Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — Investor Day (January 2023)
162 slides from Kinder Morgan's investor day presentation, Jan 25, 2023
Slide 1: 2023 Investor Day
2023 INVESTOR DAY January 25, 2023 TGP ROW, Berkshire County, Massachusetts
Slide 2: Disclosure
Disclosure Forward-looking statements / non-GAAP financial measures / industry & market data 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 con
Slide 3: Agenda & Presenters
Agenda & Presenters TIME DISCUSSION PRESENTER 9:00 – 9:15 Investor Perspective Rich Kinder Executive Chairman 9:15 – 9:45 Outlook Steve Kean CEO 9:45 – 10:25 Strategy & Execution Kim Dang President 10:25 – 10:50 Financial Overview David Michels VP & CFO 10:50 – 11:00 BREAK 11:00 – 11:30 Panel with B
Slide 4: Investor Perspective
INVESTOR PERSPECTIVE 4 Altamont gathering right-of-way, Granite Park, Utah
Slide 5: Leader in North American Energy Infrastructure
Leader in North American Energy Infrastructure Energy infrastructure, especially natural gas pipelines & storage, has a decades-long time horizon moving and storing the energy of today and tomorrow Largest natural gas transmission network Delivering energy to improve lives & create a better world —
Slide 6: Managed for Shareholders by Shareholders
Managed for Shareholders by Shareholders Highly-aligned leadership with a long-term focus & disciplined stewardship of capital 13% equity-based discipline generated & returned significant value ownership comp low-cost operator since the beginning of 2016: while maintaining by management & board a co
Slide 7: 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/franchise ✓ ✓ ✓ partial Sup
Slide 8: Real Assets, Real Cash Flows Matter
Real Assets, Real Cash Flows Matter 2022 was a year that revealed the weakness of young, unprofitable firms with speculative cash flow 140 Alerian midstream index 120 +15% 100 80 Metaverse, hydrogen, SPAC, & cryptocurrency assets 60 -44% 40 Dec-31 Jan-31 Feb-28 Mar-31 Apr-30 May-31 Jun-30 Jul-31 Aug
Slide 9: Returning Value to Shareholders
Returning Value to Shareholders S&P500 AVERAGE CURRENT DIVIDEND S&P500 CURRENT DIVIDEND YIELDS y-axis represents # of S&P500 tickers within the dividend yield YIELDS range specified on the x-axis 200 Energy 4.1% 180 Real Estate 3.5% 160 Utilities 3.2% Consumer Staples 2.7% 140 Materials 2.3% At 6.0%
Slide 10: Core Holding in Any Portfolio
Core Holding in Any Portfolio Generating significant cash flow & returning significant value to shareholders >$70 billion enterprise value Largest energy infrastructure company in the S&P500 ~13% owned by management & board Highly-aligned management with significant equity interests $7.7 billion 202
Slide 11: Outlook
OUTLOOK CIG Rawlins station, Sinclair, Wyoming
Slide 12: Doing Business the Right Way Every Day
Doing Business the Right Way Every Day For our shareholders, employees, customers & neighbors vision mission values Delivering energy to improve Provide energy transportation & Integrity, accountability, safety lives & create a better world storage services in a safe, & excellence efficient & enviro
Slide 13: KM Long-Term Value – Key Takeaways
KM Long-Term Value – Key Takeaways OUR ASSETS & SERVICES WILL BE NEEDED FOR A LONG TIME – Energy is essential to human development, and as standards of living improve, more energy will be needed – Energy transitions take a long time and consist of adding energy forms, not eliminating existing forms
Slide 14: Energy is Essential to Human & Economic Development
Energy is Essential to Human & Economic Development The transition to a renewable-energy world will not be seamless and will require the ongoing use of hydrocarbons U.S. POPULATION, GDP & ENERGY DEMAND BY SELECT FUEL TYPES 2021, 2030, 2040, 2050 400 +13% 376 +11% 350 363 347 +89% 40 332 300 +12% 40
Slide 15: Energy Transitions Take Time
Energy Transitions Take Time Our assets and services will be needed for a very long time GLOBAL ENERGY MIX BY FUEL PWh Biomass Coal Oil Natural gas Renewables Nuclear % of energy mix 180 – Energy transitions take a long time and consist of adding energy forms, 160 not eliminating existing forms 12%
Slide 16: A Balanced, Diversified Energy Policy
A Balanced, Diversified Energy Policy Also Helps Maintain Affordable Energy While Promoting Energy Transition Average Cost by Country WHOLESALE SPOT ELECTRICTY PRICES $/MWh $/MWh 2021 2022 $60.00 $320.00 U.S. $61.25 $68.33 U.K. $154.15 $246.57 Germany $113.15 $258.53 France $127.28 $294.82 Italy $14
Slide 17: Natural Gas Provides Low-Cost & Reliable Energy
Natural Gas Provides Low-Cost & Reliable Energy Must consider power mix, energy conversion losses, reliability, and costs when evaluating electrification AVERAGE UNIT COST FOR U.S. RESIDENTIAL Natural gas helps provide modern comforts… ENERGY SOURCES $/mmbtu – heating Natural gas is more affordable
Slide 18: Significant Additional LNG Capacity Will Be Needed
Significant Additional LNG Capacity Will Be Needed to Meet Future Demand US & Middle East account for ~75% of LNG supply growth to 2050 2021–2050 LNG IMPORT DEMAND GROWTH bcfd GLOBAL LNG VOLUMES bcfd Southeast Asia 21 Rest of the world 13 70 63 60 India 5 60 54 55 57 China 1 Japan and Korea -8 50 44
Slide 19: U.S. Has Increasing Production & Substantial Scale
U.S. Has Increasing Production & Substantial Scale NATURAL GAS PRODUCTION bcm 2010 2021 2030 1,200 1,000 Declining production 800 Small relative scale 600 400 200 - United States Russia Southeast Asia Europe China Iran Qatar Based on IEA data from the IEA (2022) World Energy Outlook, World Energy Ou
Slide 20: U.S. Expected to Support Increasing Global Demand
U.S. Expected to Support Increasing Global Demand Reliable trade partner with ample reserves & price-competitive production FULL CYCLE COST OF LNG PROJECTS U.S. proved natural gas reserves increased 32% in 2021 US Other U.S. LNG exports are globally competitive and can $/mmbtu provide reliable & aff
Slide 21: U.S. CO2 Emissions Declined Since 2007
U.S. CO2 Emissions Declined Since 2007 while GDP grew ~45% Primarily due to converting coal power generation to natural gas generation U.S. ELECTRICITY GENERATION MIX U.S. CO2 EMISSIONS FROM ENERGY CONSUMPTION % of total generation billion metric tons 7 -19%, -1.1 billion metric tons 6.0 6.0 6.0 20%
Slide 22: Replacing Coal Could Accelerate Global Emissions Reductions
Replacing Coal Could Likewise Accelerate Global Emissions Reductions POTENTIAL FOR LOWER GLOBAL EMISSIONS Mt CO2 Potential Net 9,394 Reduction of 26% 36,639 27,245 2021 total global CO2 emissions decrease in coal emissions 2050 potential global CO2 emissions (mostly attributable to coal to natural g
Slide 23: Reliable, Long-Duration Storage is Critical in Peak Demand
Reliable, Long-Duration Storage is Critical in Peak Demand Periods DAILY AVERAGE OF WEEK-OVER-WEEK DAILY POWER EQUIVALENT TWh per day CHANGES IN U.S. WORKING GAS bcfd send-out build 6.1 2050 U.S. APS forecasts only 20 ~1.5 TWh of daily battery 0 capacity -20 Reliability is critical during these weat
Slide 24: Intermittent Demand Requires Natural Gas Deliverability
Intermittent Demand Requires Natural Gas Deliverability We provide natural gas transportation & strong deliverability, with ~15% of U.S. storage capacity Winter Storm Elliott – December 2022 Texas Heat Wave: High Temperatures, Low Winds – July 2022 — Wind generation in Texas decreased Generation (GW
Slide 25: Supporting a Low Carbon Future
Supporting a Low Carbon Future & Enabling Our Customers to Meet Their GHG Goals Methane emission reductions Economic opportunities to R&D for new technologies & transparent disclosure participate in energy transition — Annual or more frequent compressor — ~80% of 2023B discretionary capital — Chenie
Slide 26: Attractive Potential for Handling Liquid Biofuels
Attractive Potential for Handling Liquid Biofuels Can leverage existing assets to accommodate biofuels GLOBAL BIOFUELS DEMAND OUTLOOK mmbbld 2022 VOLUMES mbbld STEPS APS Terminals Products U.S. 10 throughput throughput(a) production ethanol 116 157 999 8 4x by 2040 in APS biodiesel 8 5 105 6 renewab
Slide 27: Infrastructure is Essential to Reduce & Avoid GHG Emissions
Infrastructure is Essential to Reduce & Avoid GHG Emissions ONGOING ACTIVITES ANNOUNCED PROJECTS Avoided or reduced 17.1mm metric tons CO2e in 2021 Potential to avoid or reduce 9.8mm metric tons CO2e annually CO2e Annual CO2e avoided/reduced avoided/reduced 2021 Activities (metric tons) Projects (me
Slide 28: Recognized as an ESG Leader
Recognized as an ESG Leader Highly rated by multiple agencies improved ratings by publishing EEO-1 report and responding to CDP FTSE #3 MSCI A Sustainalytics #4 of Oil & Gas Oil & Gas Refining, of 203 Refiners & Pipelines Pipelines subsector Marketing, Transportation & & 3 of 114 Oil & Gas Storage I
Slide 29: Positioned for the Future of Energy
Positioned for the Future of Energy Our vast network of strategically-located energy infrastructure will continue delivering energy for decades to come Moving fuels of today & the future U.S. is the world’s most responsible producer Building new infrastructure networks is difficult, of scale environ
Slide 30: Strategy & Execution
STRATEGY & EXECUTION Blanco Station, San Juan County, New Mexico
Slide 31: Well Positioned In 2023
Well Positioned In 2023 Robust fundamentals driving value on existing assets & creating investment opportunities Adjusted Net Debt/ Balance Sheet Infrastructure Shareholder EBITDA Adjusted EBITDA Capacity Build Multiple Returns $ $ S $7.7bn 4.0x $3.6bn 3.4x $2.6bn 2% increase year-over- lowest year-
Slide 32: U.S. Production Continues to Recover from Pandemic
U.S. Production Continues to Recover from Pandemic U.S. NATURAL GAS PRODUCTION U.S. CRUDE PRODUCTION & REFINED PRODUCT SUPPLY bcfd mmbbld Road fuels Crude Jet fuel 108 15 102 12 96 9 2023 production well above Crude recovers to pre- 90 pre-pandemic level pandemic level during 2023 6 84 Refined produ
Slide 33: Growing Demand for Our Natural Gas Transportation & Storage
Growing Demand for Our Natural Gas Transportation & Storage Our assets are increasingly valuable U.S. natural gas market grew by 28 bcfd (+36%) Transport over the past 7 years, from 78 to 106 bcfd – KM pipeline throughput increased 11 bcfd since 2015 KM NATURAL GAS TRANSPORT & SALES VOLUMES Favorabl
Slide 34: Highly Utilized Products & Terminals Assets
Highly Utilized Products & Terminals Assets PRODUCTS SEGMENT VOLUMES mbbld TERMINALS SEGMENT VOLUMES & UTILIZATION Road fuels Crude / Condensate (incl. transport & G&P) Jet fuel Percent of liquids capacity leased Bulk tonnage (mm tons) 1,800 20 100% 100% 1,500 80% 80% 15 1,200 60% 60% 900 10 40% 40%
Slide 35: Strategy
Strategy Maximize the value of our assets on behalf of shareholders Stable, fee-based Invest in a low Financial Disciplined Enhance assets carbon future flexibility capital allocation shareholder value Core energy Established Energy 4.0x 2023B Conservative Maintain strong infrastructure Transition V
Slide 36: Executed Our Strategy in 2022
Executed Our Strategy in 2022 Generated substantial free cash flow and returned significant value to shareholders Generated ~$7.5 billion Adj. EBITDA 10% increase year-over-year(a) 4.1x YE 2022 Net Debt/Adj. EBITDA Comfortably below ~4.5x leverage target Repurchased $368 million of shares & paid $2.
Slide 37: Highly-Contracted Cash Flows
Highly-Contracted Cash Flows Stable cash flows with ~67% take-or-pay or hedged earnings CONTRACT MIX OF 2023B ADJUSTED SEGMENT EBDA Entitled to payment regardless of throughput Fixed fee collected regardless of commodity price Reservation fee for capacity Volumetric-based revenues Commodity-price ba
Slide 38: Customers Are Primarily End-Users of the Products We Handle
Customers Are Primarily End-Users of the Products We Handle Net revenues underpinned by investment grade counterparties & credit support | Ratings as of January 3, 2023 CUSTOMER TYPE CREDIT RATING End-user IG or substantial credit support Producer - IG or substantial credit support BB+ to B Producer
Slide 39: Successfully Achieving Attractive Build Multiples
Successfully Achieving Attractive Build Multiples Established track record of leveraging our footprint & project management expertise COMPETITIVE ADVANTAGES INVESTMENT MULTIPLES: PROJECTS COMPLETED 2020 – 2022 Capital invested / year 2 Project EBITDA(a) — Expansive asset base ― ability to leverage O
Slide 40: $3.3 Billion Committed Capital Project Backlog
$3.3 Billion Committed Capital Project Backlog as of 12/31/2022 Expect 62% of backlog capital in service in 2023, 22% in 2024, and 16% beyond LOWER $ million TOTAL CARBON Natural Gas $ 2,121 $ 2,121 53% for end-use, 20% supply-push, 25% G&P, 2% CCS Products 180 73 Renewable diesel projects Terminals
Slide 41: Investing at Attractive Economics
Investing at Attractive Economics Target minimum mid-teen unlevered after-tax IRRs $ million PROJECT (# of projects) PROJECT CAPITAL DESCRIPTION Natural Gas TGP/SNG Evangeline Pass projects (2) $ 678 Transport, 3Q'24/3Q'25 in-svc, 20-yr contracts Natural Gas Eagle Ford transport project 283 Transpor
Slide 42: Business Mix
Business Mix Leading infrastructure provider across multiple critical energy products Note: Business mix based on 2023 budgeted Adjusted Segment EBDA (a non-GAAP measure). See Non-GAAP Financial Measures & Reconciliations. 42
Slide 43: 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: ~1,200 miles Natural gas transported ~40% (U.S. consumption & exports) Working gas storage capacity: 700 bcf VOLUMES(a) trillion btu per day T
Slide 44: Provide High-Value Natural Gas Takeaway in all Major Basins
Provide High-Value Natural Gas Takeaway in all Major Basins U.S. NATURAL GAS PRODUCTION TGP provides valuable egress for NE producers & serves RELEVANT TO OUR FOOTPRINT bcfd important domestic markets as well as LNG and Mexico 40 Northeast +5 bcfd 35 26 Permian +10 bcfd 21 Haynesville +8 bcfd SNG’s
Slide 45: Extensive Storage Capabilities & Premium Service Offerings
Extensive Storage Capabilities & Premium Service Offerings Provide Valuable Solutions for Variable Demand from Utilities & Exports Largest storage position in U.S. with 700 bcf of storage Stagecoach provides CIG fully contracted for flexibility to serve NE Multi-turn storage facilities provide LDC &
Slide 46: Strong Gulf Coast Footprint Positioned to Serve Demand Growth
Strong Gulf Coast Footprint Positioned to Serve Demand Growth >95% of demand growth is expected to occur in Texas & Louisiana, driven by exports & industrial U.S. NATURAL GAS DEMAND bcfd 125 LNG exports 24 106 LNG exports 11 LNG plant fuel 2 LNG plant fuel 1 Industrial 35 Industrial 32 Net Mexican e
Slide 47: Transporter of Choice for LNG Facilities
Transporter of Choice for LNG Facilities due to Supply Diversity, Network Connectivity, & 700 bcf of Total Working Gas Storage U.S. LNG FEEDGAS & KM TRANSPORT POTENTIAL bcfd U.S. LNG Feedgas KM transport Contracted to move ~7 bcfd to facilities today & ~10 bcfd by the end of 2025 Evaluating ~9 bcfd
Slide 48: Products Segment Overview
Products Segment Overview Strategic footprint supplying a diverse mix of feedstock & finished products critical to refining & transportation sectors ASSET SUMMARY 2023B DELIVERY VOLUMES(a) mbbld Bakken Crude Texas Crude Pipelines: ~9,500 miles Terminals: 65 terminals 2023 budgeted throughput(a) ~2.2
Slide 49: Refined Products Pipes a Steady Contributor
Refined Products Pipes a Steady Contributor Fee-based with stable volumes and cash flow over the long-term REFINED PRODUCTS VOLUMES(a) mmbbld REFINED PRODUCTS ADJ. SEGMENT EBDA BY REGION(b) KM Refined Product (left) Domestic Refined Products Consumption (right) $ millions West Coast Southeast $890 1
Slide 50: Products Segment’s West Coast Renewable Fuels Projects
Products Segment’s West Coast Renewable Fuels Projects Subsidies & state goals for emissions reductions are driving increased RD volumes Particularly in California where stacked subsidies currently average ~$4.00/gal (RIN+LCFS+BTC) Products Pipelines Expanding our renewable fuel handling capabilitie
Slide 51: Terminals Segment Overview
Terminals Segment Overview Refined products focused; providing customers with unmatched scale, service-offerings & market-making connectivity # of capacity ASSET SUMMARY terminals (mmbbls) Terminals segment – Bulk 28 Terminals segment – Liquids 47 78 Products segment 65 56 Total Terminals 140 134 Jo
Slide 52: Our Integrated Terminal Network on the Houston Ship Channel
Our Integrated Terminal Network on the Houston Ship Channel Refined products focused with an irreplaceable collection of assets, capabilities & market-making connectivity Our unmatched scale & flexibility: KM terminals & assets refined products terminals Colonial local refineries & processing Explor
Slide 53: Tankers Meeting Domestic Maritime Demand
Tankers Meeting Domestic Maritime Demand Most modern & efficient Jones Act tanker fleet American Petroleum Tankers firm charter renewal option – 16 fuel-efficient Jones Act tankers YE-22 2023 YE-23 2024 YE-24 2025 YE-25 – Largest, most modern fleet with an average age of 8.8 years Bay State Dramatic
Slide 54: Industry-Leading Renewable Feedstock Storage & Logistics Offering
Industry-Leading Renewable Feedstock Storage & Logistics Offering Expanding Lower Mississippi River Hub Modifying 30 tanks & enhancing rail, truck, and marine New heated storage capacity and various marine, rail, & capabilities for Neste at Harvey pipeline infrastructure improvements at GRT $80 mill
Slide 55: CO2 Segment Overview
CO2 Segment Overview World class, fully-integrated assets | CO2 source to crude oil production & takeaway in the Permian Basin Interest in 5 oil fields with 9.2 billion barrels of Original Oil In Place Interest in 3 CO2 fields with 37 tcf of Original Gas In Place ~1,500 miles of CO2 pipelines with c
Slide 56: CO2 EOR & Transport Consistently Generates Free Cash Flow
CO2 EOR & Transport Consistently Generates Free Cash Flow Low cash cost structure yields healthy margins through commodity price cycles OIL & GAS CASH OPERATING COSTS & AVG. PRICE CO2 EOR & TRANSPORT FREE CASH FLOW $ millions $ per net barrel FCF Capex Adj. Segment EBDA Cash costs Avg. realized oil
Slide 57: Energy Transition Ventures (ETV) Group
Energy Transition Ventures (ETV) Group The group is evaluating commercial opportunities ETV Group focused on opportunities emerging from the low-carbon energy transition outside of our existing asset base Other business segments will continue to pursue their own energy transition opportunities on ex
Slide 58: RNG Market Opportunity
RNG Market Opportunity U.S. RNG PRODUCTION bcfd RNG DEMAND MARKETS transportation market voluntary market 3.2 RNG-based vehicles If RNG volumes are Parties interested in expect landfills to drive growth emit up to 75% less consumed by fleets in voluntarily 2.8 GHG emissions than the transportation d
Slide 59: RNG Portfolio Grows with 2022 Acquisitions
RNG Portfolio Grows with 2022 Acquisitions LANDFILL-RNG ANNUAL PRODUCTION PRIMARILY CONTRACTED IN CAPACITY net to KM GROWTH PLAN TRANSPORTATION MARKET TODAY Potential to grow +0.6 bcf over next Long-term contracts in transportation/RIN 1.8 bcf operational (2.2 bcf gross) decade with little capex mar
Slide 60: CCUS Value Chain
CCUS Value Chain Emission Sources Capture Transport EOR / Sequestration — In discussions with emissions — Evaluate opportunities to — Largest CO2 pipeline owner in — Substantial EOR experience sources throughout North invest, construct, and/or North America America on CCUS solutions operate — EOR ca
Slide 61: Red Cedar Carbon Capture and Sequestration
Red Cedar Carbon Capture and Sequestration Utilizing KM’s assets and expertise to enable an accretive CCS project Overview — Red Cedar Gathering (RCG) is a natural gas midstream joint-venture between Southern Red Cedar Facilities Ute Indian Tribe Growth Fund (51%) and Kinder Morgan (49%) in southern
Slide 62: Compelling Investment Opportunity
Compelling Investment Opportunity Strategically-positioned assets generating substantial cash flow with attractive investment opportunities Largest energy infrastructure company in the S&P500 Stable cash flows with ~67% take-or-pay or hedged earnings(a) Strong balance sheet with flexibility Attracti
Slide 63: Financial Overview
FINANCIAL OVERVIEW Kinder Morgan Building, Houston, Texas
Slide 64: No Change to Capital Allocation Priorities
No Change to Capital Allocation Priorities Focused on maintaining balance sheet strength and maximizing shareholder value balance sheet — BBB rated by all agencies strength — balance sheet capacity provides value & flexibility maintain dividend — well-covered with modest growth attractive growth — i
Slide 65: Capital Allocation Priorities in 2023
Capital Allocation Priorities in 2023 $2.9 billion free cash flow – $5.7 billion CFFO less $2.8 billion capital expenditures less $2.5 billion dividends paid – 2% increase planned for 2023 plus – expected to end 2023 with ~4.0x leverage $3.6 billion balance sheet capacity – long-term target of ~4.5x
Slide 66: Growing Cash Flow & Reducing Leverage
Growing Cash Flow & Reducing Leverage $ billions ADJUSTED EBITDA NET DEBT +18% -19% $0.4 $7.9 $38 $0.7 $0.5 $0.5 $7.5 $7.7 $37 $7.1 $7.2 $34 $33 $6.7 $6.9 $32 $31 $6.5 $31 $31 2016 2017 2018 2019 2020 2021 2022 2023B 2016 2017 2018 2019 2020 2021 2022 2023B EBITDA generated from assets divested 2016
Slide 67: Investing in Attractive Projects & Returning Value to Shareholders
Investing in Attractive Projects & Returning Value to Shareholders $ billions DISCRETIONARY CAPITAL(a) DIVIDENDS PAID & SHARES REPURCHASED(b) $18.7 billion $17.3 billion returned invested to shareholders $3.0 $0.4 $2.8 $2.8 $2.4 $2.5 $2.5 $2.4 $2.3 $2.4 $2.1 $0.3 $2.2 $1.7 $1.7 $1.8 $0.2 $1.3 $1.3 2
Slide 68: Proven History of Generating Substantial Free Cash Flow
Proven History of Generating Substantial Free Cash Flow and Returning Value to Shareholders $ in billions Generated CFFO of over $34 billion & returned nearly $15 billion over past 7 years CFFO FCF Capital expenditures Dividends paid Share repurchases $6 $5 $4 $3 $2 $1 - 2016 2017 2018 2019 2020 202
Slide 69: 2023 Guidance
2023 Guidance Performance driven by strong market fundamentals and robust demand growth for our existing & expanded services Variance to Key metrics 2023 Budget 2022 Net income $2.5 billion -1% Adjusted Segment EBDA $8.2 billion +4% Adjusted EBITDA $7.7 billion +2% Distributable Cash Flow $4.8 billi
Slide 70: Growing Cash Flow Generation
Growing Cash Flow Generation $ billions $0.1 $0.0 $7.7 $0.2 $0.3 $0.1 $7.5 $0.3 $0.2 2023 is the last year we expect meaningful recontracting risk Meanwhile, strong demand for our services is driving an even larger uplift 2022A Recontracting Favorable G&A & Divestitures Growth G&P Volume Other 2023B
Slide 71: Rising Interest Rates Present a Manageable Headwind
Rising Interest Rates Present a Manageable Headwind Historically, our floating rate policy has resulted in significant interest expense savings INTEREST EXPENSE(a) $ million Floating rate exposure — Budgeted a $331 million increase in interest expense year-over- year based on ~$7.5 billion of floati
Slide 72: 2023B Net Income & Distributable Cash Flow (DCF)
2023B Net Income & Distributable Cash Flow (DCF) in millions, except per share 2023 2022 Change Budget Actual $ % Net income attributable to Kinder Morgan, Inc. (GAAP) $ 2,525 $ 2,548 $ (23) (1%) Total Certain Items (12) 88 (100) NM Adjusted Earnings(a) 2,513 2,636 $ (123) (5%) DD&A and amortization
Slide 73: 2023B Adjusted Segment EBDA & Adjusted EBITDA
2023B Adjusted Segment EBDA & Adjusted EBITDA $ in millions Key Drivers 2023 2022 Change Budget Actual $ % Natural Gas Pipelines $ 5,066 $ 4,942 $ 124 3% – Contributions from expansion projects Products Pipelines 1,238 1,107 131 12% – Improved rates on capacity sold (MEP and others) Terminals 1,000
Slide 74: 2023B Capital Expenditures
2023B Capital Expenditures $ in millions 2023 2022 Sustaining Capital Budget Actual Change Natural Gas Pipelines $ 578 $ 466 $ 112 Products Pipelines 153 143 10 Terminals 220 243 (23) CO2(a) 20 13 7 Corporate/Other 31 36 (5) Total sustaining capital expenditures(b) $ 1,002 $ 901 $ 101 Key Projects 2
Slide 75: 2023B Cash Flow from Operations (CFFO) & Free Cash Flow (FCF)
2023B Cash Flow from Operations (CFFO) & Free Cash Flow (FCF) $ in millions 2023 2022 Change Budget Actual $ % Net income attributable to Kinder Morgan, Inc. (GAAP) $ 2,525 $ 2,548 $ (23) (1%) Net income attributable to noncontrolling interests 94 77 17 22% DD&A and amortization of excess cost of eq
Slide 76: 2023B Sources & Uses
2023B Sources & Uses(a) $ in millions 2023 SOURCES & USES $ in billions Sources Budget $10.0 CFFO (GAAP) $ 5,660 Cash balance as of 12/31/2022 745 $9.0 Cash on hand Revolver Borrowing/Debt Issuances 2,529 Distributions from equity investments in CFFI(b) 239 $8.0 Total sources $ 9,173 Debt maturities
Slide 77: Leverage & Liquidity
Leverage & Liquidity(a) $ in millions 2023 KMI LONG-TERM DEBT MATURITIES(d) Budget Debt maturities Weighted average interest rate Net Debt (Year End) $ 31,046 7.3% Adjusted EBITDA $ 7,701 Net Debt(b) to Adjusted EBITDA 4.0x 5.5% 5.0% 5.0% 4.2% 4.3% 3.8% 4.0% 3.9% KMI revolver capacity 12/31/2022 3.7
Slide 78: 2023B Quarterly Profile
2023B Quarterly Profile $ in billions, except per share ADJUSTED EBITDA DISTRIBUTABLE CASH FLOW ADJUSTED EPS 2023 Budget 2022 Actual 2023 Budget 2022 Actual 2023 Budget 2022 Actual $2.0 $2.0 $2.0 $2.0 $1.5 $1.4 $1.9 $1.8 $1.8 $1.8 $1.3 $1.2 $1.2 $0.32 $0.32 $1.1 $1.1 $0.31 $0.31 $1.0 $0.27 $0.26 $0.
Slide 79: Minimum Book Tax Detail
Minimum Book Tax Detail High-level example of calculation Net income Add back: Book depreciation Add back: Book federal income tax Subtract: Tax depreciation 2022 budgeted tax depreciation of ~$5.2 billion Adjusted Financial Statement Income (AFSI) x 15% Minimum Book Tax (MBT) PayPay the the greater
Slide 80: 2023 Budget Sensitivities
2023 Budget Sensitivities Limited overall commodity exposure 2023B assumptions Change Potential Impact to Adjusted EBITDA & DCF (full year) Natural Gas Products Terminals CO2 Total Natural gas G&P volumes 3,668 bbtud +/- 5% $40 million $40 million Refined products volumes (gasoline, diesel & jet fue
Slide 81: Financial Highlights
Financial Highlights Our financial strategy at work 2022 2023 BUDGET Exceeded budgeted Adj. EBITDA & DCF by 5% Declared dividends +3% Expect declared dividends +2% Attractive yield of ~6% today Ended year at 4.1x Net Debt / Adj. EBITDA 2023 budgeted leverage of 4.0x Net Debt / Adj. EBITDA(a) Lowest
Slide 82: Appendix
APPENDIX Terminal Pit 11, Pasadena, Texas
Slide 83: Natural Gas Segment Presentation
Natural Gas Segment Presentation 83
Slide 84: 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: ~1,200 miles Natural gas transported ~40% (U.S. consumption & exports) Working gas storage capacity: 700 bcf VOLUMES(a) trillion btu per day T
Slide 85: Provide High-Value Natural Gas Takeaway in all Major Basins
Provide High-Value Natural Gas Takeaway in all Major Basins U.S. NATURAL GAS PRODUCTION TGP provides valuable egress for NE producers & serves RELEVANT TO OUR FOOTPRINT bcfd important domestic markets as well as LNG and Mexico 40 Northeast +5 bcfd 35 26 Permian +10 bcfd 21 Haynesville +8 bcfd SNG’s
Slide 86: Natural Gas Gathering & Processing Assets Across Key Basins
Natural Gas Gathering & Processing Assets Across Key Basins Volume recovery ongoing G&P BUSINESS AS % OF 2023B NATURAL GAS SEGMENT GATHERING SHORT-TERM PRODUCTION OUTLOOK KMI ADJUSTED SEGMENT EBDA VOLUMES bbtud dry gas, bcfd, 2019 – 2024 4,000 2024 +63% over 2% Haynesville pre-COVID levels KinderHaw
Slide 87: Strong Gulf Coast Footprint Positioned to Serve Demand Growth
Strong Gulf Coast Footprint Positioned to Serve Demand Growth >95% of demand growth is expected to occur in Texas & Louisiana, driven by exports & industrial U.S. NATURAL GAS DEMAND bcfd 125 LNG exports 24 106 LNG exports 11 LNG plant fuel 2 LNG plant fuel 1 Industrial 35 Industrial 32 Net Mexican e
Slide 88: Long-Term Growth Drivers
Long-Term Growth Drivers Strategic pipeline & storage footprint positioned to serve major sources of demand growth U.S. NATURAL GAS INDUSTRIAL DEMAND Exports — Currently contracted to transport ~7 bcfd to LNG & ~4 bcfd to Mexico; well positioned to serve & EXPORTS DRIVING GROWTH bcfd additional grow
Slide 89: Extensive Storage Capabilities & Premium Service Offerings
Extensive Storage Capabilities & Premium Service Offerings Provide Valuable Solutions for Variable Demand from Utilities & Exports Largest storage position in U.S. with 700 bcf of storage Stagecoach provides CIG fully contracted for flexibility to serve NE Multi-turn storage facilities provide LDC &
Slide 90: Transporter of Choice for LNG Facilities
Transporter of Choice for LNG Facilities due to Supply Diversity, Network Connectivity, & 700 bcf of Total Working Gas Storage U.S. LNG FEEDGAS & KM TRANSPORT POTENTIAL bcfd U.S. LNG Feedgas KM transport Contracted to move ~7 bcfd to facilities today & ~10 bcfd by the end of 2025 Evaluating ~9 bcfd
Slide 91: Key Market: Exports to Mexico
Key Market: Exports to Mexico U.S. NATURAL GAS EXPORTS TO MEXICO bcfd U.S. Mexico Exports KM Contracted Transport Capacity 9 KM Projected Contracted Transport Capacity 8 7 6 5 4 3 In discussions to transport 2 up to additional 0.4 bcfd 1 ~3.8 bcfd KM contracted, ~9 years average remaining term - ~2.
Slide 92: Well Positioned to Serve Gulf Coast Petchem & Industrial Demand
Well Positioned to Serve Gulf Coast Petchem & Industrial Demand DIRECTLY CONNECTED PETCHEM AND INDUSTRIAL TEXAS & LOUISIANA INDUSTRIAL DEMAND bcfd FACILITIES 16 14 12 10 Demand growth provides expansion capital opportunities 8 6 4 2 - 2022 2024 2026 2028 2030 — Strategic pipeline & storage footprint
Slide 93: Serving Regions with Meaningful Renewable Power Today
Serving Regions with Meaningful Renewable Power Today Renewables require non-ratable flexibility & associated non-ratable services Our service offerings reflect dedicated use of infrastructure required to meet market demand (ratable & non-ratable services) Coupled with ratable service, underutilized
Slide 94: Valuable Texas Intrastate Natural Gas Systems
Valuable Texas Intrastate Natural Gas Systems — Texas Intrastates system represents ~11% of KM Adjusted Segment EBDA(a) – Highly contracted with ~80% take-or-pay(a) – Average transportation contract tenor ~6 years(b) — 7,000-mile pipeline network in Texas – GCX & PHP connect 4+ bcfd of Permian suppl
Slide 95: Continue to Serve the Permian’s Growing Gas Takeaway Needs
Continue to Serve the Permian’s Growing Gas Takeaway Needs Own interest in >7 bcfd of existing Permian takeaway capacity Highly utilized capacity with long-term contracts Advantaged Intrastates network, downstream of GCX and PHP, provides shippers with end-market optionality (Houston power & petchem
Slide 96: Highly Utilized Haynesville Capacity
Highly Utilized Haynesville Capacity Positioned to benefit as Haynesville production grows HAYNESVILLE PRODUCTION bcfd Significant Operating Footprint +8 bcfd, or 63% KinderHawk Gathering several capital efficient expansions underway which will increase our overall 21 gathered volume SNG sources a s
Slide 97: Valuable Northeast Transportation and Storage Assets
Valuable Northeast Transportation and Storage Assets NORTHEAST PRODUCTION Stagecoach Pipelines Stagecoach Gas Storage bcfd +5 bcfd, or 15% TGP TGP Gas Storage 40 35 2022 2030 TGP peak day deliveries to Northeast markets Stagecoach peak day deliveries to Northeast Stable, fee-based infrastructure of
Slide 98: Natural Gas: Interstate Pipelines
Natural Gas: Interstate Pipelines Key statistics Rate Capacity Storage Avg. Remaining Effective Date of Moratorium Ownership Miles (bcfd) (bcf) Contract Term (yrs) Next Rate Case Through Date 100% KMI-owned: TGP Tennessee Gas Pipeline 100% 11,755 12.2 76 6.1 / 3.3(a) NA 10/31/2022 SC Stagecoach 100%
Slide 99: Natural Gas: Intrastate, G&P and NGL Assets
Natural Gas: Intrastate, G&P and NGL Assets Key statistics Capacity Storage Avg. Remaining Treating Processing Ownership Miles (bcfd) (bcf) Contract Term (yrs) (GPM) (bcfd) 100% KMI-owned natural gas pipelines: KMTP / Tejas 100% 5,915 8.3 136 5.7 1,680 0.5 North Texas Pipeline 100% 80 0.3 – 10.6 – –
Slide 100: Projects Placed Into Service During 2022
Projects Placed Into Service During 2022 New natural gas projects expected to generate $45 million of annual Project EBITDA In-service date: 2022 Capacity KM share ($mm) Asset Project Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec (mDthd) Capital Project EBITDA Gathering / Other Altamont - Questar
Slide 101: Natural Gas Project Backlog
Natural Gas Project Backlog KM share ($mm) Capacity Asset Project Capital Project EBITDA (mDthd) In-service Date Project Status Evangeline Pass Project $583 2,000 10/2024, 7/2025 Phase 1 Under Construction East 300 Upgrade $263 115 11/2023 Under Construction TGP Port Sulphur Dispatch $70 235 8/2024
Slide 102: Products Segment Presentation
Products Segment Presentation 102
Slide 103: Products Segment Overview
Products Segment Overview Strategic footprint supplying a diverse mix of feedstock & finished products critical to refining & transportation sectors ASSET SUMMARY 2023B DELIVERY VOLUMES(a) mbbld Bakken Crude Texas Crude Pipelines: ~9,500 miles Terminals: 65 terminals 2023 budgeted throughput(a) ~2.2
Slide 104: Refined Products Volumes Recovering to Pre-Pandemic Levels
Refined Products Volumes Recovering to Pre-Pandemic Levels GASOLINE mbbld DIESEL mbbld JET FUEL mbbld 2019 2022 2023B 2019 2022 2023B 2019 2022 2023B 1,200 1,200 1,200 1,000 1,000 1,000 800 800 800 600 600 600 400 400 400 200 200 200 - - - 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2023B: 992 mbbld 395 mbb
Slide 105: Refined Products Pipes a Steady Contributor
Refined Products Pipes a Steady Contributor Fee-based with stable volumes and cash flow over the long-term REFINED PRODUCTS VOLUMES(a) mmbbld REFINED PRODUCTS ADJ. SEGMENT EBDA BY REGION(b) KM Refined Product (left) Domestic Refined Products Consumption (right) $ millions West Coast Southeast $890 1
Slide 106: Products Segment’s West Coast Renewable Fuels Projects
Products Segment’s West Coast Renewable Fuels Projects Subsidies & state goals for emissions reductions are driving increased RD volumes Particularly in California where stacked subsidies currently average ~$4.00/gal (RIN+LCFS+BTC) Products Pipelines Expanding our renewable fuel handling capabilitie
Slide 107: Products Segment Crude Volume Update
Products Segment Crude Volume Update Business as % of 2023B KMI Adjusted Segment EBDA: 1% Crude G&P; 3% Crude Transport CRUDE TRANSPORT & GATHERING VOLUMES(a) mbbld SHORT-TERM PRODUCTION OUTLOOK 2019 – 2023 crude, mmbld 900 1.5 2023 +12% 2023 +7% vs 2022 vs 2022 600 1.0 300 0.5 - - 1Q19 2Q19 3Q19 4Q
Slide 108: KM Crude Volumes Recovering with Production
KM Crude Volumes Recovering with Production Maximizing throughput in difficult markets: marketing affiliates on KMCC & Double H utilize available capacity on spot basis THROUGHPUT VOLUMES BY CRUDE PIPELINE & CRUDE OIL PRODUCTION & RIG COUNT(a) BAKKEN WELL CONNECTS Eagle Ford Bakken Eagle Ford Rigs B
Slide 109: Texas & Bakken Crude Oil Assets
Texas & Bakken Crude Oil Assets Strategically positioned in Eagle Ford & Bakken Texas crude assets offer connectivity to the Corpus Christi & Houston Hiland is one of the Bakken’s premier gathering systems Ship Channel markets — Backed by dedications from key producers in the basin — Flexibility to
Slide 110: Long Runway for U.S. Refined Products
Long Runway for U.S. Refined Products U.S. TOTAL FINAL CONSUMPTION OF LIQUID FUELS IN TRANSPORT SECTOR mmbbld 15 10 5 Even in a lower domestic demand scenario, our refined products pipelines remain valuable ‒ Can accommodate biofuels ‒ Per regulations, able to recover return on cost of service by in
Slide 111: Terminals Segment Presentation
Terminals Segment Presentation 111
Slide 112: Terminals Segment Overview
Terminals Segment Overview Refined products focused; providing customers with unmatched scale, service-offerings & market-making connectivity # of capacity ASSET SUMMARY terminals (mmbbls) Terminals segment – Bulk 28 Terminals segment – Liquids 47 78 Products segment 65 56 Total Terminals 140 134 Jo
Slide 113: Terminals Segment Revenue by Product
Terminals Segment Revenue by Product Liquids-focused terminals with a diverse product mix 2023B REVENUE: $1.8 BILLION(a) LIQUIDS — Market-making industry hubs in key refining centers critical to our customers — Complementary & synergistic with renewables & chemicals — Jones Act tankers to meet domes
Slide 114: Terminals Segment Services
Terminals Segment Services Offering unmatched market access with modal flexibility alongside value-added terminaling services 2023B ADJUSTED SEGMENT EBDA: $1.0 BILLION terminal — Concentrated in key industry supply & demand market hubs services — Houston Ship Channel assets serving the world’s most
Slide 115: Our Liquid Hubs
Our Liquid Hubs Strategically located to serve key supply & demand markets New York Houston Ship Channel Chicago Harbor — Serves the world’s most competitive supply of refined products & petrochemicals Philadelphia Baltimore Dayton — 9 terminals providing ~43 million barrels of capacity(a) Indianapo
Slide 116: Our Integrated Terminal Network on the Houston Ship Channel
Our Integrated Terminal Network on the Houston Ship Channel Refined products focused with an irreplaceable collection of assets, capabilities & market-making connectivity Our unmatched scale & flexibility: KM terminals & assets refined products terminals Colonial local refineries & processing Explor
Slide 117: Leader in Clearing Advantaged USGC Gasoline & Diesel Production
Leader in Clearing Advantaged USGC Gasoline & Diesel Production Unparalleled optionality to cost-effectively supply both domestic & export markets KM HSC REFINED PRODUCT THROUGHPUTS TO KM HSC REFINED PRODUCT EXPORTS(b) mbbld DOMESTIC MARKETS(a) mbbld 1,200 600 KM HSC export capacity of 600,000 bpd 1
Slide 118: Tankers Meeting Domestic Maritime Demand
Tankers Meeting Domestic Maritime Demand Most modern & efficient Jones Act tanker fleet American Petroleum Tankers firm charter renewal option – 16 fuel-efficient Jones Act tankers YE-22 2023 YE-23 2024 YE-24 2025 YE-25 – Largest, most modern fleet with an average age of 8.8 years Bay State Dramatic
Slide 119: Our Industry Leading Ethanol Capabilities
Our Industry Leading Ethanol Capabilities Handling nearly a third of domestic ethanol & positioned for growth U.S. FUEL ETHANOL PRODUCTION mmbbld KINDER MORGAN RESPONSE 1.2 Efficient, full-service, logistics solutions 1.0 RBOB & CBOB 0.8 E10 Ethanol E15 E85 0.6 Kinder Morgan Kinder Morgan Kinder Mor
Slide 120: Industry-Leading Renewable Feedstock Storage & Logistics Offering
Industry-Leading Renewable Feedstock Storage & Logistics Offering Expanding Lower Mississippi River Hub Modifying 30 tanks & enhancing rail, truck, and marine New heated storage capacity and various marine, rail, & capabilities for Neste at Harvey pipeline infrastructure improvements at GRT $80 mill
Slide 121: Reducing CO2 Emissions on Houston Ship Channel
Reducing CO2 Emissions on Houston Ship Channel Adding 5 Vapor Recovery Units at Galena Park & Pasadena terminals — $64 million — 3Q 2023 in-service Expect project to reduce Scope 1 & 2 emissions by ~34,000 metric tonnes CO2e per year, or ~38% from 2019(a) — Equivalent to CO2 emissions from: 3,860,54
Slide 122: Terminals Throughput & Tonnage Statistics
Terminals Throughput & Tonnage Statistics 2022 to 2023B comparison Variance Variance Throughput vs. 2022 Tonnage vs. 2022 MMBbls 2022 2023B MMBbls % tons (millions) 2022 2023B MM Tons % Gasoline 489.7 483.3 (6.4) -1% Ores/Metals (Bulk) 12.5 14.3 1.8 15% Distillate 125.1 119.0 (6.1) -5% Petroleum Cok
Slide 123: CO2 Segment Presentation
CO2 Segment Presentation 123
Slide 124: CO2 Segment Overview
CO2 Segment Overview World class, fully-integrated assets | CO2 source to crude oil production & takeaway in the Permian Basin Interest in 5 oil fields with 9.2 billion barrels of Original Oil In Place Interest in 3 CO2 fields with 37 tcf of Original Gas In Place ~1,500 miles of CO2 pipelines with c
Slide 125: Enhanced Oil Recovery Process
Enhanced Oil Recovery Process Specializing in the gas injection method of enhanced oil recovery Three phases of oil & gas production PRIMARY SECONDARY TERTIARY RECOVERY RECOVERY (ENHANCED) RECOVERY Reinject CO2 10% 20-40% 30-60% OOIP recovered OOIP recovered OOIP recovered Natural pressure Gas injec
Slide 126: Key Factors Driving the Success of Our CO2 Segment
Key Factors Driving the Success of Our CO2 Segment Maximizing returns through financial discipline & innovation • Vertically integrated & • Industry-leading • High-return asset base Advantaged Assets Highly-Skilled Team Profit-Focused Permian focused experience in highly specialized business will •
Slide 127: CO2 Segment Budget & Sensitivities
CO2 Segment Budget & Sensitivities SACROC Yates Other Potential Impact to Adjusted EBITDA $433 2023B assumptions Change & DCF (full year) Crude oil & NGL +/- 5% in net volumes $25.1 million production 38 mbbld net $239 CO2 sales +/- 5% mmcfd in net $7.4 million 345 mmcfd net volumes $201 $106 $85.00
Slide 128: CO2 Segment Budgeted Volumes & Highlights
CO2 Segment Budgeted Volumes & Highlights 2023B NET OIL & NGL PRODUCTION 2023B NET CO2 SALES mbbld mmcfd SACROC oil 19.7 SACROC NGL 9.8 SACROC 116 Yates 6.3 Other 2.3 38 mbbld 345 mmcfd Third parties 205 Yates 19 Other 5 OIL & GAS CO2 & TRANSPORT — Majority of required takeaway capacity provided by
Slide 129: CO2 Segment 2023 Oil & Gas Major Projects
CO2 Segment 2023 Oil & Gas Major Projects Major projects expected to generate attractive returns Asset Project 2023B capex Commentary ATIRR% at WTI price scenarios Forward Curve $60 Flat — Execute Hawaii Expansion 2 — Execute P6 38% — Execute Town Center Infill 27% Expansion SACROC Projects $193mm —
Slide 130: Extending Productive Life of Mature Fields
Extending Productive Life of Mature Fields Innovation & teamwork continue to push out SACROC decline Significant amounts of recoverable oil in place SACROC NET OIL PRODUCTION FORECASTS — SACROC is estimated at 2.8 billion barrels of bopd Actual 2012B 2014B 2018B 2020B 2023B 35,000 original oil in pl
Slide 131: EOR & CO2 Transport Long-Term Growth Outlook
EOR & CO2 Transport Long-Term Growth Outlook Projected Adjusted Segment EBDA, net production & development plan EBDA(a) NET PRODUCTION 10 YEAR DEVELOPMENT PLAN $ millions incl. NGL (mboed) 2023 – 2032 CO2 & $900 70 Transport $23 $800 Yates $178 60 $700 KM Share Capex 50 $ millions $600 $500 40 SACRO
Slide 132: CO2 EOR & Transport Consistently Generates Free Cash Flow
CO2 EOR & Transport Consistently Generates Free Cash Flow Low cash cost structure yields healthy margins through commodity price cycles OIL & GAS CASH OPERATING COSTS & AVG. PRICE CO2 EOR & TRANSPORT FREE CASH FLOW $ millions $ per net barrel FCF Capex Adj. Segment EBDA Cash costs Avg. realized oil
Slide 133: Predictable Volumes & Hedged Commodity Price
Predictable Volumes & Hedged Commodity Price Mitigating uncertainties where possible | EOR oil & gas production represents ~7% of KMI business mix NET OIL PRODUCTION: ACTUALS VS. BUDGET mbbld HEDGED VOLUMES as of 1/4/2023 Actual Budget 2023 2024 2025 2026 50 Crude oil - West Texas Intermediate $/bbl
Slide 134: ETV Group Segment Presentation
ETV Group Segment Presentation 134
Slide 135: Energy Transition Ventures (ETV) Group
Energy Transition Ventures (ETV) Group The group is evaluating commercial opportunities ETV Group focused on opportunities emerging from the low-carbon energy transition outside of our existing asset base Other business segments will continue to pursue their own energy transition opportunities on ex
Slide 136: IRA Accelerates Growth Opportunities in All Verticals
IRA Accelerates Growth Opportunities in All Verticals RENEWABLE NATURAL GAS CCS/CCUS — Investment tax credit (6%/30%) — Credit increased from $35/50 (EOR/Sequestration) to — Domestic Content +10% $60/85 — Energy Community +10% — Reduced size threshold for qualifying facilities — Production Tax Credi
Slide 137: RNG Market Opportunity
RNG Market Opportunity U.S. RNG PRODUCTION bcfd RNG DEMAND MARKETS transportation market voluntary market 3.2 RNG-based vehicles If RNG volumes are Parties interested in expect landfills to drive growth emit up to 75% less consumed by fleets in voluntarily 2.8 GHG emissions than the transportation d
Slide 138: RNG Portfolio Grows with 2022 Acquisitions
RNG Portfolio Grows with 2022 Acquisitions LANDFILL-RNG ANNUAL PRODUCTION PRIMARILY CONTRACTED IN CAPACITY net to KM GROWTH PLAN TRANSPORTATION MARKET TODAY Potential to grow +0.6 bcf over next Long-term contracts in transportation/RIN 1.8 bcf operational (2.2 bcf gross) decade with little capex mar
Slide 139: Vertical Integration Drives Value and Growth
Vertical Integration Drives Value and Growth RNG Value Chain Transportation Landfill Owner Kinetrex Energy — Vertical integration allows KM Customer to retain a higher margin Transportation — Higher margins lead to more HBTU Plant Transportation HBTU Physical Customer Transportation opportunities La
Slide 140: Opportunity to Capture Carbon from Stationary Sources
Opportunity to Capture Carbon from Stationary Sources CCUS economics are improving U.S. CO2 EMISSIONS FROM POINT SOURCES IRA INCREASES CCUS OPPORTUNITIES Other facilities - lower 453 MMTPA, 24 bcfd KEY IRA CHANGES MARKET IMPACT potential for carbon capture coal 915 MMTPA, 48 bcfd nat gas power 640 M
Slide 141: Net-Zero Scenarios Require Carbon Capture Infrastructure Buildout
Net-Zero Scenarios Require Carbon Capture Infrastructure Buildout U.S. CUMULATIVE CO2 STORAGE CAPACITY MMT CO2 POINT SOURCES & PIPELINE INFRASTRUCTURE IN 2050 5000 FIND 4000 3000 2000 1000 0 2020 2025 2030 2035 2040 2045 2050 Princeton’s Net-Zero America Report estimates that CO2 CO2 pipeline estima
Slide 142: CCUS Value Chain
CCUS Value Chain Emission Sources Capture Transport EOR / Sequestration — In discussions with emissions — Evaluate opportunities to — Largest CO2 pipeline owner in — Substantial EOR experience sources throughout North invest, construct, and/or North America America on CCUS solutions operate — EOR ca
Slide 143: Red Cedar Carbon Capture and Sequestration
Red Cedar Carbon Capture and Sequestration Utilizing KM’s assets and expertise to enable an accretive CCS project Overview — Red Cedar Gathering (RCG) is a natural gas midstream joint-venture between Southern Red Cedar Facilities Ute Indian Tribe Growth Fund (51%) and Kinder Morgan (49%) in southern
Slide 144: Verticals Interconnect to Reduce Carbon Intensity of Fuels
Verticals Interconnect to Reduce Carbon Intensity of Fuels Lowering carbon intensity generates long term value INPUTS PROCESSES OUTPUTS Animal or Biogas RNG Food Waste Processing Landfill Gas ATR/SMR Blue/Green Hydrogen Solar/Wind Electrolyzer Biofuels Biomass RD/SAF Refinery CCUS KM involvement in
Slide 145: Corporate Items & Other Energy Transition Considerations
CORPORATE ITEMS & OTHER ENERGY TRANSITION CONSIDERATIONS Gulf Coast Express
Slide 146: Contract Strategy Insulates Cash Flow Through Commodity Cycles
Contract Strategy Insulates Cash Flow Through Commodity Cycles Structure long-term contracts that minimize price & volume volatility 67% take- or-pay or 26% fee- hedged based 7% Avg. remaining 2023B Adjusted Volumes & price are Price is fixed, Commodity- contract life Segment EBDA: contractually fix
Slide 147: Joint Venture Treatment in Key Metrics
Joint Venture Treatment in Key Metrics KM does not control nor consolidate KM controls & fully consolidates KM portion referred to as equity investments in third party portion referred to as noncontrolling interests in financial statements financial statements SNG (50%), NGPL (37.5%), GCX (34%) Exam
Slide 148: Geographic Diversity is a Key Consideration in the Energy Transition
Geographic Diversity is a Key Consideration in the Energy Transition Stronger resilience and diversity in supply chains will be needed to achieve emission reduction goals Demand for critical minerals is set to soar COPPER NICKEL LITHIUM COBALT RARE EARTH ELEMENTS +3x +2x – 3x +2x – 4x +12x +3x 17.4
Slide 149: Renewables Have Not Offset German Oil & Gas Demand
Renewables Have Not Offset German Oil & Gas Demand Despite spending billions on renewables over the past decade, German oil & gas demand increased over the last decade GERMAN ENERGY DEMAND BY FUEL SOURCE Renewable spend dominated the last decade Oil Gas Coal Nuclear Renewables 9% 11% 12% 12% 13% 15%
Slide 150: U.S. is a Responsible Producer
U.S. is a Responsible Producer One of the lowest emissions intensity producers in the world & at unmatched scale AVERAGE UPSTREAM METHANE EMISSION INTENSITY 2020 OIL & GAS PRODUCTION mtoe SCALING FACTOR 7 1,600 6 Only 5 countries have 1,200 … & the U.S. produces more 5 lower emission intensity than
Slide 151: California’s Decarbonization Efforts Have Stalled
Despite Increasing its Renewable Capacity, California’s Decarbonization Efforts Have Stalled California consumers continue to pay higher electricity prices with little emissions reduction benefit CALIFORNIA POWER GRID EMISSION INTENSITY & INTERMITTENT CAPACITY wind & solar capacity (GW) emissions in
Slide 152: Intermittent Power Sources Increase Demand for Natural Gas Deliverability
Intermittent Power Sources Increase Demand for Natural Gas Deliverability Services ‒ Renewable intermittency causes large demand ERCOT MONTHLY NATURAL GAS & WIND CAPACITY FACTORS swings for natural gas Houston average high temperature natural gas wind Generation as a % of total ‒ Between 2019 – 2021
Slide 153: Non-GAAP Financial Measures & Reconciliations
Non-GAAP Financial Measures & Reconciliations Defined Terms Reconciliations for the historical periods 153
Slide 154: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures The non-GAAP financial measures of Adjusted Earnings and distributable cash flow (DCF), both in the aggregate and per share for each; segment earnings before depreciation, depletion, amortization (DD&A), amortization of excess cost of equity investments and Certain
Slide 155: Use of Non-GAAP Financial Measures (Continued)
Use of Non-GAAP Financial Measures (Continued) Adjusted Segment EBDA is calculated by adjusting segment earnings before DD&A and amortization of excess cost of equity investments (Segment EBDA) for Certain Items attributable to the segment. Adjusted Segment EBDA is used by management in its analysis
Slide 156: GAAP Reconciliations
GAAP Reconciliations $ in millions 2022 Certain 2023 Budget Certain Items in Items in Segment Adjusted Adjusted Segment Adjusted Adjusted EBDA Segment Segment EBDA Segment Segment Reconciliation of Adjusted Segment EBDA (GAAP) EBDA EBDA (GAAP) EBDA EBDA Natural Gas Pipelines $4,801 $141 $4,942 $5,06
Slide 157: GAAP Reconciliations
GAAP Reconciliations $ in millions Reconciliation of DD&A and amortization of excess cost of equity investments for DCF 2022 Reconciliation of income tax expense for DCF 2022 Depreciation, depletion and amortization (GAAP) $ (2,186) Income tax expense (GAAP) $ (710) Amortization of excess cost of eq
Slide 158: Net Income & Adjusted EBITDA
Net Income & Adjusted EBITDA $ in millions 2023 2022 Change Budget Actual $ % Net income attributable to Kinder Morgan, Inc. (GAAP) $ 2,525 $ 2,548 $ (23) -1% Total Certain Items (12) 88 (100) NM DD&A and amortization of excess cost of equity investments 2,264 2,261 3 0% Income tax expense(a) 724 74
Slide 159: Reconciliations of KMI FCF & CO2 Segment FCF
Reconciliations of KMI FCF & CO2 Segment FCF $ in millions Reconciliation of KMI FCF 2018 2019 2020 2021 2022 CFFO (GAAP) $ 5,043 $ 4,748 $ 4,550 $ 5,708 $ 4,967 Capital expenditures (GAAP)(a) (2,904) (2,270) (1,707) (1,281) (1,621) FCF 2,139 2,478 2,843 4,427 3,346 Dividends paid (GAAP)(b) (1,774)
Slide 160: Reconciliation of DCF and Adjusted EBITDA Excluding Uri
Reconciliation of DCF and Adjusted EBITDA Excluding Uri $ in millions 2021 2021 Actual Reconciliation of KMI Adjusted EBITDA Excluding Uri Actual Excluding Uri Net income attributable to Kinder Morgan, Inc. $ 1,784 $ 932 Total Certain Items 1,220 1,220 DD&A and amortization of excess cost of equity
Slide 161: Reconciliation of Adjusted EBITDA, Normalized for Divestitures
Reconciliation of Adjusted EBITDA, Normalized for Divestitures $ in millions Reconciliation of Adjusted EBITDA, Normalized for Divestitures 2016 2017 2018 2019 2020 2021 2022 Net income attributable to Kinder Morgan, Inc. (GAAP) $ 708 $ 183 $ 1,609 $ 2,190 $ 119 $ 1,784 $ 2,548 Noncontrolling intere
Slide 162: Computation of the Refined Products Contributions to the Products Pipelines Adjusted Segment EBDA
Computation of the Refined Products Contributions to the Products Pipelines Adjusted Segment EBDA $ in millions Computation of the Refined Products Contributions to the Products Pipelines Adjusted Segment EBDA 2015 2016 2017 2018 2019 2020 2021 2022 Products Pipelines Segment EBDA (GAAP) $ 1,106 $ 1