Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — Investor Day (January 2017)
161 slides from Kinder Morgan's investor day presentation, Jan 25, 2017
Slide 1: The Best is Yet to Come
The Best is Yet to Come January 25, 2017
Slide 2: Forward-Looking Statements / Non-GAAP Financial Measures
Forward-Looking Statements / Non-GAAP Financial Measures This presentation includes forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements are identified a
Slide 3: Kinder Morgan Investor Conference
Kinder Morgan Investor Conference 8:00 - 8:20 Vision – Rich Kinder 8:20 - 9:30 Operational Excellence – Steve Kean 9:30 - 9:45 Break 9:45 - 10:30 Financial Excellence – Kimberly Dang 10:30 - 11:30 Q&A 3
Slide 4: Vision
Vision Rich Kinder Executive Chairman
Slide 5: The Importance of Fossil Fuels
The Importance of Fossil Fuels Our way of life would be impossible without fossil fuels — Widespread use of coal, oil and natural gas began during the Industrial Revolution, replacing wood as the primary energy source in the U.S. — With fossil fuels, quality of life and productivity has significan
Slide 6: Fuels Our Daily Essentials: Electricity and Transportation
Fuels Our Daily Essentials Electricity and Transportation… Electricity — Fossil fuels generated ~67% of U.S. electricity in 2015 (~66% for 1st 9 months of 2016)(a) — Despite decades of R&D and subsidies, renewables only accounted for ~13% of generation in 2015 (~15% for 1st 9 months of 2016); abou
Slide 7: Fuels Our Daily Essentials: and Much, Much More
Fuels Our Daily Essentials … and Much, Much More Clothing — Approximately 66% of global textile production comes from synthetic fibers derived from fossil fuels(a) — The extensive use of synthetic fibers has improved the affordability and durability of clothes — Even the production of cotton (28%
Slide 8: Natural Gas Critical to Climate Goals
Natural Gas Critical to Climate Goals Natural gas is the cleanest burning fossil fuel with significantly lower emissions than coal or fuel oil Switching from coal to natural gas has driven a reduction in the nation’s power sector CO2 emissions — 2015 U.S. power sector CO2 emissions were the lowe
Slide 9: Becoming Cheaper and More Abundant
Becoming Cheaper and More Abundant Technology has Reduced Costs and Increased Effectiveness U.S. Oil and Gas Proved Reserves(a) U.S. Shale Breakeven Cost Curve(b) Billion Barrels Trillion Cubic Feet $/Barrel 450 45 $60 $53 $51 $51 $51 400 40 $49 $49 $50 $47 $45 $44 $44 350 35 $41 $40 $35 $35 $37 300
Slide 10: The Need for Fossil Fuel
The Need for Fossil Fuel Fossil fuels are essential to our way of life They are affordable, dependable, plentiful and are becoming more affordable, plentiful and environmentally sustainable due to advancements in technology Fossil fuels are supported by enormous installed infrastructure that w
Slide 11: Fossil Energy Demand is Strong
Fossil Energy Demand is Strong Natural Gas Refined Products Continued steady, modest volume growth Multiple trends driving increased demand for U.S. natural gas Inflation-based tariff adjustment mechanism 2014 2015 2016E 2017E 2018E 16 Power Nat gas-share 28% 33% 34% 32% 33% U.S. Refined Produ
Slide 12: Long Term Demand is Strong
Long Term Demand is Strong Substantial natural gas and oil growth expected for the foreseeable future U.S. Natural Gas Production (Bcf/d)(a) U.S. Crude Oil Production (MMBbl/d)(a) 120 12 110 11 100 10 90 80 9 70 8 60 U.S. Natural Gas U.S. Crude Oil Expected to grow >50% 7 Expected to grow ~30% 50
Slide 13: Kinder Morgan's Role
Kinder Morgan’s Role Well-Positioned to Support Future of Fossil Fuels The nation needs fossil fuels and the infrastructure that delivers them Pipelines are the safest, most economic and environmentally friendly means of transporting U.S. fuels — Damage and injury rates per billion ton-miles: 0.
Slide 14: Operational Excellence
Operational Excellence Steve Kean President and Chief Executive Officer
Slide 15: Unparalleled Asset Footprint
Unparalleled Asset Footprint Largest Energy Infrastructure Company in the U.S. Largest natural gas network in North America — Own or operate ~70,000 miles of natural gas pipeline — Connected to every important natural gas resource play in the U.S. Largest independent transporter of petroleum pro
Slide 16: KMI Overview
KMI Overview Management Aligned with Investors; 14% Stake in KMI Simple Public Structure Management & Public Directors(a) Float ~319MM (14%) ~1,920MM (86%) Kinder Morgan, Inc. Simple Structure: (C-corp, NYSE: KMI) One equity base and dividend Market Equity $47.9B(b) One debt rating Net Debt 38.2
Slide 17: Segment Overview
Segment Overview 93% Pipelines & Terminals Natural Gas Pipelines 73% interstate pipelines 2017 Budgeted Segment 9% intrastate pipelines & storage EBDA = $7.7 billion(a) 18% gathering, processing & treating — 88% fixed-fee (~27% of which is take-or-pay) CO2 KM Products Pipelines S&T Canada CO2
Slide 18: Capacity Utilization / KMI Overview by Product Served
KMI Overview by Product Served(a) Natural Gas is our Largest Market Stability of Cash Flows Natural gas: ~80% take-or-pay cash flow Refined products: competitively advantaged connection NGLs Other between refineries and end markets (includes ~61% of KMT CO2 liquids business) Crude 2% — Piped vol
Slide 19: KMI's High Quality Cash Flow
KMI’s High Quality Cash Flow Not all “fee-based” cash flow is created equal 2017 Budgeted Segment Composition of 91% EBDA = $7.7 billion(a) Fee-based Cash Flow CO2 S&T $0.2 3% Commodity- /Other 6% Hedged based <1% $0.5 Terminals Cash Flow 6% 25% Fee- Products Pipelines 10% Other 72% based Cash $1.9
Slide 20: KMI: Compelling Investment Thesis
KMI: Compelling Investment Thesis Attractive Relative Value, Best in Class Coverage Attractive Relative Value(a) Best in Class Coverage(b) 24x 5x 2016 Dividend Coverage Price/2016 DCF/share 20x 4x 16x 3x 12x 2x KMI 8x KMI 1x 4x 0x 0x Insulated from Capital Market Risk(c) KMI Positioning 4.0 Best i
Slide 21: 2016 Achievements
2016 Achievements A Year of Progress Resulting in Strong Stock Performance Improve balance sheet and liquidity The market appreciated KMI’s achievements in 2016… — Net debt/Adjusted EBITDA reduced from 5.6x at 40% year-end 2015 to 5.3x at year-end 2016 39% — $2.8 billion of cash flow in excess of
Slide 22: 2017 Goals
2017 Goals Budgeted DCF/share of $1.99 Year-end 2017 budgeted net debt/Adjusted EBITDA of 5.4x — Continue to find ways to accelerate the strengthening of our balance sheet Meet or exceed our environmental and safety targets — Perform better than industry average — Improve operational performan
Slide 23: Our Strategy
Our Strategy Focus on stable fee-based assets that are core to North American energy infrastructure — Market leader in each of our business segments — Fees largely independent of underlying commodity prices and substantially secured by take- or-pay contracts Maintain a strong balance sheet — Our
Slide 24: Asset Integrity and Safety are Top Priorities
Asset Integrity and Safety are Top Priorities Consistent, Better-than-industry Performance Across our Businesses Safe operation of our assets is mission critical to our long-term success Continuous reduction in risk to the public, employees, contractors, assets and the environment We strive fo
Slide 25: Business Risks
Business Risks Regulatory — FERC rate cases (Products pipelines and Natural Gas pipelines) — Legislative and regulatory changes CO2 crude oil production volumes Throughput on our volume-based assets Commodity prices — 2017 budget price assumptions: $53/Bbl average strip price for crude, and
Slide 26: The Best is Yet to Come
The Best is Yet to Come Positioned to Succeed for the Long-Term World class set of midstream assets Secure and growing fee-based cash flows Disciplined allocator of capital; high bar for new investment opportunities Investment grade balance sheet and substantial liquidity As future cash fl
Slide 27: Overview of Business Segments
Overview of Business Segments
Slide 28: Natural Gas Pipelines: Segment Outlook
Natural Gas Pipelines Segment Outlook Well-positioned connecting key natural gas resources with major demand centers Long-term Growth Drivers: LNG exports — Liquefaction facilities — Pipeline infrastructure Exports to Mexico Gas demand for power generation — Coal plant retirements — Regional g
Slide 29: Natural Gas Transportation & Storage
Natural Gas Pipelines Natural Gas Transportation & Storage 55% of 2017 Budgeted Segment EBDA before Certain Items(a) Natural gas transport & storage is KMI’s largest business U.S. natural gas demand(b) expected to rise by 35% through 2026(c) U.S. Natural Gas — KM moves about 40% of natural gas con
Slide 30: Drivers of Future Growth: LNG Exports
Natural Gas Pipelines Drivers of Future Growth LNG Exports LNG Export Opportunity(a) Contracted — 18.5 Bcf/d of FERC approved projects KM Project/Transportation Capacity In-Service KM Capital — 10.3 Bcf/d of projects under construction KM Asset (Terminal) (MDth/d) Date ($MM) — 9.8 Bcf/d of additio
Slide 31: Liquefaction at Elba Island
Natural Gas Pipelines Liquefaction at Elba Island Elba Liquefaction Company (ELC) / SLNG Capacity: — LNG output capacity equivalent to 350 MMcf/d Capital (100%): — ELC: $1,436.4 MM — SLNG: $ 433.8 MM Phased In-service: Mid 2018 through early 2019 Project Scope: — Facilities for liquefaction
Slide 32: Drivers of Future Growth: Exports to Mexico
Natural Gas Pipelines Drivers of Future Growth Kinder Morgan Delivers ~76% of U.S. Exports to Mexico Exports to Mexico are forecasted to increase by 2.0 Bcf/d Contracted KM to 5.6 Bcf/d by 2021(a) KM Project / Transportation Capacity Capital KM Asset (Shipper) (MDth/d) In-Service Date ($MM) KM d
Slide 33: Drivers of Future Growth: Other
Natural Gas Pipelines Drivers of Future Growth Other Power generation — Continued trend of generators procuring firm transportation and storage services to ensure their performance in ISO capacity reliability programs — Increasing need for transportation, storage and ancillary services to backstop
Slide 34: Products Pipelines: Segment Outlook
Products Pipelines Segment Outlook Stable, Strategic Assets Long-term Growth Drivers: Miles of Pipe: ~9,760 Transmix: 5 facilities Increased demand for refined products Terminals: 67 Condensate Processing: volumes Tank Capacity: Capability of 100 MBbl/d Terminal ~ 42 MMBbls 2016 Throughput: Deve
Slide 35: Products Pipelines: Stability and Growth
Products Pipelines Stability and Growth(a) Refined Products(b): U.S. Refined Product Consumption(c) 2016: — Refined products volumes 1,651 MBbl/d, up 0.3% vs. 2015 10 Motor Gasoline Distillate Fuel Oil — Gasoline up 1.2%, diesel down 3.5%, jet fuel up 1.7% 9 2017: 8 — 1,676 MBbl/d budgeted,1.5%
Slide 36: KMCC / Double Eagle
Products Pipelines KMCC / Double Eagle Location, Contracts, Connectivity Kinder Morgan Crude & Condensate (KMCC) 2016 Milestones Capacity = 300 MBbl/d, expandable to 360 MBbl/d; Approximately KMCC / Double Eagle volumes grew 15.3% year over year 90% of current capacity committed as the full year
Slide 37: Utopia Pipeline Project
Products Pipelines Utopia Pipeline Project Project Scope — 50/50 JV with Riverstone Holdings closed on June 28, 2016 — 215 mile new build and existing 67 mile 12” pipeline — Will transport ethane and ethane-propane mix from points in Harrison County, Ohio to Windsor, Ontario, Canada — Supported by
Slide 38: Terminals: Segment Outlook
Terminals Segment Outlook Diversified terminaling system in key refinery / market hubs KM Terminal Facilities Long-term Growth Drivers Bulk(a) 37 Terminals Refined product supply and demand Liquids 51 Terminals growth Total KMT 88 Terminals KMPP 67 Liquid Terminals Gulf Coast liquids exports Tot
Slide 39: Stable Fee-Based Business
Terminals Stable Fee-Based Business ~2/3 of KMT’s 2017 budgeted EBDA is supported by take-or-pay contracts 100% 90% Liquids Other Fee- 73% Take-or-pay based - fixed monthly lease 80% 27% payments (MWC) - minimum throughput Take-or- 70% guarantees Pay - Jones Act tanker charters Liquids 73% 60% 81%
Slide 40: Diversified Revenues
Terminals Diversified Revenues Diversified revenues across liquids and bulk KMT Product Revenues $ millions 2017 Budget(a) ($ millions) (percent) $0 $100 $200 $300 $400 $500 $600 Liquids $1,426 74% Gasoline Crude Bulk $500 26% Diesel / Jet Total Revenue $1,926 100% Chemicals Petcoke Top-10 Ethanol
Slide 41: KMT Presence in Liquids Hubs
Terminals KMT Presence in Liquids Hubs North 40 Edmonton South Alberta Crude Terminal Rail Edmonton South Rail Terminal KMT Liquids 90 million Bbls of capacity Van Wharves Edmonton ~1.0 billion Bbls throughput Alberta 97.5% utilization(a) $1.43 billion revenues $957 million EBDA Tankers Ed
Slide 42: Houston – Physical Connectivity
Terminals Houston – Physical Connectivity KMT’s Houston Ship Channel terminal network is the largest integrated refined product terminaling system in the world: ~43 million barrels of capacity Connectivity Fee-Based Business 20 inbound pipelines – 10 Houston — Tank leases: term-contracted, take-
Slide 43: Tankers – APT Jones Act Fleet
Terminals Tankers – APT Jones Act Fleet All of APT’s available vessels are sailing under time-charter with limited 2017 exposure Average term contract length of 2.8 0 12 KM 24 Fleet Charter 36 Status 48 60 72 years across 16-vessels Palmetto State 4 new vessels to be delivered in ‘17 American Fr
Slide 44: CO2: Segment Outlook
CO2 Segment Outlook(a) Own and operate best source of CO2 for EOR Long-term Growth Drivers: Demand for scarce supply of CO2 drives volume and price Expect to maintain current CO2 production levels with minimal incremental investment Billions of barrels of domestic oil still in place to be reco
Slide 45: 2017 Projects – Price Sensitivity
CO2 2017 Projects – Price Sensitivity AT IRR % vs Oil Price $50 $53 $60 Forward $/Bbl flat flat flat Curve(a) SACROC-Bypass 27% 32% 44% 37% (Long Lateral) SACROC-Bypass 41% 47% 61% 50% (Sidetrack Lateral) SACROC Hawaii 14% 19% 30% 22% Yates Horizontal Drain Hole 65% 73% 96% 75% Program Tall Cotton P
Slide 46: KM CO2 Current Outlook
CO2 KM CO2 Current Outlook $4.7 Billion Cumulative Free Cash Flow Generated Since Inception(a) Development Plans 2017-2026 SACROC Total Business IRR (2000-2026): 28.2% — Continue platform development/redevelopment Net BOE(b) KM Share — Expand Bypass Pay/Infill programs 2017-2026 (MMBOE) Capex ($
Slide 47: Kinder Morgan Canada: Segment Outlook
Kinder Morgan Canada Segment Outlook Sole oil pipeline from Oilsands to West Coast / export markets Long-term Growth Drivers: Expand Oilsands export capacity to West Coast and Asia — Following successful regulatory process, major expansion plans Trans Mountain Expansion Project under way — The Tra
Slide 48: Trans Mountain Expansion Project (TMEP)
KM Canada Trans Mountain Expansion Project (TMEP) Expansion to 890 MBbl/d from 300 MBbl/d Oilsands Supply vs Takeaway Capacity (MMBbl/d)(a) — 615 miles new pipe; 12 new pump stations 6.5 — 630 MBbl/d tanker export capacity; 3 new berths 6.0 — 20 new tanks 5.5 Keystone XL & Energy East Pipeline Sho
Slide 49: Trans Mountain Expansion Project Timeline
KM Canada Trans Mountain Expansion Project Timeline 2016 NEB Recommendation May ‘16 Federal Approval Dec. ‘16 2017 BC Approval Jan. ‘17 Cost Review with Shippers Feb. ‘17 KM FID 1Q / 2Q 2017 Begin Construction Sept. ‘17 2018 – 2019 Complete Construction, In-Service Dec. ‘19 49
Slide 50: Financial Excellence
Financial Excellence Kimberly Dang Chief Financial Officer
Slide 51: Cost & Allocation of Capital
Cost & Allocation of Capital Disciplined Capital Allocation Current: — Live within cash flow, ration and allocate capital to highest risk-adjusted returns — Require after-tax, unlevered project returns significantly higher than reasonable estimates of KMI’s cost of capital Future: — Once we have
Slide 52: Self-Reliant Funding
Self-Reliant Funding No Need to Access Capital Markets During 2017 (millions) Distributable cash flow can fully cover dividends and growth capital needs — No need to access equity market in 2017 Over $5 billion of liquidity at beginning of 2017 adds tremendous flexibility — No need to access deb
Slide 53: 5-year Growth Project Backlog
5-year Growth Project Backlog(a) ~$12 Billion of Attractive, Fee-based Projects World class asset footprint has driven attractive growth opportunities, secured by long-term, fee-based contracts with creditworthy counterparties — ~88% of backlog is for fee-based pipelines, terminals and associated
Slide 54: KMI Counterparty Exposure
KMI Counterparty Exposure Strong Customer Credit, Valuable Services Limit KMI’s Risk(a) High-Quality, Diversified Customer Base Top 25 Customers(b) KMI’s 2016 DCF was impacted by less than $10 million due to oil & gas bankruptcies BBB Rated A- Rated or or Greater than 2/3 of revenue(b) generated
Slide 55: Capital Invested
Capital Invested ~$59 Billion of Asset Investment & Acquisitions Since Inception(a,c) ($ in billions) Total Invested by Type(a,c) Total Invested by Year(b,c) $35 $11 $30 Expansion $10.1 $25 $10 Acquisition $20 $9 $15 $31.4 $8.4 $27.3 $10 $8 $5 $7 $6.6 $- Expansions Acquisitions $6 $5.8 $5 Total Inve
Slide 56: Returns on Invested Capital
Returns on Invested Capital Segment ROI(a): 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Natural Gas Pipes 13.3% 15.5% 12.9% 13.5% 14.0% 15.5% 16.7% 17.5% 16.9% 14.0% 11.9% 11.9% 11.9% 10.9%(b) 10.9%(b) 10.3%(b,c) 9.9%(b,c) Products Pipelines 11.9 11.8 12.8 12
Slide 57: 2017 Guidance
2017 Guidance Supported by Diversified, Fee-based Cash Flow 2017 Published Budget DCF of $4.46 billion(a) — 2017 DCF per share of $1.99 — 2017 declared dividend of $0.50 per share — ~$3.3 billion of DCF generated in excess of dividend (before growth capex) Growth capital of $3.2 billion includin
Slide 58: 2017 Budgeted Distributable Cash Flow (DCF)
2017 Budgeted Distributable Cash Flow (DCF) (millions, except per share) 2017 2016 Change Distributable Cash Flow Budget Actual $ % Net Income before Certain Items available to common stockholders $ 1,458 $ 1,477 $ (19) -1% (a) DD&A including KMI share of JV DD&A 2,651 2,617 34 1% Book taxes(b) 1,04
Slide 59: 2017 Budgeted Segment EBDA before Certain Items
2017 Budgeted Segment EBDA before Certain Items (millions, except per share) 2017 2016 Change Budget Actual $ % Natural Gas Pipelines $ 3,877 $ 4,036 $ (159) -4% CO2 880 919 (39) -4% Products Pipelines 1,187 1,180 7 1% Terminals 1,217 1,169 48 4% Kinder Morgan Canada 191 181 10 6% Total Segment EBDA
Slide 60: 2017 Budgeted Adjusted EBITDA
2017 Budgeted Adjusted EBITDA (millions) 2017 2016 Change Adjusted EBITDA Budget Actual $ % Segment EBDA before Certain Items $ 7,352 $ 7,485 $ (133) -2% Natural Gas Pipelines JV DD&A 379 349 30 9% CO2 JV DD&A 7 - 7 n/a Products Pipelines JV DD&A 12 4 8 200% Terminals JV DD&A (6) (4) (2) 50% Subtota
Slide 61: Reconciliation of Financials Presentation, 4Q '16 Earnings Release to Jan '17
Reconciliation of Financials Presentation, from 4Q ‘16 Earnings Release to Jan ‘17 Analyst Day (millions) 4Q ER As Book Interest Other As Reported Tax Income Segment Revised Natural Gas Pipelines $ 4,029 $ 7 $ - $ - $ 4,036 CO2 917 2 - - 919 Products Pipelines 1,185 (5) - - 1,180 Terminals 1,133 36
Slide 62: 2017 Budgeted Quarterly Profile
2017 Budgeted Quarterly Profile (millions, except per share) Segment EBDA before Certain Items plus JV DD&A(a) Q1 Q2 Q3 Q4 Total 2017 Budget 25% 24% 24% 27% $ 7,744 2016 Actual 27% 24% 24% 25% $ 7,834 Adjusted EBITDA 2017 Budget 25% 24% 24% 27% $ 7,187 2016 Actual 26% 24% 25% 25% $ 7,242 Distributab
Slide 63: 2017 Budget Assumptions/Highlights
2017 Budget Assumptions/Highlights Business segments(a) Natural Gas Pipelines (4%): — Reduction due to full-yr impact of 50% sale of SNG, lower volumes on gathering and processing assets and CIG rate case — Partially offset by expansion projects on TGP, Elba Express and NGPL CO2 (4%): — Decrease
Slide 64: 2017 Cash Tax Budget Calculation Detail
2017 Cash Tax Budget Calculation Detail (millions) Not expected to owe material federal income cash taxes until after 2023 (under current tax structure) 2017 Budget Segment EBDA before Certain Items $ 7,352 Noncontrolling interests(a) (23) JV earnings from c-corps(a) (200) JV distributions from c-
Slide 65: 2017 Budgeted Sustaining Capital
2017 Budgeted Sustaining Capital (millions) 2017 2016 (a) Sustaining capital expenditures Budget Actual Change Natural Gas Pipelines $ 296 $ 276 $ 20 CO2 14 9 5 Products Pipelines 72 45 27 Terminals 201 160 41 Kinder Morgan Canada 24 26 (1) Corporate / Other 23 24 (1) Total sustaining capital expend
Slide 66: 2017 Budgeted Growth Capital
2017 Budgeted Growth Capital (millions) 2017 budgeted growth capital fully funded by internally generated cash flow, with no requirement to access capital markets 2017 2016 (a) Growth capital Budget Actual Natural Gas Pipelines $ 1,762 $ 1,304 CO2 - S&T 31 (2) CO2 - EOR 321 265 Products Pipelines
Slide 67: Credit Ratios and Liquidity
Credit Ratios and Liquidity(a) ($ in millions) 2017 Leverage metrics 2013 2014 2015 2016 Budget (b) Net debt to Adjusted EBITDA 5.0x 5.5x 5.6x 5.3x 5.4x Adjusted EBITDA to Interest, net 3.9x 4.1x 3.5x 3.6x 3.8x Revolver capacity(c) Long-term debt maturities(d) Committed revolving credit facility $ 5
Slide 68: Financial Excellence
Financial Excellence Disciplined capital allocation Attractive return on investments Hedge direct commodity exposure Maintain strong balance sheet Transparency to investors 68
Slide 69: Next Stop: Happy Sunlit Meadow
Next Stop: Happy Sunlit Meadow Happy Sunlit Meadow NEXT EXIT
Slide 70: Appendix
KINDERMORGAN Appendix
Slide 71: Natural Gas Pipelines: Segment Presentation
Natural Gas Pipelines Segment Presentation
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Slide 73: Natural Gas Pipelines: Segment Outlook
Natural Gas Pipelines Segment Outlook Well-positioned connecting key natural gas resources with major demand centers Long-term Growth Drivers: LNG exports — Liquefaction facilities — Pipeline infrastructure Exports to Mexico Gas demand for power generation — Coal plant retirements — Regional g
Slide 74: Drivers of Future Growth: LNG Exports
Drivers of Future Growth LNG Exports LNG Export Opportunity(a) Contracted — 18.5 Bcf/d of FERC approved projects KM Project/Transportation Capacity In-Service KM Capital — 10.3 Bcf/d of projects under construction KM Asset (Terminal) (MDth/d) Date ($MM) — 9.8 Bcf/d of additional projects pending a
Slide 75: Liquefaction at Elba Island
Liquefaction at Elba Island Elba Liquefaction Company (ELC) / SLNG Capacity: — LNG output capacity equivalent to 350 MMcf/d Capital (100%): — ELC: $1,436.4 MM — SLNG: $ 433.8 MM Phased In-service: Mid 2018 through early 2019 Project Scope: — Facilities for liquefaction (10 modular units) — S
Slide 76: Drivers of Future Growth: Exports to Mexico
Drivers of Future Growth Kinder Morgan Delivers ~76% of U.S. Exports to Mexico Exports to Mexico are forecasted to increase by 2.0 Bcf/d Contracted KM to 5.6 Bcf/d by 2021(a) KM Project / Transportation Capacity Capital KM Asset (Shipper) (MDth/d) In-Service Date ($MM) KM deliveries to Mexico ~2
Slide 77: Drivers of Future Growth: Other
Drivers of Future Growth Other Power generation — Continued trend of generators procuring firm transportation and storage services to ensure their performance in ISO capacity reliability programs — Increasing need for transportation, storage and ancillary services to backstop variable renewable ge
Slide 78: North Region Assets
North Region Assets Growth Drivers: Power Demand: New infrastructure required for growing gas-fired power generation — Gas-fired power demand growth in the Northeast and Midwest — Economic/environmental replacement of coal/oil generation LNG Export: New infrastructure requirements drive opportun
Slide 79: South Region Assets
South Region Assets Growth Drivers: LNG Export: KM participating in LNG liquefaction infrastructure — Elba Island terminal liquefaction facilities under construction Expansion: Additional SNG expansion opportunities to support growth in service territory of JV partner-Southern Company Power De
Slide 80: West Region Assets
West Region Assets Growth Drivers: Mexico Exports: Leading connectivity for incremental supply to Mexico — 5.6 Bcf/d of exports to Mexico forecast by 2021(a) — 2016 YTD deliveries to Mexico: • West Region:1.1 MMDth/d • KM Total: 2.8 MMDth/d Power Demand: Renewable energy growth promotes gas-fire
Slide 81: Midstream Assets
Midstream Assets Growth Drivers: Mexico Exports: Leading connectivity for increased deliveries into Mexico (Texas Intrastate) Industrial Demand: Well positioned to serve >$170 B announced U.S. pet-chem. expansion projects, $76 B completed or under construction (Texas Intrastate) LNG Exports: A
Slide 82: Contracted Capacity and Term by Region
Contracted Capacity and Term by Region Contracted Average Term Region Capacity Remaining Storage 355 Bcf 3 yr, 1 mo North Transport 19.7 Bcf/d 6 yr, 2 mo Storage 52 Bcf 1 yr, 8 mo Interstate South Transport 13.5 Bcf/d 7 yr, 8 mo Transport Contracts LNG 18 Bcf 15 yr, 5 mo Avg. = 6 yr, 3 mo Storage 45
Slide 83: Natural Gas Segment: Projects Placed Into Service - 2016
Natural Gas Segment Projects Placed Into Service - 2016 83
Slide 84: Natural Gas Segment: Project Backlog – North Region
Natural Gas Segment Project Backlog – North Region Capital, Board Customer In-service Asset Project KM Share Capacity Project Status Approval Execution Date ($MM) Agreement reached re compensation for Connecticut Expansion 93.1 72 MDth/d 11/2017 MA state lands. Pursuing final state permits. Construc
Slide 85: Natural Gas Segment: Project Backlog – South, West & Midstream
Natural Gas Segment Project Backlog (Cont’d) – South, West & Midstream Capital, Board Customer In-service Asset Project KM Share Capacity Project Status Approval Execution Date ($MM) Open season completed. FERC filing Feb SNG Completed Completed Fairburn Expansion Project 120.6 329-341 MDth/d 10/201
Slide 86: New Firm Transport Capacity
New Firm Transport Capacity 86
Slide 87: Products Pipelines: Segment Presentation
Products Pipelines Segment Presentation
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Slide 89: Products Pipelines: Segment Outlook
Products Pipelines Segment Outlook Stable, Strategic Assets Long-term Growth Drivers: Miles of Pipe: ~9,760 Transmix: 5 facilities Terminals: 67 Condensate Processing: Increased demand for refined products Capability of 100 MBbl/d volumes Tank Capacity: Terminal ~ 42 MMBbls 2016 Throughput: Deve
Slide 90: Volumes / Revenues
Volumes / Revenues 2016 Actual Volumes(a) 2017 Plan Volumes(a) NGL(1) 5% Crude & Crude & Condensate (2) NGL(1) 5% Condensate 16% (2) 15% Refined Products Refined (3)79% Products (3) 80% 2016 Actual Revenues(b) 2017 Plan Revenues(b) Crude & Crude & NGL(1) 11% Condensate (2) NGL(1) 11% Condensate (2)
Slide 91: Volumes / Markets
Volumes / Markets(a) Refined Products(b): 2016: Refined products volumes 1,651 MBbl/d, up 0.3% vs. 2015 KM-share Volumes(b) Revenues(b) — Gasoline up 1.2%, diesel down 3.5%, jet fuel up 1.7% Product Group 2016 Actual 2017 Plan 2016 Actual 2017 Plan 2017: 1,676 MBbl/d budgeted,1.5% up vs. 2016 Re
Slide 92: Historical Demand and 2017 EIA Outlook
Historical Demand and 2017 EIA Outlook(a) U.S. Refined Products Consumption (MMBbl/d) U.S. Refined Products Demand Outlook 2015 2016 2017E 10 Mogas 1.1% 0.7% 0.7% 9 Distillate -3.5% 3.2% 1.6% 8 Jet Fuel 3.6% 0.5% 0.1% 7 Total 0.1% 1.4% 0.8% 6 5 4 FERC Tariff Index 3 Jul‘15–Jun‘16 Jul‘16–Jun‘17 Jul‘1
Slide 93: KMCC / Double Eagle
KMCC / Double Eagle Location, Contracts, Connectivity Kinder Morgan Crude & Condensate (KMCC) 2016 Milestones Capacity = 300 MBbl/d, expandable to 360 MBbl/d; Approximately KMCC / Double Eagle volumes grew 15.3% year over year 90% of current capacity committed as the full year impact of expansio
Slide 94: Utopia Pipeline Project
Utopia Pipeline Project Project Scope — 50/50 JV with Riverstone Holdings closed on June 28, 2016 — 215 mile new build and existing 67 mile 12” pipeline — Will transport ethane and ethane-propane mix from points in Harrison County, Ohio to Windsor, Ontario, Canada — Supported by long-term, fee-bas
Slide 95: West Coast Region Assets
West Coast Region Assets Pacific Operation: Kinder Morgan operates ~3,440 miles of refined products pipelines that serve Arizona, California, Nevada, New Mexico, Oregon, Washington and Texas SFPP pipeline System: — North Line: transports products from San Francisco Bay area refineries to delivery
Slide 96: Central Region Assets
Central Region Assets NGL Pipelines Cochin pipeline: 1,810-mile multi-product pipeline between Metamora, OH and Fort Saskatchewan, Alberta currently shipping light condensate westbound from Kankakee County Illinois to Fort Saskatchewan Utopia pipeline (under construction): 215-mile new build, 12
Slide 97: East Coast Region Assets
East Coast Region Assets Southeast Operations: Plantation Pipe Line Company: 3,180-mile refined petroleum products pipeline, which originates in Louisiana and ends in the Washington, D.C. area Central Florida Pipeline (CFPL): 210-mile petroleum pipeline that transports gasoline, batched denature
Slide 98: Terminals: Segment Presentation
Terminals Segment Presentation
Slide 99: Terminals: Segment Outlook
Terminals Segment Outlook Diversified terminaling system in key refinery / market hubs KM Terminal Facilities Long-term Growth Drivers Bulk(a) 37 Terminals Refined product supply and demand Liquids 51 Terminals growth Total KMT 88 Terminals KMPP 67 Liquid Terminals Gulf Coast liquids exports Tot
Slide 100: Stable Fee-Based Business
Stable Fee-Based Business ~2/3 of KMT’s 2017 budgeted EBDA is supported by take-or-pay contracts 100% 90% Liquids Other Fee- 73% Take-or-pay based - fixed monthly lease 80% 27% payments (MWC) - minimum throughput Take-or- 70% guarantees Pay - Jones Act tanker charters Liquids 73% 60% 81% 27% Other
Slide 101: Diversified Revenues
Diversified Revenues Diversified revenues across liquids and bulk KMT Product Revenues $ millions 2017 Budget(a) ($ millions) (percent) $0 $100 $200 $300 $400 $500 $600 Liquids $1,426 74% Gasoline Crude Bulk $500 26% Diesel / Jet Total Revenue $1,926 100% Chemicals Petcoke Top-10 Ethanol $911 47%
Slide 102: Focused on U.S. Refining
Focused on U.S. Refining KM Terminals’ logistics infrastructure serves the world’s most advantaged upstream / downstream industries Supply of crude oil and feedstocks Product storage and blending Advantaged market access Crude Chemicals by Rail Ethanol Crude Hub Truck U.S. Refined Product Rack
Slide 103: KMT Presence in Liquids Hubs
KMT Presence in Liquids Hubs North 40 Edmonton South Alberta Crude Terminal Rail Edmonton South Rail Terminal KMT Liquids 90 million Bbls of capacity Van Wharves Edmonton ~1.0 billion Bbls throughput Alberta 97.5% utilization(a) $1.43 billion revenues $957 million EBDA Tankers Edmonton 20%
Slide 104: High Demand Liquids Hubs
High Demand Liquids Hubs Critical infrastructure to industry and our customers, 100% contracted Houston Ship Channel – largest integrated refined product terminaling system in the world New York Harbor – global refined product clearing hub with liquid, transparent markets Edmonton – largest in
Slide 105: Houston – Physical Connectivity
Houston – Physical Connectivity KMT’s Houston Ship Channel terminal network is the largest integrated refined product terminaling system in the world: ~43 million barrels of capacity Connectivity Fee-Based Business 20 inbound pipelines – 10 Houston — Tank leases: term-contracted, take-or-pay com
Slide 106: Houston – Market Connectivity
Houston – Market Connectivity A market-making hub serving our customers’ businesses Inbound: products and blendstocks from refineries, chemical plants, renewables, and NGLs — staging, storage, blending services, buy/sell transfers Outbound: pipeline, truck, rail, ship and barge to domestic and i
Slide 107: Houston – Export Growth
Houston – Export Growth Texas refining base becoming the world’s advantaged supplier of refined products Houston-Galveston Port District(a): ~ 40% of PADD 3 distillate exports Houston-Galveston Primary Export Markets ~ 55% of PADD 3 gasoline exports 1,800 Distillate Gasoline 1,600 1,400 PADD 3 Exp
Slide 108: Houston – Expansion
Houston – Expansion Adding dock capacity with KMET, Pit 11 / North Docks projects, and other debottlenecking Expanding ship loading capacity to meet long-term export demand growth North Docks Pit 11 / North Docks ($258 million KM capital) Adds ~2.0 million Bbls of tankage 3 cross-channel refin
Slide 109: New York Harbor (NYH) – Physical Connectivity
New York Harbor (NYH) – Physical Connectivity A global refined product clearing hub with liquid, transparent markets: KMT with ~16 Connectivity million barrels of capacity 5 ship docks & 11 barge berths Fee-Based Business - imports, exports and Jones Act movements — Monthly tank leases: term-con
Slide 110: NYH – Market Connectivity
NYH – Market Connectivity A global refined product clearinghouse Inbound: products and blendstocks — Imports from Canada, Europe and worldwide KMT throughput: — East Coast refineries Supply 168 million Bbls Demand — Colonial Pipeline Imports Jones Act — Staging, storage, blending services, buy/sel
Slide 111: Edmonton – Physical Connectivity
Edmonton – Physical Connectivity KMT has the largest independent Canadian merchant crude terminaling system with ~7 million barrels of capacity(a) Fee-Based Business — Monthly tank leases: term-contracted, take-or-pay commitments — Ancillary fees: blending services Alberta Crude Terminal Custome
Slide 112: Edmonton – Market Connectivity
Edmonton – Market Connectivity A Market-making Crude Hub for Western Canada Inbound: connected to a majority of Alberta production — Staging, storage, blending services, buy/sell KMT throughput: transfers Supply 90 million Bbls Demand Outbound: pipeline and rail connections to markets U.S. West
Slide 113: Edmonton – Expansion
Edmonton – Expansion Alberta Crude North 40 Base Line Crude Terminal Terminal Terminal ($341 million(a) KM capital) (KMT:Keyera JV) (KMT Merchant Tankage) Joint Venture with Keyera Edmonton 4.8 million Bbls crude terminal South Terminal — 12 x 400,000 Bbl tanks (KMT Merchant Tankage) — expansion
Slide 114: Tankers – Jones Act Markets
U.S. Jones Act Fleet(a) 48 tankers Tankers – Jones Act Markets 15.8 million Bbls KM’s Jones Act fleet to reach 16 tankers in 2017 53 ATBs Demand has fallen alongside Eagle Ford production declines 10.4 million — Vessels have shifted to U.S. Gulf and West Coast product trade Bbls — New vessel deliv
Slide 115: Tankers – APT Jones Act Fleet
Tankers – APT Jones Act Fleet All of APT’s available vessels are sailing under time-charter with limited 2017 exposure Average term contract length of 2.8 0 12 KM 24 Fleet Charter 36 Status 48 60 72 years across 16-vessels Palmetto State 4 new vessels to be delivered in ‘17 American Freedom 1x2-
Slide 116: Renewables – Value Chain
Renewables – Value Chain KMT’s diversified, multimodal ethanol service offerings capture ~31% of U.S. demand Increasing midstream solutions needed to meet RFS — Ethanol mandates require higher level ethanol blends (E15 and E85 market penetration) — Advanced biofuel mandates require increasing impo
Slide 117: Bulk Industry Hubs
Bulk Industry Hubs Van Wharves KMT Bulk Pacific 54 million tons handled Northwest $500 million revenues Portland (2) Longview Vancouver Nucor Dakota Mid Atlantic Services 18% 13% Other Milwaukee 21% Milwaukee Bagging Pinney Dock Pacific Whiting Northwest Fairless Hills 20% Gulf & Lower Mid-Atlan
Slide 118: Petroleum Coke – Value Chain
Petroleum Coke – Value Chain KMT is the largest U.S. petcoke handler Top U.S. Petcoke Export Markets 45 PADD 3 PADD 2 KMT 40 Petcoke Production (million tpy) 35 30 25 20 15 10 Kinder Morgan petcoke tonnage 5 (~38% of production) 0 KMT Petcoke Revenues Fee-Based Requirements 13% 49% Take-or-Pay 38% R
Slide 119: Vancouver Wharves
Vancouver Wharves A diversified Canadian multi-commodity export hub Strategically located in the Port of Vancouver for trans-Pacific trade growth 6 million tons of export capacity 4 separate berths handling multiple commodities — Copper exports and zinc concentrate imports — Diesel exports and
Slide 120: Terminals Segment Historical Growth
Terminals Segment Historical Growth 2013 2014 2015 2016 2017 (a) Actual Actual Actual Actual Budget(b) Revenue (net) $1,388,319 $1,689,930 $1,843,578 $1,878,836 $1,926,469 Opex 576,822 681,381 760,094 710,138 708,976 Adjusted EBITDA $811,497 $1,008,549 $1,083,484 $1,168,698 $1,217,493 Book Income Ta
Slide 121: Terminals Projects Placed in Service during 2016
Terminals Projects Placed in Service during 2016 Capital First Full Year Avg. Contract (a) (b) Project Name Product Capacity (MM) EBITDA In Service Length North Docks 1 & 2 (Greens Port) Refined Products 200K bpd $72.4 Q1/16 - Q4/16 7.5 South Hill Tankage (Wilmington, NC) Methanol 0.1MM Bbls $6.6 Q1
Slide 122: Terminals Project Backlog
Terminals Project Backlog Capital First Full Year Expected Avg. Contract (a) (b) (b) Project Name Product Capacity (MM) EBITDA In Service Length (c) Houston Export Terminal Blendstock 1.5MM Bbls $244.7 Q1/17 11 Jones Act Tankers (4) Crude/Products 1.3MM Bbls $604.6 Palmetto State Q2/17 5 American En
Slide 123: Terminals Liquids Throughput
Terminals Liquids Throughput Variance to Budget Actual Budget Amt % 2016(a) 2017(a) Chemical 44,147,450 47,495,296 3,347,847 7.0% Distillate 139,270,328 158,940,986 19,670,658 12.4% Gasoline 422,735,919 480,222,777 57,486,858 12.0% Fuel Grade Ethanol / Bio-diesel 66,697,344 68,895,473 2,198,129 3.2%
Slide 124: Terminals Bulk Tonnage
Terminals Bulk Tonnage Variance to Budget Actual Budget Variance Amt to Budget % 2016(a) 2017(a) Actual Budget Amt % Coal 7,857,117 2016 (a) 6,823,538 2017(a) (1,033,579) -15.1% Petcoke 13,523,672 14,155,518 631,846 4.5% Cement Coal (Including Clinker) 966,392 7,857,117 972,383 6,823,538 5,991 (1,03
Slide 125: CO2 Segment Presentation
KINDERMORGAN Co, Segment Presentation
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Slide 127: CO2: Segment Outlook
CO2 Segment Outlook(a) Own and operate best source of CO2 for EOR Long-term Growth Drivers: Demand for scarce supply of CO2 drives volume and price Expect to maintain current CO2 production levels with minimal incremental investment Billions of barrels of domestic oil still in place to be reco
Slide 128: 2017 Projects – Price Sensitivity
2017 Projects – Price Sensitivity AT IRR % vs Oil Price $50 $53 $60 Forward $/Bbl flat flat flat Curve(a) SACROC-Bypass 27% 32% 44% 37% (Long Lateral) SACROC-Bypass 41% 47% 61% 50% (Sidetrack Lateral) SACROC Hawaii 14% 19% 30% 22% Yates Horizontal Drain Hole 65% 73% 96% 75% Program Tall Cotton Phase
Slide 129: KM CO2 Current Outlook
KM CO2 Current Outlook $4.7 Billion Cumulative Free Cash Flow Generated Since Inception(a) Development Plans 2017-2026 SACROC Total Business IRR (2000-2026): 28.2% — Continue platform development/redevelopment Net BOE(b) KM Share — Expand Bypass Pay/Infill programs 2017-2026 (MMBOE) Capex ($MM)(
Slide 130: History of CO2 Group and Looking Forward
History of CO2 Group and Looking Forward Track Record – Consistently very close to budget despite inherent volatility Shell CO2 formed in 1998, KM share 20% Acquired remaining 80% in April 2000 Acquired SACROC interests June 2000 DCF ($MM)(a) Acquired Yates interests in 2001 and 2003 — Feb 2
Slide 131: 2017 DCF and Capex by Asset Group
2017 DCF and Capex by Asset Group(a) 2017 DCF = $866 MM 2017 Budget – $352 MM Expansion Capital Tall Cotton 3% GLSAU 2% Katz Katz S&T 4% 5% 9% Tall Cotton S&T 20% 34% GLSAU Sacroc Complex 44% 4% Yates SACROC 8% 54% Yates 13% __________________________ Note: CO2 purchases and staff overhead are alloc
Slide 132: Impact of Oil Price / Volume Variance on 2017 DCF
Impact of Oil Price / Volume Variance on 2017 DCF ($ in millions) 2017 Budget: $866MM Volume +/- 1,000 Bbl/d SACROC / Katz / GLSAU / Tall Cotton $15.0MM Yates $8.1MM CO2 Volume +/- 50 MMcf/d $7.2MM Oil Price +/- $1/Bbl WTI NGL $1.6MM CO2 $0.3MM Crude $2.5MM TOTAL: $4.4MM NGL/Crude Ratio +/- 1% $2.3M
Slide 133: CO2 Asset Summary
CO2 Asset Summary KMI Remaining CO2 Reserves Interest Location Deliverability Operator McElmo Dome 45% SW Colorado 20+ years KMI Doe Canyon 87% SW Colorado 10+ years KMI Bravo Dome 11% NE New Mexico 10+ years Oxy KMI Capacity Pipelines Interest Location (MMcf/d) Operator McElmo Dome to Cortez 50% De
Slide 134: 2017 Expansion Program Summary
2017 Expansion Program Summary Capex Program $352MM(a) S&T – $31MM Capex (incl. $4MM Cap OH) $31MM 9% Continue Cow Canyon development CO2 Production 1,310 MMcf/d SACROC – $190MM Capex(b,c) (incl. $52MM Cap OH & Cap CO2) $190MM 54% Activate 20 conventional patterns in Hawaii project area Expa
Slide 135: CO2 Entitlement Volumes
CO2 Entitlement Volumes Produced and Sold to our Customers Significant growth since 2008: CO2 KM-share (MMcf/d) CAGR: volumes +2.22% 900 2017 vs 2016: volumes -1.49% 800 700 As a reminder: 600 Sales revenues are based on our working 500 interest entitlement and not deliveries 400 KM share of
Slide 136: Demand Growth and Regeneration
Demand Growth and Regeneration 5-year Contracted CO2 Volumes CO2 Daily Contract Quantities (MMcf/d) 2006 2017 1,000 800 600 400 200 - 1 2 3 4 5 Year Weighted average contract life with 3rd parties is 9.49 years 136
Slide 137: Oil and Gas Segment: Production and DCF
Oil and Gas Segment Production and DCF Net Hydrocarbon Production (MBOE/d) Original oil in place (Billion Bbls) SACROC 2.8 SACROC Yates Katz GLSAU Tall Cotton Gas Processing 60 Yates 5.0 50 Katz 0.23 GLSAU 0.48 40 Tall Cotton 0.70 30 20 Actual Budget Gross production (Bbl/d) (a) 2016 2017
Slide 138: CO2 Oil Production Hedge Profile
CO2 Oil Production Hedge Profile Hedge our BOE production Net Oil Production (Mboe/d)(a) — Targeted minimum hedge amounts: 50 Hedged Current Year: 70% Net Equity Production(b) 40 Unhedged Year 2: 50% % Hedged Year 3: 30% 30 75% Year 4: 10% 20 53% 10 33% 20% 0% 0 2017 2018 2019 2020 2021 Average he
Slide 139: Oil & Gas: Margins and Cost Structure
Oil & Gas Margins and Cost Structure Oil & Gas Cash Cost Structure(a) ($/Net BOE) O&G cost structure has strong $100 correlation to energy prices $90 $80 Power is tied to gas prices $70 $60 Purchased CO2 and TOTI(b) are $50 strongly correlated to oil prices $40 $30 Market conditions have decre
Slide 140: Oil and Gas Segment: Capex and Production vs Plan
Oil and Gas Segment Over past 9 years capex 0.5% below plan, oil production 0.8% below plan Capex ($MM) Net Oil Production (MBbl/d) $600 45 40 $500 35 $400 30 25 $300 20 $200 15 10 $100 5 $- - 2008 2009 2010 2011 2012 2013 2014 2015 2016 2008 2009 2010 2011 2012 2013 2014 2015 2016 Budget Actual Bud
Slide 141: Oil and Gas Segment Production Forecasts
Oil and Gas Segment Production Forecasts Production expectations tend to grow over time We expect production to exceed our reserve report over the long-term — Higher recoveries and additional targets added to inventory — New Technologies Evolution of Forecasted 2017 Production(a) Proved Reserves P
Slide 142: SACROC Unit – Long Range Plan
SACROC Unit – Long Range Plan SACROC Oil Production LRP 40,000 Changes from 2016 plan 35,000 — Addition of Hawaii Project 30,000 — Addition of BE PH I Project 25,000 — Infill Timing with CTI’s — BPP response/timing 20,000 BOPD Actual BOPD 2017 BOPD 2016 Examining Transition Zone 15,000 BOPD 2015
Slide 143: Oil & Gas, and Business Unit IRR
Oil & Gas, and Business Unit IRR 30% Gas Processing All-in O&G IRR (2000-2026): 21.7% Proved Reserves Total Proved reserves cash flows: 17.0% Total 25% Adding in Gas Processing excluded from disclosures increases IRR to 19.4% 20% S&T Adding in reserves discounted to P2 and using planned develo
Slide 144: Kinder Morgan Canada: Segment Presentation
Kinder Morgan Canada Segment Presentation
Slide 145: Kinder Morgan Canada: Segment Outlook
Kinder Morgan Canada Segment Outlook Sole oil pipeline from Oilsands to West Coast / export markets Long-term Growth Drivers: Expand Oilsands export capacity to West Coast and Asia — Following successful regulatory process, major expansion plans Trans Mountain Expansion Project under way — The Tra
Slide 146: Trans Mountain Pipeline
Trans Mountain Pipeline Current Capacity: Regulation: 300 MBbl/d ex-Edmonton National Energy Board 241 MBbl/d to Puget Sound Regulated 2016–2018 toll settlement Markets: British Columbia ‒ Crude and Refined Products Washington State Refineries Westridge Marine Terminal ‒ Offshore Marke
Slide 147: Market Access Drivers
Market Access Drivers Western Canada Supply vs. Takeaway Capacity (MMBbl/d)(a) 6.5 6.0 5.5 Keystone XL & Energy East Pipeline Shortfall 5.0 Supply(b) Enbridge Line 3 Replacement 4.5 Trans Mountain Expansion 4.0 3.5 Existing Pipeline Capacity 3.0 2015 2020 2025 2030 Brent - WCS Spread ($/Bbl)(c) Mark
Slide 148: Trans Mountain Expansion Project (TMEP)
Trans Mountain Expansion Project (TMEP) Expansion to 890 MBbl/d from 300 MBbl/d Oilsands Supply vs Takeaway Capacity (MMBbl/d)(a) — 615 miles new pipe; 12 new pump stations 6.5 — 630 MBbl/d tanker export capacity; 3 new berths 6.0 — 20 new tanks 5.5 Keystone XL & Energy East Pipeline Shortfall 5.0
Slide 149: Trans Mountain Expansion Project Timeline
Trans Mountain Expansion Project Timeline 2016 NEB Recommendation May ‘16 Federal Approval Dec. ‘16 2017 BC Approval Jan. ‘17 Cost Review with Shippers Feb. ‘17 KM FID 1Q / 2Q 2017 Begin Construction Sept. ‘17 2018 – 2019 Complete Construction, In-Service Dec. ‘19 149
Slide 150: Other: Support Slides
KINDERMORGAN Other Support Slides
Slide 151: Energy Toll Road
Energy Toll Road Security of Cash Natural Gas Products Kinder Morgan Terminals CO2 Pipelines Pipelines Canada – Interstate & LNG: take-or-pay – Liquids & Jones Act: – Refined products: – S&T: primarily – Intrastate: ~77% take-or-pay(a,b) primarily take-or-pay Volume primarily volume-based minimum
Slide 152: Two Decades of Stable Growth
Two Decades of Stable Growth Strategy Has Led to Consistent, Growing Results KMP Annual LP DCF per Unit(a) KMI Annual DCF per Common Share $6 $2.50 $5.39 $5.61 $5.07 $5 $4.68 $4.43 $2.00 $2.14 $4.15 $4.25 $2.02 $2.00 $1.99 $4 $3.65 $3.38 $3.29 $1.50 $3.10 $1.65 $3 $2.54 $2.69 $1.46 $2.18 $1.00 $1.22
Slide 153: Incidents & Releases: Liquids Pipeline Right-of-way
Incidents & Releases Liquids Pipeline Right-of-way Liquids Pipelines Liquids Pipelines Incidents per 1,000 Miles(a) Release Rate(a) 1.0 50 Barrels per billion barrel miles 0.8 40 Incidents per 1,000 Miles 0.6 0.57 30 0.45 0.39 0.4 20 17.96 0.29 15.50 0.24 13.05 0.21 0.2 0.16 10 6.00 0.08 0.08 0.08 2
Slide 154: Incidents & Releases: Natural Gas Pipeline Right-of-way
Incidents & Releases Natural Gas Pipeline Right-of-way Natural Gas Pipelines Natural Gas Pipelines Incidents Rate All Reportable Incidents(a) Incidents Rate Onshore Ruptures-only(c) 1.0 0.5 0.8 0.4 Incidents per 1,000 Miles Incidents per 1,000 Miles 0.6 0.3 0.45 0.4 0.37 0.37 0.2 (d) 0.16 0.32 0.27
Slide 155: Employee Safety Statistics
Employee Safety Statistics(a) KM Lost-time Incident Rate (DART) OSHA Recordable Incident Rate 4 7 Lost-time injuries per 200k hours 6.4 OSHA Recordable Incidents per 3.7 6 6.1 200k Hours Worked 3 5 worked 4 2 3 2.5 2.6 2.5 2.5 1.0 2.0 1.8 1.8 1 2 0.7 0.7 0.7 0.9 1.0 1 1.6 0.8 0.7 0.6 0.5 0.6 0.5 0.6
Slide 156: Definitions and GAAP Reconciliations
Definitions and GAAP Reconciliations
Slide 157: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures The non-generally accepted accounting principles (non-GAAP) financial measures of distributable cash flow (DCF), both in the aggregate and per share, segment earnings before depreciation, depletion, amortization and amortization of excess cost of equity investments
Slide 158: Use of Non-GAAP Financial Measures (Cont'd)
Use of Non-GAAP Financial Measures (Cont’d) Segment EBDA before Certain Items is used by management in its analysis of segment performance and management of our business. General and administrative expenses are generally not under the control of our segment operating managers, and therefore, are not
Slide 159: GAAP Reconciliation
GAAP Reconciliation ($ in millions) Yr. Ended Yr. Ended Reconciliation of DCF 12/31/16 Reconciliation of Adjusted EBITDA 12/31/16 Net Income $ 721 Net Income $ 721 Certain Items 933 Certain Items 933 Net Income before Certain Items (Adjusted Earnings) 1,654 Net Income before Certain Items (Adjusted
Slide 160: Explanation of Return Calculations
Explanation of Return Calculations Formula Notes Formula Notes Segment EBDA before Certain Gross PP&E Segment (a) Items less sustaining capex Equity Investments (JVs) (f) Return on Goodwill Investment (b) Average Total Investment Gross intangibles (excluding amortization) Plus: Return on DCF before
Slide 161: Investor Relations Contacts
Investor Relations Contacts Institutional Investors / Sell-side Analysts David Michels VP Finance & Investor Relations (713) 369-9895 david_michels@kindermorgan.com Peter Staples Director Investor Relations (713) 369-9221 peter_staples@kindermorgan.com Retail Investors / Brokers Miguel Garcia Invest