Kinder Morgan, Inc. (NYSE:KMI) Q2 2019 Earnings Conference Call - Final Transcript

Jul 17, 2019 • 04:30 pm ET


Kinder Morgan, Inc. (NYSE:KMI) Q2 2019 Earnings Conference Call - Final Transcript


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Welcome to the Quarterly Earnings Conference Call. [Operator Instructions]

I would now like to turn the call over to Mr. Rich Kinder, Executive Chairman of Kinder Morgan. Sir, you may begin.

Richard D. Kinder

Thank you. Brandon. Before we begin, as usual, I'd like to remind you that today's earnings releases by KMI and KML. And this call includes forward-looking at financial outlook statements within the meaning of the Private Securities Litigation Reform Act of 1995 the Securities and Exchange Act of 1934, now for both Canadian provincial and territorial securities laws, as well as certain non-GAAP financial measures. Before making any investment decisions, we strongly encourage you to reasonable [Technical Issues] disclosures on forward-looking and financial outlook statements and use of non-GAAP financial measures set forth at the end of KMI's and KML's earnings releases and to review our latest filings with the SEC and Canadian Provincial and Territorial Securities Commissions for a list of important material assumptions, expectations and risk factors that may cause actual results to differ materially from those anticipated and described in such forward-looking and financial outlook statements.

Before we turning the call over to Steve and the management team, I usually begin these quarterly earnings calls with a few words about our financial strategy at Kinder Morgan. I hope by now we've made it very clear that we are managing our assets and the substantial cash flow they generate, the financially responsible way that maximizes returns to our shareholders. That said, it's important to understand and appreciate what underpins that cash flow and whether that business will continue to generate strong and growing returns with the opportunity to expand our asset base.

As you know, majority [Phonetic] of our segment earnings before DD&A comes through our natural gas segment. Through our 70,000 plus miles of natural gas pipelines. We handle about 40% of all the gas consumed in this country. In addition, the bulk of our current and projected capital expansion dollars are also devoted to the natural gas segment. We are very bullish on the future of natural gas from both the supply and demand perspective, natural gas is critical to our American economy to satisfy the growing energy needs around the world. Very importantly to reducing our greenhouse gas emissions in a cost effective manner. Our optimism is borne out by actual results over the last few years and by the consensus estimates of those firms and governmental agencies, which follow the energy feel most closely.

Sometimes we lose sight of the actual facts involve, so looking first through the rear view mirror, US demand in 2018 was up 12% from 2017, 44% above demand of the decade earlier. 2019 is shaping up to be another strong year. Looking forward, as we've previously said, US demand is projected to grow by over 30% between now and 2030, the demand growth is being driven by LNG power and industrial demand and by exports to Mexico.

Turning to the supply side, the US is projected by 2025 to