mlp & energy infrastructure conference...may 01, 2019 · tallgrass energy, lp, and their...

MLP & Energy Infrastructure Conference

May 2019

NYSE: TGE │ www.tallgrassenergy.com 2

Cautionary Statements

This presentation contains forward-looking statements. These forward-looking statements are identified as any statement that does not

relate strictly to historical or current facts. In particular, statements, express or implied, concerning future actions, conditions or events,

future operating results or the ability to generate revenues, income or cash flow or to make distributions or pay dividends are forward-

looking statements. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions.

Future actions, conditions or events and future results of operations of Tallgrass Energy, LP or Rockies Express Pipeline LLC and their

respective affiliates may differ materially from those expressed in these forward-looking statements. Many of the factors that will

determine these results are beyond Tallgrass Energy, LP’s and Rockies Express Pipeline LLC’s ability to control or predict and are

necessarily based upon various assumptions involving judgements with respect to the future. Forward-looking statements contained in

this presentation specifically include, without limitation, 2019 TGE Guidance, statements regarding the expected strategy and benefits

resulting from the investment in Tallgrass Energy, LP by affiliates of Blackstone Infrastructure Partners and its co-investors, the feasibility,

cost, execution and in-service timing of capital and other growth and joint venture projects at Rockies Express Pipeline LLC and

Tallgrass Energy, LP, and their respective affiliates, including, without limitation, the joint venture with Kinder Morgan, the Cheyenne

Connector pipeline, the Cheyenne Hub enhancements, the expansion of capacity on the Pony Express System, the Seahorse Pipeline

Project, the Plaquemines Liquids Terminal Project, identified growth opportunities of Gathering and Processing and BNN Water

Solutions, and the Grasslands Terminal, the recontracting of contracts at Rockies Express Pipeline LLC, and the 2020 projected

EBITDA, DCF and Leverage at Rockies Express Pipeline LLC. These statements also include, among others, Tallgrass Energy, LP’s and

Rockies Express Pipeline LLC’s respective ability to complete and integrate acquisitions, implement their respective business plans and

complete internal growth projects; changes in general economic conditions; competitive conditions; actions taken by third-party

operators, processors and transporters; demand for natural gas transportation, storage and processing services and crude oil

transportation services; price and availability of debt and equity financing; availability and price of natural gas and crude oil compared to

alternative fuels; energy efficiency and technology trends; operating hazards and other risks incidental to the business; natural disasters,

weather-related delays and casualty losses; interest rates; labor relations; customer defaults; changes in tax status; effects of existing

and future laws and governmental regulations; effects of future litigation; and other uncertainties. 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.

This presentation does not constitute an offer to sell any securities of Tallgrass Energy, LP or its respective affiliates or a solicitation of an

offer to buy any securities of Tallgrass Energy, LP or its respective affiliates.


Non-GAAP Measures

Adjusted EBITDA (“EBITDA”), Cash Available for Dividends (“CAD”), and Distributable Cash Flow (“DCF”) are non-GAAP supplemental financial measures that management and external users

of our consolidated financial statements and financial statements of our subsidiaries and unconsolidated investments, such as industry analysts, investors, lenders and rating agencies, may use

to assess:

• Our operating performance as compared to other publicly traded midstream infrastructure companies, without regard to historical cost basis or, in the case of EBITDA, financing methods;

• The ability of our assets to generate sufficient cash flow to make dividends to our shareholders;

• Our ability to incur and service debt and fund capital expenditures; and

• The viability of acquisitions and other capital expenditure projects and the returns on investment of various expansion and growth opportunities.

We believe that the presentation of EBITDA, CAD, and DCF provides useful information to investors in assessing our financial condition and results of operations. EBITDA, CAD, and DCF

should not be considered alternatives to net income, operating income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in

accordance with GAAP, nor should EBITDA, CAD, and DCF be considered alternatives to available cash or other definitions in our partnership agreement. EBITDA, CAD, and DCF have

important limitations as analytical tools because they exclude some but not all items that affect net income and net cash provided by operating activities. Additionally, because EBITDA, CAD,

and DCF may be defined differently by other companies in our industry, our definition of EBITDA, CAD, and DCF may not be comparable to similarly titled measures of other companies,

thereby diminishing their utility.

We generally define EBITDA as net income excluding the impact of interest, income taxes, depreciation and amortization, non-cash income or loss related to derivative instruments, non-cash

long-term compensation expense, impairment losses, gains or losses on asset or business disposals or acquisitions, gains or losses on the repurchase, redemption or early retirement of debt,

and earnings from unconsolidated investments, but including the impact of distributions from unconsolidated investments and deficiency payments received from or utilized by our customers. In

addition, EBITDA at Rockies Express excludes the impact of other non-cash gains or losses and includes the impact of the change in contract asset, which represents the cumulative amount by

which the revenue recognized exceeds the actual cash collected from the customer. We also use CAD and DCF, which we generally define as EBITDA, less cash interest costs, maintenance

capital expenditures, and certain cash reserves permitted by our governing documents. EBITDA and CAD are both calculated and presented at the Tallgrass Equity, LLC (“Tallgrass Equity”)

level, before consideration of noncontrolling interest associated with the Exchange Right Holders or calculating distributions from Tallgrass Equity to us, on one hand, and to the Exchange Right

Holders, on the other. We believe calculating these measures at Tallgrass Equity provides investors the most complete picture of our overall financial and operational results and provides a

consistent metric for period over period comparisons that is not impacted by any future exercises by the Exchange Right Holders of the right to exchange TGE Class B Shares and Tallgrass

Equity Units for an equal number of TGE Class A Shares (the "Exchange Right"), which does not have a dilutive effect on TGE's net income per share. For a reconciliation of these non-GAAP

measures to their most directly comparable GAAP financial measures, please see EBITDA Reconciliations in the appendix.

We have also presented Merger Adjusted Segment Adjusted EBITDA for each of our reporting segments. We define Merger Adjusted Segment Adjusted EBITDA as EBITDA for such segment

as adjusted for the impact of the TEP Merger Transaction, assuming it had closed on the first day of the period presented. We believe that the presentation of this measure on a merger

adjusted basis provides useful information to investors in assessing our financial condition and results of operations for each of our reporting segments because the accounting treatment of our

ownership interests in TEP prior to the TEP Merger Transaction and the impact of non-controlling interests for the period was significantly impacted by the TEP Merger Transaction during the

period but is not representative of the comparable measures during our historical periods. For a reconciliation of these non-GAAP measures to their most directly comparable GAAP financial

measures, please see EBITDA Reconciliations in the appendix.

We are unable to project net cash provided by operating activities or net income attributable to TGE to provide the related reconciliation of projected EBITDA and CAD to the most comparable

financial measures calculated in accordance with GAAP, because the impact of changes in operating assets and liabilities and the volume and timing of deficiency payments received and

utilized from our customers are out of our control and cannot be reasonably predicted. We provide a range for the forecasts of EBITDA and CAD to allow for the variability in the timing of cash

receipts and disbursements, customer utilization of our assets, and maintenance capital spending and the impact on the related reconciling items, many of which interplay with each other. The

timing of maintenance capital expenditures is volatile as it depends on weather, regulatory approvals, contractor availability, system performance and various other items. Therefore, the

reconciliation of projected EBITDA to projected net cash provided by operating activities and net income attributable to TGE and the reconciliation of projected CAD to projected net cash

provided by operating activities is not available without unreasonable effort.

NYSE: TGE │ www.tallgrassenergy.com

(1) Includes 75% REX distributions, 2019 reflects TGE 2019 guidance.

(2) REX leases capacity on Overthrust Pipeline, which is owned by Dominion and consists of 255 miles of pipeline.

4

Tallgrass Energy Overview

$872$965

2018 2019

Crude Oil

Transportation

G&P and

Terminalling

33%

11%

Natural Gas

Transportation56%

• 3 FERC-regulated natural gas transportation & storage systems totaling >6,800 miles of pipe

• Rockies Express Pipeline (“REX”): ~4.4 Bcf/d long haul capacity

• Tallgrass Interstate Gas Trasmission (“TIGT”) and Trailblazer Pipeline Company (“Trailblazer”):

~2.0 Bcf/d of transportation and ~16 Bcf of storage design capacity

• Pony Express: 834-mile FERC-regulated crude oil pipeline system with ~400 kbbls/d of

capacity

• Powder River Gateway (“PRG”): 2 FERC-regulated crude oil pipelines with ~190 kbbls/d of

capacity

• Gathering and Processing: ~1,500 miles of natural gas gathering and ~190 mmcf/d of

processing capacity

• Water services: Fresh water transportation, recycling, and/or salt water gathering and disposal

systems across 6 active basins

• Terminalling: 5 terminals serving the Pony Express Crude Oil System

Represents % of Q1 2019 Consolidated EBITDA by segment

Consolidated Footprint

EBITDA(1)

Guidance

Unique platform with large scale, diversified asset base with long-term contracted cash flows

$1,035

(2)


Key Investment Highlights

Tallgrass Energy is a core midstream infrastructure company with a solid platform

providing a unique combination of both stability and growth

Simple organizational structure, taxed as a C-corp

Stable cash flows, backed by long-term, fee-based, firm commitments

1

2

History of investment in high return midstream infrastructure projects3

Conservative financial profile4

1 public company with no IDR burden

1099 instead of K-1

96% of TGE’s 2018 EBITDA was fee based

90% was from firm fee commitments

~$3.6bn invested in core midstream assets from 2013 - 2018 at an average multiple of ~5.6x

(1) As of 3/31/2019 in accordance with TGE’s credit facilities.

Debt / EBITDA of 3.7x(1) or proportionally consolidated (REX) financial leverage of ~4.8x

Q1 2019 dividend coverage ratio of 1.35x


Organizational Structure

Tallgrass’ platform combined with world class infrastructure investors’ experience and access to capital to

drive ongoing stability and growth

Highly reputable and experienced investor Blackstone, as a firm,

has invested in over $40 billion of infrastructure-related projects

globally in the last 15 years

The principals of Blackstone Infrastructure Partners have extensive

experience investing in energy infrastructure assets

Strategic partnership with co-investors GIC and Enagas who

combined have global investment portfolios worth well over $100

billion across over 40 countries worldwide

Operating Subsidiaries

Tallgrass Equity, LLC

Tallgrass Energy

Partners, LP

Organizational Structure Strengths of the Blackstone Platform

Tallgrass Energy, LP

(NYSE: TGE)

TGE Public

and

Management

BIP / GIC / Enagas

~56% economic interest 100% GP Control

~44% economic interest(1)

(1)

(1) As of 3/31/2019.

Blackstone Investment Thesis

Blackstone views Tallgrass as a platform for additional long-term

investment in critical U.S. energy infrastructure

Essential high-capacity, long-haul pipelines connecting prolific

supply basins to key markets

Highly contracted assets backed by take-or-pay commitments

World-class team with outstanding track record to stay on to

manage Tallgrass

Robust backlog of high value growth projects


Tallgrass Energy Key Accomplishments

Drop Down

AcquisitionOtherProject

3rd Party

AcquisitionFinancing

2013 2014 2015 2016 2017 2018 2019

Strong track record of organic project execution, third party M&A and capital markets access

Contract REX’s

Seneca Lateral

20% interest in

Cushing Terminal

Acquisition

Pony Northeast

Colorado Lateral Open

Season

Contract Trailblazer’s

Redtail Lateral

TMID Casper

Expansion

TMID Douglas

Expansion

TIGT West End

Expansion

TMID Keep Whole

Contract Conversion

File REX PDO For

Zone 3 East-to-West

Transportation

TEP IPO

REX Refinances Notes

BNN Water

Business Acquisition

REX Signs E2W PAs

REX Settles with 3

MFN Shippers

REX Signs Capacity

Enhancement PAs

TMID POP

Contract Conversion

Pony placed into

service

Settle Trailblazer Rate

Case

Sterling Terminal

Constructed

33.3% Pony Acquisition

Trailblazer Acquisition

~$330mm TEP follow-

on Equity Offering

Commence ATM

Equity Program

Seneca Lateral

Achieves

Full Capacity

REX Zone 3 E2W

Project placed into

service

REX Settles with final

MFN Shipper

Pony Expansion

Project placed into

service

Whiting Water

Business Acquisition

TMID Redtail NGL

Pipeline

placed into service

33.3% Pony

Acquisition

TEGP IPO

~$570mm TEP follow-

on Equity Offering

REX Repays $450mm

2015 Notes

25.0% REX

Acquisition

from Sempra

REX modifies

Encana contract

Buckingham Terminal

Constructed

REX Capacity

Enhancement Project

Fully Contracted

Settle TIGT Rate Case

31.3% Pony

Acquisition

TEP increases

Revolver to $1.75bn

$400mm TEP Senior

Notes Offering

REX reaches

settlement

with Ultra

REX Capacity

Enhancement placed

into service

Successful Open

Seasons for Cheyenne

Connector &

Cheyenne Hub

PRB Gas Gathering

System Acquisition

PRB & DJ Water

Asset Acquisitions

North Sterling Water

Pipeline placed into

service

PRB Oil Gathering

System Acquisition

Successful Platteville

Extension Open

Seasons

Announced new Pony

Refinery & Supply

Connections

Acquired additional

49% interest in

Deeprock

Development

24.99% REX

Acquisition

Terminals and NatGas

Operator Acquisition

$350mm & $750mm

TEP Senior Notes

Offerings

PXP modifies

CLR contract

Acquired 51% interest

in Pawnee Terminal

Acquired 38% interest

in Deeprock North

Cushing Terminal

Buckhorn Bakken

Water Acquisition

TGE/TEP Merger

NGL Bakken

Water Acquisition

25.01% REX Acquisition

2% Pony Acquisition

REX Repays $550mm

2018 Notes

REX Upgraded to

Investment Grade

Credit by S&P

TEP Revolver upsize

and repricing

TEP and REX Issued

Investment Grade

Credit Ratings by Fitch

$500mm TEP Senior

Notes Offering

Closed Powder River

Gateway JV, including

the Iron Horse and

Powder River Express

Pipelines

BIP Closed Acquisition

of controlling interest

in Tallgrass for $3.2bn

CES Marcellus / Utica

Water Acquisition

$550mm REX Senior

Notes Offering


Financial Update and 2019 Guidance

TGE Financial Update

TGE 2019 Guidance

2019 Adjusted EBITDA

2019 CAD

$965 – 1,035 million

$760 – 835 million

Coverage Ratio >1.25x

DPS Growth ~6.0% – 8.0%

Q1 2019

Adjusted EBITDA ~$246 million

Cash Available for

Dividends (CAD)~$201 million

Coverage Ratio 1.35x

Leverage Ratio(1) ~3.7x

8

(1) As of 3/31/2019 in accordance with TGE’s credit facilities.


Consistent Infrastructure Investment

$446

$845

$353 $256

$197

$409

$31

$76

$444

$249

$266 $446

$876

$429

$700

$446

$675

$3,572

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$0

$250

$500

$750

$1,000

2013 2014 2015 2016 2017 2018

Tallgrass Energy EBITDA(1)

Tallgrass Energy Invested Capital

Growth Capex 3rd Party Acquisitions

All $ in millions

(1) Adjusted EBITDA amounts include Deficiency Payments.

(2) Excludes $150mm Ultra settlement payment to REX.

$231$292

$580

$709

$797

$872

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

2013 2014 2015 2016 2017 2018(2)

Cumulative Investment

Capital Investment Summary

Invested Capital $3,572

(÷) Growth EBITDA 641

Multiple on Invested Capital 5.6x

Tallgrass has made significant investments over the last 6 years to build a platform of core midstream

infrastructure, and has a full slate of future projects to continue its growth trajectory


Asset Summary


Summary of Segments

Natural Gas Transportation Segment

• Consists of 3 FERC-regulated natural gas transportation & storage

systems (REX, TIGT and Trailblazer)

▪ >6,800 miles of pipelines

▪ ~6.6 Bcf/d of transportation design capacity

• Access to multiple high-growth basins in the Rockies and

Appalachia, and multiple large demand centers across the

northern US

• REX Pipeline

▪ Placed in service in November 2009

▪ ~1,712 miles of 42” and 36” pipeline

▪ ~1.8 Bcf/d of West-to-East long-haul capacity

▪ ~2.6 Bcf/d of Zone 3 East-to-West capacity

▪ Contracted capacity supports stable cash flow

▪ Access to substantially all major natural gas supply basins in the

Rocky Mountain region, Ohio and Pennsylvania corridors

▪ Favorable proximity to numerous major end-use markets with

significant demand load

1 Crude Oil Transportation Segment2

Gathering, Processing and Terminalling Segment3

• Pony: 834-mile FERC-regulated crude oil pipeline system from

Guernsey, WY / NE Colorado to Cushing, OK

▪ Total transportation capacity of ~400 kbbls/d

▪ Take or pay contracts for a total of ~300 kbbls/d

• PRG: 2 FERC-regulated crude oil pipelines with ~190 kbbls/d of

capacity upon Iron Horse in-service

• Processing and treating

▪ ~ 1,500 miles of natural gas gathering pipeline through the core

of the Powder River Basin

▪ ~190 mmcf/d of processing capacity in the PRB and Wind River

Basin in Wyoming

• Water business services

▪ Fresh water transportation and salt water gathering and disposal

systems in the DJ Basin

▪ Water disposal and gathering in the Bakken

▪ Water disposal infrastructure in the Marcellus / Utica, PRB and

Permian

▪ Effluent management operations in the Eagle Ford Shale

and Permian

• Terminals

▪ 5 terminals serving the Pony Express System

▪ 1 additional terminal under construction

Sizable asset footprint which serves some of the largest, most economic domestic basins

11


Natural Gas Transportation

Note: Overthrust Pipeline is owned by Dominion and consists of ~255 miles of pipeline.

(1) Cheyenne Connector under construction, with expected in-service Q4 2019.

Current Footprint

Asset Overview

Cheyenne Connector and Cheyenne Hub projects received

Environmental Assessments in December 2018. Expected in-

service for both projects is Q4 2019.

TIGT reached an agreement in principle on a pre-filing rate

case settlement in May 2019.

Recent Updates

Consists of 3 FERC-regulated natural gas transportation &

storage systems (REX, TIGT, and Trailblazer)

▪ >6,800 miles of pipelines

▪ ~6.6 Bcf/d of transportation design capacity

Access to multiple high-growth basins in the Rockies and

Appalachia, and multiple large demand centers across the

northern US

(1)

12


Note: Overthrust Pipeline is owned by Dominion and consists of ~255 miles of pipeline.

(1) As of 12/31/2018.

REX Pipeline Overview

• Developed REX into the nation’s northernmost natural gas header system

• Attractive access to both supply basins and large end user markets with significant demand load

• Currently moving both Rocky Mountain and Appalachian production

“Shale to Shining Shale”

Highlights

• Long-term West-end Contracts

▪ >700 mmcf/d West-to-East contracted post-2019

▪ Recontracting conversations with current and potential new west-end

shippers underway

• Cheyenne Hub

▪ Contracted 600 mmcf/d for firm hub service

▪ Discussing expansion opportunities with multiple shippers

▪ Provides DJ basin gas access to REX

• East-end Incremental Contracts

▪ Incremental 105 mmcf/d contracted for 3-5 year terms

▪ Brings total contracted capacity on East-end to >2.7 Bcf/d

• >95% of the 2019 recontracting cash flow risk has been mitigated,

based on FY2013 revenue

• 98% of 2018 revenue was take or pay

• Weighted Average Contract Life(1)

▪ East-to-West Contracts: ~14 years

▪ West-to-East Contracts: ~3 years

• Repaid $550mm of debt in July 2018 through partner

capital contributions

• 4.4 Bcf/d nameplate capacity, but have flowed up to 4.9 Bcf/d

Provides natural gas transportation service for North American energy markets

Wamsutter

Kanda

Meeker

Opal

Cheyenne

Lebanon

Clarington

Zone 1 Zone 2 Zone 3

ROCKIES EXPRESS PIPELINE

SENECA LATERAL

LEASE OF OVERTHRUST CAPACITY

REX COMPRESSOR STATION

>2.6 Bcf/d

13


100% TGE (75%)

REX Currently Contracted EBITDA $500

(–) Interest Expense (127)

(–) Maintenance Capital (15)

REX Currently Contracted DCF $358 $268

Case 1 Case 2

Currently Contracted DCF $358 $358

(+) Recontracting Cash Flow 100 150

Total REX DCF (100%) $458 $508

TGE (75%) $343 $381

REX EBITDA $600 $650

REX Leverage 3.4x 3.1x

Securing Visible REX Cash Flow

REX is currently expected to have ~$500mm of contracted EBITDA in 2020 with

additional capacity available for renewal(1)

East End

▪ ~2.7 Bcf/d of East End volume contracted long-term(2)

▪ Evaluating additional expansion opportunities

West End

▪ >0.7 Bcf/d of West End volume contracted long-term(2)

▪ Discussing post-2019 contracting with multiple parties across multiple basins

REX 2020 Projected EBITDA REX West End Recontracting

Potential incremental revenue from West End

recontracting:(3)

Volume

(MMcf/d)

Encana and Ultra Contracts 706

(+) Assumed Recontracting: 1,094

Total 1,800

$/Mcf

100%

Incremental

REX CF

$0.250 $100

0.300 120

Average 0.375 150

Recontracting 0.400 160

Rate 0.500 200

0.600 240

0.700 280

0.800 319

14

(1)

All $ in millions

(1) Amount estimated based on currently Contracted Revenue for 2020 less anticipated cash operating

expenses for such annual period (forecasted to be in line with the Company's historical costs).

(2) As of 12/31/2018.

(3) For illustrative purposes, assumes current interest expense.


Crude Oil Transportation

(1) Under construction.

Pony System Overview

• 834-mile FERC regulated crude oil pipeline system from Guernsey,

WY / NE Colorado to Cushing, OK

• Total transportation design capacity of ~400 kbbls/d

• Currently expanding system capacity to ~420 kbbls/d by late

summer 2019

• Take or pay contracts for a total of ~300 kbbls/d

Updates and Growth Opportunities

• 2018 throughput averaged ~336 kbbls/d and Q1 2019 averaged

~336 kbbls/d

• April 2019 throughput averaged ~370 kbbls/d, with similar

expectations for May

• Recent demand interconnects

▪ Holly Frontier El Dorado refinery

▪ CHS McPherson refinery

• Recent supply interconnects

▪ Natoma – Access to Kansas production

▪ Platteville Extension – Access to additional DJ Basin production

Current Footprint

(1)

15

Powder River Gateway Overview

• Includes Powder River Express and Iron Horse pipelines and 2

terminals in Guernsey, WY

• ~190 kbbls/d of total capacity across the systems


Seahorse Pipeline Project

Tallgrass Energy is developing a new batch-capable, crude oil pipeline from Cushing, Oklahoma to

the Gulf Coast

Project Design

~700 miles; up to 30” pipeline

Initial capacity of up to 400 kbbls/d

Destinations

St. James, Louisiana

▪ Interconnectivity to more than 2.5 million barrels

per day of refining capacity

Plaquemines Liquids Terminal (see next page for

details)

Potential direct refinery connections

Asset Summary

Project Highlights

Currently conducting binding open season

Gives producers access to premium St. James and

international markets

Provides international refinery markets with access to

field production from five separate basins

Provides Pony shippers with access to WTI, LLS and

Brent-based markets

16


Plaquemines Liquids Terminal Project

Tallgrass Energy is developing the Gulf Coast Plaquemines Liquids Terminal (“PLT”)

Project Design

Storage capacity of up to 20 million bbls

Ability to load Suezmax (up to one million barrels) and

VLCC (up to two million barrels) tankers

Asset Summary

Project Highlights

Project is developed specifically for large scale export of

light shale production

Gives producers access to premium international

markets

Provides international refinery markets with access to

field production from five separate basins

Provides Pony and Seahorse shippers with access to

WTI, LLS and Brent-based markets

Strategic location provides significant logistical

efficiencies over competing Gulf Coast ports in Texas

and Louisiana

17


Gathering & Processing Overview

Tallgrass PRB Footprint

Current Assets

• ~1,500 miles of natural gas gathering pipeline through the

core of the PRB

• ~190 mmcf/d of processing capacity in the PRB and Wind

River Basin in Wyoming

Identified Growth Opportunities

• Additional processing capacity in the PRB is permitted

• Expansion of Douglas gas gathering system

• On-going discussions with multiple producers to

underwrite expansion projects

Recent Updates

• Recently signed 15-year agreement with a significant

producer to gather and process future volumes

Gathering and Processing

(1)

18


BNN Water Solutions Overview

Current Assets

• Freshwater transportation and saltwater gathering and disposal

system in the DJ Basin

• Water disposal and gathering in the Bakken

• Water disposal infrastructure in the Marcellus / Utica

• Water disposal infrastructure in the PRB

• Water disposal infrastructure in the Permian Basin

• Effluent management operations in the Eagle Ford Shale and

Permian Basin

Identified Growth Opportunities

• Clarkelen (PRB) expansion under construction

• Additional PRB disposal facilities

• Additional expansion opportunities in the Permian

• Continued freshwater expansion in DJ

• Additional Bakken acquisitions and/or system expansions

• Acquisitions to enter new basins

Water Business Services

Bakken Assets

NE DJ Basin AssetsSW DJ Basin Assets

19


Terminals Overview

(1) Under construction.

Terminals currently owns 5 crude oil terminals positioned along the Pony Express system with terminals

under construction for the Platteville Extension

GrasslandsUnder

ConstructionBuckingham Natoma

Cushing Sterling Pawnee

• Located in Cushing, OK

• Offload point for Pony Express

• Maintains neat batches of crude

• Facilitates delivery into almost every other

terminal in Cushing

• ~4 million bbls of storage

• Located at the point of intersection between Pony

Express’s Guernsey and Northeast Colorado Lines

• Serves as operational storage for Pony Express

• ~1.3 million bbls of storage

• Serves as injection point for NECL with ~0.3 million

bbls of storage

• ~0.3 million bbl terminal at Platteville to

serve Platteville Extension

• ~0.4 million bbl terminal at Guernsey

currently in-service

• ~0.5 million bbl terminal at Guernsey to

serve Iron Horse

• Guernsey Terminals are part of PRG

• Located along Northeast

Colorado lateral

• 4 truck unloading skids

▪ Capable of receiving ~42,000

bbls/d

• Expanding to add ~0.3 million bbls of

storage to serve Platteville Extension

• Serves as receipt point for Pony

Express’s new Kansas supply sources

Guernsey

(1)

20


Tallgrass Joint Ventures

Existing Joint Venture Overview

21

Natural Gas Transportation

75% of Rockies Express Pipeline LLC (“REX”)

Each of Western Gas Partners and DCP Midstream have a one-time option to acquire a minority interest in

Cheyenne Connector prior to in-service


51% of Powder River Gateway, which owns Iron Horse Pipeline, Powder River Express Pipeline, and 2 crude oil

terminal facilities in Guernsey, WY

Gathering, Processing and Terminalling

Water Solutions

▪ ~92% of Central Environmental Services, Inc. (“CES”)

▪ ~75% of BNN West Texas

▪ 63% of BNN Colorado Water

Terminals

▪ ~60% of a crude oil terminal facility in Cushing, OK

▪ 51% of a crude oil terminal facility in Pawnee, CO

▪ 100% preferred and 80% common interest in PLT


Tallgrass Energy Q1 2019 EBITDA and CAD Reconciliation

22

Summary Financial Information Three Months Ended

(in millions) March 31, 2019

Net income attributable to TGE $ 50.6

Add:

Interest expense, net(1) 39.7

Depreciation and amortization expense(1) 30.7

Distributions from unconsolidated investments 115.1

Deficiency payments, net(1) 12.1

Non-cash compensation expense 17.1

Non-cash loss related to derivative instruments 1.3

Deferred income tax expense 17.1

Net income attributable to Exchange Right Holders 50.5

Less:

Equity in earnings of unconsolidated investments (88.5)

Adjusted EBITDA $ 245.7

Less:

Cash interest cost (38.1)

Maintenance capital expenditures, net (1) (7.0)

Cash Available for Dividends $ 200.6

Less:

Dividends to Class A (TGE) (95.0)

Dividends to Class B (Exchange Right Holders) (54.1)

Amounts in excess of dividends $ 51.5

Dividend coverage 1.35x

(1) Net of noncontrolling interest associated with less than wholly owned subsidiaries

of Tallgrass Equity.


Tallgrass Energy 2018 EBITDA and CAD Reconciliation

23

Summary Financial Information Year Ended

(in millions, except coverage) December 31, 2018(1)

Net income $ 455.9

Net income attributable to noncontrolling interests (235.2)

Net income attributable to TGE 220.8

Add:

Interest expense, net 133.3




Non-cash compensation expense 10.7

Loss on debt retirement 2.2

Distributions received by Tallgrass Development (3) 11.5

Deferred income tax expense 67.4

Net income attributable to Exchange Right Holders 229.0

Less:

Equity in earnings of unconsolidated investments (306.8)

Gain on disposal of assets(2) (10.7)

Non-cash gain related to derivative instruments (2) (4.3)

Adjusted EBITDA $ 871.9

Less:

Cash interest cost (128.0)

Maintenance capital expenditures, net (2) (21.0)

Cash Available for Dividends $ 723.0

Less:

Dividends to Class A (TGE) (266.4)

Dividends to Class B (Exchange Right Holders) (251.7)

Distribution to TEP public unitholders (46.4)

Amounts in excess of dividends $ 158.5

Dividend coverage 1.28x

(2) Net of noncontrolling interest associated with less than wholly owned subsidiaries of Tallgrass Equity.

(1) Indicated amounts presented for the year ended Dec. 31, 2018, are on a pro forma basis assuming that

the merger transaction with TEP had closed on Jan. 1, 2018.

(3) Represents distributions received by Tallgrass Development from its (i) 25.01 percent membership

interest in REX from January 1, 2018 to February 6, 2018 and its (ii) 2 percent membership interest in Pony

Express from January 1, 2018 to January 31, 2018.


Tallgrass Energy EBITDA ReconciliationSummary Financial Information

2017 2016 2015 2014 2013

Tallgrass Energy Partners, LP ("TEP") (1)

Net income attributable to partners 434.0 270.5 172.9 77.1 15.1

Add:

Interest expense, net of noncontrolling interest 83.5 40.7 15.5 7.6 11.0

Depreciation and amortization expense, net of noncontrolling interest 92.5 88.1 77.1 45.7 37.9

Distributions from unconsolidated investments 306.6 78.6 4.6 2.0 -

Non-cash compensation expense 8.7 5.8 5.1 5.1 1.8

(Gain) loss from disposal of assets, net of noncontrolling interest (0.7) 1.8 4.8 - 0.4

Non-cash loss (gain) related to derivative instruments, net of

noncontrolling interest 0.2 1.5 - (0.2) -

Deficiency payments, net of noncontrolling interest 27.2 33.5 16.5 5.4 -

Loss on extinguishment of debt - - 0.2 - 17.5

Less:

Equity in earnings of unconsolidated investments (237.1) (54.5) (2.8) (1.6) -

Gain on remeasurement of unconsolidated investment (9.7) - - (9.4) -

Non-cash loss allocated to noncontrolling interest - - (9.4) (10.2) -

TEP Adjusted EBITDA 705.2 466.0 284.7 121.6 83.7

Tallgrass Development, LP ("TDEV") (2)

Net income 169.1 192.7 178.1 89.8 158.5

Add:

Interest expense, net - - 7.8 38.8 33.3

Depreciation and amortization expense 3.9 3.5 2.6 1.9 0.2

Distributions from unconsolidated investments 222.9 272.8 337.7 223.7 168.3

Non-cash loss (gain) related to derivative instruments 1.9 (1.3) - - -

Loss on extinguishment of debt - - 18.9 - 0.1

Gain on deconsolidation of TEP - - - - (96.6)

Less:

Equity in earnings of unconsolidated investments (173.4) (194.2) (210.3) (146.2) (105.4)

TDEV Adjusted EBITDA 224.4 273.4 334.9 208.1 158.6

Less:

Distributions to TEP & TDEV from REX' Ultra Resources settlement (112.9) - - - -

Distributions to TDEV from TEP (19.8) (30.8) (39.2) (37.5) (11.4)

Tallgrass Energy Adjusted EBITDA (3)796.9 708.7 580.4 292.2 230.9

(3) Represents EBITDA across the Tallgrass Energy Family of Companies.

Year Ended December 31,

(in millions)

(1) The financial results for all periods presented in the TEP table have been recast to include the applicable results of operations of Trailblazer Pipeline Company LLC, the initial

33.3 percent membership interest in Tallgrass Pony Express Pipeline, LLC (“Pony Express”), Tallgrass Terminals, LLC, and Tallgrass NatGas Operator, LLC. The acquisitions of

an additional 33.3 percent and 31.3 percent membership interest in Pony Express effective March 1, 2015, and January 1, 2016, respectively, are presented prospectively from

the dates of acquisition, and as a result, financial information for periods prior to March 1, 2015, and January 1, 2016, have not been recast to reflect the additional 33.3 percent

and 31.3 percent membership interests.

(2) The financial results for the periods presented in the TDEV table include the applicable results of operations of (i) a 50 percent membership interest in Rockies Express

Pipeline, LLC (“Rockies Express”) from January 1, 2013 to March 31, 2017 and a 25.01 percent membership interest in Rockies Express from April 1, 2017 to December 31,

2017 and (ii) a 66.6% membership interest in Pony Express from January 1, 2013 to February 28, 2015, a 33.3 percent membership interest in Pony Express from March 1,

2015 to December 31, 2015, and a 2 percent membership interest from January 1, 2016 to December 31, 2017.

24


Tallgrass Energy Q1 2019 Segment EBITDA Reconciliation

25

Summary Financial Information(1) Three Months Ended

March 31, 2019

Natural Gas Transportation (in millions)

Operating income 19.9$

Add:

Depreciation and amortization expense 4.9

Distributions from unconsolidated investment (2) 113.4

Other income, net 0.7

Segment Adjusted EBITDA 138.9$



Add:


Deficiency payments, net 5.6


Gathering, Processing & Terminalling


Add:


Non-cash loss related to derivative instruments 1.3



Less:

Adjusted EBITDA attributable to noncontrolling interests (1.3)


(1) Segment reporting does not include corporate general and administrative costs

or intersegment eliminations.(2) Includes 75% of REX.(3) Net of noncontrolling interest associated with less than wholly owned subsidiaries



Tallgrass Energy 2018 Merger Adjusted Segment EBITDA Reconciliation

26

Summary Financial Information(1)

Natural Gas Transportation (in millions)

Operating Income 69.6$

Add:


Distributions from unconsolidated investment (2) 380.7


Merger Adjusted Segment Adjusted EBITDA 472.6$

Less:

Merger Adjustments (95.4)

Segment Adjusted EBITDA as Reported in 10-K 377.2$



Add:


Deficiency payments, net 9.6

Less:

Adjusted EBITDA attribtuable to noncontrolling interests (0.4)

Merger Adjusted Segment Adjusted EBITDA 321.7$

Less:



Gathering, Processing & Terminalling


Add:





Less:

Non-cash gain related to derivative instruments (4.3)

Gain on disposal of assets (10.7)

Adjusted EBITDA attributable to noncontrolling interests (5.8)


Less:



(1) Segment reporting does not include corporate general and administrative costs

or intersegment eliminations.(2) Includes 75% of REX.(3) Net of noncontrolling interest associated with less than wholly owned subsidiaries


Year Ended

December 31, 2018

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