Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

General and Basis of Presentation

The following discussion and analysis should be read in conjunction with our accompanying interim consolidated financial statements and related notes included elsewhere in this report, and in conjunction with (i) our consolidated financial statements and related notes in our 2021 Form 10-K; (ii) our management’s discussion and analysis of financial condition and results of operations included in our 2021 Form 10-K; (iii) “Information Regarding Forward-Looking Statements” at the beginning of this report and in our 2021 Form 10-K; and (iv) “Risk Factors” in Part I, Item 1A of our 2021 Form 10-K.

Sale of Interest in Elba Liquefaction Company L.L.C.

On September 27, 2022, we completed the sale of a 25.5% ownership interest in Elba Liquefaction Company L.L.C. (ELC). We received net proceeds of $557 million which were used to reduce short-term borrowings. As we continue to have a controlling financial interest in and consolidate ELC, we recorded an increase of $190 million to “Additional paid in capital” for the impact of the change in our ownership interest in ELC, which is reflected on our accompanying consolidated statements of stockholders’ equity for the three and nine months ended September 30, 2022. We continue to own a 25.5% interest in and operate ELC. See Note 2 “Acquisitions and Divestitures” for additional information regarding ELC.

North American Natural Resources Acquisition

On August 11, 2022, we completed the acquisition of seven landfill assets from North American Natural Resources, Inc. and, its sister companies, North American Biofuels, LLC and North American-Central, LLC (NANR) consisting of gas-to-power facilities in Michigan and Kentucky for $132 million, including a preliminary purchase price adjustment for working capital. We plan to convert three of the seven gas-to-power facilities to renewable natural gas facilities with a capital spend of approximately $145 million. We expect these facilities to be in service by mid-2024 and, once complete, are expected to generate approximately 1.7 Bcf per year of renewable natural gas. The remaining four NANR assets, projected to produce 8.0 megawatt-hours in 2023, further diversify KMI’s renewable portfolio by adding electricity generation to its landfill gas-to-power operations.

Mas CanAm Acquisition

On July 19, 2022, we completed an acquisition of three landfill assets from Mas CanAm, LLC, comprising a renewable natural gas facility in Arlington, Texas and medium Btu facilities in Shreveport, Louisiana and Victoria, Texas for $358 million including a preliminary purchase price adjustment for working capital. The Arlington facility is expected to produce 1.4 Bcf of renewable natural gas in 2023 and has the potential to grow significantly over the next decade.

2022 Dividends and Discretionary Capital

We expect to declare dividends of $1.11 per share for 2022, a 3% increase from the 2021 declared dividends of $1.08 per share. We now expect to invest $1.8 billion in expansion projects, acquisitions, and contributions to joint ventures or discretionary capital expenditures during 2022.

The expectations for 2022 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.

Results of Operations

Overview

As described in further detail below, our management evaluates our performance primarily using the GAAP financial measures of Segment EBDA (as presented in Note 8 “Reportable Segments”) and Net income attributable to Kinder Morgan, Inc., along with the non-GAAP financial measures of Adjusted Earnings and DCF, both in the aggregate and per share for each, Adjusted Segment EBDA, Adjusted EBITDA and Net Debt.

GAAP Financial Measures

The Consolidated Earnings Results for the three and nine months ended September 30, 2022 and 2021 present Segment EBDA and Net income attributable to Kinder Morgan, Inc. which are prepared and presented in accordance with GAAP. 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 these non-GAAP financial measures by reviewing our comparable GAAP measures, 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 our view are likely to occur only sporadically (for example, certain legal settlements, enactment of new tax legislation and casualty losses). We also include adjustments related to joint ventures (see “Amounts from Joint Ventures” below and the tables included in “—Consolidated Earnings Results (GAAP)—Certain Items Affecting Consolidated Earnings Results,” “—Non-GAAP Financial Measures—Reconciliation of Net Income Attributable to Kinder Morgan, Inc. (GAAP) to Adjusted EBITDA” and “—Non-GAAP Financial Measures—Supplemental Information” below). In addition, Certain Items are described in more detail in the footnotes to tables included in “—Segment Earnings Results” and “—DD&A, General and Administrative and Corporate Charges, Interest, net, and Noncontrolling Interests” below.

Adjusted Earnings

Adjusted Earnings is calculated by adjusting Net income attributable to Kinder Morgan, Inc. for Certain Items. Adjusted Earnings is used by us and certain external users of our financial statements to assess the earnings of our business excluding Certain Items as another reflection of our ability to generate earnings. We believe the GAAP measure most directly comparable to Adjusted Earnings is Net income attributable to Kinder Morgan, Inc. Adjusted Earnings per share uses Adjusted Earnings and applies the same two-class method used in arriving at basic earnings per share. See “—Non-GAAP Financial Measures—Reconciliation of Net Income Attributable to Kinder Morgan, Inc. (GAAP) to Adjusted Earnings to DCF” below.

DCF

DCF is calculated by adjusting Net income attributable to Kinder Morgan, Inc. for Certain Items (Adjusted Earnings), and further by DD&A and amortization of excess cost of equity investments, income tax expense, cash taxes, sustaining capital expenditures and other items. We also include amounts from joint ventures for income taxes, DD&A and sustaining capital expenditures (see “Amounts from Joint Ventures” below). DCF is a significant performance measure useful to management and external users of our financial statements in evaluating our performance and in measuring and estimating the ability of our assets to generate cash earnings after servicing our debt, paying cash taxes and expending sustaining capital, that could be used for discretionary purposes such as dividends, stock repurchases, retirement of debt, or expansion capital expenditures. 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. (GAAP) to Adjusted Earnings to DCF” and “—Non-GAAP Financial Measures—Adjusted Segment EBDA to Adjusted EBITDA 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 and external users of our financial statements additional insight into the ability of our segments to generate cash earnings on an ongoing basis. 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. We believe the GAAP measure most directly comparable to Adjusted Segment EBDA is Segment EBDA. See “—Consolidated Earnings Results (GAAP)—Certain Items Affecting Consolidated Earnings Results” for a reconciliation of Segment EBDA to Adjusted Segment EBDA by business segment.

Adjusted EBITDA

Adjusted EBITDA is calculated by adjusting EBITDA for Certain Items. 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 and external users, in conjunction with our Net Debt (as described further below), to evaluate certain leverage metrics. Therefore, we believe Adjusted EBITDA is useful to investors. We believe the GAAP measure most directly comparable to Adjusted EBITDA is Net income attributable to Kinder Morgan, Inc. See “—Non-GAAP Financial Measures—Adjusted Segment EBDA to Adjusted EBITDA to DCF” and “—Non-GAAP Financial Measures—Reconciliation of Net Income Attributable to Kinder Morgan, Inc. (GAAP) 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. (See “—Non-GAAP Financial Measures—Supplemental Information” 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 September 30, 2022, by subtracting the following amounts from our debt balance of $31,741 million: (i) cash and cash equivalents of $483 million; and (ii) debt fair value adjustments of $107 million; and excluding the foreign exchange impact on Euro-denominated bonds of $(53) million for which we have entered into currency swaps to convert that debt to U.S. dollars. Net Debt is a non-GAAP financial measure that management believes is useful to investors and other users of our financial information in evaluating our leverage. We believe the most comparable measure to Net Debt is debt net of cash and cash equivalents.

Consolidated Earnings Results (GAAP)

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

			Three Months Ended September 30,
			2022						2021						Earnings increase/(decrease)
			(In millions, except percentages)
Segment EBDA(a)
Natural Gas Pipelines			$	1,135					$	1,069					$	66					6%
Products Pipelines			257						279						(22)						(8)%
Terminals			240						216						24						11%
CO2			215						163						52						32%
Total Segment EBDA			1,847						1,727						120						7%
DD&A			(551)						(526)						(25)						(5)%
Amortization of excess cost of equity investments			(19)						(21)						2						10%
General and administrative and corporate charges			(149)						(167)						18						11%
Interest, net			(399)						(368)						(31)						(8)%
Income before income taxes			729						645						84						13%
Income tax expense			(134)						(134)						—						—%
Net income			595						511						84						16%
Net income attributable to noncontrolling interests			(19)						(16)						(3)						(19)%
Net income attributable to Kinder Morgan, Inc.			$	576					$	495					$	81					16%

			Nine Months Ended September 30,
			2022						2021						Earnings increase/(decrease)
			(In millions, except percentages)
Segment EBDA(a)
Natural Gas Pipelines			$	3,453					$	2,602					$	851					33		%
Products Pipelines			855						792						63						8		%
Terminals			731						689						42						6		%
CO2			619						599						20						3		%
Total Segment EBDA			5,658						4,682						976						21		%
DD&A			(1,632)						(1,595)						(37)						(2)		%
Amortization of excess cost of equity investments			(57)						(56)						(1)						(2)		%
General and administrative and corporate charges			(438)						(465)						27						6		%
Interest, net			(1,087)						(1,122)						35						3		%
Income before income taxes			2,444						1,444						1,000						69		%
Income tax expense			(512)						(248)						(264)						(106)		%
Net income			1,932						1,196						736						62		%
Net income attributable to noncontrolling interests			(54)						(49)						(5)						(10)		%
Net income attributable to Kinder Morgan, Inc.			$	1,878					$	1,147					$	731					64		%

(a)Includes revenues, earnings from equity investments, operating expenses, (gain) loss on divestitures and impairments, net, other income, net, and other, net. Operating expenses include costs of sales, operations and maintenance expenses, and taxes, other than income taxes.

Net income attributable to Kinder Morgan, Inc. increased $81 million and $731 million for the three and nine months ended September 30, 2022, respectively, as compared to the respective prior year periods. The third quarter increase was

primarily due to higher earnings from our Natural Gas Pipelines and CO2 business segments. The year-to-date increase was primarily due to the $1,600 million pre-tax non-cash impairment loss in 2021 related to South Texas gathering and processing assets within our Natural Gas Pipeline segment and higher earnings from our Products Pipelines business segment with our West Coast Refined Products and Southeast Refined Products assets partially offset by the benefit in the 2021 period of $1,097 million for largely nonrecurring earnings related to the February 2021 winter storm, mostly impacting the earnings from our Natural Gas Pipelines and CO2 business segments.

Certain Items Affecting Consolidated Earnings Results

			Three Months Ended September 30,
			2022																		2021
			GAAP						Certain Items						Adjusted						GAAP						Certain Items						Adjusted						Adjusted amounts increase/(decrease) to earnings
			(In millions)
Segment EBDA
Natural Gas Pipelines			$	1,135					$	24					$	1,159					$	1,069					$	21					$	1,090					$	69
Products Pipelines			257						—						257						279						1						280						(23)
Terminals			240						—						240						216						17						233						7
CO2			215						(20)						195						163						(9)						154						41
Total Segment EBDA(a)			1,847						4						1,851						1,727						30						1,757						94
DD&A and amortization of excess cost of equity investments			(570)						—						(570)						(547)						—						(547)						(23)
General and administrative and corporate charges(a)			(149)						—						(149)						(167)						—						(167)						18
Interest, net(a)			(399)						15						(384)						(368)						(8)						(376)						(8)
Income before income taxes			729						19						748						645						22						667						81
Income tax expense(b)			(134)						(20)						(154)						(134)						(12)						(146)						(8)
Net income			595						(1)						594						511						10						521						73
Net income attributable to noncontrolling interests			(19)						—						(19)						(16)						—						(16)						(3)
Net income attributable to Kinder Morgan, Inc.			$	576					$	(1)					$	575					$	495					$	10					$	505					$	70

			Nine Months Ended September 30,
			2022																		2021
			GAAP						Certain Items						Adjusted						GAAP						Certain Items						Adjusted						Adjusted amounts increase/(decrease) to earnings
			(In millions)
Segment EBDA
Natural Gas Pipelines			$	3,453					$	136					$	3,589					$	2,602					$	1,646					$	4,248					$	(659)
Products Pipelines			855						—						855						792						44						836						19
Terminals			731						—						731						689						17						706						25
CO2			619						(5)						614						599						(3)						596						18
Total Segment EBDA(a)			5,658						131						5,789						4,682						1,704						6,386						(597)
DD&A and amortization of excess cost of equity investments			(1,689)						—						(1,689)						(1,651)						—						(1,651)						(38)
General and administrative and corporate charges(a)			(438)						—						(438)						(465)						—						(465)						27
Interest, net(a)			(1,087)						(46)						(1,133)						(1,122)						(17)						(1,139)						6
Income before income taxes			2,444						85						2,529						1,444						1,687						3,131						(602)
Income tax expense(b)			(512)						(35)						(547)						(248)						(439)						(687)						140
Net income			1,932						50						1,982						1,196						1,248						2,444						(462)
Net income attributable to noncontrolling interests(a)			(54)						—						(54)						(49)						—						(49)						(5)
Net income attributable to Kinder Morgan, Inc.			$	1,878					$	50					$	1,928					$	1,147					$	1,248					$	2,395					$	(467)

(a)For a more detailed discussion of Certain Items, see the footnotes to the tables within “—Segment Earnings Results” and “—DD&A, General and Administrative and Corporate Charges, Interest, net and Noncontrolling Interests” below.

(b)The combined net effect of the income tax Certain Items represents the income tax provision on Certain Items plus discrete income tax items.

Net income attributable to Kinder Morgan, Inc. adjusted for Certain Items (Adjusted Earnings) increased by $70 million for the three months ended September 30, 2022 and decreased by $467 million for the nine months ended September 30, 2022 as compared to the respective prior year periods. The third quarter increase was primarily due to higher earnings from our Natural Gas Pipeline and CO2 business segments. The year-to-date decrease was impacted by lower earnings of $744 million from our Natural Gas Pipelines business segment’s Midstream region (primarily related to the February 2021 winter storm, and therefore largely nonrecurring) partially offset by lower income tax expense.

Non-GAAP Financial Measures

Reconciliation of Net Income Attributable to Kinder Morgan, Inc. (GAAP) to Adjusted Earnings to DCF

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
			(In millions)
Net income attributable to Kinder Morgan, Inc. (GAAP)			$	576					$	495					$	1,878					$	1,147
Total Certain Items			(1)						10						50						1,248
Adjusted Earnings(a)			575						505						1,928						2,395
DD&A and amortization of excess cost of equity investments for DCF(b)			647						612						1,897						1,854
Income tax expense for DCF(a)(b)			167						165						601						754
Cash taxes(b)			(15)						(12)						(63)						(56)
Sustaining capital expenditures(b)			(243)						(241)						(581)						(558)
Other items(c)			(9)						(16)						(29)						(22)
DCF			$	1,122					$	1,013					$	3,753					$	4,367

Adjusted Segment EBDA to Adjusted EBITDA to DCF

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
			(In millions, except per share amounts)
Natural Gas Pipelines			$	1,159					$	1,090					$	3,589					$	4,248
Products Pipelines			257						280						855						836
Terminals			240						233						731						706
CO2			195						154						614						596
Adjusted Segment EBDA(a)			1,851						1,757						5,789						6,386
General and administrative and corporate charges(a)			(149)						(167)						(438)						(465)
Joint venture DD&A and income tax expense(a)(b)			90						84						262						270
Net income attributable to noncontrolling interests(a)			(19)						(16)						(54)						(49)
Adjusted EBITDA			1,773						1,658						5,559						6,142
Interest, net(a)			(384)						(376)						(1,133)						(1,139)
Cash taxes(b)			(15)						(12)						(63)						(56)
Sustaining capital expenditures(b)			(243)						(241)						(581)						(558)
Other items(c)			(9)						(16)						(29)						(22)
DCF			$	1,122					$	1,013					$	3,753					$	4,367
Adjusted Earnings per share			$	0.25					$	0.22					$	0.85					$	1.05
Weighted average shares outstanding for dividends(d)			2,267						2,279						2,275						2,278
DCF per share			$	0.49					$	0.44					$	1.65					$	1.92
Declared dividends per share			$	0.2775					$	0.27					$	0.8325					$	0.81

(a)Amounts are adjusted for Certain Items. See tables included in “—Reconciliation of Net Income Attributable to Kinder Morgan, Inc. (GAAP) to Adjusted EBITDA” and “—Supplemental Information” below.

(b)Includes or represents DD&A, income tax expense, cash taxes and/or sustaining capital expenditures (as applicable for each item) from joint ventures. See tables included in “—Supplemental Information” below.

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

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

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

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
			(In millions)
Net income attributable to Kinder Morgan, Inc. (GAAP)			$	576					$	495					$	1,878					$	1,147
Certain Items:
Fair value amortization			(4)						(7)						(11)						(15)
Legal, environmental and taxes other than income tax reserves			23						—						23						112
Change in fair value of derivative contracts(a)			(6)						22						49						64
Loss on impairments, divestitures and other write-downs, net(b)			—						4						—						1,515
Income tax Certain Items			(20)						(12)						(35)						(439)
Other			6						3						24						11
Total Certain Items(c)			(1)						10						50						1,248
DD&A and amortization of excess cost of equity investments			570						547						1,689						1,651
Income tax expense(d)			154						146						547						687
Joint venture DD&A and income tax expense(d)(e)			90						84						262						270
Interest, net(d)			384						376						1,133						1,139
Adjusted EBITDA			$	1,773					$	1,658					$	5,559					$	6,142

(a)Gains or losses are reflected in our DCF when realized.

(b)Nine months ended September 30, 2021 amount includes a pre-tax non-cash impairment loss of $1,600 million related to our South Texas gathering and processing assets within our Natural Gas Pipelines business segment reported within “(Gain) loss on divestitures and impairments, net” and a pre-tax gain of $206 million associated with the sale of a partial interest in our equity investment in NGPL Holdings LLC, offset partially by a write-down of $117 million on a long-term subordinated note receivable from an equity investee, Ruby, reported within “Other, net” and “Earnings from equity investments,” respectively, on the accompanying consolidated statement of income.

(c)Three months ended September 30, 2022 and 2021 amounts include less than $1 million and $2 million, respectively, and nine months ended September 30, 2022 and 2021 amounts include $4 million and $129 million, respectively, reported within “Earnings from equity investments” on our consolidated statements of income.

(d)Amounts are adjusted for Certain Items. See tables included in “—Supplemental Information” and “—DD&A, General and Administrative and Corporate Charges, Interest, net, and Noncontrolling Interests” below.

(e)Represents joint venture DD&A and income tax expense. See tables included in “—Supplemental Information” below.

Supplemental Information

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
			(In millions)
DD&A (GAAP)			$	551					$	526					$	1,632					$	1,595
Amortization of excess cost of equity investments (GAAP)			19						21						57						56
DD&A and amortization of excess cost of equity investments			570						547						1,689						1,651
Joint venture DD&A			77						65						208						203
DD&A and amortization of excess cost of equity investments for DCF			$	647					$	612					$	1,897					$	1,854
Income tax expense (GAAP)			$	134					$	134					$	512					$	248
Certain Items			20						12						35						439
Income tax expense(a)			154						146						547						687
Unconsolidated joint venture income tax expense(a)(b)			13						19						54						67
Income tax expense for DCF(a)			$	167					$	165					$	601					$	754
Additional joint venture information
Unconsolidated joint venture DD&A			$	89					$	76					$	242					$	236
Less: Consolidated joint venture partners’ DD&A			12						11						34						33
Joint venture DD&A			77						65						208						203
Unconsolidated joint venture income tax expense(a)(b)			13						19						54						67
Joint venture DD&A and income tax expense(a)			$	90					$	84					$	262					$	270
Unconsolidated joint venture cash taxes(b)			$	(12)					$	(13)					$	(51)					$	(47)
Unconsolidated joint venture sustaining capital expenditures			$	(38)					$	(29)					$	(89)					$	(81)
Less: Consolidated joint venture partners’ sustaining capital expenditures			(2)						(2)						(6)						(5)
Joint venture sustaining capital expenditures			$	(36)					$	(27)					$	(83)					$	(76)

(a)Amounts are adjusted for Certain Items.

(b)Amounts are associated with our Citrus, NGPL Holdings and Products (SE) Pipe Line equity investments.

Segment Earnings Results

Natural Gas Pipelines

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
			(In millions, except operating statistics)
Revenues			$	3,505					$	2,555					$	9,674					$	8,656
Operating expenses			(2,548)						(1,634)						(6,706)						(4,981)
Gain (loss) on divestitures and impairments, net			8						—						8						(1,599)
Other income			—						—						2						2
Earnings from equity investments			168						144						471						311
Other, net			2						4						4						213
Segment EBDA			1,135						1,069						3,453						2,602
Certain Items(a)			24						21						136						1,646
Adjusted Segment EBDA			$	1,159					$	1,090					$	3,589					$	4,248
Change from prior period			Increase/(Decrease)
Adjusted Segment EBDA			$	69											$	(659)
Volumetric data(b)
Transport volumes (BBtu/d)			38,637						38,527						38,726						38,593
Sales volumes (BBtu/d)			2,469						2,616						2,521						2,480
Gathering volumes (BBtu/d)			3,179						2,808						2,999						2,662
NGLs (MBbl/d)			24						29						29						30

Certain Items affecting Segment EBDA

(a)Three months ended September 30, 2022 amount includes an increase in revenues of $51 million and an increase in costs of sales of $47 million, and nine months ended September 30, 2022 amount includes an increase in revenues of $48 million and an increase in costs of sales of $133 million related to non-cash mark-to-market derivative contracts used to hedge forecasted natural gas and NGL sales and purchases. Three and nine months ended September 30, 2022 amounts also include an increase in other operating expenses of $23 million related to a certain litigation matter and $6 million and $24 million, respectively, related to costs associated with a pipeline rupture. Three and nine months ended September 30, 2021 amounts include decreases in revenues of $14 million and $36 million, respectively, related to non-cash mark-to-market derivative contracts used to hedge forecasted natural gas and NGL sales. Nine months ended September 30, 2021 amount also includes a pre-tax non-cash asset impairment loss of $1,600 million related to our South Texas gathering and processing assets, a write-down of $117 million on a long-term subordinated note receivable from an equity investee, Ruby, and an increase in expense of $69 million related to a litigation reserve partially offset by a pre-tax gain of $206 million associated with the sale of a partial interest in our equity investment in NGPL Holdings.

Other

(b)Joint venture throughput is reported at our ownership share. Volumes for acquired pipelines are included and volumes for assets sold are excluded for all periods presented, however, EBDA contributions from acquisitions are included only for the periods subsequent to their acquisition.

Below are the changes in Adjusted Segment EBDA in the comparable three and nine-month periods ended September 30, 2022 and 2021:

Three Months Ended September 30, 2022 versus Three Months Ended September 30, 2021

			Adjusted Segment EBDA
			2022						2021						increase/ (decrease)
Midstream			$	351					$	289					$	62
East			595						577						18
West			213						224						(11)
Total Natural Gas Pipelines			$	1,159					$	1,090					$	69

Nine Months Ended September 30, 2022 versus Nine Months Ended September 30, 2021

			Adjusted Segment EBDA
			2022						2021						increase/ (decrease)
Midstream			$	1,063					$	1,807					$	(744)
East			1,846						1,706						140
West			680						735						(55)
Total Natural Gas Pipelines			$	3,589					$	4,248					$	(659)

The changes in Segment EBDA for our Natural Gas Pipelines business segment are further explained by the following discussion of the significant factors driving Adjusted Segment EBDA in the comparable three and nine-month periods ended September 30, 2022 and 2021:

• $62 million (21%) increase and $744 million (41%) decrease, respectively, in Midstream. The third quarter increase was primarily due to higher volumes on our KinderHawk assets, higher sales margins due to higher prices on our Texas intrastate natural gas pipeline operations and Altamont asset. The year-to-date decrease was primarily due to lower sales margins of $840 million on our Texas intrastate natural gas pipeline operations and $65 million on our South Texas assets largely driven by higher 2021 commodity prices related to the February 2021 winter storm. These decreases were partially offset by higher volumes on our KinderHawk assets, higher NGL sales margins driven by higher prices on our Altamont asset and higher earnings on our Oklahoma assets from higher 2021 commodity prices on certain purchase contracts as a result of the February 2021 winter storm. Overall, Midstream’s revenue changes are partially offset by corresponding changes in costs of sales;

• $18 million (3%) and $140 million (8%) increases, respectively, in the East Region were primarily due to higher capacity sales associated with our Stagecoach assets, higher equity earnings from SNG as a result of increased revenues due to an increase in demand for services and increased earnings from Kinder Morgan Louisiana Pipeline, LLC reflecting a new LNG customer contract partially offset by decreased earnings on TGP driven by higher operating expenses due in part to higher property taxes and pipeline integrity costs. The year-to-date increase was further impacted by our July 2021 acquisition of the Stagecoach assets; and

• $11 million (5%) and $55 million (7%) decreases, respectively, in the West Region were primarily due to lower earnings from Colorado Interstate Gas Company, L.L.C. driven by lower revenues resulting from a rate case settlement and a decrease in revenues from EPNG driven by lower commodity and park and loan volumes that resulted from a partial pipeline outage.

Products Pipelines

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
			(In millions, except operating statistics)
Revenues			$	872					$	605					$	2,634					$	1,572
Operating expenses			(632)						(341)						(1,846)						(828)
Gain on divestitures and impairments, net			—						—						12						—
Earnings from equity investments			17						15						55						48
Segment EBDA			257						279						855						792
Certain Items(a)			—						1						—						44
Adjusted Segment EBDA			$	257					$	280					$	855					$	836
Change from prior period			Increase/(Decrease)
Adjusted Segment EBDA			$	(23)											$	19
Volumetric data(b)
Gasoline(c)			989						1,023						982						987
Diesel fuel			368						389						370						395
Jet fuel			278						250						262						217
Total refined product volumes			1,635						1,662						1,614						1,599
Crude and condensate			467						491						477						503
Total delivery volumes (MBbl/d)			2,102						2,153						2,091						2,102

Certain Items affecting Segment EBDA

(a)Nine months ended September 30, 2021 amount includes increases in expenses of $28 million and $15 million related to a litigation reserve and an environmental reserve adjustment, respectively.

Other

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

(c)Volumes include ethanol pipeline volumes.

Below are the changes in Adjusted Segment EBDA in the comparable three and nine-month periods ended September 30, 2022 and 2021:

Three Months Ended September 30, 2022 versus Three Months Ended September 30, 2021

			Adjusted Segment EBDA
			2022						2021						increase/ (decrease)
Crude and Condensate			$	72					$	85					$	(13)
Southeast Refined Products			57						64						(7)
West Coast Refined Products			128						131						(3)
Total Products Pipelines			$	257					$	280					$	(23)

Nine Months Ended September 30, 2022 versus Nine Months Ended September 30, 2021

			Adjusted Segment EBDA
			2022						2021						increase/ (decrease)
Crude and Condensate			$	250					$	269					$	(19)
Southeast Refined Products			209						198						11
West Coast Refined Products			396						369						27
Total Products Pipelines			$	855					$	836					$	19

The changes in Segment EBDA for our Products Pipelines business segment are further explained by the following discussion of the significant factors driving Adjusted Segment EBDA in the comparable three and nine-month periods ended September 30, 2022 and 2021:

• $13 million (15%) and $19 million (7%) decreases, respectively, in Crude and Condensate were primarily due to lower earnings from our Bakken Crude assets due to lower volumes from our Double H pipeline and an unfavorable inventory valuation adjustment due to a decline in commodity prices and from our Kinder Morgan Crude & Condensate pipeline driven primarily by lower deficiency revenues, partially offset by higher earnings from our KM Condensate Processing facility reflecting increased revenues due to higher volumes and rate escalations. Our Crude and Condensate pipeline also had higher revenues of $209 million and $832 million, respectively, with corresponding increases in cost of sales, resulting from increased marketing activities;

• $7 million (11%) decrease and $11 million (6%) increase, respectively, in Southeast Refined Products. The third quarter decrease was primarily due to lower earnings at our Transmix processing operations as a result of an unfavorable inventory valuation adjustment due to a decline in commodity prices. The year-to-date increase was primarily due to higher earnings at our Transmix processing operations primarily due to higher prices and volumes; and

• $3 million (2%) decrease and $27 million (7%) increase, respectively, in West Coast Refined Products. The third quarter decrease was primarily due to lower earnings on our Pacific operations (SFPP) as a result of higher integrity management spending and lower revenues due to an overall decrease in volumes partially offset by an increase in regulated rates. The year-to-date increase was primarily due to a gain on sale of land at Calnev Pipe Line LLC, increased earnings driven by higher revenues on our West Coast terminals from higher volumes and SFPP resulting from higher revenues driven by increased regulatory rates.

Terminals

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
			(In millions, except operating statistics)
Revenues			$	457					$	422					$	1,337					$	1,275
Operating expenses			(222)						(200)						(637)						(588)
(Loss) gain on divestitures and impairments, net			—						(14)						9						(14)
Other income			1						4						5						4
Earnings from equity investments			3						3						11						10
Other, net			1						1						6						2
Segment EBDA			240						216						731						689
Certain Items(a)			—						17						—						17
Adjusted Segment EBDA			$	240					$	233					$	731					$	706
Change from prior period			Increase/(Decrease)
Adjusted Segment EBDA			$	7											$	25
Volumetric data(b)
Liquids leasable capacity (MMBbl)			78.9						79.0						78.9						79.0
Liquids utilization %(c)			91.1		%				94.7		%				91.1		%				94.7		%
Bulk transload tonnage (MMtons)			13.4						13.4						40.0						37.9

Certain Items affecting Segment EBDA

(a)Three and nine months ended September 30, 2021 amounts each include a pre-tax non-cash impairment loss of $14 million related to the reclassification of an asset to held for sale.

Other

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

(c)The ratio of our tankage capacity in service to tankage capacity available for service.

For purposes of the following tables and related discussions, the results of operations of our terminals held for sale or divested, including any associated gain or loss on sale, are reclassified for all periods presented from the historical region and included within the All others group. Below are the changes in Adjusted Segment EBDA in the comparable three and nine-month periods ended September 30, 2022 and 2021:

Three Months Ended September 30, 2022 versus Three Months Ended September 30, 2021

			Adjusted Segment EBDA
			2022						2021						increase/ (decrease)
Mid Atlantic			$	30					$	15					$	15
Gulf Central			35						31						4
Gulf Liquids			65						76						(11)
Northeast			22						25						(3)
Marine operations			34						37						(3)
All others (including intrasegment eliminations)			54						49						5
Total Terminals			$	240					$	233					$	7

Nine Months Ended September 30, 2022 versus Nine Months Ended September 30, 2021

			Adjusted Segment EBDA
			2022						2021						increase/ (decrease)
Mid Atlantic			$	77					$	47					$	30
Gulf Central			102						83						19
Gulf Liquids			217						220						(3)
Northeast			67						80						(13)
Marine operations			105						117						(12)
All others (including intrasegment eliminations)			163						159						4
Total Terminals			$	731					$	706					$	25

The changes in Segment EBDA for our Terminals business segment are further explained by the following discussion of the significant factors driving Adjusted Segment EBDA in the comparable three and nine-month periods ended September 30, 2022 and 2021:

• $15 million (100%) and $30 million (64%) increases, respectively, in the Mid Atlantic terminals were primarily due to higher handling rates and coal volumes at our Pier IX facility;

• $4 million (13%) and $19 million (23%) increases, respectively, in the Gulf Central terminals were primarily due to lower property tax expense at our Battleground Oil Specialty Terminal Company LLC. The year-to-date increase was also impacted by higher volumes for petroleum coke handling activities, owing largely to refinery outages in the 2021 period associated with the February 2021 winter storm;

• $11 million (14%) and $3 million (1%) decreases, respectively, in the Gulf Liquids region were primarily due to higher property tax expense at Pasadena and Galena Park terminals. The year-to-date decrease was partially offset by increased revenues from contractual rate escalations and higher volumes and associated ancillary fees;

• $3 million (12%) and $13 million (16%) decreases, respectively, in the Northeast terminals were primarily driven by decreased revenues associated with lower utilization and rates on re-contracted tank positions at our Carteret and Perth Amboy facilities; and

• $3 million (8%) and $12 million (10%) decreases, respectively, in Marine operations were primarily due to lower average charter rates partially offset by higher fleet utilization.

CO**2

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
			(In millions, except operating statistics)
Revenues			$	351					$	257					$	999					$	729
Operating expenses			(143)						(112)						(408)						(161)
Gain on divestitures and impairments, net			—						11						1						8
Earnings from equity investments			7						7						27						23
Segment EBDA			215						163						619						599
Certain Items(a)			(20)						(9)						(5)						(3)
Adjusted Segment EBDA			$	195					$	154					$	614					$	596
Change from prior period			Increase/(Decrease)
Adjusted Segment EBDA			$	41											$	18
Volumetric data
SACROC oil production			19.9						20.1						19.6						19.9
Yates oil production			6.4						6.5						6.5						6.5
Katz and Goldsmith oil production			1.8						2.1						1.9						2.3
Tall Cotton oil production			1.0						1.1						1.0						1.0
Total oil production, net (MBbl/d)(b)			29.1						29.8						29.0						29.7
NGL sales volumes, net (MBbl/d)(b)			9.7						9.7						9.5						9.3
CO2 sales volumes, net (Bcf/d)			0.3						0.4						0.4						0.4
Realized weighted average oil price ($ per Bbl)			$	66.34					$	53.03					$	67.91					$	52.21
Realized weighted average NGL price ($ per Bbl)			$	37.68					$	28.01					$	41.01					$	23.73

Certain Items affecting Segment EBDA

(a)Three and nine months ended September 30, 2022 amounts include $(20) million and $(5) million, respectively, and three and nine months ended September 30, 2021 amounts include $1 million and $7 million, respectively, of changes in revenue related to non-cash mark-to-market derivative contracts used to hedge forecasted commodity sales.

Other

(b)Net of royalties and outside working interests.

Below are the changes in Adjusted Segment EBDA in the comparable three and nine-month periods ended September 30, 2022 and 2021:

Three Months Ended September 30, 2022 versus Three Months Ended September 30, 2021

			Adjusted Segment EBDA
			2022						2021						increase/ (decrease)
Oil and Gas Producing activities			$	132					$	63					$	69
Source and Transportation activities			59						89						(30)
Subtotal			191						152						39
Energy Transition Ventures			4						2						2
Total CO2			$	195					$	154					$	41

Nine Months Ended September 30, 2022 versus Nine Months Ended September 30, 2021

			Adjusted Segment EBDA
			2022						2021						increase/ (decrease)
Oil and Gas Producing activities			$	410					$	397					$	13
Source and Transportation activities			190						197						(7)
Subtotal			600						594						6
Energy Transition Ventures			14						2						12
Total CO2			$	614					$	596					$	18

The changes in Segment EBDA for our CO2 business segment are further explained by the following discussion of the significant factors driving Adjusted Segment EBDA in the comparable three and nine-month periods ended September 30, 2022 and 2021:

• $69 million (110%) and $13 million (3%) increases, respectively, in Oil and Gas Producing activities primarily due to higher realized crude oil and NGL prices which increased revenues by $44 million and $173 million, respectively and a third quarter 2021 settlement of $38 million for a terminated affiliate purchase contract with Source and Transportation activities. The year-to-date increase was also impacted by higher operating expenses of $179 million mainly driven by the benefit realized in the 2021 period from returning power to the grid by curtailing oil production during the February 2021 winter storm; and

• $30 million (34%) and $7 million (4%) decreases, respectively, in Source and Transportation activities primarily due to a third quarter 2021 settlement of $38 million for a terminated affiliate sales contract with Oil and Gas Producing activities offset by increased revenues of $12 million and $46 million, respectively, related to higher CO2 sales prices. The year-to-date decrease was also impacted by decreased revenues related to lower CO2 sales volumes.

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 September 30, 2022:

			Remaining 2022						2023						2024						2025						2026
Crude Oil(a)
Price ($ per Bbl)			$	62.42					$	63.28					$	61.04					$	61.08					$	65.67
Volume (MBbl/d)			26.40						21.10						13.40						8.95						3.00
NGLs
Price ($ per Bbl)			$	56.02					$	61.39
Volume (MBbl/d)			4.57						2.04
Midland-to-Cushing Basis Spread
Price ($ per Bbl)			$	0.53					$	0.87
Volume (MBbl/d)			23.65						14.50

(a)Includes West Texas Intermediate hedges.

DD&A, General and Administrative and Corporate Charges, Interest, net and Noncontrolling Interests

			Three Months Ended September 30,												Earnings increase/(decrease)
			2022						2021
			(In millions, except percentages)
DD&A (GAAP)			$	(551)					$	(526)					$	(25)					(5)		%
General and administrative (GAAP)			$	(162)					$	(174)					$	12					7		%
Corporate benefit			13						7						6						86		%
Certain Items(a)			—						—						—						—		%
General and administrative and corporate charges(b)			$	(149)					$	(167)					$	18					11		%
Interest, net (GAAP)			$	(399)					$	(368)					$	(31)					(8)		%
Certain Items(c)			15						(8)						23						288		%
Interest, net(b)			$	(384)					$	(376)					$	(8)					(2)		%
Net income attributable to noncontrolling interests (GAAP)			$	(19)					$	(16)					$	(3)					(19)		%
Certain Items			—						—						—						—		%
Net income attributable to noncontrolling interests(b)			$	(19)					$	(16)					$	(3)					(19)		%

			Nine Months Ended September 30,												Earnings increase/(decrease)
			2022						2021
			(In millions, except percentages)
DD&A (GAAP)			$	(1,632)					$	(1,595)					$	(37)					(2)		%
General and administrative (GAAP)			$	(470)					$	(490)					$	20					4		%
Corporate benefit			32						25						7						28		%
Certain Items(a)			—						—						—						—		%
General and administrative and corporate charges(b)			$	(438)					$	(465)					$	27					6		%
Interest, net (GAAP)			$	(1,087)					$	(1,122)					$	35					3		%
Certain Items(c)			(46)						(17)						(29)						(171)		%
Interest, net(b)			$	(1,133)					$	(1,139)					$	6					1		%
Net income attributable to noncontrolling interests (GAAP)			$	(54)					$	(49)					$	(5)					(10)		%
Certain Items(d)			—						—						—						—		%
Net income attributable to noncontrolling interests(b)			$	(54)					$	(49)					$	(5)					(10)		%

Certain items

(a)Three and nine months ended September 30, 2022 amounts include less than $1 million of general and administrative and corporate charges associated with Certain Items.

(b)Amounts are adjusted for Certain Items.

(c)Three and nine months ended September 30, 2022 amounts include an increase of $19 million and a decrease of $35 million in interest expense, respectively, related to non-cash mismatches between the change in fair value of interest rate swaps and change in fair value of hedged debt, primarily related to our floating-to-fixed LIBOR interest rate swaps which are not designated as accounting hedges and decreases in expense of $4 million and $11 million, respectively, related to non-cash debt fair value adjustments associated with acquisitions. Three and nine months September 30, 2021 amounts include decreases of $7 million and $15 million, respectively, related to non-cash debt fair value adjustments associated with acquisitions.

(d)Nine months ended September 30, 2021 amount includes less than $1 million of noncontrolling interests associated with Certain Items.

General and administrative expenses and corporate charges adjusted for Certain Items for the three and nine months ended September 30, 2022 when compared with the respective prior year periods decreased $18 million and $27 million, respectively, primarily due to higher capitalized costs of $10 million and $31 million, respectively, reflecting higher capital spending and lower benefit-related and pension costs of $5 million and $9 million, respectively, partially offset by $1 million and $12 million, respectively, of higher labor, travel and legal costs.

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 consolidated interest expense, net adjusted for Certain Items for the three and nine months ended September 30, 2022 when compared with the respective prior year periods increased $8 million and decreased $6 million, respectively, primarily due to lower long-term average interest rates and long-term debt balances, partially offset by higher short-term debt rates.

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 September 30, 2022 and December 31, 2021, approximately 8% and 21%, 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 September 30, 2022 rate was lower because we entered into variable-to-fixed interest rate hedges that expire at the end of 2022. Without those hedges, as of September 30, 2022, our debt subject to variable interest rates would have been approximately 24%. For more information on our interest rate swaps, see Note 6 “Risk Management—Interest Rate Risk Management” to our consolidated financial statements.

Net income attributable to noncontrolling interests represents the allocation of our consolidated net income attributable to all outstanding ownership interests in our consolidated subsidiaries that are not owned by us.

Income Taxes

Our tax expense for the three months ended September 30, 2022 was approximately $134 million as compared with $134 million for the same period of 2021. The tax expense was the same due primarily to federal taxes on higher pre-tax book income, partially offset by state income taxes as a result of the reduction of the state tax rate in current period.

Our tax expense for the nine months ended September 30, 2022 was approximately $512 million as compared with $248 million for the same period of 2021. The $264 million increase in tax expense was due primarily to federal and state taxes on higher pre-tax book income in the current year and the release of the valuation allowance on our investment in NGPL Holdings in the prior year.

On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (IRA) into law. The IRA includes a new corporate alternative minimum tax (Corporate AMT) of 15% on the adjusted financial statement income (AFSI) of corporations with average AFSI exceeding $1.0 billion over a three-year period. The Corporate AMT is effective for tax years beginning after December 31, 2022. We are evaluating the Corporate AMT and its potential impact on our current income tax expense and cash taxes. However, we currently do not believe this will have an impact on our cash taxes for the 2023 tax year.

Liquidity and Capital Resources

General

As of September 30, 2022, we had $483 million of “Cash and cash equivalents,” a decrease of $657 million from December 31, 2021. Additionally, as of September 30, 2022, we had borrowing capacity of approximately $3.9 billion under our credit facilities (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 facilities are more than adequate to allow us to manage our day-to-day cash requirements and anticipated obligations.

We have consistently generated substantial cash flows from operations, providing a source of funds of $3,563 million and $4,440 million in the first nine months of 2022 and 2021, respectively. The period-to-period decrease is discussed below in “—Cash Flows—Operating Activities.” We primarily rely on cash provided from 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.

Our board of directors declared a quarterly dividend of $0.2775 per share for the third quarter of 2022, consistent with the dividend declared for the previous quarter.

On February 23, 2022, EPNG issued in a private offering $300 million aggregate principal amount of 3.50% senior notes due 2032 and received net proceeds of $298 million after discount and issuance costs.

On August 3, 2022, we issued in a registered offering two series of senior notes consisting of $750 million aggregate principal amount of 4.80% senior notes due 2033 and $750 million aggregate principal amount of 5.45% senior notes due 2052 and received combined net proceeds of $1,484 million. We used a portion of the proceeds to repay short-term borrowings and for general corporate purposes.

During the first quarter, upon maturity, we repaid EPNG’s 8.625% senior notes, our 4.15% corporate senior notes, and the 1.50% series of our Euro denominated debt. During the second quarter 2022, we repaid $1 billion of our 3.95% senior notes using short-term borrowings. The short-term borrowings were repaid in the third quarter 2022 with proceeds from the August 2022 senior note issuances.

Short-term Liquidity

As of September 30, 2022, our principal sources of short-term liquidity are (i) cash from operations; and (ii) our combined $4.0 billion of credit facilities and associated commercial paper program. The loan commitments under our credit facilities can be used for working capital and other general corporate purposes and as a backup to our commercial paper program. Commercial paper borrowings reduce borrowings allowed under our credit facilities and letters of credit reduce borrowings allowed under our $3.5 billion credit facility. We provide for liquidity by maintaining a sizable amount of excess borrowing capacity under our credit facilities and, as previously discussed, have consistently generated strong cash flows from operations.

As of September 30, 2022, our $2,634 million of short-term debt consisted primarily of 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, 2021 was $2,646 million.

We had working capital (defined as current assets less current liabilities) deficits of $2,329 million and $1,992 million as of September 30, 2022 and December 31, 2021, respectively. From time to time, our current liabilities may include short-term borrowings 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. The overall $337 million unfavorable change from year-end 2021 was primarily due to (i) a $657 million decrease in cash and cash equivalents which includes $1,190 million related to repayments of senior notes that matured in the first quarter of 2022 using cash on hand (while the change in our current maturities of senior notes remains flat); (ii) unfavorable short-term fair value adjustments on derivative contracts of $349 million; and (iii) a $58 million net unfavorable change in our accounts receivables and payables; partially offset by (i) a $233 million increase in restricted deposits related to our derivative activity; (ii) a $192 million decrease in accrued contingencies; (iii) a $177 million decrease in accrued interest; and (iv) a $153 million increase in inventories, primarily gas in underground storage. Generally, our working capital balance 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.

Capital Expenditures

We account for our capital expenditures in accordance with GAAP. We also distinguish between capital expenditures that are maintenance/sustaining capital expenditures and those that are expansion capital expenditures (which we also refer to as discretionary capital expenditures). Expansion capital expenditures are those expenditures which increase throughput or capacity from that which existed immediately prior to the addition or improvement, and are not deducted in calculating DCF (see “—Results of Operations—Overview—Non-GAAP Financial Measures—DCF”). With respect to our oil and gas producing activities, we classify a capital expenditure as an expansion capital expenditure if it is expected to increase capacity or throughput (i.e., production capacity) from the capacity or throughput immediately prior to the making or acquisition of such additions or improvements. Maintenance capital expenditures are those which maintain throughput or capacity. The distinction between maintenance and expansion capital expenditures is a physical determination rather than an economic one, irrespective of the amount by which the throughput or capacity is increased.

Budgeting of maintenance capital expenditures is done annually on a bottom-up basis. For each of our assets, we budget for and make those maintenance capital expenditures that are necessary to maintain safe and efficient operations, meet customer needs and comply with our operating policies and applicable law. We may budget for and make additional maintenance 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 are generally made 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. Generally, the determination of whether a capital expenditure is classified as maintenance/sustaining or as expansion capital expenditures is made on a project level. The classification of our capital expenditures as expansion capital expenditures or as maintenance 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 from DCF, while those classified as maintenance capital expenditures are.

Our capital expenditures for the nine months ended September 30, 2022, and the amount we expect to spend for the remainder of 2022 to sustain our assets and grow our business are as follows:

			Nine Months Ended September 30, 2022						2022 Remaining						Total 2022
			(In millions)
Sustaining capital expenditures(a)(b)			$	581					$	317					$	898
Discretionary capital investments(b)(c)(d)			1,214						632						1,846

(a)Nine months ended September 30, 2022, 2022 Remaining, and Total 2022 amounts include $83 million, $53 million, and $136 million, respectively, for sustaining capital expenditures from unconsolidated joint ventures, reduced by consolidated joint venture partners’ sustaining capital expenditures. See table included in “—Results of Operations—Non-GAAP Financial Measures—Supplemental Information.”

(b)Nine months ended September 30, 2022 amount includes $15 million due to increases in accrued capital expenditures and contractor retainage and net changes in other.

(c)Nine months ended September 30, 2022 amount includes $63 million of our contributions to certain unconsolidated joint ventures for capital investments. Both Nine Months Ended September 30, 2022 and Total 2022 amounts also include $490 million for our acquisitions of Mas CanAm, LLC and NANR.

(d)Amounts include our actual or estimated contributions to unconsolidated joint ventures, net of actual or estimated contributions from certain partners in non-wholly owned consolidated subsidiaries for capital investments.

Off Balance Sheet Arrangements

There have been no material changes in our obligations with respect to other entities that are not consolidated in our financial statements that would affect the disclosures presented as of December 31, 2021 in our 2021 Form 10-K.

Commitments for the purchase of property, plant and equipment as of September 30, 2022 and December 31, 2021 were $556 million and $209 million, respectively. The increase of $347 million was primarily driven by an overall increase of capital commitments.

Cash Flows

Operating Activities

Cash provided by operating activities decreased $877 million in the nine months ended September 30, 2022 compared to the respective 2021 period primarily due to:

• a $576 million decrease in cash after adjusting the $736 million increase in net income by $1,312 million for the combined effects of the period-to-period net changes in non-cash items. This overall cash decrease primarily resulted from the benefit recognized in the 2021 period for largely nonrecurring earnings related to the February 2021 winter storm (see discussion above in “—Results of Operations”); and

• a $301 million decrease in cash associated with net changes in working capital items and other non-current assets and liabilities. The decrease was primarily driven by unfavorable changes due to (i) increases in our customer accounts receivables largely in our Natural Gas business segment which was impacted by higher natural gas price increases in the 2022 period relative to the 2021 period; (ii) higher inventories reflecting higher storage rates and increased volumes; and (iii) a decrease in reserves associated with litigation matters in the 2022 period compared with the 2021 period.

Investing Activities

Cash used in investing activities decreased $366 million for the nine months ended September 30, 2022 compared to the respective 2021 period primarily attributable to:

• a $1,030 million decrease in expenditures for the acquisition of assets and investments, net of cash acquired, primarily driven by a combined $488 million of net cash used for our acquisitions of Mas CanAm, LLC and NANR in the 2022 period, compared with a combined $1,508 million of net cash used for the acquisitions of Stagecoach Gas Services LLC and Kinetrex Energy in the 2021 period; partially offset by,

• a $413 million decrease in proceeds from sales of investments primarily due to $412 million received from the sale of a partial interest in our equity investment in NGPL Holdings in the 2021 period; and

• a $250 million increase in capital expenditures reflecting an overall increase of expansion capital projects in the 2022 period over the comparative 2021 period.

Financing Activities

Cash used in financing activities decreased $1,017 million for the nine months ended September 30, 2022 compared to the respective 2021 period primarily attributable to:

• an $837 million net decrease in cash used related to debt activity as a result of lower net debt payments in the 2022 period compared to the 2021 period; and

• $557 million of net proceeds received from the sale of a 25.5% ownership interest in ELC in the 2022 period; partially offset by,

• $333 million of cash used in the 2022 period for share repurchases under our share buy-back program.

Dividends

We expect to declare dividends of $1.11 per share on our stock for 2022. The table below reflects our 2022 dividends declared:

Three months ended						Total quarterly dividend per share for the period						Date of declaration						Date of record						Date of dividend
March 31, 2022						$	0.2775					April 20, 2022						May 2, 2022						May 16, 2022
June 30, 2022						0.2775						July 20, 2022						August 1, 2022						August 15, 2022
September 30, 2022						0.2775						October 19, 2022						October 31, 2022						November 15, 2022

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 Part I, Item 1A. “Risk Factors—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.” of our 2021 Form 10-K. All of these matters will be taken into consideration by our board of directors in 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.

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 10.1 to this Report “Cross Guarantee Agreement, dated as of November 26, 2014, among Kinder Morgan, Inc. and certain of its subsidiaries, with schedules updated as of September 30, 2022.”

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 September 30, 2022 and December 31, 2021, the Obligated Group had $30,842 million and $31,608 million, respectively, of Guaranteed Notes outstanding.

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

Summarized Combined Balance Sheet Information			September 30, 2022						December 31, 2021
			(In millions)
Current assets			$	3,523					$	3,556
Current assets - affiliates			644						1,233
Noncurrent assets			61,395						61,754
Noncurrent assets - affiliates			512						508
Total Assets			$	66,074					$	67,051
Current liabilities			$	5,826					$	5,413
Current liabilities - affiliates			709						1,332
Noncurrent liabilities			31,337						32,310
Noncurrent liabilities - affiliates			1,075						1,047
Total Liabilities			38,947						40,102
Kinder Morgan, Inc.’s stockholders’ equity			27,127						26,949
Total Liabilities and Stockholders’ Equity			$	66,074					$	67,051

Summarized Combined Income Statement Information			Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
			(In millions)
Revenues			$	4,757					$	13,490
Operating income			811						2,606
Net income			482						1,587