pipelines $ 2,268 $ 1,767 $0.7 billion JV expansion spending Products Pipelines 168 126 Terminals 147 69 $0.6 billion JV debt maturities CO2 - S&T 68 25 CO2 - EOR 434 376 $(0.2) billion partner c
Slide 66: KMI: 2019B Sources and Uses
KMI: 2019B Sources and Uses $ in millions 2019 2019 Sources Budget Uses Budget DCF $ 5,006 Dividends declared $ 2,278 Cash Proceeds from TMEP sale, net of KMI cash taxes (a) 1,965 Growth capital and contributions to JVs 3,085 Revolver Borrowing(b)/Debt Issuances 1,638 Debt maturities 2,813 CP/Revolv
Slide 67: KMI: Leverage and Liquidity
KMI: Leverage and Liquidity(a) $ in millions 2019 Budget Year End 2019 Debt Outstanding $ 35,082 Recent credit rating upgrade at S&P and Moody’s reflects 50% of KML preferred equity 215 balance sheet strength Adjusted Net Debt $ 35,297 Adjusted EBITDA $ 7,817 Financial flexibility with ~$4 billion o
Slide 68: KML: 2019 Outlook and Budget
KML: 2019 Outlook and Budget Dax Sanders KML CFO KMI EVP & Chief Strategy Officer 68
Slide 69: Overview of Kinder Morgan Canada Limited (TSX: KML)
Overview of Kinder Morgan Canada Limited (TSX: KML) Stable, fee-based assets central to Western Canada’s energy infrastructure Assets include integrated terminals and pipelines that support a key Edmonton Terminals piece of Western Canada’s economy Alberta Crude Largest merchant crude oil terminal
Slide 70: Asset Snapshot: Leading Crude Oil Terminal Footprint
Asset Snapshot: Leading Crude Oil Terminal Footprint Fully-integrated terminals in Canada’s Edmonton crude oil hub | C$1.3 billion invested since 2006 with opportunities ahead 1 KML-ow ned land 100% 9 tanks (1 x 150,000 bbl, 8 x 250,000 bbl) North 40 (N40) 2.1 mmbbl total shell capacity 5 10
Slide 71: Asset Snapshot: Leading Energy Infrastructure Assets
Asset Snapshot: Leading Energy Infrastructure Assets Irreplaceable infrastructure in key markets in Western Canada COCHIN PIPELINE (CANADIAN PORTION) Transports condensate from the Canada / U.S. border to Fort Saskatchewan, Alberta, for bitumen blending 95 mbbld of current throughput capacity (l
Slide 72: Canadian Crude Oil Fundamentals
Canadian Crude Oil Fundamentals Long-term production growth, despite near-term transportation constraints, with goal to reach international markets Western Canadian crude oil supply is projected to grow by nearly WESTERN CANADIAN CRUDE OIL SUPPLY FORECAST 2 mmbbld from 2017 to reach over 6 mmbbld by
Slide 73: KML: 2019 Guidance ― Published Budget
KML: 2019 Guidance ― Published Budget Highly contracted, fee-based cash flow Key Metrics(a) 2019 Budget Segment Highlights YoY ∆ in EBDA(b) Adjusted EBITDA C$213 million Full-year contribution from Distributable Cash Flow C$109 million Terminals Base Line Tank Terminal expansion +12% DCF per Share
Slide 74: KML: 2019B Segment EBDA before Certain Items
KML: 2019B Segment EBDA before Certain Items C$ in millions, except share amounts 2019 2018 Change Budget Actual(a) $ % Terminals $ 206 $ 184 $ 22 12% Pipelines (Cochin and Jet Fuel) 42 39 3 8% Total Segment EBDA before Certain Items 248 223 25 11% General and administrative and corporate charges (3
Slide 75: KML: 2019B Distributable Cash Flow (DCF)
KML: 2019B Distributable Cash Flow (DCF) C$ in millions, except share amounts 2019 2018 Change Distributable Cash Flow Budget Actual(a) $ % Net Income before Certain Items $ 87 $ 98 $ (11) -11% DD&A 90 83 7 8% Total book tax 35 37 (2) -5% Cash taxes (52) (8) (44) 550% Preferred dividends (29) (29) 0
Slide 76: KML: 2019B Cash Tax Calculation Detail
KML: 2019B Cash Tax Calculation Detail C$ in millions 2019 Budget Segment EBDA before Certain Items $ 248 General and administrative and corporate charges (35) Interest, net (1) Tax depreciation (86) Other items 3 Taxable income $ 129 KML Canadian cash taxes (a) $ 52 Other cash taxes - 2019B include
Slide 77: KML: 2019B Capital Expenditures and Sources / Uses
KML: 2019B Capital Expenditures and Sources / Uses C$ in millions 2019 2018 2019 2018 Sustaining Capital Expenditures Budget Actual(a) Change Growth Capital Budget Actual(a) Change Terminals $ 19 $ 16 $ 3 Terminals $ 32 $ 53 $ (21) Pipelines (Cochin and Jet Fuel) 3 3 0 Pipelines (Cochin and Jet Fuel
Slide 78: KML: Leverage and Liquidity
KML: Leverage and Liquidity(a) C$ in millions 2019 Budget Revolver balance $ 5 50% of KML preferred equity balance 275 Less: Cash - Net Debt including 50% of KML preferred equity balance 280 Adjusted EBITDA 213 Adjusted Net Debt to Adjusted EBITDA 1.3x Financial flexibility to pursue accretive oppor
Slide 79: KML Long-term Opportunities and Risks
KML Long-term Opportunities and Risks Established footprint provides attractive opportunities to serve growing Canadian crude oil production OPPORTUNITIES RISKS Incremental rail •Original contract provided minimum monthly payments Rate business given Edmonton South to underwrite investment in the fa
Slide 80: Natural Gas Pipelines
Natural Gas Pipelines Segment Presentation 80
Slide 81: Natural Gas Segment Overview
Natural Gas Segment Overview Connecting key natural gas resources with major demand centers Asset Summary Natural Gas Pipelines: ~70,000 Miles NGL Pipelines: ~2,700 Miles U.S. Natural Gas Consumption Moved: ~40% Working Gas Storage Capacity: 657 Bcf 2019B EBDA(a): ~$5.1 billion Project Backlog: $3.9
Slide 82: Long-Term Growth Drivers: Natural Gas Pipelines
Long-Term Growth Drivers: Natural Gas Pipelines Kinder Morgan capitalizes on industry trends LNG exports: liquefaction facilities and pipeline infrastructure Exports Exports to Mexico Expansions / extensions off existing footprint Shale-driven expansions / extensions Midstream gathering and
Slide 83: Growth Driver: Buildout of U.S. LNG Exports
Growth Driver: Buildout of U.S. LNG Exports Multiple liquefaction and natural gas transport opportunities across KM footprint GLOBAL DEMAND DRIVING SIGNIFICANT BUILDOUT OF U.S. LNG KM NETWORK REACHES MULTIPLE EXPORT FACILITIES EXPORT CAPABILITIES Forecasted U.S. Liquefaction Capacity (Bcfd) 16.7 13.
Slide 84: Project Highlight: Elba Island LNG Export Terminal
Project Highlight: Elba Island LNG Export Terminal Elba Liquefaction Company (ELC) (a) / Southern LNG Company (SLNG) Project Scope Liquefaction facilities (10 small-scale modular units) Ship loading facilities; boil-off gas compression Located on Elba Island near Savannah, Georgia Project Stat
Slide 85: Key Market: Exports to Mexico
Key Market: Exports to Mexico Kinder Morgan delivers ~3.1 Bcfd of U.S. natural gas exports to Mexico(a) Extensive footprint offers diverse supply solutions to multiple Mexico interconnections (12 direct, 4 indirect) U.S. natural gas exports to Mexico are expected to grow by 36%, or ~1.6 Bcfd, to 6
Slide 86: Growth Driver: Surging Permian Production
Growth Driver: Surging Permian Production KM providing additional takeaway capacity for associated natural gas production Existing footprint reaches across Texas and connects into all major KM POSITIONED TO SERVE PERMIAN PRODUCTION demand markets Natural Gas Pipelines Interconnected deliverability
Slide 87: Project Highlight: Gulf Coast Express (GCX)
Project Highlight: Gulf Coast Express (GCX) Permian direct-to-Gulf Coast project satisfying multiple growth drivers Project Scope Mainline: 447.5 miles of 42” pipeline originating at the Waha Hub and terminating near Agua Dulce, Texas Midland lateral: 50 miles of 36” pipeline 214,280 HP of ins
Slide 88: Project Highlight: Permian Highway Pipeline (PHP)
Project Highlight: Permian Highway Pipeline (PHP) PHP provides broad U.S. Gulf Coast market optionality for Permian production Project Scope Mainline: ~430 miles of 42” pipeline from the Waha to Katy, Texas areas with connections to the U.S. Gulf Coast and Mexico markets 300,320 HP of installed
Slide 89: Growth Driver: G&P Upside from Continued Shale Growth
Growth Driver: G&P Upside from Continued Shale Growth Opportunities from both operating leverage and capital projects EAGLE FORD & HAYNESVILLE BAKKEN 70% of forecasted 2018-2030 demand and export growth occurs in, or $500 million of Bakken G&P projects in Project Backlog transits, Texas and Loui
Slide 90: Growth Driver: Support for Increasing Variable Demand
Growth Driver: Support for Increasing Variable Demand Expect greater daily and seasonal demand volatility from renewable / gas generation, exports and winter conditions Demand drivers requiring enhanced deliverability PLANNED NEW GAS FIRED GENERATION CAPACITY THROUGH 2022: Opportunities for increa
Slide 91: Natural Gas: Interstate Pipelines
Natural Gas: Interstate Pipelines Key statistics Capacity Storage Avg. Remaining Effective Date of Ownership Miles (bcfd) (bcf) Contract Term (yrs) Next Rate Case 100% KMI-owned: (a) TGP Tennessee Gas Pipeline 100% 11,800 12.1 110 8.4 / 3.8 NA EPNG El Paso Natural Gas + Mojave 100% 10,660 5.7 44 5.2
Slide 92: Natural Gas: G&P and Intrastate Assets
Natural Gas: G&P and Intrastate Assets Key statistics Capacity Avg. Remaining Storage Treating Processing Ownership Miles (bcfd) Contract Term (yrs) (Bcf) (GPM) (Bcfd) Capacity Avg. Remaining Storage Treating Processing 100% KMI-owned natural gas pipelines: Ownership Miles (bcfd) Contract Term (yrs)
Slide 93: Highly-Contracted Natural Gas Pipelines
Highly-Contracted Natural Gas Pipelines Contracted capacity and term by region NET ANNUAL INCREMENTAL RE-CONTRACTING EXPOSURE (KM SHARE): Assumptions % of $8.4bn 2019B Total Segment EBDA(a) Negative figures represent unfavorable re-contracting exposure based on November 2018 market assumptions 202
Slide 94: Projects Placed Into Service During 2018
Projects Placed Into Service During 2018 New natural gas projects expected to generate $327 million of annual EBITDA In-service Capacity Capital, KM Share EBITDA Asset Project Date (mDthd) ($mm) ($mm) Broad Run Expansion Oct 2018 200 463.2 32.9 SW Louisiana Supply (Cameron) Mar 2018 900 174.6 32.2 T
Slide 95: Project Backlog: Interstate Pipelines
Project Backlog: Interstate Pipelines Natural Gas Capital, KM Share Capacity In-service Asset Project ($mm) (mDthd) Date Project Status ELC / Elba Liquefaction $752 357 1Q 2019 Construction near completion. Commissioning in process. Schedule is dependent on commissioning. SLNG SLNG Ship Loading $433
Slide 96: Project Backlog: G&P and Intrastates
Project Backlog: G&P and Intrastates Natural Gas Capital, KM Share Capacity In-service Asset Project ($mm) (mDthd) Date Project Status Gulf Coast Express $637 1,980 4Q 2019 Under construction Permian Highway $572 2,100 4Q 2020 Construction contractors secured and surveys underway TX Intrastate Combi
Slide 97: FERC-Regulated Natural Gas Assets
FERC-Regulated Natural Gas Assets Summary statistics, including remaining contract term and rate moratorium dates (where applicable) Transport Storage Avg. Remaining % of 2017 Revenues KM Capacity Capacity Contract Term from Negotiated or Rate Moratorium # Asset Name (Nickname) Ownership Miles (Bcfd
Slide 98: Products Pipelines
Products Pipelines Segment Presentation 98
Slide 99: Products Segment Overview
Products Segment Overview Strategic footprint with significant cash flow generation Asset Summary Pipelines (a): ~9,500 Miles 2018 Throughput(a) ~2.3 mmbbld Condensate Processing Capacity 100 mbbld Transmix 5 facilities Terminals: 67 Terminals Terminals Tank Capacity ~39 mmbbls Pipeline Tank Capacit
Slide 100: KMCC and Double Eagle Update
KMCC and Double Eagle Update Valuable connectivity to Corpus Christi and the Houston Ship Channel Strong Permian and Eagle Ford production growth driving new projects and increased utilization on existing assets Permian 2019B assumes 7% year-over-year increase in volumes oil production transported f
Slide 101: Bakken Crude Update
Bakken Crude Update Strong production growth in the Bakken translating into higher transport volumes 2019B estimates 21% year-over-year increase in volumes Bakken transported on our assets from the Bakken oil production +255 mbbld KMI benefitting from premier gathering system +21% in 2018(a) Backe
Slide 102: Stable U.S. Market Demand for Refined Products
Stable U.S. Market Demand for Refined Products Expansive footprint positioned to capture market opportunities U.S. REFINED PRODUCTS CONSUMPTION(a) & KM REFINED PRODUCTS VOLUMES TRANSPORTED(b) Our expansive refined products footprint connects major mmbbld refining centers to major consuming markets
Slide 103: Project Highlight: Roanoke Expansion
Project Highlight: Roanoke Expansion Securing refined products delivery for the Roanoke / Montvale area Market Drivers Historically, both the Colonial Pipeline Montvale Lateral and Plantation Roanoke Lateral have served the Roanoke, Virginia market Roanoke Abandonment of the Colonial Montvale La
Slide 104: Products Pipelines Segment Snapshot
Products Pipelines Segment Snapshot Asset statistics Crude oil assets: Statistics Origin Destination KM Crude & Condensate pipeline (KMCC) 264 miles Eagle Ford Shale Field in South TX (Dew itt, Karnes, Gonzales Houston Ship Channel Refining Complex Counties) Camino Real Gathering 70 miles South Texa
Slide 105: Terminals
Terminals Segment Presentation 105
Slide 106: Terminals Segment Overview
Terminals Segment Overview Diversified terminaling network connected to key refining centers and market hubs Asset Summary Total Kinder Morgan Terminals: 157 Terminals Terminals Segment – Bulk 34 Terminals Terminals Segment – Liquids 56 Terminals Products Pipelines Segment Terminals 67 Terminals Jon
Slide 107: Terminals Segment Product Mix
Terminals Segment Product Mix Commodities serving the world’s most advantaged petroleum and petrochemical industry Bulk Refined Houston Ship Channel position is the largest single refined products and Other Bulk 25% 9% Products / renewables terminaling system worldwide Copper Renewables Organic
Slide 108: Terminals Segment Contract Model
Terminals Segment Contract Model Stable, fee-based business model Leased tank capacity (pre-paid monthly) Take-or-Pay Jones Act tanker charters (pre-paid monthly) 71% Minimum volume commitments (per bbl or ton) Fee-based Other Fee- Based Requirements(b) Ratable – tied to customer productio
Slide 109: Terminals Segment Strategy
Terminals Segment Strategy Critical infrastructure and value-added service solutions Market clearing point between global buyers and sellers Hub Multi-modal connectivity and value-added services Terminals Critical to our customers and their business 49% Logistics KM liquids hubs: Houston, Ed
Slide 110: Terminals Liquids Hubs
Terminals Liquids Hubs Houston, Edmonton, and New York Harbor North 40 Edmonton South Alberta Crude Terminal Rail Edmonton South Rail Terminal ESRT Rail Base Line Tank Terminal Van Wharves Edmonton Alberta Houston Ship New York Edmonton Channel Harbor Alberta % of 2019B Liquids EBDA(a) 39% 10% 14% C
Slide 111: Strong Liquids Fundamentals
Strong Liquids Fundamentals Attractive opportunities to supply U.S. products to consumers here and abroad GLOBAL LIQUIDS CONSUMPTION EXPECTED TO EXCEED GROWTH LED BY CHINA AND INDIA (2017 – 2019) 100 MILLION BARRELS PER DAY BY 2019 World Petroleum and Other Liquids Consumption (mmbbld) +2.2 Rest of
Slide 112: Positioned to Support U.S. Gulf Coast Exports
Positioned to Support U.S. Gulf Coast Exports Houston’s premier refined products aggregation and market-clearing terminaling hub Our Houston Ship Channel position represents the largest Integrated Houston Ship Channel Terminal Footprint independent refined products terminaling system in U.S. Colonia
Slide 113: Positioned to Meet Domestic Maritime Demand
Positioned to Meet Domestic Maritime Demand American Petroleum Tankers (APT) fleet of 16 MR-tankers All 2019 charter expirations are expected to 2019 2020 2021 2022 renew with current customers Palmetto State No exposure to IMO 2020 American Freedom ~ APT’s tankers currently fueled by 0.1% sulfur
Slide 114: Positioned to Serve International Bulk Trade
Positioned to Serve International Bulk Trade Complementary services supporting multiple bulk commodities Petroleum Coke Coal Vancouver Wharves One of the nation’s largest handlers of Advantaged U.S. export position in our Premier Canadian commodity import / petroleum coke Norfolk, VA Pier IX t
Slide 115: Positioned to Support Alberta Crude Exports
Positioned to Support Alberta Crude Exports Alberta crude oil aggregation and market-clearing terminaling hub Industry’s preferred Canadian merchant (i.e. # Asset Connectivity non-regulated) crude oil terminal solution 15 Inbound Crude Pipelines Total pipeline connections vary by Matches oil sands
Slide 116: Project Highlight: Base Line Terminal
Project Highlight: Base Line Terminal 4.8 million barrel Edmonton merchant crude oil terminal Project Scope 12-tank crude oil merchant storage terminal in Edmonton, Alberta KM 50% and Keyera 50% ownership interest Fully contracted with long-term, firm take-or-pay agreements with creditworthy c
Slide 117: Beyond the Backlog
Beyond the Backlog Long-term liquids fundamentals drive value on existing assets and new projects Crude export KM Terminals’ demand Advantaged Position: Domestic crude & NGL liquids production growth Current key-asset footprint NGL export demand Existing key-customer relationships Fee-based se
Slide 118: U.S. Gulf Export Demand
U.S. Gulf Export Demand Continued industry demands with Shale production development 2,500 2,500 2,500 Refined Products LPGs Crude 2,000 2,000 2,000 Thousand Barrels per Day Thousand Barrels per Day Thousand Barrels per Day 1,500 1,500 1,500 1,000 1,000 1,000 500 500 500 0 0 0 Gasoline Jet Distillat
Slide 119: Texas COLT
Texas COLT Crude Offshore Loading Terminal Project Scope ~9 million barrel onshore crude storage terminal Connectivity to inbound Houston pipelines Pipeline to a platform located 35 miles offshore of Freeport, TX 2 Single Buoy Mooring (SBM) VLCC loading positions ~85,000 bph loading (one V
Slide 120: Terminals Throughput and Tonnage Statistics
Terminals Throughput and Tonnage Statistics 2018A vs. 2019B Liquids Throughput Bulk Tonnage Throughput Variance Tonnage Variance mmbbls 2018 2019B mmbbls % tons (millions) 2018 2019B mm tons % Gasoline 463.6 511.9 48.4 10 % Ores / Metals (Bulk) 17.8 17.6 (0.2) (1)% Petroleum 160.2 193.5 33.3 21 % Co
Slide 121: CO2 Segment Presentation
CO2 Segment Presentation 121
Slide 122: CO2 Segment Overview
CO2 Segment Overview World class, fully integrated assets ― CO2 source to crude oil production and takeaway in the Permian Basin 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+ years 3.0 CO2
Slide 123: CO2 Segment Key Budget Assumptions
CO2 Segment Key Budget Assumptions Kinder Morgan is the largest producer and transporter of CO 2 in North America Yates CO2 & TRANSPORT 10% Katz/GLSAU Budgeted 2019 SW Colorado CO2 production: 1,289 mmcfd 4% Tall gross / 614 mmcfd net Cotton Oil & Gas 4% Our O&G group is projected to consume ~47
Slide 124: CO2 Segment 2019 Expansion Program Summary
CO2 Segment 2019 Expansion Program Summary $502 million capex program, flexibility to adjust given dynamic commodity price environment Capex % of Total CO2 Purchased Net Oil Produced Asset ($mm)(a) Capex Commentary (mmcfd) (mbopd) Activate 21 Transition Zone East Flank Patterns Continue Bullseye
Slide 125: CO2 Segment 2019 Project Returns at Various Flat Prices
CO2 Segment 2019 Project Returns at Various Flat Prices Projects expected to generate attractive returns in multiple commodity price environments YATES HZ DRAINYates HOLEHZ Drain Hole Program PROGRAM SACROC Conventional SACROC CONVENTIONAL ATIRR% ATIRR% 110% 100% + 100%+ 100% Bypassed Pay Bullseye P
Slide 126: CO2 Segment 10 Year Development Plan
CO2 Segment 10 Year Development Plan 2019 ― 2028: Maximizing returns and recoverability Total Net KM Share Keys to Success: Production CapEx(b) Asset (mmboe)(a) ($mm) Expansion Program Plans Robust portfolio that is profitable through Complete East Flank development commodity cycles Bullseye r
Slide 127: CO2 Segment Long-Term Growth Outlook
CO2 Segment Long-Term Growth Outlook Projected EBDA and B.O.E. production EBDA B.O.E. PRODUCTION $ millions mboepd Projections $1,500 60 $1,250 50 $1,000 40 $750 30 $500 20 $250 10 $- 0 CO2 & Transport SACROC Yates Katz Goldsmith Tall Cotton Net B.O.E./d Note: 2019B segment EBDA before Certain Items
Slide 128: CO2 Segment Significant Returns and Free Cash Flow
CO2 Segment Significant Returns and Free Cash Flow Long history of generating high returns and ~$6 billion in cumulative free cash flow IRR% 2000-2018 CUMULATIVE FREE CASH FLOW GENERATION $ billions Commodity price $6.2 28% change $5.8 $5.3 $4.9 $4.2 18% $3.7 $3.1 Oil & Gas Total CO2 Segment (incl.
Slide 129: History of Predictable and Stable Oil Volumes
History of Predictable and Stable Oil Volumes Actual oil production within 1.4% of budget 2008-2018 | Capex within 0.6% of budget for projects completed NET OIL PRODUCTION: ACTUALS VS. PLAN Mbbld Budget Actual 50 40 30 20 10 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 129
Slide 130: Disciplined Approach to Managing Price Volatility
Disciplined Approach to Managing Price Volatility Hedge profile: Limited near-term price risk WTI: 2019 ~67% hedged at $55.81/bbl as of 12/31/2018, 5-year hedge policy requires additional hedges on a rolling basis MIDLAND-CUSHING DIFFERENTIAL: ~94% hedged at $(8.08)/bbl in 2019, with limited hedges
Slide 131: Oil & Gas Production Group: Margins and Costs
Oil & Gas Production Group: Margins and Costs CO2 Segment: Success maintaining cost structure in rising commodity price market OIL & GAS CASH COST STRUCTURE(a) Commentary $ / net BOE Disciplined approach to managing cost structure $80 Maintained aggregate operating cost savings of Net Crude Real
Slide 132: Big Fields Get Bigger
Big Fields Get Bigger Successful track record of extending productive life of mature fields Significant amounts of recoverable oil in place SACROC NET OIL PRODUCTION FORECASTS SACROC – 2.8 billion barrels of original oil in place bopd – Exploiting Transition Zone 35,000 Actual 2019B 2015B 2014B 20
Slide 133: CO2 Outlook: Tall Cotton
CO2 Outlook: Tall Cotton Long-term development plans San Andres Residual Oil Zone (ROZ) oil saturation similar to water- TALL COTTON FULL FIELD DEVELOPMENT flooded main pay San Andres bbld Several significant San Andres ROZ projects underway in the Permian 25,000 Basin Tall Cotton full field d
Slide 134: Appendix
KINDER/MORGAN Appendix
Slide 135: Energy Toll Road
Energy Toll Road Cash flow security with ~90% from take-or-pay and other fee-based contracts Natural Gas Pipelines Products Pipelines Terminals CO2 2019B EBDA %(a) 61% 15% 14% 10% 72% interstate pipelines 78% liquids Asset Mix 60% refined products 61% terminals 62% oil production related 9% intrasta
Slide 136: Joint Venture Treatment in Key Metrics
Joint Venture Treatment in Key Metrics KM controls and fully consolidates KM does not control or consolidate (third party portion referred to as noncontrolling interests in financial statements) (KM portion referred to as equity investments in financial statements) NGPL (50%), SNG (50%), FGT (50%),
Slide 137: Asset Integrity and Safety are Top Priorities
Asset Integrity and Safety are Top Priorities Kinder Morgan’s EHS metrics consistently outperform the industry Safe operation of our assets is mission critical to our long-term OUR SAFETY PERFORMANCE VS. INDUSTRY(a) success # of safety metrics We continue to reduce operational risks, which in turn
Slide 138: Incidents & Releases: Liquids Pipelines
Incidents & Releases: Liquids Pipelines Liquids pipeline right-of-way INCIDENTS PER 1,000 MILES(a,b) RELEASE RATE(a,b) Barrels per billion barrel miles 0.57 17.96 0.43 15.50 0.45 12.86 13.05 0.39 12.86 0.33 0.29 0.27 0.24 0.21 6.00 2.50 0.16 0.67 0.05 0.01 0.11 0.04 0.01 0.08 0.08 0.08 - – 2006 2007
Slide 139: 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) Incidents per 1,000 miles Incidents per 1,000 miles 0.16 0.52 0.45 0.39 0.38 0.37 0.37 0.32 0.30 0.27 0.27 0.26 0.04 0.02 0.02 0.02
Slide 140: Employee Safety Statistics
Employee Safety Statistics 12-month performance summary as of 12/31/2018 KM LOST-TIME INCIDENT RATE (DART) OSHA RECORDABLE INCIDENT RATE Lost-time injuries per 200,000 hours worked 3.8 OSHA recordable incidents per 200,000 hours worked 5.6 2.0 2.8 1.4 0.9 0.9 1.4 1.3 1.0 1.3 1.1 0.7 0.6 0.7 0.5 0.5
Slide 141: KMI Business Risks
KMI Business Risks Summary 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 – 2019 budget average strip price assumptions: $60.0
Slide 142: KML Business Risks and Key Assumptions
KML Business Risks and Key Assumptions Summary Industry demand / supply trends Throughput on our volume-based assets – If uncontracted volume throughput were higher or lower than forecasted by 10%, the estimated impact on 2019B Adjusted EBITDA would be an increase or decrease of ~5% on a full-ye
Slide 143: Non-GAAP Financial Measures and Reconciliations
Non-GAAP Financial Measures and Reconciliations Defined Terms Reconciliations for the historical period 143
Slide 144: 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 Certa in Items (in the case of KMI only), Adjusted EBITDA, Adjusted Earnings, both in the aggregate and per share, and Net Debt and Adjusted N
Slide 145: Use of Non-GAAP Financial Measures (Cont’d)
Use of Non-GAAP Financial Measures (Cont’d) Project EBITDA is calculated for an individual capital project as earnings before interest expense, taxes, and DD&A attributable to such project. Management uses project EBITDA to evaluate our return on investment for capital projects. We believe the GAAP
Slide 146: KMI GAAP Reconciliation
KMI GAAP Reconciliation $ in millions Yr. Ended Yr. Ended Reconciliation of DCF 12/31/18 Reconciliation of Adjusted EBITDA 12/31/18 Net Income $ 1,919 Net Income $ 1,919 Noncontrolling interests' portion of Certain Items (240) Total Certain Items 501 Noncontrolling interests (a) (70) Noncontrolling
Slide 147: KML GAAP Reconciliation for Continuing Operations
KML GAAP Reconciliation for Continuing Operations C$ in millions Yr. Ended Yr. Ended Reconciliation of DCF 12/31/18 Reconciliation of Adjusted EBITDA 12/31/18 Net Income $ 1,418 Net Income $ 1,418 Income from Discontinued Operations, net of tax (a) (1,318) Income from Discontinued Operations, net of
Slide 148: Explanation of Return Calculations
Explanation of Return Calculations Form ula Notes Form ula Notes Gross PP&E Equity Investments (JVs) (f ) Segment EBDA before Certain Segment (a) Goodw ill Items less sustaining capex Return on Gross intangibles (excluding amortization) Investment Average Total Investment (b) Plus: Asset w rite-offs