KINDER MORGAN, INC. 
INVESTOR PRESENTATION
2Q 2024
TransColorado Conn Creek Compressor Station
Disclosure
Forward-looking Statements / Non-GAAP Financial Measures / Industry & Market Data
General - The information contained in this presentation does not purport to be all-inclusive or to contain all information that prospective investors may require. Prospective investors are encouraged to conduct their own analysis and review of information contained in this presentation as well as important additional information through the Securities and Exchange Commission's ("SEC") EDGAR system at www.sec.gov and on our website at www.kindermorgan.com.
Policies and Procedures - This presentation includes descriptions of our vision, mission and values and various policies, standards, procedures, processes, systems, programs, initiatives, assessments, technologies, practices, and similar measures related to our operations and compliance systems ("Policies and Procedures"). References to Policies and Procedures in this presentation do not represent guarantees or promises about their efficacy, or any assurance that such measures will apply in every case, as there may be exigent circumstances, factors, or considerations that may cause implementation of other measures or exceptions in specific instances.
Forward-LookingStatements - 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 Exchange Act of 1934 ("Exchange Act"). Forward-looking statements include any statement that does not relate strictly to historical or current facts and include statements accompanied by or using words such as "anticipate," "believe," "intend," "plan," "projection," "forecast," "strategy," "outlook," "continue," "estimate," "expect," "may," "will," "shall," and "long-term". In particular, statements, express or implied, concerning future actions, conditions or events, including our Policies and Procedures and their efficacy, long term demand for our assets and services, energy-transition related opportunities, including opportunities related to alternative energy sources, future operating results such as our expectations for 2024 (including expected financial results, dividends, sustaining and discretionary capital expenditures and our financing and capital allocation strategy) are forward-looking statements.
Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. There is no assurance that any of the actions, events or results of the forward-looking statements will occur, or if any of them do, what impact they will have on our results of operations or financial condition. Because of these uncertainties, you are cautioned not to put undue reliance on any forward-looking statement. We disclaim any obligation, other than as required by applicable law, to publicly update or revise any of our forward-looking statements to reflect future events or developments.
Future actions, conditions or events and future results of operations may differ materially from those expressed in these forward-looking statements. Many of the factors that will determine these results are beyond our ability to control or predict. These statements are necessarily based upon various assumptions involving judgments with respect to the future, including, among others: the ability to recognize the expected commercial synergies and other benefits of the STX Midstream transaction; commodity prices; the timing and extent of changes in the supply of and demand for the products we transport and handle; national, international, regional and local economic, competitive, political and regulatory conditions and developments; the timing and success of business development efforts; the timing, cost, and success of expansion projects; technological developments; the condition of capital and credit markets; inflation rates; interest rates; the political and economic stability of oil- producing nations; energy markets; federal, state or local income tax legislation; weather conditions; environmental conditions; business, regulatory and legal decisions; terrorism; cyber-attacks; and other uncertainties. Important factors that could cause actual results to differ materially from those expressed in or implied by forward-looking statements include the risks and uncertainties described in this presentation and in our Annual Report on Form 10-K for the year ended December 31, 2023, and our subsequent reports filed with the SEC (under the headings "Risk Factors," "Information Regarding Forward-Looking Statements" and elsewhere). These reports are available through the SEC's EDGAR system at www.sec.gov and on our website at www.kindermorgan.com.
GAAP - Unless otherwise stated, all historical and estimated future financial information included in this presentation has been prepared in accordance with generally accepted accounting principles in the United States ("GAAP").
Non-GAAP- In addition to using financial measures prescribed by GAAP, we use non-generally accepted accounting principles ("non-GAAP") financial measures in this presentation. Descriptions of our non- GAAP financial measures, and reconciliations to comparable GAAP measures, can be found in this presentation under "Non-GAAP Financial Measures and Reconciliations". These non-GAAP financial measures do not have any standardized meaning under GAAP and may not be comparable to similarly titled measures presented by other issuers. As such, they should not be considered as alternatives to GAAP financial measures.
Industry and Market Data - Certain data included in this presentation has been derived from a variety of sources, including independent industry publications, government publications and other published independent sources. Although we believe that such third-party sources are reliable, we have not independently verified, and take no responsibility for, the accuracy or completeness of such data.
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Irreplaceable Infrastructure Portfolio
Largest natural gas transmission network
- ~66,000 miles of natural gas pipelines move ~40% of U.S. natural gas production
- Have interest in 702 bcf of working storage capacity, ~15% of U.S. capacity
Delivering energy to improve lives & create a better world
Largest independent transporter of refined products
- Transport ~1.7 mmbbld of refined products to coastal demand markets
- ~9,500 miles of refined products and crude pipelines
Largest independent terminal operator
- 139 terminals & 16 Jones Act vessels
- 135 mmbbl of total liquids storage capacity
One of the largest CO2 transporters
- ~1,500 miles of CO2 pipelines with transport capacity of ~1.5 bcfd
- Produce and transport CO2 for enhanced oil recovery
Growing Energy Transition Portfolio
- Up to 6.4 bcf(a) of RNG production capacity by 2H 2024
Business Mix | Natural gas | Refined Products(b) | CO2 |
64% | 26% | 10% |
NATURAL GAS | REFINED PRODUCTS | ||
Storage | |||
Terminals | |||
Processing | 16 | Jones Act tankers | |
LNG facilities
CO2
CO2 source fields | Landfill gas-to-electricity facilities |
Oil fields | LNG production & fueling facilities |
RNG plants | Operational medium BTU plants |
RNG plants under |
Note: Volumes per 2024 budget. Business mix based on 2024 budgeted Total Adjusted Segment EBDA. See Corporate Items and Non-GAAP Financial Measures & Reconciliations.
- Annual capacity at KM share.
- Refined Products includes 14% from our Products Segment and 12% from our Terminals Segment.
development |
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How Kinder Morgan Drives Shareholder Value
Natural Gas Focus | ~64% of KM cash flows(a) come from natural gas | |
Transport ~40% of U.S. natural gas production | ||
Balance Sheet Strength | BBB investment grade balance sheet | |
~3.9x YE 2024B Net Debt / Adjusted EBITDA |
High-ReturningGrowth Projects ~$3.3 billion of committed projects at <5x EBITDA build multiple
Predictable and Growing Cash Flow | ~68% of cash flows(a) take-or-pay or hedged | |
+14% Adj. EPS and +8% Adj. EBITDA growth expected in 2024 | ||
Returns to Shareholders | Nearly $900mm shares repurchased since the beginning of 2022 | |
~6% current dividend yield | ||
Note: Total Adjusted Segment EBDA, Adjusted EPS, Adjusted EBITDA, and Net Debt are non-GAAP measures. See Corporate Items and Non-GAAP Financial Measures & Reconciliations. | 4 | |
a) Based on 2024 budgeted Total Adjusted Segment EBDA. |
Strong Business Mix Continues to Improve
BUSINESS MIX
Natural Gas Transmission & Storge | Natural Gas G&P | ||||||||||
24% | CO2 EOR | Other | Refined Products | ||||||||
26% | |||||||||||
19% | 8% | ||||||||||
7% | |||||||||||
CHANGES SINCE 2014
Steady contributions from
Refined Products
Contribution from CO2 EOR
reduced -11%
NATURAL GAS
11%
43%
57%
Natural Gas G&P contributions
decreased -4%
Contributions from Natural Gas
Transmission & Storage have
increased +14%
2014 | 2024B | |
Note: Business mix based on Total Adjusted Segment EBDA, which is a non-GAAP measure. See Corporate Items and Non-GAAP Financial Measures & Reconciliations. Refined Products includes contributions from Products and | 5 | |
Terminals segments. Other includes KM Canada in 2014 and the ETV group in 2024B. |
High-Quality, Natural Gas Focused Cash Flows
CASH FLOW MIX(a)
Remaining KM
36%
Natural Gas
64%
G&P
12%
Transportation & Storage
88%
Natural Gas Transportation & Storage
- 57% of 2024B Total Adj. Segment EBDA
- 89% take-or-pay cash flows(a)
- Average remaining contract life:
- ~6 years for transportation
- ~4 years for storage
KM's percent cash flow contribution from long-haul natural gas pipelines is greater than any other large U.S. midstream company(b)
a) | Based on 2024 budgeted Total Adjusted Segment EBDA, which is a non-GAAP measure. See Corporate Items and Non-GAAP Financial Measures & Reconciliations. | 6 |
b) | Includes U.S. midstream companies with market capitalizations greater than $10 billion. |
Growing Earnings, Reducing Leverage, and Returning Meaningful Value to Shareholders
ADJUSTED | NET DEBT / | DIVIDENDS PAID & |
EPS | ADJUSTED EBITDA | SHARES REPURCHASED(b) |
($ billion) |
8% CAGR | 26% decrease in | $20.3 billion returned |
leverage | to shareholders | |
1.32 |
$0.66 $0.66
$0.89
$0.95
COVID
$0.88
Uri
0.38
$0.94
$1.16
$1.07
$1.22
5.3x
5.1x
4.6x | |
4.4x 4.3x | (a) |
4.1x | 4.2x |
3.9x | 3.9x |
$0.2
$1.3 $1.3
$0.3
$1.8
$0.4 | $0.5 |
$2.2 $2.4 $2.4 $2.5 $2.5 $2.6
2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 2024B | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 2024B | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 2024B |
Dividends paid | Shares repurchased | ||||||||||||||||||||||
Note: Adjusted EPS, Adjusted EBITDA and Net Debt are non-GAAP measures. See Corporate Items and Non-GAAP Financial Measures & Reconciliations. Individual years may not sum to total due to rounding. | |||||||||||||||||||||||
a) Includes debt associated with STX Midstream acquisition, which closed on 12/28/2023. Year-end 2023 leverage would have been 4.1x with a full-year EBITDA contribution from the acquired assets. | 7 | ||||||||||||||||||||||
b) No share repurchases assumed in 2024 budget. 2016, 2017, and 2018 include dividends paid to preferred shareholders. |
Base Business Stability Provides Platform for Growth
ADJUSTED EBITDA $billion
2016
‒
2022
~$700 million in divested EBITDA from asset sales related to Canadian assets, SNG, NGPL, and Elba
base business impacted by asset sales, recontracting headwinds, Uri, and COVID
Large contract rollovers associated with supply push pipelines like MEP, FEP, and Ruby
$8.2 | COVID impact in 2020-2021 & Uri impact in 2021 | ||||||||
$0.4 | Uri | ||||||||
$0.5 | $7.5 | ||||||||
$1.1 | $7.5 | ||||||||
COVID | 2023 | ||||||||
$0.7 | $0.5 | $7.2 | |||||||
2024+ | |||||||||
$7.0 | ‒ | ||||||||
$6.7 | $6.9 | $6.8 | |||||||
$6.5 | Reached an inflection point where large recontracting | ||||||||
headwinds are behind us and base business is more stable | |||||||||
Existing natural gas network continues to fill up, leading | |||||||||
to higher values for contract renewals on average | |||||||||
Benefit from rate escalators in Products and Terminals | |||||||||
2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024B | ~$3.3 billion of committed projects |
Adj. EBITDA generated from assets divested 2016 - 2023 | at <5x EBITDA build multiple |
Note: Adjusted EBITDA is a non-GAAP measure. See Corporate Items and Non-GAAP Financial Measures & Reconciliations. | 8 |
$3.3bn Committed Growth Capital Project Backlog as of 3/31/2024
Expect ~40% of Backlog Capital In Service in 2024, ~45% in 2025, and ~15% Beyond
$ million | TOTAL | |
Natural Gas (excluding G&P) | $1,711 | 96% for end-use demand (LDC, LNG, etc.) |
Refined Products (excluding G&P) | 161 | Renewable feedstocks and fuels projects |
Energy Transition Ventures | 91 | 93% RNG facilities; 7% CCS project |
Subtotal | $1,964 | Contracted, stable cash flows, |
EBITDA build multiple | ~4.8x | minimal direct commodity exposure |
Gathering & processing | $763 | Volume-based cash flows; 96% natural gas, 4% crude oil |
EOR | 558 | Commodity price & volume-based cash flows |
Total backlog | $3,284 | |
Lower carbon investments ~79% of backlog
Expect annual growth capital spend of ~$1-2 billion going forward; high end of range in the near-term
Note: The EBITDA build multiple reflects KM share of estimated capital divided by estimated Project EBITDA (a non-GAAP measure). See Corporate Items and Non-GAAP Financial Measures & Reconciliations. Figures may not | 9 |
sum due to rounding. Lower carbon includes investments in conventional natural gas, renewable diesel, biofuel feedstocks, RNG, and CCS. Refined Products includes projects in our Products and Terminals segments. |
Robust Macro Environment Gives Confidence in the High End of ~$1-$2 Billion of Annual Growth Spend Over the Next Few Years
NATURAL GAS
- LNG Exports (Gulf Coast & West Coast)
- Supply short Southeast markets
- Exports to Mexico (Gulf Coast & West Coast)
- Storage
- Industrials
- Power
- Permian egress
REFINED PRODUCTS
- Infrastructure for renewable feedstocks & fuels
ETV GROUP
- RNG
- CCS, near & outside current CO2 footprint
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Disclaimer
Kinder Morgan Inc. published this content on 24 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 April 2024 10:47:08 UTC.
