Reportable Segments

Our reportable business segments are:


•	Natural Gas Pipelines—the ownership and operation of (i) major interstate and intrastate natural gas pipeline and storage systems; (ii) natural gas and crude oil gathering systems and natural gas processing and treating facilities; (iii) NGL fractionation facilities and transportation systems; and (iv) LNG facilities;


•	Products Pipelines—the ownership and operation of refined petroleum products, NGL and crude oil and condensate pipelines that primarily deliver, among other products, gasoline, diesel and jet fuel, propane, ethane, crude oil and condensate to various markets, plus the ownership and/or operation of associated product terminals and petroleum pipeline transmix facilities;


•	Terminals—the ownership and/or operation of (i) liquids and bulk terminal facilities located throughout the U.S. and portions of Canada that transload and store refined petroleum products, crude oil, ethanol and chemicals, and bulk products, including petroleum coke, metals and ores; and (ii) Jones Act tankers;


•	CO₂—(i) the production, transportation and marketing of CO₂ to oil fields that use CO₂ as a flooding medium to increase recovery and production of crude oil from mature oil fields; (ii) ownership interests in and/or operation of oil fields and gas processing plants in West Texas; and (iii) the ownership and operation of a crude oil pipeline system in West Texas; and

•

Kinder Morgan Canada (prior to August 31, 2018)—the ownership and operation of the Trans Mountain pipeline system that transports crude oil and refined petroleum products from Edmonton, Alberta, Canada to marketing terminals and refineries in British Columbia, Canada and the state of Washington. As a result of the TMPL Sale, this segment does not have results of operations on a prospective basis.

We evaluate performance principally based on each segment’s EBDA, which excludes general and administrative expenses, interest expense, net, and income tax expense. Our reportable segments are strategic business units that offer different products and services, and they are structured based on how our chief operating decision makers organize their operations for optimal performance and resource allocation. Each segment is managed separately because each segment involves different products and marketing strategies.

We consider each period’s earnings before all non-cash DD&A expenses to be an important measure of business segment performance for our reporting segments. We account for intersegment sales at market prices, while we account for asset transfers at either market value or, in some instances, book value.

During 2018, 2017 and 2016, we did not have revenues from any single external customer that exceeded 10% of our consolidated revenues.

Financial information by segment follows (in millions):



	Year Ended December 31,
	2018			2017		2016
Revenues
Natural Gas Pipelines
Revenues from external customers	$	9,004		$	8,608	$	7,998
Intersegment revenues	11			10		7
Products Pipelines
Revenues from external customers	1699			1645		1631
Intersegment revenues	14			16		18
Terminals
Revenues from external customers	2,017			1,965		1,921
Intersegment revenues	2			1		1
CO2	1,255			1,196		1,221
Kinder Morgan Canada	170			256		253
Corporate and intersegment eliminations(a)	(28		)	8		8
Total consolidated revenues	$	14,144		$	13,705	$	13,058



	Year Ended December 31,
	2018			2017			2016
Operating expenses(b)
Natural Gas Pipelines	$	5,353		$	5,457		$	4,393
Products Pipelines	594			487			573
Terminals	818			788			768
CO₂	453			394			399
Kinder Morgan Canada	72			95			87
Corporate and intersegment eliminations	(2		)	(6		)	2
Total consolidated operating expenses	$	7,288		$	7,215		$	6,222



	Year Ended December 31,
	2018			2017			2016
Other expense (income)(c)
Natural Gas Pipelines	$	593		$	26		$	199
Products Pipelines	34			—			76
Terminals	54			(14		)	99
CO₂	79			(1		)	19
Kinder Morgan Canada	(596		)	—			—
Corporate	—			1			(7		)
Total consolidated other expense (income)	$	164		$	12		$	386



	Year Ended December 31,
	2018		2017		2016
DD&A
Natural Gas Pipelines	$	1,058	$	1,011	$	1,041
Products Pipelines	228		216		221
Terminals	484		472		435
CO₂	473		493		446
Kinder Morgan Canada	29		46		44
Corporate	25		23		22
Total consolidated DD&A	$	2,297	$	2,261	$	2,209



	Year Ended December 31,
	2018		2017		2016
Earnings from equity investments and amortization of excess cost of equity investments, including loss on impairments
Natural Gas Pipelines	$	391	$	253	$	(269	)
Products Pipelines	75		48		56
Terminals	22		24		19
CO₂	34		42		22
Total consolidated equity earnings	$	522	$	367	$	(172	)



	Year Ended December 31,
	2018		2017			2016
Other, net-income (expense)
Natural Gas Pipelines	$	37	$	49		$	19
Products Pipelines	3		(1		)	2
Terminals	2		8			4
Kinder Morgan Canada	26		25			15
Corporate	39		16			38
Total consolidated other, net-income (expense)	$	107	$	97		$	78



	Year Ended December 31,
	2018			2017			2016
Segment EBDA(d)
Natural Gas Pipelines	$	3,580		$	3,487		$	3,211
Products Pipelines	1,173			1,231			1,067
Terminals	1,171			1,224			1,078
CO₂	759			847			827
Kinder Morgan Canada	720			186			181
Total segment EBDA	7,403			6,975			6,364
DD&A	(2,297		)	(2,261		)	(2,209		)
Amortization of excess cost of equity investments	(95		)	(61		)	(59		)
General and administrative and corporate charges	(588		)	(660		)	(652		)
Interest, net	(1,917		)	(1,832		)	(1,806		)
Income tax expense	(587		)	(1,938		)	(917		)
Total consolidated net income	$	1,919		$	223		$	721



	Year Ended December 31,
	2018		2017		2016
Capital expenditures
Natural Gas Pipelines	$	1,620	$	1,376	$	1,227
Products Pipelines	150		127		244
Terminals	380		888		983
CO₂	397		436		276
Kinder Morgan Canada	332		338		124
Corporate	25		23		28
Total consolidated capital expenditures	$	2,904	$	3,188	$	2,882



	2018		2017
Investments at December 31
Natural Gas Pipelines	$	6,358	$	6,218
Products Pipelines	839		777
Terminals	268		263
CO₂	16		6
Kinder Morgan Canada	—		34
Total consolidated investments	$	7,481	$	7,298



	2018		2017
Assets at December 31
Natural Gas Pipelines	$	51,562	$	51,173
Products Pipelines	8,429		8,539
Terminals	9,283		9,935
CO₂	3,928		3,946
Kinder Morgan Canada	—		2,080
Corporate assets(e)	5,664		3,382
Total consolidated assets	$	78,866	$	79,055

_______


(a)	2017 and 2016 amounts include a management fee of $35 million and $34 million, respectively, for services we perform as operator of an equity investee.


(b)	Includes costs of sales, operations and maintenance expenses, and taxes, other than income taxes.


(c)	Includes loss on impairments and divestitures, net and other income, net.


(d)	Includes revenues, earnings from equity investments, other, net, less operating expenses, loss on impairments and divestitures, net, loss on impairments and divestitures of equity investments, net and other income, net,

(e)

Includes cash and cash equivalents, margin and restricted deposits, certain prepaid assets and deferred charges, including income tax related assets, risk management assets related to debt fair value adjustments, corporate headquarters in Houston, Texas and miscellaneous corporate assets (such as information technology, telecommunications equipment and legacy activity) not allocated to our reportable segments.

We do not attribute interest and debt expense to any of our reportable business segments.

Following is geographic information regarding the revenues and long-lived assets of our business (in millions):



	Year Ended December 31,
	2018		2017		2016
Revenues from external customers
U.S.	$	13,596	$	13,073	$	12,459
Canada	447		503		483
Mexico and other foreign	101		129		116
Total consolidated revenues from external customers	$	14,144	$	13,705	$	13,058



	December 31,
	2018		2017		2016
Long-term assets, excluding goodwill and other intangibles
U.S.	$	47,468	$	47,928	$	49,125
Canada	748		3,071		2,399
Mexico and other foreign	83		80		82
Total consolidated long-lived assets	$	48,299	$	51,079	$	51,606