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Run for Shareholders By Shareholders – Kinder Morgan, Inc.

Kinder Morgan, Inc. · Dec 6, 2017 · 55 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 1
    Run for Shareholders, By Shareholders Steve Kean Chief Executive Officer December 6, 2017
  2. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 2
    2018 Guidance: Published Budget Supported by Diversified, Fee-based Cash Flow KMI KML 2018 from 2018 from Budget 2017 Budget 2017 Adjusted EBITDA(a) 7.5 billion 4% Adjusted EBITDA(a) C474 million 23% Distributable Cash Flow(a)…
  3. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 3
    Dividend Policy Expectations KMI has reduced its net debt by 5.9 billion since the end of 3Q 2015 Continue to strengthen the balance sheet by funding all growth capital needs at KMI out of internally generated cash flow Expect to…
  4. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 4
    Unparalleled Asset Footprint One of the Largest Energy Infrastructure Companies in North America Largest natural gas transmission network in North America Own or operate 70,000 miles of natural gas pipeline Connected to every…
  5. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 5
    KMI Overview Management Aligned with Investors; 14% Stake in KMI Management & Public Public Directors(a) Float Float 321MM (14%) 1,921MM (86%) 103MM (30%) Kinder Morgan, Inc. (C-corp, NYSE: KMI) Kinder Morgan Canada Limited…
  6. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 6
    KMI: Compelling Investment Thesis Attractive Relative Value, Best-in-Class Coverage Attractive Relative Value(a) Best-in-Class Coverage(b) PRICE / 2017E DCFPS 2017E DIVIDEND COVERAGE 4.0x 17.5x Med: 14.9x 16.0x 15.0x 14.9x…
  7. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 7
    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…
  8. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 8
    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…
  9. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 9
    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. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 10
    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…
  11. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 11
    KMIs 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…
  12. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 12
    Market Update Strong Demand Natural Gas Refined Products Continued steady, modest volume growth Multiple trends driving increased demand for U.S. natural gas Annual inflation-based tariff adjustment mechanism 2014 2015 2016 2017E…
  13. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 13
    Natural Gas Transportation & Storage 55% of 2017 Budgeted Segment EBDA before Certain Items(a) Natural gas transport & storage is KMIs largest business U.S. natural gas demand(b) expected to rise by 32% through 2026(c) U.S.…
  14. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 14
    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 85% of…
  15. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 15
    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…
  16. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 16
    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 Investment grade balance sheet and substantial…
  17. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 17
    Appendix KMI
  18. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 18
    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)…
  19. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 19
    KMI Overview by Product Served(a) Natural Gas is our Largest Market Stability of Cash Flows Natural gas: 80% take-or-pay cash flow 2017 Budgeted Segment Refined products: competitively advantaged connection EBDA = 7.7 billion(a)…
  20. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 20
    2017 Growth Capital Forecast (millions) KMIs 2017 forecast growth capital fully funded by internally generated cash flow, with no requirement to access capital markets 2017 2016 (a) (b) KMI growth capital Forecast Actual Natural…
  21. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 21
    KMI Credit Ratios and Liquidity(a) ( in millions) 2017 Leverage metric 2013 2014 2015 2016 Forecast (b) Net debt to Adjusted EBITDA 5.0x 5.5x 5.6x 5.3x 5.1-5.2x (c) (d) Revolver capacity Long-term debt maturities…
  22. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 22
    KMI Counterparty Exposure Strong Customer Credit, Valuable Services Limit KMIs Risk(a) High-Quality, Diversified Customer Base Top 25 Customers(b) To date, KMIs budgeted 2017 DCF has had a 0 impact due to bankruptcies KMIs 2016…
  23. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 23
    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,…
  24. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 24
    Incidents & Releases Pipeline Right-of-way Liquids Pipelines Natural Gas Pipelines 1.0 1.0 KM Incidents Industry 3-yr Avg(b) Industry 2011 Avg KM Incidents Industry 3-yr Avg(b) 2005 Industry Avg Incidents per 1,000 Incidents…
  25. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 25
    Employee Safety Statistics(a) KM Lost-time Incident Rate (DART) OSHA Recordable Incident Rate 4 7 6.4 Lost-time injuries per 200k hours OSHA Recordable Incidents per 3.6 6 6.0 200k Hours Worked 3 5 worked 4 2 3…
  26. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 26
    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…
  27. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 27
    Natural Gas Pipelines Segment Drivers of Future Growth LNG Exports U.S. LNG Export Opportunity(a) Contracted KM Project/Transportation Capacity In-Service KM Capital 18.5 Bcf/d of FERC approved projects KM Asset (Terminal)…
  28. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 28
    Natural Gas Pipelines Segment Liquefaction at Elba Island Elba Liquefaction Company (ELC)(a) / SLNG Capacity: LNG output capacity equivalent to 350 MMcf/d Capital (100%)(b): ELC: 1.4 billion(a) SLNG: 0.4 billion Phased…
  29. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 29
    Natural Gas Pipelines Segment Drivers of Future Growth Kinder Morgan Delivers 75% of U.S. Exports to Mexico Exports to Mexico are forecasted to increase by 1.9 Bcf/d Contracted KM to 5.6 Bcf/d by 2021(a) KM Project / Transportation…
  30. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 30
    Natural Gas Pipelines Segment Drivers of Future Growth Other New opportunities in growing export markets Storage and ancillary services in support of LNG liquefaction and exports to Mexico Industrial growth markets Well…
  31. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 31
    Natural Gas Pipelines Segment 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…
  32. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 32
    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:…
  33. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 33
    Products Pipelines Segment 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 Jet Fuel Gasoline up…
  34. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 34
    Products Pipelines Segment 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…
  35. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 35
    Terminals Segment Outlook Diversified terminaling system in key refinery / market hubs KM Terminal Facilities Long-term Growth Drivers Bulk 37 Terminals Refined product supply and demand Liquids 51 Terminals growth Total KMT 88…
  36. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 36
    Terminals Segment Stable Fee-Based Business 2/3 of KMTs 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…
  37. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 37
    Terminals Segment 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%…
  38. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 38
    Terminals Segment 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…
  39. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 39
    Terminals Segment 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…
  40. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 40
    Terminals Segment Tankers APT Jones Act Fleet All of APTs available vessels are sailing under time-charter with limited exposure in 2017 and 2018 Average term contract length of 3.4 KM Fleet Charter Status years across…
  41. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 41
    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…
  42. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 42
    CO2 Segment 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)…
  43. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 43
    CO2 Segment 2017 Projects Price Sensitivity AT IRR % vs Oil Price 50 53 60 Forward /Bbl flat flat flat Curve(a) SACROC-Bypass (Long Lateral) 27% 32% 44% 37% SACROC-Bypass (Sidetrack Lateral) 41% 47% 61% 50% SACROC Hawaii 14%…
  44. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 44
    Kinder Morgan Canada Segment Outlook Sole oil pipeline from Oilsands to West Coast / export markets Long-term Growth Drivers: Expand Oilsands access to the West Coast and offshore markets The Trans Mountain Pipeline Expansion…
  45. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 45
    KM Canada Segment Trans Mountain Expansion Project (TMEP) Only Crude Oil Pipeline Serving Canadian West Coast Expansion to 890 MBbl/d from 300 MBbl/d today Western Canada Supply vs Takeaway Capacity (MMBbl/d)(b) 615 miles new pipe;…
  46. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 46
    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…
  47. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 47
    Appendix KML
  48. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 48
    KML at a Glance ( in millions) Legend General Information Trans Mountain Pipeline Trans Mountain Expansion Cochin Pipeline Puget Sound KMI Ownership 70% Terminal Refinery 2017F Adjusted EBITDA C380 - 390 million Meter Station…
  49. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 49
    KML Investment Highlights Canada's only crude and refined products pipeline connected to the West Coast, including B.C. tidewater access Portfolio of Strategically Leading integrated network of crude tank storage and rail terminals in…
  50. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 50
    KMLs Portfolio of Strategically Located Assets Premier Western Canadian Midstream Asset Portfolio TMPL Legend Cochin Pipeline (Canada) Transportation capacity of 300 Trans Mountain Pipeline Transportation capacity of 110 Trans…
  51. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 51
    TMEP Marquee Growth Project of National Importance TMEP C7.4 Billion Growth Project(a) British Limited construction activities began in September 2017, with targeted in- service schedule of December 31, 2019 Columbia Alberta…
  52. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 52
    KML Has Significant Potential Growth Beyond TMEP TMPL System Base Line Terminal Puget Sound pipeline Total expected cost of capacity is capable of being C724 million (C374MM expanded to 500 MBbl/d net to KML) from 240 MBbl/d today…
  53. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 53
    KML Governance & Organizational Structure Governance Overview Organizational Structure Structure following IPO Kinder Morgan, Inc. KML owns an approximate 30% interest in its Canadian Public Shareholders (KMI) assets (Delaware)…
  54. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 54
    TMEP Capital Cost Risk Sharing Capital costs associated with TMEP are classified into 2 segments: (i) capped costs, and (ii) uncapped costs Uncapped costs are structured as follows: Costs above or below the uncapped cost amount will…
  55. Run for Shareholders By Shareholders – Kinder Morgan, Inc. – slide 55
    KML Non-GAAP Measures Reconciliation to Net Income Reconciliation of Net Income (Loss) to Adjusted EBITDA(a) CMM 2014 2015 2016 Net Income (Loss)(b) 19.5 (22.9) 201.8 DD&A 88.7 123.5 137.2 Unrealized FX (gain) loss on KMI Loans…

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