KINDER MORGAN, INC. (KMI) FY 2023 MD&A

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with our consolidated financial statements and the notes thereto.  We prepared our consolidated financial statements in accordance with GAAP. Additional sections in this report which should be helpful to the reading of our discussion and analysis include the following: (i) a description of our business strategy found in Items 1 and 2. “Business and Properties—Narrative Description of Business—Business Strategy;” (ii) a description of developments during 2023, found in Items 1 and 2. “Business and Properties—General Development of Business—Recent Developments;” (iii) a description of terms for services and commodities we provide, found in Items 1 and 2.

“Business and Properties—Narrative Description of Business—Business Segments;” (iv) a description of risk factors affecting us and our business, found in Item 1A. “Risk Factors;” and (v) a discussion of forward-looking statements, found in “Information Regarding Forward-Looking Statements” at the beginning of this report.

A comparative discussion of our 2022 to 2021 operating results can be found in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 7, 2022.

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General

Acquisitions

Following are acquisitions we made during the reporting period. See Note 3. “Acquisitions and Divestitures” to our consolidated financial statements for further information on these transactions.

2024 Dividends and Discretionary Capital

We expect to declare dividends of $1.15 per share for 2024, a 2% increase from the 2023 declared dividends of $1.13 per share. We also expect to invest $2.3 billion in expansion projects and contributions to joint ventures, or discretionary capital expenditures, during 2024.

The expectations for 2024 discussed above involve risks, uncertainties and assumptions, and are not guarantees of performance.  Many of the factors that will determine these expectations are beyond our ability to control or predict, and because of these uncertainties, it is advisable not to put undue reliance on any forward-looking statement.  Please read “Information Regarding Forward-Looking Statements” at the beginning of this report and Item 1A. “Risk Factors” for more information.

Critical Accounting Estimates

Critical accounting estimates and assumptions involve material levels of subjectivity and complex judgement to account for highly uncertain matters or matters with a high susceptibility to change, and could result in a material impact to our financial statements. Examples of certain areas that require more judgment relative to others when preparing our consolidated financial statements and related disclosures include our use of estimates in determining (i) revenue recognition; (ii) income taxes; (iii) the economic useful lives of our assets and related depletion rates; (iv) the fair values used in (a) assignment of the purchase price for a business acquisition, (b) calculations of possible asset and equity investment impairment charges, (c) calculation for the annual goodwill impairment test (or interim tests if triggered), and (d) recording derivative contract assets and liabilities; (v) reserves for environmental claims, legal fees, transportation rate cases and other litigation liabilities; (vi) provisions for credit losses; and (vii) exposures under contractual indemnifications. We routinely evaluate these estimates, utilizing historical experience, consultation with experts and other methods we consider reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from our estimates, and any effects on our business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known.

For a summary of our significant accounting policies, see Note 2 “Summary of Significant Accounting Policies” to our consolidated financial statements and the following discussion for further information regarding critical accounting estimates and assumptions used in the preparation of our financial statements. For discussion on our hedging activities and related sensitivities to our estimates, see Note 14 “Risk Management” to our consolidated financial statements and Item 7A. “Quantitative and Qualitative Disclosures About Market Risk,” respectively.

Impairments

In addition to our annual testing of impairment for goodwill, we evaluate impairment of our long-lived assets when a triggering event occurs. Management applies judgment in determining whether there is an impairment indicator. Fair value calculated for the purpose of testing our long-lived assets, including intangible assets, goodwill and equity method investments,

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for impairment involves the use of significant estimates and assumptions regarding the timing and amounts of future cash inflows and outflows, discount rates, market prices and asset lives, among other items. The estimates and assumptions can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors such as changes in our business strategy and our internal forecasts. An estimate of the sensitivity to changes in underlying assumptions of a fair value calculation is not practicable, given the numerous assumptions that can materially affect our estimates.

For more information on our impairments and significant estimates and assumptions used in our impairment evaluations, see Note 4 “Losses and Gains on Divestitures, Impairments and Other Write-downs.”

Environmental Matters

With respect to our environmental exposure, we utilize both internal staff and external experts to assist us in identifying environmental issues and in estimating the costs and timing of remediation efforts. Our accrual of environmental liabilities often coincides either with our completion of a feasibility study or our commitment to a formal plan of action, but generally, we recognize and/or adjust our probable environmental liabilities, if necessary or appropriate, following quarterly reviews of potential environmental issues and claims that could impact our assets or operations. In recording and adjusting environmental liabilities, we consider the effect of environmental compliance, pending legal actions against us, and potential third-party liability claims. For more information on environmental matters, see Part I, Items 1 and 2. “Business and Properties—Narrative Description of Business—Environmental Matters.” For more information on our environmental disclosures, see Note 18 “Litigation and Environmental” to our consolidated financial statements.

Legal and Regulatory Matters

Many of our operations are regulated by various U.S. regulatory bodies, and we are subject to legal and regulatory matters as a result of our business operations and transactions. We utilize both internal and external counsel in evaluating our potential exposure to adverse outcomes from orders, judgments or settlements. Any such liability recorded is revised as better information becomes available. Accordingly, to the extent that actual outcomes differ from our estimates, or additional facts and circumstances cause us to revise our estimates, our earnings will be affected. For more information on regulatory matters, see Part I, Items 1 and 2. “Business and Properties—Narrative Description of Business—Industry Regulation.” For more information on legal proceedings, see Note 18 “Litigation and Environmental” to our consolidated financial statements.

Employee Benefit Plans

Our pension and OPEB obligations and net benefit costs are primarily based on actuarial calculations. A significant assumption we utilize is the discount rate used in calculating our benefit obligations. The selection of assumptions used in the actuarial calculations of our pension and OPEB plans is further discussed in Note 10 “Share-based Compensation and Employee Benefits” to our consolidated financial statements.

Actual results may differ from the assumptions included in these calculations, and as a result, our estimates associated with our pension and OPEB obligations can be, and have been revised in subsequent periods. The income statement impact of the changes in the assumptions on our related benefit obligations are deferred and amortized into income over either the period of expected future service of active participants, or over the expected future lives of inactive plan participants.

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The following sensitivity analysis shows the estimated impact of a 1% change in the primary assumptions used in our actuarial calculations associated with our pension and OPEB plans for the year ended December 31, 2023:

(a)Includes amounts deferred as either accumulated other comprehensive income (loss) or as a regulatory asset or liability for certain of our regulated operations.

Income Taxes

We make significant judgments and estimates in determining our provision for income taxes, including our assessment of our income tax positions given the uncertainties involved in the interpretation and application of complex tax laws and regulations in various taxing jurisdictions. Numerous and complex judgments and assumptions are inherent in the estimation of future taxable income when determining a valuation allowance, including factors such as future operating conditions and the apportionment of income by state. For more information, see Note 5 “Income Taxes” to our consolidated financial statements.

Results of Operations

Overview

As described in further detail below, our management evaluates our performance primarily using Net income attributable to Kinder Morgan, Inc. and Segment earnings before DD&A expenses, including amortization of excess cost of equity investments, (EBDA) (as presented in Note 16 “Reportable Segments”) along with the non-GAAP financial measures of Adjusted Net income attributable to Common Stock, and distributable cash flow (DCF), both in the aggregate and per share for each, Adjusted Segment EBDA, Adjusted Net income attributable to Kinder Morgan, Inc., Adjusted earnings before interest, income taxes, DD&A expenses, including amortization of excess cost of equity investments, (EBITDA) and Net Debt.

GAAP Financial Measures

The Consolidated Earnings Results for the years ended December 31, 2023 and 2022 present Net income attributable to Kinder Morgan, Inc., as prepared and presented in accordance with GAAP, and Segment EBDA, which is disclosed in Note 16 “Reportable Segments” pursuant to FASB ASC 280. The composition of Segment EBDA is not addressed nor prescribed by generally accepted accounting principles. Segment EBDA is a useful measure of our operating performance because it measures the operating results of our segments before DD&A and certain expenses that are generally not controllable by our business segment operating managers, such as general and administrative expenses and corporate charges, interest expense, net, and income taxes. Our general and administrative expenses and corporate charges include such items as unallocated employee benefits, insurance, rentals, unallocated litigation and environmental expenses, and shared corporate services including accounting, information technology, human resources and legal services.

Non-GAAP Financial Measures

Our non-GAAP financial measures described below should not be considered alternatives to GAAP Net income attributable to Kinder Morgan, Inc. or other GAAP measures and have important limitations as analytical tools. Our computations of these non-GAAP financial measures may differ from similarly titled measures used by others. You should not consider these non-GAAP financial measures in isolation or as substitutes for an analysis of our results as reported under GAAP. Management compensates for the limitations of our consolidated non-GAAP financial measures by reviewing our

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comparable GAAP measures identified in the descriptions of consolidated non-GAAP measures below, understanding the differences between the measures and taking this information into account in its analysis and its decision-making processes.

Certain Items

Certain Items, as adjustments used to calculate our non-GAAP financial measures, are items that are required by GAAP to be reflected in Net income attributable to Kinder Morgan, Inc., but typically either (i) do not have a cash impact (for example, unsettled commodity hedges and asset impairments), or (ii) by their nature are separately identifiable from our normal business operations and in most cases are likely to occur only sporadically (for example, certain legal settlements, enactment of new tax legislation and casualty losses). (See the tables included in “—Non-GAAP Financial Measures—Reconciliation of Net Income Attributable to Kinder Morgan, Inc. to Adjusted Net Income Attributable to Kinder Morgan, Inc.,” “—Non-GAAP Financial Measures—Reconciliation of Net Income Attributable to Kinder Morgan, Inc. to DCF” and “—Non-GAAP Financial Measures—Reconciliation of Net Income Attributable to Kinder Morgan, Inc. to Adjusted EBITDA” below). We also include adjustments related to joint ventures (see “Amounts from Joint Ventures” below). The following table summarizes our Certain Items for the years ended December 31, 2023 and 2022, which are also described in more detail in the footnotes to tables included in “—Segment Earnings Results” below.

(a)Gains or losses are reflected when realized.

(b)Represents the income tax provision on Certain Items plus discrete income tax items. Includes the impact of KMI’s income tax provision on Certain Items affecting earnings from equity investments and is separate from the related tax provision recognized at the investees by the joint ventures which are also taxable entities.

(c)2023 amount represents pension cost adjustments related to settlements made by our pension plans.

(d)2023 and 2022 amounts include the following amounts reported within “Earnings from equity investments” on the accompanying consolidated statements of income: (i) none and $1 million, respectively, included within “Change in fair value of derivative contracts” and (ii) $67 million, for the 2023 period only, included within “Loss on impairment” for a non-cash impairment related to our investment in Double Eagle Pipeline LLC in our Products Pipelines business segment (see Note 4 “Losses and Gains on Divestitures, Impairments and Other Write-downs—Impairments—Investments”).

(e)2023 and 2022 amounts include, in the aggregate, $(7) million and $(11) million, respectively, included within “Interest, net” on the accompanying consolidated statements of income which consist of none and $(15) million, respectively, of “Fair value amortization” and $(7) million and $4 million, respectively, of “Change in fair value of derivative contracts.”

Adjusted Net Income Attributable to Kinder Morgan, Inc.

Adjusted Net Income Attributable to Kinder Morgan, Inc. (previously referred to as “Adjusted Earnings”) is calculated by adjusting Net income attributable to Kinder Morgan, Inc. for Certain Items. Adjusted Net Income Attributable to Kinder Morgan, Inc. is used by us, investors and other external users of our financial statements as a supplemental measure that provides decision-useful information regarding our period-over-period performance and ability to generate earnings that are core to our ongoing operations. We believe the GAAP measure most directly comparable to Adjusted Net Income Attributable to Kinder Morgan, Inc. is Net income attributable to Kinder Morgan, Inc. See “—Non-GAAP Financial Measures—Reconciliation of Net Income Attributable to Kinder Morgan, Inc. to Adjusted Net Income Attributable to Kinder Morgan, Inc.”

Adjusted Net Income Attributable to Common Stock and Adjusted EPS

Adjusted Net Income Attributable to Common Stock is calculated by adjusting Net income attributable to Kinder Morgan, Inc., the most comparable GAAP measure, for Certain Items, and further for net income allocated to participating securities and adjusted net income in excess of distributions for participating securities. We are adopting Adjusted Net Income Attributable to

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Common Stock because we believe it allows for calculation of adjusted earnings per share (Adjusted EPS) on the most comparable basis with earnings per share, the most comparable GAAP measure to Adjusted EPS. Adjusted EPS is calculated as Adjusted Net Income Attributable to Common Stock divided by our weighted average shares outstanding. Adjusted EPS applies the same two-class method used in arriving at basic earnings per share. Adjusted EPS is used by us, investors and other external users of our financial statements as a per-share supplemental measure that provides decision-useful information regarding our period-over-period performance and ability to generate earnings that are core to our ongoing operations. See “—Non-GAAP Financial Measures—Reconciliation of Net Income Attributable to Kinder Morgan, Inc. to Adjusted Net Income Attributable to Common Stock” below.

DCF

DCF is calculated by adjusting Net income attributable to Kinder Morgan, Inc. for Certain Items, and further for DD&A and amortization of excess cost of equity investments, income tax expense, cash taxes, sustaining capital expenditures and other items. We also adjust amounts from joint ventures for income taxes, DD&A, cash taxes and sustaining capital expenditures (see “Amounts from Joint Ventures” below). DCF is a significant performance measure used by us, investors and other external users of our financial statements to evaluate our performance and to measure and estimate the ability of our assets to generate economic earnings after paying interest expense, paying cash taxes and expending sustaining capital. DCF provides additional insight into the specific costs associated with our assets in the current period and facilitates period-to-period comparisons of our performance from ongoing business activities. DCF is also used by us, investors, and other external users to compare the performance of companies across our industry. DCF per share serves as the primary financial performance target for purposes of annual bonuses under our annual incentive compensation program and for performance-based vesting of equity compensation grants under our long-term incentive compensation program. DCF should not be used as an alternative to net cash provided by operating activities computed under GAAP. We believe the GAAP measure most directly comparable to DCF is Net income attributable to Kinder Morgan, Inc. DCF per share is DCF divided by average outstanding shares, including restricted stock awards that participate in dividends. See “—Non-GAAP Financial Measures—Reconciliation of Net Income Attributable to Kinder Morgan, Inc. to DCF” below.

Adjusted Segment EBDA

Adjusted Segment EBDA is calculated by adjusting Segment EBDA for Certain Items attributable to the segment. Adjusted Segment EBDA is used by management in its analysis of segment performance and management of our business. We believe Adjusted Segment EBDA is a useful performance metric because it provides management, investors and other external users of our financial statements additional insight into performance trends across our business segments, our segments’ relative contributions to our consolidated performance and the ability of our segments to generate earnings on an ongoing basis. Adjusted Segment EBDA is also used as a factor in determining compensation under our annual incentive compensation program for our business segment presidents and other business segment employees. We believe it is useful to investors because it is a measure that management uses to allocate resources to our segments and assess each segment’s performance. See “—Non-GAAP Financial Measures—Reconciliation of Segment EBDA to Adjusted Segment EBDA” below.

Adjusted EBITDA

Adjusted EBITDA is calculated by adjusting Net income attributable to Kinder Morgan, Inc. for Certain Items and further for DD&A and amortization of excess cost of equity investments, income tax expense and interest. We also include amounts from joint ventures for income taxes and DD&A (see “Amounts from Joint Ventures” below). Adjusted EBITDA is used by management, investors and other external users, in conjunction with our Net Debt (as described further below), to evaluate our leverage. Management and external users also use Adjusted EBITDA as an important metric to compare the valuations of companies across our industry. Our ratio of Net Debt-to-Adjusted EBITDA is used as a supplemental performance target for purposes of our annual incentive compensation program. We believe the GAAP measure most directly comparable to Adjusted EBITDA is Net income attributable to Kinder Morgan, Inc. See “—Non-GAAP Financial Measures—Reconciliation of Net Income Attributable to Kinder Morgan, Inc. to Adjusted EBITDA” below.

Amounts from Joint Ventures

Certain Items, DCF and Adjusted EBITDA reflect amounts from unconsolidated joint ventures and consolidated joint ventures utilizing the same recognition and measurement methods used to record “Earnings from equity investments” and “Noncontrolling interests,” respectively. The calculations of DCF and Adjusted EBITDA related to our unconsolidated and consolidated joint ventures include the same items (DD&A and income tax expense, and for DCF only, also cash taxes and sustaining capital expenditures) with respect to the joint ventures as those included in the calculations of DCF and Adjusted EBITDA for our wholly-owned consolidated subsidiaries; further, we remove the portion of these adjustments attributable to

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non-controlling interests. (See “—Non-GAAP Financial Measures—Reconciliation of Net Income Attributable to Kinder Morgan, Inc. to DCF” and “—Non-GAAP Financial Measures—Reconciliation of Net Income Attributable to Kinder Morgan, Inc. to Adjusted EBITDA” below.) Although these amounts related to our unconsolidated joint ventures are included in the calculations of DCF and Adjusted EBITDA, such inclusion should not be understood to imply that we have control over the operations and resulting revenues, expenses or cash flows of such unconsolidated joint ventures.

Net Debt

Net Debt is calculated, based on amounts as of December 31, 2023, by subtracting the following amounts from our debt balance of $32,116 million: (i) cash and cash equivalents of $83 million; (ii) debt fair value adjustments of $187 million; and (iii) the foreign exchange impact on Euro-denominated bonds of $9 million for which we have entered into currency swaps to convert that debt to U.S. dollars. Net Debt, on its own and in conjunction with our Adjusted EBITDA as part of a ratio of Net Debt-to-Adjusted EBITDA, is a non-GAAP financial measure that is used by management, investors and other external users of our financial information to evaluate our leverage. Our ratio of Net Debt-to-Adjusted EBITDA is also used as a supplemental performance target for purposes of our annual incentive compensation program. We believe the most comparable measure to Net Debt is total debt.

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Consolidated Earnings Results

The following tables summarize the key components of our consolidated earnings results.

Our consolidated revenues include fees for transportation and other midstream services that we perform. Fluctuations in our consolidated services revenue largely reflect changes in volumes and/or in the rates we charge. Our consolidated costs of sales and sales revenues also include purchases and sales of natural gas and products (which means, collectively, NGL, crude oil, CO2 and transmix) and related derivative activity. Our consolidated sales revenue will fluctuate with commodity prices and volumes, and the associated costs of sales will usually have a commensurate and offsetting impact, except for the CO2 segment, which produces, instead of purchases, the crude oil and CO2 it sells. Additionally, fluctuations in revenues and costs of sales may be further impacted by gains or losses from derivative contracts that we use to manage our commodity price risk.

Below is a discussion of significant changes in our Consolidated Earnings Results for the comparable years ended 2023 and 2022:

Revenues

Revenues decreased $3,866 million in 2023 compared to 2022. The decrease was primarily due to lower natural gas sales of $3,616 million and lower product sales of $1,029 million driven primarily by lower commodity prices partially offset by the impact of derivative contracts used to hedge commodity sales of $532 million, which includes both realized and unrealized gains and losses from derivatives. These decreases in revenues were offset by corresponding decreases in our costs of sales as described below under “Operating Costs, Expenses and Other—Costs of sales.”

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Operating Costs, Expenses and Other

Costs of Sales

Costs of sales decreased $4,317 million in 2023 compared to 2022. The decrease was primarily due to lower costs of sales for natural gas of $3,587 million and for products of $622 million driven primarily by lower commodity prices. Costs of sales was further reduced by $73 million for the impacts of derivative contracts used to hedge commodity purchases which includes both realized and unrealized gains and losses from derivatives.

Operations and Maintenance

Operations and maintenance increased $152 million in 2023 compared to 2022. The increase was primarily driven by higher labor and other expenses, including integrity costs and services, fuel costs and materials and supplies, related to greater activity levels and inflation, partially offset by lower legal costs due to a legal reserve established in the 2022 period associated with the EPNG pipeline rupture.

Other Income (Expense)

Interest, net

In the table above, we report our interest expense as “net,” meaning that we have subtracted interest income and capitalized interest from our total interest expense to arrive at one interest amount.  Our interest expense, net increased $284 million in 2023 compared to 2022. The increase was primarily due to higher interest rates associated with fixed-to-floating interest rate swaps.

Other, net

Other, net changed $92 million in 2023 compared to 2022. The unfavorable change was primarily due to increased pension costs resulting from higher interest rates, declining pension asset performance and adjustments related to settlements made by our pension plans partially offset by a payment made in the 2022 period associated with the bankruptcy settlement involving our former equity investee, Ruby.

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Non-GAAP Financial Measures

Reconciliation of Net Income Attributable to Kinder Morgan, Inc. to Adjusted Net Income Attributable to Kinder Morgan, Inc.

(a)See table included in “—Overview—Non-GAAP Financial Measures—Certain Items” above.

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(b)See “—Non-GAAP Financial Measures—Reconciliation of Net Income Attributable to Kinder Morgan, Inc. to Adjusted Net Income Attributable to Common Stock” for a detailed listing.

(c)Net income allocated to common stock and participating securities is based on the amount of dividends paid in the current period plus an allocation of the undistributed earnings or excess distributions over earnings to the extent that each security participates in earnings or excess distributions over earnings, as applicable.

(d)Adjusted net income in excess of distributions for participating securities.

(e)To avoid duplication, adjustments for income tax expense for 2023 and 2022 exclude $33 million and $(37) million, which amounts are already included within “Certain Items.” See table included in “—Overview—Non-GAAP Financial Measures—Certain Items” above.

(f)Associated with our Citrus, NGPL Holdings and Products (SE) Pipe Line equity investments.

(g)Includes the tax provision on Certain Items recognized by the investees that are taxable entities. The impact of KMI’s income tax provision on Certain Items affecting earnings from equity investments is included within “Certain Items.” See table included in “—Overview—Non-GAAP Financial Measures—Certain Items” above.

(h)Includes non-cash pension expense, non-cash compensation associated with our restricted stock program and pension contributions.

(i)Includes restricted stock awards that participate in dividends.

Reconciliation of Net Income Attributable to Kinder Morgan, Inc. to Adjusted EBITDA

(a)See table included in “—Overview—Non-GAAP Financial Measures—Certain Items” above.

(b)To avoid duplication, adjustments for income tax expense for 2023 and 2022 exclude $33 million and $(37) million, which amounts are already included within “Certain Items.” See table included in “—Overview—Non-GAAP Financial Measures—Certain Items” above.

(c)To avoid duplication, adjustments for interest, net for 2023 and 2022 exclude $(7) million and $(11) million, respectively, which amounts are already included within “Certain Items.” See table included in “—Overview—Non-GAAP Financial Measures—Certain Items,” above.

(d)Includes that tax provision on Certain Items recognized by the investees that are taxable entities associated with our Citrus, NGPL Holdings and Products (SE) Pipe Line equity investments. The impact of KMI’s income tax provision on Certain Items affecting earnings from equity investments is included within “Certain Items” above.

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Below is a discussion of significant changes in our Adjusted Net Income Attributable to Kinder Morgan, Inc., DCF and Adjusted EBITDA:

Adjusted Net Income Attributable to Kinder Morgan, Inc. decreased $226 million in 2023 compared to 2022. The decrease was primarily driven by higher interest expense. Higher interest expense also affected DCF. The $255 million decrease in DCF in 2023 compared to 2022 was further impacted by an increase in sustaining capital expenditures. Adjusted EBITDA increased $45 million in 2023 compared to 2022. The increase was due to favorable margins from settled derivatives on our Natural Gas Pipeline business segment partially offset by overall lower commodity prices across our business segments.

General and Administrative and Corporate Charges

General and administrative expenses increased $31 million and corporate (charges) benefit increased $135 million in 2023 compared to 2022. The combined changes were primarily due to higher pension costs of $95 million resulting from higher interest rates and declining pension asset performance, and higher labor and benefit-related costs of $39 million. In addition, the combined changes include the impact of increased pension costs of $45 million in 2023 related to settlements made by our pension plans and increased costs of $6 million in 2022 associated with the Ruby bankruptcy, which we treated as Certain Items.

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Reconciliation of Segment EBDA to Adjusted Segment EBDA

(a)Includes revenues, earnings from equity investments, operating expenses, gain on divestitures and impairments, net, other (expense) income, net, and other, net. Operating expenses include costs of sales, operations and maintenance expenses, and taxes, other than income taxes. See “—Overview—GAAP Financial Measures” above.

(b)See “—Overview—Non-GAAP Financial Measures—Certain Items” above.

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Segment Earnings Results

Natural Gas Pipelines

(a)See table included in “—Overview—Non-GAAP Financial Measures—Certain Items” above. 2023 and 2022 Certain Items of (i) $(122) million and $63 million, respectively, are associated with our Midstream business; (ii) none and $1 million, respectively, are associated with our East business; and (iii) none and $77 million, respectively, are associated with our West business. For more detail of significant Certain Items, see the discussion of changes in Segment EBDA below.

(b)Joint venture throughput is reported at our ownership share. Volumes for assets sold are excluded for all periods presented.

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Below are the changes in Natural Gas Pipelines Segment EBDA:

The changes in Natural Gas Pipelines Segment EBDA in the comparable years of 2023 and 2022 are explained by the following discussion:

•The $256 million (18%) increase in Midstream was affected by decreases in revenues and costs of sales related to the mark-to-market impacts of non-cash unrealized derivative contracts used to hedge forecasted commodity sales and purchases, which we treated as Certain Items.

In addition, Midstream was favorably impacted by (i) higher earnings on our Texas intrastate natural gas pipeline operations resulting from increased sales margins, which were largely driven by realized gains on sales hedges but reduced by lower commodity prices and sales volumes, and from lower pipeline integrity costs; (ii) higher earnings from our Hiland Midstream systems primarily due to higher services fees resulting from higher volumes and rates; and (iii) higher earnings on our KinderHawk assets driven by increased volumes partly reduced by higher operating expenses. These were partially offset by (i) lower service fee revenues as a result of renegotiated contracts at lower rates on our South Texas assets; and (ii) lower commodity sales margin driven primarily by lower volumes on our Oklahoma assets.

Overall, Midstream’s revenue changes are partially offset by corresponding changes in costs of sales.

•The $135 million (5%) increase in East was primarily due to (i) higher equity earnings from Midcontinent Express Pipeline LLC, driven by favorable pricing on new customer contracts entered into in the later part of 2022; (ii) higher revenues on our Stagecoach assets as a result of increased demand for its services and favorable pricing; (iii) higher revenues on TGP due to increased rates on capacity sales, increased demand for its services, favorable pricing on services and an expansion project that went into service in November 2023 partially offset by higher pipeline maintenance costs.

•The $90 million (10%) increase in West was primarily due to higher earnings from EPNG due to (i) increased revenues from favorable pricing on its services and the return of a pipeline segment to service in February 2023 and (ii) an increase in gas sales margin, partially offset by (i) increased pipeline integrity costs on EPNG and (ii) lower revenues from Cheyenne Plains Gas Pipeline Company, L.L.C. and Wyoming Interstate Company, L.L.C., principally resulting from contract expirations in December 2022.

In addition, the West was affected by costs associated with the EPNG pipeline rupture and related litigation reserve and a payment associated with the bankruptcy settlement involving our former equity investee, Ruby, for the 2022 period only, which we treated as Certain Items.

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Products Pipelines

(a)See table included in “—Overview—Non-GAAP Financial Measures—Certain Items” above. 2023 and 2022 Certain Items of (i) $(1) million and none, respectively, are associated with our Southeast Refined Products business and (ii) $67 million and none, respectively, are associated with our Crude and Condensate business. For more detail of significant Certain Items, see the discussion of changes in Segment EBDA below.

(b)Joint venture throughput is reported at our ownership share.

(c)Volumes include ethanol pipeline volumes.

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Below are the changes in Products Pipelines Segment EBDA:

The changes in Products Pipelines Segment EBDA in the comparable years of 2023 and 2022 are explained by the following discussion:

•The $66 million (20%) decrease in Crude and Condensate was affected by a decrease of $67 million to equity earnings for a non-cash impairment related to our investment in Double Eagle Pipeline LLC, which we treated as a Certain Item.

In addition, Crude and Condensate was impacted by (i) higher earnings from our Bakken assets due primarily to higher volumes and gathering rates and lower operating costs driven by favorable net changes in product gains and losses partially offset by unfavorable product pricing and (ii) an increase in equity earnings, excluding the impairment discussed above, from Double Eagle Pipeline LLC due to an increase in volumes and deficiency revenues, offset by lower earnings from Kinder Morgan Crude & Condensate pipeline driven primarily by a decrease in revenues as a result of re-contracting at lower rates and lower deficiency revenues. Our Crude and Condensate business also had lower revenues with a corresponding decrease in costs of sales, resulting primarily from decreased commodity pricing and volumes.

•The $13 million (5%) increase in Southeast Refined Products was driven by (i) an increase in equity earnings from Products (SE) Pipe Line primarily due to increased revenues driven by higher rates, volumes and blending activities partially offset by unfavorable net changes in product gains and losses and (ii) higher revenues on Central Florida Pipeline LLC due to higher volumes and rates partially offset by lower earnings at our Transmix processing operations primarily due to unfavorable product pricing.

•The $8 million (2%) increase in West Coast Refined Products was impacted by increased revenues from our Pacific operations as a result of renewable diesel growth projects and higher rates partially offset by higher operating costs driven by unfavorable net changes in product gains and losses, higher fuel rates, and increased labor costs and increased revenues from Calnev Pipe Line LLC driven by higher rates partially offset by a gain on sale of land in the 2022 period.

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Terminals

(a)Volumes for facilities divested, idled, and/or held for sale are excluded for all periods presented.

(b)The ratio of our tankage capacity in service to liquids leasable capacity.

The groupings for our Terminals business segment have been updated from previous periods to reflect a more condensed presentation of Terminals Segment EBDA. For purposes of the following tables and related discussions, the results of operations of our terminals are reclassified for all periods presented from the historical business grouping. Terminals held for sale or divested, including any associated gain or loss on sale, are included within the Other group.

Below are the changes in Terminals Segment EBDA:

The changes in Terminals Segment EBDA in the comparable years of 2023 and 2022 are explained by the following discussion:

•The $31 million (21%) increase in Jones Act tankers was primarily due to higher average charter rates.

•The $28 million (5%) increase in Liquids was primarily due to increased revenues associated with contributions from expansion projects, contractual rate escalations, re-contracting at higher rates and increased utilization partially offset by higher labor and maintenance expense.

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•The $13 million (5%) increase in Bulk was primarily due to higher revenues associated with contributions from expansion projects, contractual rate escalations, higher volumes for petroleum coke and higher volumes and ancillaries for steel handling activities partially offset by reduced revenues from coal handling activities and higher labor and other operating expenses.

CO2

(a)See table included in “—Overview—Non-GAAP Financial Measures—Certain Items” above. 2023 and 2022 Certain Items are associated with our Oil and Gas Producing activities. For more detail of significant Certain Items, see the discussion of changes in Segment EBDA below.

(b)Volumes for acquired assets are included for all periods presented, however, EBDA contributions from acquisitions are included only for the periods subsequent to their acquisition.

(c)Includes volumetric data for Diamond M.

(d)Net of royalties and outside working interests.

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Below are the changes in CO2 Segment EBDA:

The changes in CO2 Segment EBDA in the comparable years of 2023 and 2022 are explained by the following discussion:

•The $80 million (14%) decrease in Oil and Gas Producing activities was impacted by decreases in revenues related to lower realized NGL prices and lower volumes, lower crude oil volumes and higher operating expenses partially offset by higher realized crude oil prices.

In addition, Oil and Gas Producing activities was affected by unfavorable changes in revenues related to the mark-to-market impacts of non-cash unrealized derivative hedge contracts, which we treated as Certain Items.

•The $60 million (24%) decrease in Source and Transportation activities was primarily due to lower revenues related to lower CO2 sales prices and volumes.

•The $10 million (53%) increase in Energy Transition Ventures activities was primarily driven by three additional plants placed into service during 2023 leading to higher RNG margins as a result of higher volumes, partially offset by higher operating expenses.

We believe that our existing hedge contracts in place within our CO2 business segment substantially mitigate commodity price sensitivities in the near-term and to lesser extent over the following few years from price exposure. Below is a summary of our CO2 business segment hedges outstanding as of December 31, 2023.

(a)Includes West Texas Intermediate hedges.

Liquidity and Capital Resources

General

As of December 31, 2023, we had $83 million of “Cash and cash equivalents,” a decrease of $662 million from December 31, 2022. Additionally, as of December 31, 2023, we had borrowing capacity of approximately $1.4 billion under our credit facility (discussed below in “—Short-term Liquidity”). As discussed further below, we believe our cash flows from operating activities, cash position and remaining borrowing capacity on our credit facility is more than adequate to allow us to manage our day-to-day cash requirements and anticipated obligations.

We have consistently generated substantial cash flow from operations, providing a source of funds of $6,491 million and $4,967 million in 2023 and 2022, respectively. The year-to-year increase is discussed below in “—Cash Flows—Operating Activities.” We primarily rely on cash provided by operations to fund our operations as well as our debt service, sustaining capital expenditures, dividend payments and our growth capital expenditures; however, we may access the debt capital markets from time to time to refinance our maturing long-term debt and finance incremental investments, if any. From time to time,

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short-term borrowings are used to finance our expansion capital expenditures, which we may periodically replace with long-term financing and/or pay down using retained cash from operations.

Our Board declared a quarterly dividend of $0.2825 per share for the fourth quarter of 2023, consistent with previous quarters in 2023. The total of the dividends declared for 2023 of $1.13 represents a 2% increase over total dividends declared for 2022.

We financed our fourth quarter acquisition of STX Midstream using commercial paper borrowings.

On January 31, 2023, we issued in a registered offering, $1,500 million aggregate principal amount of 5.20% senior notes due 2033 for net proceeds of $1,485 million, which were used to repay short-term borrowings, maturing debt and for general corporate purposes.

During the year ended December 31, 2023, upon maturity, we repaid our 3.15% senior notes, our floating rate senior notes, our 3.45% senior notes, our 3.50% senior notes and our 5.625% senior notes.

On February 1, 2024, we issued in a registered offering, two series of senior notes consisting of $1,250 million aggregate principal amount of 5.00% senior notes due 2029 and $1,000 million aggregate principal amount of 5.40% senior notes due 2034 for combined net proceeds of $2,230 million, which were used to repay short-term borrowings, fund maturing debt and for general corporate purposes.

Short-term Liquidity

As of December 31, 2023, our principal sources of short-term liquidity are (i) cash from operations; and (ii) our $3.5 billion credit facility with an available capacity of approximately $1.4 billion and an associated $3.5 billion commercial paper program. The loan commitments under our credit facility can be used for working capital and other general corporate purposes and as a backup to our commercial paper program. Commercial paper borrowings and letters of credit reduce borrowings allowed under our credit facility. We provide for liquidity by maintaining a sizable amount of excess borrowing capacity under our credit facility and, as previously discussed, have consistently generated strong cash flows from operations.

As of December 31, 2023, our $4,049 million of short-term debt consisted primarily of commercial paper borrowings and senior notes that mature in the next twelve months. We intend to fund our debt as it becomes due, primarily through credit facility borrowings, commercial paper borrowings, cash flows from operations, and/or issuing new long-term debt. Our short-term debt balance as of December 31, 2022 was $3,385 million.

We had working capital (defined as current assets less current liabilities) deficits of $4,679 million and $3,127 million as of December 31, 2023 and 2022, respectively. The overall $1,552 million unfavorable change from year-end 2022 was primarily due to (i) a $664 million increase in current debt, primarily related to commercial paper borrowings used to fund our acquisition of STX Midstream; (ii) a $662 million decrease in cash and cash equivalents, resulting from using cash on hand as of December 31, 2022 to repay a portion of our senior notes that matured in the first quarter of 2023 partially offset by a decrease in current maturities of senior notes; (iii) a $174 million net unfavorable change in our accounts receivables and payables; (iv) a $109 million decrease in inventories, primarily products inventories; and (v) a $97 million decrease in other current assets, primarily in exchange gas receivables and regulatory assets; partially offset by favorable net short-term fair value adjustments of $155 million on derivative contract assets and liabilities in 2023. Generally, our working capital varies due to factors such as the timing of scheduled debt payments, timing differences in the collection and payment of receivables and payables, the change in fair value of our derivative contracts and changes in our cash and cash equivalent balances as a result of excess cash from operations after payments for investing and financing activities (discussed below in “—Long-term Financing” and “—Capital Expenditures”).

We employ a centralized cash management program for our U.S.-based bank accounts that concentrates the cash assets of our wholly owned subsidiaries in joint accounts for the purpose of providing financial flexibility and lowering the cost of borrowing. These programs provide that funds in excess of the daily needs of our wholly owned subsidiaries are concentrated, consolidated or otherwise made available for use by other entities within the consolidated group. We place no material restrictions on the ability to move cash between entities, payment of intercompany balances or the ability to upstream dividends to KMI other than restrictions that may be contained in agreements governing the indebtedness of those entities.

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Credit Ratings and Capital Market Liquidity

We believe that our capital structure will continue to allow us to achieve our business objectives. We expect that our short-term liquidity needs will be met primarily through retained cash from operations or short-term borrowings. Generally, we anticipate re-financing maturing long-term debt obligations in the debt capital markets and are therefore subject to certain market conditions which could result in higher costs or negatively affect our and/or our subsidiaries’ credit ratings. A decrease in our credit ratings could negatively impact our borrowing costs and could limit our access to capital.

The following table represents our debt ratings as of December 31, 2023.

Long-term Financing

Our equity consists of Class P common stock with a par value of $0.01 per share. We do not expect to need to access the equity capital markets to fund our discretionary capital investments for the foreseeable future. See also “—Dividends and Stock Buy-back Program” below for additional discussion related to our dividends and stock buy-back program.

From time to time, we issue long-term debt securities, often referred to as senior notes.  Our senior notes issued to date, other than those issued by certain of our subsidiaries, generally have very similar terms, except for interest rates, maturity dates and prepayment premiums. All of our fixed rate senior notes provide that the notes may be redeemed at any time at a price equal to 100% of the principal amount of the notes plus accrued interest to the redemption date, and, in most cases, plus a make-whole premium.  In addition, from time to time, our subsidiaries issue long-term debt securities. Furthermore, we and almost all of our direct and indirect wholly owned domestic subsidiaries are parties to a cross guaranty wherein each party guarantees each other party’s debt. See “—Summarized Combined Financial Information for Guarantee of Securities of Subsidiaries.” As of December 31, 2023 and 2022, the aggregate principal amount outstanding of our various long-term debt obligations (excluding current maturities) was $27,880 million and $28,288 million, respectively.

We use interest rate swap agreements to convert a portion of the underlying cash flows related to our long-term fixed rate debt securities (senior notes) into variable rate debt in order to achieve our desired mix of fixed and variable rate debt. As of December 31, 2023 and 2022, approximately $8,253 million (26%) and $6,314 million (20%), respectively, of the principal amount of our debt balances were subject to variable interest rates—either as short-term or long-term variable-rate debt obligations or as fixed-rate debt converted to variable rates through the use of interest rate swaps. The December 31, 2023 amount includes $1,989 million of commercial paper notes. The percentage at December 31, 2022 includes $1,250 million of variable-to-fixed interest rate derivative contracts which expired in December 2023.

For additional information about our outstanding senior notes and debt-related transactions in 2023, see Note 9 “Debt” to our consolidated financial statements.  For information about our interest rate risk, see Note 14 “Risk Management—Interest Rate Risk Management” to our consolidated financial statements and Item 7A. “Quantitative and Qualitative Disclosures About Market Risk—Interest Rate Risk.”

Capital Expenditures

We account for our capital expenditures in accordance with GAAP. Additionally, we distinguish between capital expenditures as follows:

Budgeting of maintenance capital expenditures, which we refer to as sustaining capital expenditures, is done annually on a bottom-up basis. For each of our assets, we budget for and make those sustaining capital expenditures that are necessary to

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maintain safe and efficient operations, meet customer needs and comply with our operating policies and applicable law. We may budget for and make additional sustaining capital expenditures that we expect to produce economic benefits such as increasing efficiency and/or lowering future expenses. Budgeting and approval of expansion capital expenditures generally occurs periodically throughout the year on a project-by-project basis in response to specific investment opportunities identified by our business segments from which we generally expect to receive sufficient returns to justify the expenditures. Assets comprising expansion capital projects could result in additional sustaining capital expenditures over time. The need for sustaining capital expenditures in respect of newly constructed assets tends to be minimal but tends to increase over time as such assets age and experience wear and tear. Regardless of whether assets result from sustaining or expansion capital expenditures, once completed, the addition of such assets to our depreciable asset base will impact our calculation of depreciation, depletion and amortization over the remaining useful lives of the impacted or resulting assets.

Generally, the determination of whether a capital expenditure is classified as sustaining or as expansion capital expenditures is made on a project level. The classification of our capital expenditures as expansion capital expenditures or as sustaining capital expenditures is made consistent with our accounting policies and is generally a straightforward process, but in certain circumstances can be a matter of management judgment and discretion. The classification has an impact on DCF because capital expenditures that are classified as expansion capital expenditures are not deducted in calculating DCF, while those classified as sustaining capital expenditures are.

Our capital expenditures for the year ended December 31, 2023, and the amount we expect to spend for 2024 to sustain our assets and expand our business are as follows:

(a)Sustaining capital expenditures by our joint ventures generally do not require cash outlays by us.

(b)Reflects cash contributions to unconsolidated joint ventures. Also includes contributions to an unconsolidated joint venture that are netted within the amount the joint venture declares as a distribution to us.

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Our capital investments consist of the following:

(a)Sustaining capital expenditures by our joint ventures generally do not require cash outlays by us.

(b)Reflects cash contributions to unconsolidated joint ventures. Also includes contributions to an unconsolidated joint venture that are netted within the amount the joint venture declares as a distribution to us.

Impact of Regulation

The trend toward increasingly stringent regulations creates uncertainty regarding our capital and operating expenditure requirements over the longer term. For example, on June 5, 2023, the EPA’s final rule known as the “Good Neighbor Plan” (the Plan) was published in the federal register. As a precursor to the Plan, the EPA disapproved 21 SIPs and found that two other states had failed to submit SIPs under the interstate transport (good neighbor) provisions of the Clean Air Act for the 2015 Ozone NAAQS. The Plan imposes prescriptive emission standards for several sectors, including new and existing internal combustion engines of a certain size used in pipeline transportation of natural gas. The EPA subsequently proposed to disapprove five additional state SIPs and apply the Plan or portions of the Plan to sources in those states, including one state that would affect our operations.

Multiple legal challenges have already been filed, including by us. See Note 18, “Litigation and Environmental—Environmental Matters—Challenge to Federal “Good Neighbor Plan,” to our consolidated financial statements. While we are unable to predict whether any legal challenges will result in changes to the Plan or how those changes, if any, would impact us, we believe that the EPA’s disapprovals of the SIPs were improper, that the Plan is deeply flawed and that numerous and substantial bases for challenging the Plan exist. Several states in which we have affected assets, including Arkansas, Kentucky, Louisiana, Mississippi, Missouri, Oklahoma and Texas, have appealed the EPA’s disapprovals of SIPs and requested stays pending appeal. The criteria for a stay pending appeal include a requirement that the applicant show likelihood of success on the merits. Stays pending appeal have been granted with respect to the EPA’s disapprovals of SIPs submitted by Alabama, Arkansas, Kentucky, Louisiana, Minnesota, Mississippi, Missouri, Nevada, Oklahoma Texas, Utah and West Virginia meaning that (for as long as the stays remain in place) the EPA no longer has a legal basis to enforce the Plan in these states. In response to those stays, on July 31, 2023, and September 29, 2023, the EPA published interim final rules acknowledging that the Plan requirements in those states were suspended and indicating that the Plan compliance deadlines in those states may be extended. The guidance afforded by the EPA in the interim final rules is uncertain so we have filed petitions seeking review of the interim final rules. If the Plan were fully implemented, its emission standards would require installation of more stringent air pollution controls on hundreds of existing internal combustion engines used by our Natural Gas Pipelines business segment. The Plan would require that all impacted engines meet the stringent emission limits by May 1, 2026 unless compliance schedule extensions are granted by the EPA, which would need to be supported by us and approved by the EPA on an engine-by-engine basis. If the Plan were to remain in effect in its current form (including full compliance by its May 1, 2026 compliance deadline, and assuming failure of all pending challenges to SIP disapprovals and no successful challenge to the Plan), we currently estimate that it would have a material impact on us, including estimated costs necessary to comply with the Plan ranging from $1.5 billion to $1.8 billion (including costs for joint ventures that we operate, net to our interests in such joint ventures), potential shortages of equipment resulting in our inability to comply with the Plan, and operational disruptions. However, impacts are difficult to predict, given the extensive pending litigation. The outcomes of these numerous lawsuits may significantly decrease our exposure. For example, our currently estimated costs necessary to comply with the Plan associated with states that have not been granted stays with respect to the EPA’s disapproval of their SIPs range from $200 million to $300

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million. However, successful challenges to the Plan would impact all affected states. In addition, we would seek to mitigate the impacts and to recover expenditures through adjustments to our rates on our regulated assets where available.

The cost estimates discussed above are preliminary, based on a number of assumptions and subject to significant variation, including outside of the ranges provided. Costs are assumed based on the average cost incurred historically for a typical retrofit of an average engine. These estimates reflect only the anticipated upgrades that would need to be performed (and in the case of joint ventures, only on assets that we operate) and do not take into account potential complications such as additional maintenance requirements that may be identified during the upgrade process.

Off Balance Sheet Arrangements

We have invested in entities that are not consolidated in our financial statements. For information on our obligations with respect to these investments, as well as our obligations with respect to related letters of credit, see Note 13 “Commitments and Contingent Liabilities” to our consolidated financial statements. Additional information regarding the nature and business purpose of our investments is included in Note 7 “Investments” to our consolidated financial statements.

Contractual Obligations and Commercial Commitments

The table below provides a summary of our material cash requirements.

(a)See Note 9 “Debt” to our consolidated financial statements.

(b)Interest payment obligations exclude adjustments for interest rate swap agreements and assume no change in variable interest rates from those in effect at December 31, 2023.

(c)Represents commitments pursuant to the terms of operating lease agreements as of December 31, 2023.

(d)Represents the amount by which the benefit obligations exceeded the fair value of plan assets at year-end for pension and OPEB plans whose accumulated postretirement benefit obligations exceeded the fair value of plan assets. The payments by period include expected contributions in 2024 and estimated benefit payments for underfunded plans in the other years.

(e)Primarily represents transportation agreements of $310 million, storage agreements for capacity of $189 million and NGL volume agreements of $109 million.

(f)Primarily includes (i) rights-of-way obligations; and (ii) environmental liabilities related to sites that we own or have a contractual or legal obligation with a regulatory agency or property owner upon which we will perform remediation activities. These environmental liabilities are included within “Other current liabilities” and “Other long-term liabilities and deferred credits” in our consolidated balance sheet as of December 31, 2023.

(g)The $157 million in letters of credit outstanding as of December 31, 2023 consisted of the following (i) $51 million under six letters of credit for insurance purposes; (ii) a $46 million letter of credit supporting our International Marine Terminals Partnership Plaquemines Bond; (iii) a $24 million letter of credit supporting our Kinder Morgan Operating LLC “B” tax-exempt bonds; and (iv) a combined $36 million in thirty-four letters of credit supporting environmental and other obligations of us and our subsidiaries.

(h)Represents commitments for the purchase of plant, property and equipment as of December 31, 2023.

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Cash Flows

The following table summarizes our net cash flows provided by (used in) operating, investing and financing activities between 2023 and 2022.

Operating Activities

$1,524 million more cash provided by operating activities in the comparable years of 2023 and 2022 is explained by the following discussion.

•an $894 million increase in cash related to changes in deferred revenues primarily driven by an $843 million prepayment received for certain fixed reservation charges under long-term transportation and terminaling contracts in the 2023 period. See Note 15 “Revenue Recognition” to our consolidated financial statements for further information regarding this prepayment; and

•an $896 million increase in cash associated with net changes in working capital items and other non-current assets and liabilities, excluding the change in deferred revenues discussed above. The increase was primarily driven by (i) the sale of natural gas inventories and higher settlements associated with commodity hedges in 2023, both related to gas in underground storage; (ii) lower litigation payments in the 2023 period compared with 2022; (iii) net favorable changes related to the timing of accounts receivable collections and trade payable payments, largely in our Natural Gas Pipelines business segment; and (iv) higher pension benefit expenses in 2023, which are netted against contribution payments, resulting from actuarial valuation adjustments and one-time pension cost adjustments related to settlements made by our pension plans.

Investing Activities

$2,000 million more cash used in investing activities in the comparable years of 2023 and 2022 is explained by the following discussion.

•a $1,355 million increase in expenditures for the acquisition of assets and investments, net of cash acquired, primarily driven by $1,829 million of net cash used for the acquisition of STX Midstream in 2023, compared with a combined $487 million of net cash used for our acquisitions of Mas Ranger, LLC and NANR in 2022; See Note 3 “Acquisitions and Divestitures” to our consolidated financial statements for further information regarding these acquisitions; and

•a $696 million increase in capital expenditures primarily driven by the expansion projects in our Natural Gas Pipelines and Terminals business segments, partially offset by a decrease in expansion projects in our Products Pipelines business segment.

Financing Activities

$131 million less cash used in financing activities in the comparable years of 2023 and 2022 is explained by the following discussion.

•a $916 million net increase in cash related to debt activity as a result of net issuances in 2023 compared to net debt payments in 2022. Net debt issuances in 2023 were primarily driven by the utilization of borrowings under our credit facility to fund the STX Midstream acquisition; partially offset by,

•a decrease of $557 million in cash due to net proceeds received from the sale of a 25.5% ownership interest in ELC in 2022; and

•a $154 million increase in cash used for share repurchases under our share buy-back program.

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Dividends and Stock Buy-back Program

The table below reflects the declaration of dividends of $1.13 per share for 2023:

We expect to continue to return additional value to our shareholders in 2024 through our previously announced dividend increase. We plan to increase our dividend by 2% to $1.15 per common share in 2024. On January 18, 2023, our Board approved an increase to our stock buy-back program from $2 billion to $3 billion. Since December 2017, in total, we have repurchased approximately 86 million shares of our Class P common stock under the program at an average price of $17.09 per share for $1,472 million, leaving a remaining capacity of approximately $1.5 billion. For information on our stock buy-back program, see Note 11 “Stockholders’ Equity” to our consolidated financial statements.

The actual amount of dividends to be paid on our capital stock will depend on many factors, including our financial condition and results of operations, liquidity requirements, business prospects, capital requirements, legal, regulatory and contractual constraints, tax laws, Delaware laws and other factors. See Item 1A. “Risk Factors—Risks Related to Ownership of Our Capital Stock—The guidance we provide for our anticipated dividends is based on estimates. Circumstances may arise that lead to conflicts between using funds to pay anticipated dividends or to invest in our business.” All of these matters will be taken into consideration by our Board when declaring dividends.

Our dividends are not cumulative. Consequently, if dividends on our stock are not paid at the intended levels, our stockholders are not entitled to receive those payments in the future. Our dividends generally will be paid on or about the 15th day of each February, May, August and November.

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Summarized Combined Financial Information for Guarantee of Securities of Subsidiaries

KMI and certain subsidiaries (Subsidiary Issuers) are issuers of certain debt securities. KMI and substantially all of KMI’s wholly owned domestic subsidiaries (Subsidiary Guarantors), are parties to a cross guarantee agreement whereby each party to the agreement unconditionally guarantees, jointly and severally, the payment of specified indebtedness of each other party to the agreement. Accordingly, with the exception of certain subsidiaries identified as subsidiary non-guarantors (Subsidiary Non-Guarantors), the parent issuer, Subsidiary Issuers and Subsidiary Guarantors (the “Obligated Group”) are all guarantors of each series of our guaranteed debt (Guaranteed Notes). As a result of the cross guarantee agreement, a holder of any of the Guaranteed Notes issued by KMI or Subsidiary Issuers are in the same position with respect to the net assets, and income of KMI and the Subsidiary Issuers and Guarantors. The only amounts that are not available to the holders of each of the Guaranteed Notes to satisfy the repayment of such securities are the net assets, and income of the Subsidiary Non-Guarantors.

In lieu of providing separate financial statements for the Obligated Group, we have presented the accompanying supplemental summarized combined income statement and balance sheet information for the Obligated Group based on Rule 13-01 of the SEC’s Regulation S-X.  Also, see Exhibit 10.11 to this Report “Cross Guarantee Agreement, dated as of November 26, 2014, among KMI and certain of its subsidiaries, with schedules updated as of December 31, 2023.”

All significant intercompany items among the Obligated Group have been eliminated in the supplemental summarized combined financial information. The Obligated Group’s investment balances in Subsidiary Non-Guarantors have been excluded from the supplemental summarized combined financial information. Significant intercompany balances and activity for the Obligated Group with other related parties, including Subsidiary Non-Guarantors (referred to as “affiliates”), are presented separately in the accompanying supplemental summarized combined financial information.

Excluding fair value adjustments, as of December 31, 2023 and 2022, the Obligated Group had $31,167 million and $30,886 million, respectively, of Guaranteed Notes outstanding.

Summarized combined balance sheet and income statement information for the Obligated Group follows:

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Recent Accounting Pronouncements

Please refer to Note 19 “Recent Accounting Pronouncements” to our consolidated financial statements for information concerning recent accounting pronouncements.