2022 INVESTOR DAY January 26, 2022 EPNG natural gas arch bridge over the Colorado River, Topock, Arizona
Agenda & Presenters TIME DISCUSSION PRESENTER 8:00 8:15 Investor Perspective Rich Kinder Executive Chairman 8:15 8:35 Our Future Steve Kean CEO 8:35 9:00 Strategy & Business Kim Dang Review President 9:00 9:20 BREAK 9:20 10:00…
INVESTOR PERSPECTIVE Image of right-of-way on net-zero Ruby pipeline
Leader in North American Energy Infrastructure Energy infrastructure, especially natural gas pipelines & storage, has a decades-long time horizon Largest natural gas transmission network Move 40% of U.S. natural gas consumption &…
25th Anniversary of 1997 Company Formation Key metrics Year End 1996(a) Year End 2021 Increase Market value 180 million 36 billion 200x Enterprise value 350 million 67 billion 190x Miles of pipeline 2,000 83,000 40x of employees…
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…
Generating Substantial Free Cash Flow SP500 AVERAGE 2022E FCF YIELDS SP500 FREE CASH FLOW YIELDS y-axis represents of SP500 tickers within the free cash flow yield range specified on the x-axis Energy 10.8% 250 Materials 6.7%…
Returning Value to Shareholders SP500 AVERAGE CURRENT DIVIDEND SP500 CURRENT DIVIDEND YIELDS y-axis represents of SP500 tickers within the dividend yield YIELDS range specified on the x-axis Energy 3.3% 250 Utilities 3.2% Consumer…
Core Holding in Any Portfolio Generating significant cash flow & returning significant value to shareholders 35 billion market capitalization One of the 10 largest energy companies in the S&P500 13% owned by management…
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…
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 worlds most responsible producer…
All Energy Sources Required to Meet Demand Outlook Total energy demand expected to grow 20% 13% GLOBAL TOTAL ENERGY DEMAND BY FUEL Exajoules 2020, 2030, 2040 28% 2020-2040 growth in Exajoules 17% 200 2040 % mix (10) 10 30 50 70 Asia…
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 Only 5 countries have…
U.S. Helps Meet Increasing Global Demand Reliable trade partner with price-competitive & responsible production U.S. OIL & LIQUIDS mmbbld U.S. NATURAL GAS bcfd Production Demand Production Demand 25 125 20 103 103 100 20 19 92…
Reliable Grids Increase Demand for Natural Gas Deliverability Services Renewable intermittency causes large demand swings for natural CASE STUDY: CALIFORNIA POWER GENERATION BY SOURCE gas Gigawatts But pipeline volumes have to be…
Meeting Extreme Weather Demand Requires Natural Gas Deliverability Opportunities for short notice, high deliverability services & gas storage Extreme Weather Events, Winter Storm Uri Texas Hourly Generation During Uri February 14 was one…
Scenarios Solving for an End-Result Do Not Contemplate the Constraints of Reality more spend to achieve the same growth substantial mineral requirements geographically challenged mineral requirements 2021-2050 GLOBAL INVESTMENT,…
Our Infrastructure is Important to Fueling the Future BENEFITS OF NATURAL GAS LOW EMISSIONS ABUNDANT & LOW COST Natural gas is the cleanest burning fossil fuel with Cost-effective generation significantly lower emissions than coal…
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…
Replacing Coal Could Accelerate Emissions Reductions Goals POTENTIAL FOR LOWER GLOBAL EMISSIONS Mt CO2 2,005 Potential Net 6% of 2020 CO2 6,217 Reduction of 24% 18% of 2020 CO2 34,156 25,934 2020 CO2 2020-2050 net change…
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 20 0 6 2050 U.S. SDS forecasts only 1 TWh of…
Attractive Potential for Handling Liquid Biofuels Can leverage existing assets with minimal capex spend to accommodate biofuels GLOBAL BIOFUELS DEMAND OUTLOOK mmbbld 2021 VOLUMES mbbld STEPS APS SDS Terminals Products U.S. 9…
ESG Strategy Provide energy services in a safe, efficient, and environmentally responsible manner for the benefit of people, communities, and businesses environmental social governance Invest in low carbon future Build & maintain…
Reducing CO2 Emissions on Houston Ship Channel Adding 5 Vapor Recovery Units at Galena Park & Pasadena terminals 64 million 3Q 2023 in-service Expect 7.1x EBITDA multiple Expect project to reduce Scope 1 & 2 emissions by 34,000…
As Founding ONE Future Member, Encourage Industry Participation due to Proven Results ONE FUTURE METHANE EMISSION INTENSITY ONE Future uses science-based Transmission & storage Remaining natural gas supply chain technology and methods…
Responsibly Sourced Natural Gas Conventional natural gas produced by companies whose operations meet certain ESG standards Standards focus on management practices TOTAL NATURAL GAS PRODUCTION REPRESENTED BY for methane emissions, water…
Recognized as an ESG Leader Highly rated by multiple agencies improved MSCI rating to A from BBB & Moodys ranking to 2 from 14 due to enhanced disclosure Sustainalytics 3 MSCI A FTSE 3 Refinitiv 6 Moodys 2 SSGA top 10% of 203 Refiners…
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 worlds most responsible producer…
STRATEGY & BUSINESS REVIEW Kinder Morgan Building, Houston, Texas
U.S. Production Continues to Recover from Pandemic U.S. NATURAL GAS PRODUCTION bcfd U.S. CRUDE PRODUCTION mmbbld 108 14 Recovers to pre-pandemic levels during 2023 102 13 96 12 2022 production above 90 11 84…
Volume Recovery Still Playing Out on Our Assets PRODUCTS SEGMENT VOLUMES mbbld NATURAL GAS SEGMENT G&P VOLUMES bbtud Road fuels Jet fuel Crude / Condensate (incl. transport & G&P) 1,800 4,000 1,500 3,000 1,200 900 2,000 600 1,000…
Strategy Maximize the value of our assets on behalf of shareholders Stable, fee- Invest in a low Financial Disciplined Enhance based assets carbon future flexibility capital shareholder allocation value Core energy Newly formed…
Executed on our Strategy in 2021 Demonstrated importance of assets during Uri, conducted value accretive M&A, and invested in low carbon opportunities February Continued operations during a very difficult winter storm which…
Highly-Contracted Cash Flows Stable cash flows with 69% take-or-pay or hedged earnings CONTRACT MIX OF 2022B ADJUSTED SEGMENT EBDA Entitled to payment regardless of throughput Fixed fee collected regardless of commodity price…
Customers Are Primarily End-Users of the Products We Handle Net revenues underpinned by investment grade counterparties & credit support Ratings as of January 19, 2022 CUSTOMER TYPE CREDIT RATING End-user IG or substantial credit…
Successfully Achieving Attractive Build Multiples Established track record of leveraging our footprint & project management expertise COMPETITIVE ADVANTAGES INVESTMENT MULTIPLES: PROJECTS COMPLETED 2019 2021 Capital invested / year 2…
Business Mix Leading infrastructure provider across multiple critical energy products Note: Business mix based on 2022 budgeted Adjusted Segment EBDA. See Non-GAAP Financial Measures & Reconciliations. 39
Natural Gas Segment Overview Connecting key natural gas resources with major demand centers ASSET SUMMARY Natural gas pipelines: 71,000 miles NGL pipelines: 1,200 miles Natural gas transported 40% (U.S. consumption & exports) Working…
Substantial Growth Projected for U.S. Natural Gas KEY BASINS DRIVING U.S. GROWTH 2021 to 2030 growth in bcfd 9 Additional 21 bcfd 7 expected from three areas 5 Permian Haynesville Northeast DEMAND in bcfd 15 bcfd from…
Transporter of Choice for LNG Facilities due to Supply Diversity & 700 bcf of Total Working Gas Storage bcfd U.S. LNG Exports KM contracted transport capacity Potential KM contracted transport capacity 20 18 16 14 12 50% - KM 2021…
Key Market: Exports to Mexico U.S. NATURAL GAS EXPORTS TO MEXICO bcfd U.S. Mexico Exports KM Contracted Transport Capacity 8 KM Projected Contracted Transport Capacity 7 6 5 4 3 In discussions to transport up to additional 1 bcfd…
Well Positioned to Serve Gulf Coast Petchem & Industrial Demand DIRECTLY CONNECTED PETCHEM AND INDUSTRIAL FACILITIES TEXAS & LOUISIANA INDUSTRIAL DEMAND bcfd 16 14 12 10 Demand growth provides expansion capital opportunities 8…
Products Segment Overview Strategic footprint supplying a diverse mix of feedstock & finished products critical to refining & transportation sectors ASSET SUMMARY 2022B DELIVERY VOLUMES(a) mbbld Pipelines: 9,500 miles Terminals: 65…
Refined Products Pipes Historically A Steady Contributor Fee-based with stable volumes and cash flow over the long-term REFINED PRODUCTS VOLUMES(a) mmbbld REFINED PRODUCTS EBDA BY REGION(b) millions KM Refined Product (left) Domestic…
West Coast Renewable Fuels Projects Utilizing our vast network to lead the fuel transition, beginning in California Subsidies & state goals for emissions reductions are driving increased RD volumes Particularly in California where…
Terminals Segment Overview National terminaling network connecting our customers with domestic & international markets of capacity ASSET SUMMARY terminals (mmbbls) Terminals segment Bulk 28 Terminals segment Liquids 50 80 Products…
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…
Leading Exporter of U.S. Gasoline & Diesel COVID recovery & prospective long-term growth in product exports U.S. GULF GASOLINE & BLENDSTOCK EXPORTS(a) KM HOUSTON SHIP CHANNEL REFINED PRODUCT thousand barrels per day 5Yr Range 2019 2020…
Partnering with NESTE on Renewable Fuels Logistics Leading position in fast growing market Modifying 30 tanks & enhancing rail, truck, and marine HARVEY TERMINAL UTILIZATION capabilities at Harvey for renewable feedstock movements…
CO2 Segment Overview World class, fully-integrated assets CO2 source to crude oil production & takeaway in the Permian Basin Interest in 5 crude fields with 9.2 billion barrels of Original Oil In Place Interest in 3 CO2 fields with 37…
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…
Energy Transition Ventures (ETV) Group The group is evaluating commercial opportunities Opportunities for ETV group are outside emerging from the low-carbon energy transition of our existing asset base Business segments will continue…
310 million Acquisition of Kinetrex Energy Platform acquisition provides multi-year head start to participate in emerging RNG market ASSETS & VALUATION U.S. RNG PRODUCTION bcfd 2 small-scale LNG facilities - 2 MMdth capacity Volumes…
Demand Markets Provide Diversification Plan to mitigate exposure to RIN volatility through fixed price contracts in the voluntary market REVENUE EXAMPLE per mmbtu D3 RINs can also satisfy D5 & D6 obligations RIN value (a) revenues…
Positioned to Participate Across CCUS Value Chain Emission Sources Capture Transport EOR / Sequestration In discussions with emissions Evaluate opportunities to Largest CO2 pipeline operator Substantial EOR experience sources…
Compelling Investment Opportunity Strategically-positioned assets generating substantial cash flow with attractive investment opportunities Stable cash flows with 69% take-or-pay or hedged earnings(a) 6% current yield & healthy…
PANEL WITH BUSINESS UNIT LEADERS 59 Pipe storage yard at the KM Fairless Hills Terminal, Pennsylvania
2022 BUDGET 60 Altamont gathering right-of-way, Granite Park, Utah
Proven History of Cash Flow Generation and Shareholder Returns in billions except per share ADJUSTED EBITDA CFFO FREE CASH FLOW NET DEBT DECLARED DIVIDENDS CFFO Capital Expenditures(a) PER SHARE +9% +11% +82% -18% +122% 1.11 0.7…
Generated 15bn Free Cash Flow Over Last 6 Years in billions Generated CFFO of nearly 30 billion & paid CFFO FCF Capital Expenditures Dividends Paid cash dividends of 11 billion over last 6 years 6 5 4 3 2 1 - 2016…
2022 Budget Summary in billions, except per share 2021 2022 Increase Key metrics 2021 excluding Uri Budget excluding Uri Net income 1.8 0.9 2.5 2.5x Adjusted EBITDA 7.9 6.9 7.2 5% Distributable Cash Flow 5.5 4.4 4.7 8% (DCF)…
Growing Cash Flow Generation billions 8.0 7.5 Uri Benefit 1.1 0.1 7.2 0.1 7.0 0.1 0.1 6.9 0.1 0.1 6.5 2021A Natural Gas CO2 Segment Natural Gas Other Base Natural Gas Stagecoach/ 2022B Adjusted Contract Price Offset…
2022 Budget Assumptions & Highlights YoY EBDA(a) SEGMENT EXCLUDING URI KEY DEVELOPMENTS FROM 2021 Full year contribution from Stagecoach acquisition TX Intrastates favorable renewals & storage optimization Natural Gas +3%…
2022B Net Income & Distributable Cash Flow (DCF) in millions, except per share 2022 2021 Change Budget Actual % Net income attributable to Kinder Morgan, Inc. (GAAP) 2,480 1,784 696 39% Total Certain Items (10) 1,220 (1,230) (101%)…
2022B Adjusted Segment EBDA & Adjusted EBITDA in millions 2022 2021 Change Budget Actual % Natural Gas Pipelines (a) 4,631 5,463 (832) (15%) Products Pipelines 1,180 1,117 63 6% Terminals 974 950 24 3% CO2(a) 704 754 (50) (7%)…
2022B Capital Expenditures in millions 2022 2021 Sustaining Capital Budget Actual Change Natural Gas Pipelines 438 474 (36) Products Pipelines 143 94 49 Terminals 237 245 (8) CO2 15 17 (2) Corporate / other 32 34 (2) Discretionary…
2022B Cash Flow from Operations (CFFO) & Free Cash Flow (FCF) in millions 2022 2021 Change Budget Actual % Net income attributable to Kinder Morgan, Inc. (GAAP) 2,480 1,784 696 39% Net income attributable to noncontrolling interests…
2022B Sources & Uses(a) in millions 2022 SOURCES & USES in billions Sources Budget 7.5 CFFO (GAAP) 5,285 Cash balance as of 12/31/2021 1,140 7.0 Cash on hand Revolver Borrowing/Debt Issuances 866 6.5 Distributions from equity…
Leverage & Liquidity(a) in millions 2022 KMI LONG-TERM DEBT MATURITIES(d) Budget 6,000 Debt maturities Weighted average interest rate 6% Net Debt (Year End) 30,858 5.5% Adjusted EBITDA 7,184 5,000 5.0% 5% Net Debt(b) to Adjusted…
2022B Quarterly Profile in millions, except per share Adjusted Segment EBDA Q1 Q2 Q3 Q4 Total 2022 Budget 26% 24% 24% 26% 7,489 2021 Actual 35% 21% 21% 23% 8,284 Adjusted EBITDA 2022 Budget 26% 24% 24% 26% 7,184 2021 Actual 35%…
2022B Cash Tax Calculation Detail in millions 2022 Budget Adjusted Segment EBDA 7,489 Net income attributable to NCI (68) JV earnings from C corps (330) JV distributions from C corps (net of 65% dividend received deduction) 100…
2022 Budget Sensitivities Limited overall commodity exposure 2022B assumptions Change Potential Impact to Adjusted EBITDA & DCF (full year) Natural Gas Products Terminals CO2 Total Natural gas G&P volumes 3,033 Bbtu/d +/- 5% 33…
Financial Highlights Our financial strategy at work 2021 2022 BUDGET Met budget, even excluding one-time benefit from Uri Declared dividends +3% Expect declared dividends +3% Attractive yield of 6% today Reduced net debt by 825…
APPENDIX 76 Pipe storage yard at the KM Fairless Hills Terminal, Pennsylvania
Natural Gas Segment Presentation 77
Natural Gas Segment Overview Connecting key natural gas resources with major demand centers ASSET SUMMARY Natural gas pipelines: 71,000 miles NGL pipelines: 1,200 miles Natural gas transported 40% (U.S. consumption & exports) Working…
Gathering & Processing Assets Across Key Basins Our primary areas are expected to be relatively resilient G&P BUSINESS AS % OF 2022B KMI SHORT-TERM PRODUCTION OUTLOOK 2019 2023 ADJUSTED SEGMENT EBDA dry gas, bcfd crude, mmbbld 2%…
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 6 bcfd to LNG & 4 bcfd to Mexico; well…
Transporter of Choice for LNG Facilities due to Supply Diversity & 700 bcf of Total Working Gas Storage bcfd U.S. LNG Exports KM contracted transport capacity Potential KM contracted transport capacity 20 18 16 14 12 50% - KM 2021…
Key Market: Exports to Mexico U.S. NATURAL GAS EXPORTS TO MEXICO bcfd U.S. Mexico Exports KM Contracted Transport Capacity 8 KM Projected Contracted Transport Capacity 7 6 5 4 In discussions to transport up to additional 1 bcfd…
Well Positioned to Serve Gulf Coast Petchem & Industrial Demand DIRECTLY CONNECTED PETCHEM AND INDUSTRIAL FACILITIES TEXAS & LOUISIANA INDUSTRIAL DEMAND bcfd 16 14 12 10 Demand growth provides expansion capital opportunities 8…
Meeting Extreme Weather Demand Requires Natural Gas Deliverability Opportunities for short notice, high deliverability services & gas storage Extreme Weather Events, Winter Storm Uri Texas Hourly Generation During Uri February 14 was one…
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 &…
Valuable Texas Intrastate Natural Gas Systems Winter Storm Uri emphasized the importance of our Texas Natural Gas network Texas Intrastates system represents 10% of KM Adjusted Segment EBDA(a) Highly contracted with 80% take-or-pay(a)…
New RSG Pooling Service on TGP RSG may trade at a premium due to low emissions production certification New RSG pooling service encourages certified producers to move their gas on TGP Working with ICE to establish trading hubs at 5…
Valuable Northeast Transportation and Storage Assets NORTHEAST PRODUCTION Stagecoach Pipelines +5 bcfd, or 14% Stagecoach Gas Storage bcfd TGP TGP Gas Storage 39 34 2021 2030 TGP peak day deliveries to Northeast…
Leading the Way Out of the Permian Excellent execution in face of global pandemic & substantial opposition Gulf Coast Express (GCX) Permian Highway Pipeline (PHP) Leveraged existing footprint into new takeaway capacity Mainline: 450…
Highly Utilized Haynesville Capacity As Haynesville production grows, up to 45 million of Adjusted EBITDA growth beyond 22 HAYNESVILLE PRODUCTION bcfd Significant Operating Footprint +7 bcfd, or 70% KinderHawk Gathering Up to 1 bcfd…
Evaluating Potential for Hydrogen Transportation on Existing Pipes 3-5 year effort to position existing assets for a developing hydrogen market Cut out pipe samples from R&D underway to understand Were testing in some limited Working…
Manageable Natural Gas Re-Contracting Exposure Analysis of existing contracts that renew during next two years KMI ADJUSTED EBITDA billions Expiring contracts are assessed for volumetric & Adjusted EBITDA Natural Gas re-contracting…
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…
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% 5,925…
Projects Placed Into Service During 2021 New natural gas projects expected to generate 94 million of annual Adjusted EBITDA In-service date: 2021 Capacity KM share (mm) Asset Project Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec…
Natural Gas Project Backlog KM share (mm) Capacity Asset Project Capital EBITDA (mDthd) In-service Date Project Status East 300 Upgrade 246 115 11/2023 FERC issued FEIS TGP South Texas Expansion 25 413 11/2023 Preparing prior notice…
Products Segment Presentation 97
Products Segment Overview Strategic footprint supplying a diverse mix of feedstock & finished products critical to refining & transportation sectors ASSET SUMMARY 2022B DELIVERY VOLUMES(a) mbbld Pipelines: 9,500 miles Terminals: 65…
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 EBDA BY REGION(b) millions KM Refined Product (left) Domestic Refined…
West Coast Renewable Fuels Projects Utilizing our vast network to lead the fuel transition, beginning in California Subsidies & state goals for emissions reductions are driving increased RD volumes Particularly in California where…
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