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Barclays Americas Select Franchise Conference – Kinder Morgan, Inc.

Kinder Morgan, Inc. · May 14, 2019 · 45 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. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 1
    Investor Presentation May 2019
  2. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 2
    Kinder Morgan: Leader in Energy Infrastructure Unparalleled and irreplaceable asset footprint built over decades CO2 S&T Natural Gas Largest natural gas transmission network CO2 oil production 6%4% Pipelines 70,000 miles of natural gas…
  3. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 3
    A Core Energy Infrastructure Holding Significant cash flow generation, returning significant value to shareholders 40 billion market capitalization One of the 10 largest energy companies in the S&P 500 Investment grade rated…
  4. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 4
    Our Strategy Stable, fee-based assets Financial flexibility Disciplined capital allocation Enhancing shareholder value Core energy Low cost of capital Conservative Attractive projects infrastructure assumptions Recent credit…
  5. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 5
    Environmental, Social and Governance (ESG) ENVIRONMENTAL & SAFETY CORPORATE GOVERNANCE ESG RESOURCES Leader in methane emission reductions 13 independent board members out Disclosure: of 16 - 2017 ESG Report SASB and TCFD - 20+ years…
  6. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 6
    Cash Flow Generation Machine 5 billion of 2019B distributable cash flow (DCF) = 2 billion for dividends + 3 billion to enhance shareholder value billions Common Dividends Declared DCF After Dividends 2019B dividend coverage of…
  7. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 7
    Stable, Multi-Year Fee-Based Cash Flow 96% of 2019B segment cash flow is from take-or-pay and other fee-based contracts or hedged(a) 66% Fee-Based Take-or-Pay: highly dependable cash flow under multi-year contracts Entitled to payment…
  8. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 8
    Capital Allocation Priorities Right-sized balance sheet and set dividend target through 2020 Balance Capital Share Dividend Sheet Projects Repurchase Return threshold for new projects well in excess of cost of Repurchased 4.3bn…
  9. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 9
    Achieved Balance Sheet Goals 4.5x Net Debt / Adjusted EBITDA target is supported by low-risk business model YEAR-END NET DEBT / ADJUSTED EBITDA 5.3x 5.1x 4.5x 4.5x 2016 2017 2018 2019 Budget CREDIT CONSIDERATIONS Funding…
  10. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 10
    Globally, the Need for Energy is Growing Natural gas and petroleum demand expected to grow for decades to come STEADY GROWTH IN GLOBAL ENERGY DEMAND DEMAND GROWTH DRIVEN BY DEVELOPING ECONOMIES Billion tons of oil equivalent % of…
  11. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 11
    U.S. is the Largest Oil and Gas Producer in the World Abundant supply enables growing U.S. role as exporter OIL AND GAS PRODUCTION Long runway of expected growth in U.S. oil and gas production Million barrels of oil equivalent per day…
  12. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 12
    Significant Growth Projected for U.S. Natural Gas Kinder Morgan transports 40% of all natural gas consumed in the U.S. U.S. NATURAL GAS PRODUCTION U.S. NATURAL GAS DEMAND Bcfd Bcfd Growth 2018 2030E Sector 2018 2030E Bcfd % 50 Net LNG…
  13. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 13
    6.1bn of Commercially Secured Capital Projects Underway Significant opportunities primarily resulting from expansive natural gas footprint Demand Pull / KMI Capital Estimated Commercially Secured Capital Projects Supply Push ( billion)…
  14. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 14
    Successfully Achieving Attractive Build Multiples Disciplined steward of capital Competitive advantages: INVESTMENT MULTIPLES: PROJECTS COMPLETED 2015-2018 Capital invested / year 2 Project EBITDA(a) Expansive asset base ability to…
  15. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 15
    Project Highlights: Gulf Coast Express and Permian Highway Providing Permian natural gas production with broad U.S. Gulf Coast market optionality Gulf Coast Express (GCX) Permian Highway Pipeline (PHP) Mainline: 448 miles of 42 pipeline…
  16. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 16
    Growth Driver: Buildout of U.S. LNG Exports Our natural gas network serves significant LNG export capacity and is well-positioned to capture more GLOBAL DEMAND DRIVING SIGNIFICANT BUILDOUT OF U.S. LNG OUR NETWORK REACHES MULTIPLE EXPORT…
  17. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 17
    Strong Liquids Fundamentals Attractive opportunities to supply U.S. products to consumers here and abroad GLOBAL LIQUIDS CONSUMPTION EXPECTED TO EXCEED GROWTH LED BY CHINA AND INDIA (2018 2020) 100 MILLION BARRELS PER DAY BY 2019 World…
  18. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 18
    Leading Refined Products Terminal Hub on U.S. Gulf Coast Our premier refined products aggregation and market-clearing terminaling hub on the Houston Ship Channel Largest independent refined products terminal hub in U.S. Our Integrated…
  19. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 19
    Beyond the Backlog Strong long-term fundamentals to drive additional opportunities Takeaway for Storage to support Grow crude and significant renewable power Infrastructure to NGL footprint out Marcellus / Utica generation and…
  20. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 20
    Compelling Investment Opportunity Returning value to shareholders via significant dividend growth Attractive valuation DRILL-DOWN OF S&P 500 COMPANIES ENTERPRISE VALUE / 2019E EBITDA Attractive valuation provides upside potential…
  21. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 21
    KMI: A Compelling Investment Opportunity Strategically-positioned assets generating substantial cash flow with attractive investment opportunities 90% take-or-pay or fee-based earnings(a) 8 billion 2019B Adjusted EBITDA(b) 25%…
  22. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 22
    Appendix 23
  23. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 23
    KMI: 2019 Guidance Published Budget Strong fundamentals and strategic footprint support steady growth in our diversified, fee-based cash flow Key Metrics 2019 Budget from 2018 Notes SIGNIFICANT CASH GENERATION billions Expect to be…
  24. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 24
    Energy Toll Road Cash flow security with 90% from take-or-pay and other fee-based contracts Natural Gas Pipelines Products Pipelines Terminals CO2 2019B EBDA %(a) 61% 15% 14% 10% 72% interstate pipelines (f) 78% liquids Asset Mix 60%…
  25. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 25
    Stable Foundation of Cash Flows through Commodity Cycles 5-year change in Adjusted EBITDA billions 1.7 7.8 7.4 (0.6) (0.5) 0.2 (0.3) (0.1) Helped to fund 8.3 billion Adjusted Net Debt reduction(b) 2014 Adjusted EBITDA…
  26. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 26
    Averaged 2.5 Billion of Discretionary Capital since 2008 ANNUAL GROWTH CAPITAL & CONTRIBUTIONS TO JVs(a,b) billions Expansion Average 3.4 3.3 3.2 3.2 3.1 3.0 2.5 2.7 2.3 2.3 1.7 1.4 1.1 2008 2009 2010 2011 2012…
  27. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 27
    High-Quality, Diversified Customer Base Strong customer credit, valuable services limit KMIs risk TOP 25 CUSTOMERS Diverse, primarily investment grade customers limit counterparty risk BB+ to BB B- or Below Our average customer…
  28. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 28
    KMI Business Risks Summary Regulatory FERC rate cases (Products Pipelines and Natural Gas Pipelines) Provincial, state, and local permitting issues CO2 crude oil production volumes Throughput on our volume-based assets Commodity…
  29. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 29
    Joint Venture Treatment in Key Metrics KM controls and fully consolidates KM does not control or consolidate (third party portion referred to as noncontrolling interests in financial statements) (KM portion referred to as equity…
  30. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 30
    Natural Gas Segment Overview Connecting key natural gas resources with major demand centers Asset Summary Natural Gas Pipelines: 70,000 Miles NGL Pipelines: 2,700 Miles U.S. Natural Gas Consumption Moved: 40% Working Gas Storage…
  31. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 31
    U.S. Natural Gas Demand is Concentrated in Gulf Coast 70% of forecasted 2018-2030 growth is in Texas and Louisiana, where we have significant assets in place Forecasted Texas and Louisiana demand and export growth between 2018 and…
  32. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 32
    Growth Driver: Surging Permian Production Building 4 Bcfd of new natural gas takeaway capacity Ability to leverage our assets to competitively serve future growth Our existing footprint reaches across Texas and connects into all major…
  33. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 33
    Highly-Contracted Natural Gas Pipelines Contracted capacity and term by region NET ANNUAL INCREMENTAL RE-CONTRACTING EXPOSURE (KM SHARE): Assumptions % of 8.4bn 2019B Total Segment EBDA(a) Negative figures represent unfavorable…
  34. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 34
    FERC-Regulated Interstate Natural Gas Assets Summary statistics, including remaining contract term and rate moratorium dates (where applicable) Transport Storage Avg. Remaining % of 2017 Revenues KM Capacity Capacity Contract Term from…
  35. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 35
    Products Segment Overview Strategic footprint with significant cash flow generation Asset Summary Pipelines (a): 9,500 Miles 2018 Throughput(a) 2.3 mmbbld Condensate Processing Capacity 100 mbbld Transmix 5 facilities Terminals: 67…
  36. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 36
    Terminals Segment Overview Diversified terminaling network connected to key refining centers and market hubs Asset Summary Total Kinder Morgan Terminals: 157 Terminals Terminals Segment Bulk 34 Terminals Terminals Segment Liquids 56…
  37. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 37
    CO2 Segment Overview World class, fully integrated assets CO2 source to crude oil production and takeaway in the Permian Basin KMI Remaining OGIP CO2 Reserves Interest NRI Location Deliverability (tcf) McElmo Dome 45% 37% SW Colorado…
  38. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 38
    CO2 Segments Significant Returns and CO2 Free Cash Flow Long history of generating high returns and significant CO2 free cash flow with minimal acquisitions CO2 IRR% 2000-2018 SIGNIFICANT CO2 FREE CASH FLOW millions 1,432 1,458 Oil…
  39. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 39
    Non-GAAP Financial Measures and Reconciliations Defined Terms Reconciliations for the historical period 40
  40. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 40
    KMI GAAP Reconciliation in millions Yr. Ended Yr. Ended Reconciliation of DCF 12/31/18 Reconciliation of Adjusted EBITDA 12/31/18 Net Income 1,919 Net Income 1,919 Noncontrolling interests (a) (310) Total Certain Items 501 Preferred…
  41. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 41
    Reconciliation of CO2 Free Cash Flow in millions Year Ended December 31, Reconciliation of CO2 Free Cash Flow 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Segment EBDA 783 965 1,099 1,322 1,435 1,240 657 827 847 759 Certain…
  42. Barclays Americas Select Franchise Conference – Kinder Morgan, Inc. – slide 42
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