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 2022 Form 10-K; (ii) our management’s discussion and analysis of financial condition and results of operations included in our 2022 Form 10-K; (iii) “Information Regarding Forward-Looking Statements” at the beginning of this report and in our 2022 Form 10-K; and (iv) “Risk Factors” in Part II, Item 1A of this report and Part I, Item 1 in our 2022 Form 10-K.

2023 Dividends and Discretionary Capital

We expect to declare dividends of $1.13 per share for 2023, a 2% increase from the 2022 declared dividends of $1.11 per share. We expect to invest $2.2 billion in expansion projects, acquisitions, and contributions to joint ventures during 2023.

The expectations for 2023 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 Net income attributable to Kinder Morgan, Inc. and Segment EBDA (as presented in Note 7 “Reportable Segments”) 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 months ended March 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 7 “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 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 Earnings,” “—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 three months ended March 31, 2023 and 2022, which are also described in more detail in the footnotes to tables included in “—Segment Earnings Results” below.

			Three Months Ended March 31,
			2023						2022
			(In millions)
Certain Items
Fair value amortization			$	(4)					$	(4)
Change in fair value of derivative contracts(a)			(68)						82
Loss on impairment			67						—
Income tax Certain Items(b)			1						(20)
Other			—						7
Total Certain Items(c)(d)			$	(4)					$	65

(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 and 2022 amounts include the following amounts included within “Earnings from equity investments” on our accompanying consolidated statements of income: (i) $(2) million and $5 million, respectively, included within “Change in fair value of derivative contracts” and (ii) for the 2023 period only, $67 million 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 2 “Losses on Impairments*—Impairments*”).

(d)2023 and 2022 amounts include, in the aggregate, $(8) million and $(44) million, respectively, included within “Interest, net” on the accompanying consolidated statements of income which consist of $(4) million in each period of “Fair value amortization” and $(4) million and $(40) million, respectively, of “Change in fair value of derivative contracts.”

Adjusted Earnings

Adjusted Earnings is calculated by adjusting Net income attributable to Kinder Morgan, Inc. for Certain Items. Adjusted Earnings 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 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. to Adjusted Earnings” 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 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 March 31, 2023, by subtracting the following amounts from our debt balance of $31,506 million: (i) cash and cash equivalents of $416 million; (ii) debt fair value adjustments of $207 million; and (iii) the foreign exchange impact on Euro-denominated bonds of $(1) 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.

Consolidated Earnings Results

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

			Three Months Ended March 31,
			2023						2022						Earnings increase/(decrease)
			(In millions, except percentages)
Revenues			$	3,888					$	4,293					$	(405)					(9)		%
Operating Costs, Expenses and Other
Costs of sales (exclusive of items shown separately below)			(1,215)						(1,894)						679						36		%
Operations and maintenance			(639)						(585)						(54)						(9)		%
DD&A			(565)						(538)						(27)						(5)		%
General and administrative			(166)						(156)						(10)						(6)		%
Taxes, other than income taxes			(110)						(111)						1						1		%
Gain on divestitures and impairments, net			—						10						(10)						(100)		%
Other income, net			1						5						(4)						(80)		%
Total Operating Costs, Expenses and Other			(2,694)						(3,269)						575						18		%
Operating Income			1,194						1,024						170						17		%
Other Income (Expense)
Earnings from equity investments			165						187						(22)						(12)		%
Amortization of excess cost of equity investments			(17)						(19)						2						11		%
Interest, net			(445)						(333)						(112)						(34)		%
Other, net			2						19						(17)						(89)		%
Total Other Expense			(295)						(146)						(149)						(102)		%
Income Before Income Taxes			899						878						21						2		%
Income Tax Expense			(196)						(194)						(2)						(1)		%
Net Income			703						684						19						3		%
Net Income Attributable to Noncontrolling Interests			(24)						(17)						(7)						(41)		%
Net Income Attributable to Kinder Morgan, Inc.			$	679					$	667					$	12					2		%
Basic and diluted earnings per share			$	0.30					$	0.29					$	0.01					3		%
Basic and diluted weighted average shares outstanding			2,247						2,267						(20)						(1)		%
Declared dividends per share			$	0.2825					$	0.2775					$	0.005					2		%

Below is a discussion of significant changes in our Consolidated Earnings Results for the comparable three-month periods ended March 31, 2023 and 2022:

Revenues

Revenues decreased $405 million in 2023 compared to 2022. The decrease was primarily due to lower commodity sales driven by lower commodity prices and volumes.

Operating Costs, Expenses and Other

Costs of sales

Costs of sales decreased $679 million in 2023 compared to 2022. The decrease was primarily due to lower commodity prices and volumes. The decrease was further impacted by the period-over-period change related to the impacts of non-cash mark-to-market derivative contracts used to hedge forecasted commodity purchases.

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 $112 million in 2023 compared to 2022. The increase was primarily due to higher realized SOFR rates associated with interest rate swaps and changes in fair value of interest rate swaps.

Non-GAAP Financial Measures

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

									Three Months Ended March 31,
															2023						2022
															(In millions, except per share amounts)
Net income attributable to Kinder Morgan, Inc.															$	679					$	667
Certain Items(a)
Fair value amortization															(4)						(4)
Change in fair value of derivative contracts															(68)						82
Loss on impairment															67						—
Income tax Certain Items															1						(20)
Other															—						7
Total Certain Items															(4)						65
Adjusted Earnings															$	675					$	732
Reconciliation of Net Income Attributable to Kinder Morgan, Inc. to DCF
Net income attributable to Kinder Morgan, Inc.															$	679					$	667
Total Certain Items(b)															(4)						65
DD&A															565						538
Amortization of excess cost of equity investments															17						19
Income tax expense(c)															195						214
Cash taxes															(1)						(1)
Sustaining capital expenditures															(156)						(115)
Amounts from joint ventures
Unconsolidated joint venture DD&A															81						77
Remove consolidated joint venture partners’ DD&A															(16)						(11)
Unconsolidated joint venture income tax expense(d)(e)															26						21
Unconsolidated joint venture cash taxes(d)															—						—
Unconsolidated joint venture sustaining capital expenditures															(29)						(12)
Remove consolidated joint venture partners’ sustaining capital expenditures															2						2
Other items(f)															15						(9)
DCF															$	1,374					$	1,455
Adjusted Earnings per share															$	0.30					$	0.32
Weighted average shares outstanding for dividends(g)															2,260						2,280
DCF per share															$	0.61					$	0.64
Declared dividends per share															$	0.2825					$	0.2775

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

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

(c)To avoid duplication, 2023 and 2022 adjustments for income tax expense exclude $1 million and $(20) million, respectively, which amounts are already included within “Certain Items.” See table included in “*—Overview—Non-GAAP Financial Measures—*Certain Items” above.

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

(e)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.

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

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

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

									Three Months Ended March 31,
															2023						2022
															(In millions)
Net income attributable to Kinder Morgan, Inc.															$	679					$	667
Certain Items(a)
Fair value amortization															(4)						(4)
Change in fair value of derivative contracts															(68)						82
Loss on impairment															67						—
Income tax Certain Items															1						(20)
Other															—						7
Total Certain Items															(4)						65
DD&A															565						538
Amortization of excess cost of equity investments															17						19
Income tax expense(b)															195						214
Interest, net(c)															453						377
Amounts from joint ventures
Unconsolidated joint venture DD&A															81						77
Remove consolidated joint venture partners’ DD&A															(16)						(11)
Unconsolidated joint venture income tax expense(d)															26						21
Adjusted EBITDA															$	1,996					$	1,967

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

(b)To avoid duplication, 2023 and 2022 adjustments for income tax expense exclude $1 million and $(20) million, respectively, which amounts are already included within “Certain Items.” See table included in “*—Overview—Non-GAAP Financial Measures—*Certain Items” above.

(c)To avoid duplication, 2023 and 2022 adjustments for interest, net exclude $(8) million and $(44) 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.

Below is a discussion of significant changes in our Adjusted Earnings, DCF and Adjusted EBITDA for the comparable three-month periods ended March 31, 2023 and 2022:

Change from prior period															Increase/(Decrease)
															(In millions)
Adjusted Earnings															$	(57)
DCF															$	(81)
Adjusted EBITDA															$	29

Adjusted Earnings decreased $57 million in 2023 compared to 2022 and was driven by an increase in interest expense partially offset by favorable margins primarily from our Natural Gas Pipelines business segment. These items also affected DCF. The $81 million decrease in DCF in 2023 compared to 2022 was further impacted by an increase in sustaining capital expenditures. Adjusted EBITDA increased $29 million in 2023 compared to 2022, which was also driven by favorable margins from our Natural Gas Pipelines business segment.

General and Administrative and Corporate Charges

			Three Months Ended March 31,												Earnings increase/(decrease)
			2023						2022
			(In millions, except percentages)
General and administrative			$	(166)					$	(156)					$	(10)					(6)		%
Corporate (charges) benefit			(13)						11						(24)						(218)		%
General and administrative and corporate charges			$	(179)					$	(145)					$	(34)					(23)		%

We had unfavorable changes of $10 million in general and administrative expenses and $24 million in our corporate (charges) benefit for the three months ended March 31, 2023 when compared with the respective prior year period. The combined changes were primarily due to higher pension costs of $22 million and higher labor and benefit-related costs of $9 million.

Reconciliation of Segment EBDA to Adjusted Segment EBDA

			Three Months Ended March 31,
			2023						2022
			(In millions)
Segment EBDA(a)
Natural Gas Pipelines Segment EBDA			$	1,495					$	1,184
Certain Items(b)
Change in fair value of derivative contracts			(65)						106
Other			—						7
Natural Gas Pipelines Adjusted Segment EBDA			$	1,430					$	1,297
Products Pipelines Segment EBDA			$	184					$	299
Certain Items(b)
Loss on impairment			67						—
Products Pipelines Adjusted Segment EBDA			$	251					$	299
Terminals Segment EBDA			$	254					$	238
CO2 Segment EBDA			$	172					$	192
Certain Items(b)
Change in fair value of derivative contracts			1						16
CO2 Adjusted Segment EBDA			$	173					$	208

(a)Includes revenues, earnings from equity investments, operating expenses, gain 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. See “—Overview—GAAP Financial Measures” above.

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

Segment Earnings Results

Natural Gas Pipelines

									Three Months Ended March 31,
															2023						2022
															(In millions, except operating statistics)
Revenues															$	2,466					$	2,813
Operating expenses															(1,177)						(1,784)
Other income															1						1
Earnings from equity investments															200						154
Other, net															5						—
Segment EBDA															1,495						1,184
Certain Items:
Change in fair value of derivative contracts															(65)						106
Other															—						7
Certain Items(a)															(65)						113
Adjusted Segment EBDA															$	1,430					$	1,297
Change from prior period															Increase/(Decrease)
Segment EBDA															$	311
Adjusted Segment EBDA															$	133
Volumetric data(b)
Transport volumes (BBtu/d)															40,400						39,319
Sales volumes (BBtu/d)															2,117						2,515
Gathering volumes (BBtu/d)															3,325						2,817
NGLs (MBbl/d)															35						32

(a)See table included in “*—Overview—Non-GAAP Financial Measures—*Certain Items” above. 2023 Certain Items of $(63) million and $(2) million are associated with our Midstream and East businesses, respectively. 2022 Certain Items of $101 million, $7 million and $5 million are associated with our Midstream, West and East businesses, respectively. 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.

Below are the changes in Segment EBDA in the comparable three-month periods ended March 31, 2023 and 2022:

Three Months Ended March 31, 2023 versus Three Months Ended March 31, 2022

			2023						2022						increase/ (decrease)
			(In millions)
Midstream			$	540					$	283					$	257
East			696						647						49
West			259						254						5
Total Natural Gas Pipelines Segment EBDA			$	1,495					$	1,184					$	311

The changes in Segment EBDA for our Natural Gas Pipelines business segment in the comparable three-month periods ended March 31, 2023 and 2022 are explained by the following discussion:

• A $257 million (91%) increase in Midstream was affected by period-over-period decreases in costs of sales and, to a lesser extent, in revenues related to the impacts of non-cash mark-to-market derivative contracts used to hedge forecasted commodity sales and purchases, which we treated as Certain Items.

In addition, Midstream was favorably impacted by higher sales margins on our Texas intrastate natural gas pipeline operations largely driven by realized gains on sales hedges partially offset by lower sales volumes, higher volumes on our KinderHawk assets and higher gas sales margins driven by higher weather-related prices on our Altamont asset, partially offset by lower deficiency revenues and lower service fee revenues as a result of a renegotiated contract at a lower price on our South Texas assets. Overall, Midstream’s revenue changes are partially offset by corresponding changes in costs of sales.

• A $49 million (8%) increase in the East Region was primarily due to higher equity earnings from Midcontinent Express Pipeline LLC, driven by new customer contracts entered into in the later part of 2022, and higher revenues as a result of increased demand in park and loan services due to favorable pricing on our Stagecoach assets.

• A $5 million (2%) increase in the West Region was primarily due to higher earnings from EPNG due to an increase in gas sales margin and the return of a pipeline to service, partially offset by lower revenues from Cheyenne Plains Gas Pipeline Company, L.L.C. due to the expiration of a customer contract in December 2022 and lower revenues from Colorado Interstate Gas Company, L.L.C. and Wyoming Interstate Company, L.L.C. resulting from rate case settlements effective April 2022.

Products Pipelines

									Three Months Ended March 31,
															2023						2022
															(In millions, except operating statistics)
Revenues															$	668					$	766
Operating expenses															(440)						(497)
Gain on divestitures and impairments, net															—						12
(Loss) earnings from equity investments															(44)						18
Segment EBDA															184						299
Certain Items:
Loss on impairment															67						—
Certain Items(a)															67						—
Adjusted Segment EBDA															$	251					$	299
Change from prior period															Increase/(Decrease)
Segment EBDA															$	(115)
Adjusted Segment EBDA															$	(48)
Volumetric data(b)
Gasoline(c)															948						940
Diesel fuel															328						369
Jet fuel															271						242
Total refined product volumes															1,547						1,551
Crude and condensate															460						486
Total delivery volumes (MBbl/d)															2,007						2,037

(a)See table included in “*—Overview—Non-GAAP Financial Measures—*Certain Items” above. 2023 Certain Item of $67 million is 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.

Below are the changes in Segment EBDA in the comparable three-month periods ended March 31, 2023 and 2022:

Three Months Ended March 31, 2023 versus Three Months Ended March 31, 2022

			2023						2022						increase/ (decrease)
			(In millions)
Crude and Condensate			$	5					$	89					$	(84)
West Coast Refined Products			108						137						(29)
Southeast Refined Products			71						73						(2)
Total Products Pipelines Segment EBDA			$	184					$	299					$	(115)

The changes in Segment EBDA for our Products Pipelines business segment in the comparable three-month periods ended March 31, 2023 and 2022 are explained by the following discussion:

• An $84 million (94%) decrease in Crude and Condensate was affected by a $67 million reduction 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 unfavorably impacted by lower earnings from lower volumes on our Double H pipeline and from our 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 from decreased commodity pricing.

• A $29 million (21%) decrease in West Coast Refined Products was primarily due to lower earnings on our Pacific operations resulting from net changes in product gains and losses affecting operating costs and a gain on sale of land in the 2022 period at Calnev.

• A $2 million (3%) decrease in Southeast Refined Products was primarily due to lower earnings at our Transmix processing operations primarily due to lower prices, partially offset by higher volumes and rate escalations across numerous assets.

Terminals

									Three Months Ended March 31,
															2023						2022
															(In millions, except operating statistics)
Revenues															$	461					$	430
Operating expenses															(210)						(199)
Loss on divestitures and impairments, net															—						(3)
Other income															—						4
Earnings from equity investments															2						4
Other, net															1						2
Segment EBDA															$	254					$	238
Change from prior period															Increase/(Decrease)
Segment EBDA															$	16
Volumetric data(a)
Liquids leasable capacity (MMBbl)															78.3						78.2
Liquids leased capacity %(b)															92.8		%				90.6		%
Bulk transload tonnage (MMtons)															13.4						13.0

(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.

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 business grouping below and included within the All others group.

Below are the changes in Segment EBDA in the comparable three-month periods ended March 31, 2023 and 2022:

Three Months Ended March 31, 2023 versus Three Months Ended March 31, 2022

			2023						2022						increase/ (decrease)
			(In millions)
Gulf Central			$	38					$	32					$	6
Marine operations			41						38						3
Mid Atlantic			26						23						3
Northeast			25						22						3
All others (including intrasegment eliminations)			124						123						1
Total Terminals Segment EBDA			$	254					$	238					$	16

The changes in Segment EBDA for our Terminals business segment in the comparable three-month periods ended March 31, 2023 and 2022 are explained by the following discussion:

• A $6 million (19%) increase in the Gulf Central terminals was primarily due to higher revenues resulting from contractual rate escalations and higher volumes for petroleum coke handling activities.

• A $3 million (8%) increase in Marine operations was primarily due to higher average charter rates.

• A $3 million (13%) increase in the Mid Atlantic terminals was primarily due to higher revenues resulting from increased effective handling rates on export coal volumes at our Pier IX facility.

• A $3 million (14%) increase in the Northeast terminals was primarily driven by increased revenues associated with higher utilization at our Carteret facility.

CO**2

									Three Months Ended March 31,
															2023						2022
															(In millions, except operating statistics)
Revenues															$	297					$	305
Operating expenses															(132)						(125)
Gain on divestitures and impairments, net															—						1
Earnings from equity investments															7						11
Segment EBDA															172						192
Certain Items:
Change in fair value of derivative contracts															1						16
Certain Items(a)															1						16
Adjusted Segment EBDA															$	173					$	208
Change from prior period															Increase/(Decrease)
Segment EBDA															$	(20)
Adjusted Segment EBDA															$	(35)
Volumetric data
SACROC oil production															18.90						19.27
Yates oil production															6.74						6.79
Other															2.61						2.91
Total oil production, net (MBbl/d)(b)															28.25						28.97
NGL sales volumes, net (MBbl/d)(b)															8.16						9.41
CO2 sales volumes, net (Bcf/d)															0.36						0.37
Realized weighted average oil price ($ per Bbl)															$	67.15					$	66.90
Realized weighted average NGL price ($ per Bbl)															$	34.06					$	43.68

(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)Net of royalties and outside working interests.

Below are the changes in Segment EBDA in the comparable three-month periods ended March 31, 2023 and 2022:

Three Months Ended March 31, 2023 versus Three Months Ended March 31, 2022

			2023						2022						increase/ (decrease)
			(In millions)
Source and Transportation activities			$	49					$	62					$	(13)
Oil and Gas Producing activities			118						126						(8)
Subtotal			167						188						(21)
Energy Transition Ventures			5						4						1
Total CO2 Segment EBDA			$	172					$	192					$	(20)

The changes in Segment EBDA for our CO2 business segment in the comparable three-month periods ended March 31, 2023 and 2022 are explained by the following discussion:

• A $13 million (21%) decrease in Source and Transportation activities primarily due to higher operating expenses and a decrease in revenues related to lower CO2 sales prices and volumes.

• An $8 million (6%) decrease in Oil and Gas Producing activities primarily due to a decrease in revenues related to lower realized NGL prices and lower NGL and crude oil volumes which was largely driven by an extended outage at SACROC.

In addition, Oil and Gas Producing activities was affected by a favorable change period-over-period in revenues related to non-cash mark-to-market derivative hedge contracts which we treated as Certain Items.

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 a lesser extent over the following few years from price exposure. Below is a summary of our CO2 business segment hedges outstanding as of March 31, 2023:

			Remaining 2023						2024						2025						2026						2027
Crude Oil(a)
Price ($ per Bbl)			$	64.67					$	62.45					$	61.98					$	65.32					$	62.23
Volume (MBbl/d)			23.57						15.50						10.05						5.30						0.50
NGLs
Price ($ per Bbl)			$	55.11					$	36.23
Volume (MBbl/d)			3.82						0.04
Midland-to-Cushing Basis Spread
Price ($ per Bbl)			$	1.00					$	1.15
Volume (MBbl/d)			21.00						2.75
Argus Calendar Month Average Basis Spread
Price ($ per Bbl)			$	0.91					$	0.43
Volume (MBbl/d)			21.25						2.50

(a)Includes West Texas Intermediate hedges.

Liquidity and Capital Resources

General

As of March 31, 2023, we had $416 million of “Cash and cash equivalents,” a decrease of $329 million from December 31, 2022. Additionally, as of March 31, 2023, 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 $1,333 million and $1,084 million in the first three months of 2023 and 2022, respectively. The period-to-period increase 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 expansion 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.

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 March 31, 2023 and December 31, 2022, approximately 13% and 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 percentage at March 31, 2023 and December 31,

2022 includes $3,445 million and $1,250 million, respectively, of variable-to-fixed interest rate derivative contracts which expire in December 2023. For more information on our interest rate swaps, see Note 5 “Risk Management—Interest Rate Risk Management” to our consolidated financial statements.

Our board of directors declared a quarterly dividend of $0.2825 per share for the first quarter of 2023, a 2% increase over the dividend declared for the first quarter of 2022.

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 first quarter, upon maturity, we repaid our 3.15% senior notes, our floating rate senior notes and our 3.45% senior notes.

Short-term Liquidity

As of March 31, 2023, our principal sources of short-term liquidity are (i) cash from operations; and (ii) our combined $4.0 billion of credit facilities with an available capacity of approximately $3.9 billion and an associated $3.5 billion 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 March 31, 2023, our $2,160 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, 2022 was $3,385 million.

We had working capital (defined as current assets less current liabilities) deficits of $2,079 million and $3,127 million as of March 31, 2023 and December 31, 2022, 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 $1,048 million favorable change from year-end 2022 was primarily due to (i) a $1,225 million decrease in senior notes that mature in the next twelve months; (ii) a $288 million decrease in other current liabilities, primarily related to reductions in property tax and bonus accruals and exchange gas payables; (iii) a $164 million decrease in accrued interest; and (iv) favorable short-term fair value adjustments on derivative contracts of $54 million; partially offset by (i) a $329 million decrease in cash and cash equivalents which was used to repay a portion of senior notes that matured in the first quarter of 2023; (ii) a $162 million net unfavorable change in our accounts receivables and payables; (iii) a $120 million decrease in other current assets, primarily in exchange gas receivables and regulatory assets; and (iv) a $45 million decrease in inventories, primarily associated with 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. Additionally, we distinguish between capital expenditures as follows:

Type of Expenditure						Physical Determination of Expenditure
Sustaining capital expenditures						•Investments to maintain the operational integrity and extend the useful life of our assets
Expansion capital expenditures (discretionary capital expenditures)						•Investments to expand throughput or capacity from that which existed immediately prior to the making or acquisition of additions or improvements

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 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 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 three months ended March 31, 2023, and the amount we expect to spend for the remainder of 2023 to sustain our assets and expand our business are as follows:

			Three Months Ended March 31, 2023						2023 Remaining						Total 2023
			(In millions)
Capital expenditures:
Sustaining capital expenditures			$	156					$	718					$	874
Expansion capital expenditures			368						1,617						1,985
Accrued capital expenditures, contractor retainage and other			(17)						—						—
Capital expenditures			$	507					$	2,335					$	2,859
Add:
Sustaining capital expenditures of unconsolidated joint ventures(a)			$	29					$	130					$	159
Investments in unconsolidated joint ventures(b)			44						200						244
Less: Consolidated joint venture partners’ sustaining capital expenditures			(2)						(9)						(11)
Accrued capital expenditures, contractor retainage and other			17						—						—
Total capital investments			$	595					$	2,656					$	3,251

(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.

Our capital investments consist of the following:

						Three Months Ended March 31, 2023						2023 Remaining						Total 2023
						(In millions)
Sustaining capital investments
Capital expenditures for property, plant and equipment						$	156					$	718					$	874
Sustaining capital expenditures of unconsolidated joint ventures(a)						29						130						159
Less: Consolidated joint venture partners’ sustaining capital expenditures						(2)						(9)						(11)
Total sustaining capital investments						183						839						1,022
Expansion capital investments
Capital expenditures for property, plant and equipment						368						1,617						1,985
Investments in unconsolidated joint ventures(b)						44						200						244
Total expansion capital investments						412						1,817						2,229
Total capital investments						$	595					$	2,656					$	3,251

(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.

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, 2022 in our 2022 Form 10-K.

Commitments for the purchase of property, plant and equipment as of March 31, 2023 and December 31, 2022 were $322 million and $527 million, respectively. The decrease of $205 million was primarily driven by capital commitments related to our Terminals and Products Pipelines segments.

Cash Flows

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

						Three Months Ended March 31,
						2023						2022						Changes
						(In millions)
Net Cash Provided by (Used in)
Operating activities						$	1,333					$	1,084					$	249
Investing activities						(508)						(371)						(137)
Financing activities						(1,181)						(1,512)						331
Net Decrease in Cash, Cash Equivalents and Restricted Deposits						$	(356)					$	(799)					$	443

Operating Activities

$249 million more cash provided by operating activities in the comparable three-month periods ended March 31, 2023 and 2022 is explained by the following discussion:

• a $316 million increase in cash associated with net changes in working capital items and other non-current assets and liabilities. The increase was primarily driven by (i) net favorable changes related to the timing of accounts receivable collections and trade payable payments, largely in our Natural Gas business segment; and (ii) a decrease in inventories primarily driven by higher settlements associated with commodity hedges related to gas in underground storage; partially offset by,

• a $67 million decrease in cash after adjusting the $19 million increase in net income by $86 million for the combined effects of the period-to-period net changes in non-cash items.

Investing Activities

$137 million more cash used in investing activities in the comparable three-month periods ended March 31, 2023 and 2022 is explained by the following discussion:

• a $100 million increase in capital expenditures primarily driven by the expansion projects in our Natural Gas business segment.

Financing Activities

$331 million less cash used in financing activities in the comparable three-month periods ended March 31, 2023 and 2022 is explained by the following discussion:

• a $470 million net decrease in cash used related to debt activity as a result of lower net debt payments in the 2023 period compared to the 2022 period; partially offset by,

• a $112 million increase in cash used for share repurchases under our share buy-back program.

Dividends

We expect to declare dividends of $1.13 per share on our stock for 2023. The table below reflects our 2023 dividends declared:

Three months ended						Total quarterly dividend per share for the period						Date of declaration						Date of record						Date of dividend
March 31, 2023						$	0.2825					April 19, 2023						May 1, 2023						May 15, 2023

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—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 2022 Form 10-K. All of these matters will be taken into consideration by our board of directors 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.

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 a Subsidiary Issuer is 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 March 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 March 31, 2023 and December 31, 2022, the Obligated Group had $30,519 million and $30,886 million, respectively, of Guaranteed Notes outstanding.

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

Summarized Combined Balance Sheet Information			March 31, 2023						December 31, 2022
			(In millions)
Current assets			$	2,397					$	3,514
Current assets - affiliates			587						618
Noncurrent assets			61,489						61,523
Noncurrent assets - affiliates			520						516
Total Assets			$	64,993					$	66,171
Current liabilities			$	4,456					$	6,612
Current liabilities - affiliates			639						707
Noncurrent liabilities			31,679						30,668
Noncurrent liabilities - affiliates			1,137						1,096
Total Liabilities			37,911						39,083
Kinder Morgan, Inc.’s stockholders’ equity			27,082						27,088
Total Liabilities and Stockholders’ Equity			$	64,993					$	66,171

Summarized Combined Income Statement Information									Three Months Ended March 31, 2023
									(In millions)
Revenues									$	3,613
Operating income									1,108
Net income									613