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.

Acquisition

Following is an acquisition we made during the nine months ended September 30, 2023.

Event			Description			Business Segment
Diamond M Field acquisition (June 2023)			We closed on our acquisition of Parallel Petroleum’s interest in the Diamond M Field for $15 million, before working capital adjustments. The acquired field is located directly adjacent to our existing SACROC field. It is currently under waterflood, but it is expected to be very receptive to CO2 flooding given its proximity to SACROC. Implementation of enhanced oil recovery is projected to begin in 2024.			CO2 business segment (Oil and Gas Producing activities)

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 now expect to invest $1.9 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 and nine months ended September 30, 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 and nine months ended September 30, 2023 and 2022, which are also described in more detail in the footnotes to tables included in “—Segment Earnings Results” below.

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(In millions)
Certain Items
Fair value amortization			$	—					$	(4)					$	—					$	(11)
Legal, environmental and other reserves			—						23						—						23
Change in fair value of derivative contracts(a)			37						(6)						(93)						49
Loss on impairment			—						—						67						—
Income tax Certain Items(b)			(7)						(20)						6						(35)
Other			—						6						—						24
Total Certain Items(c)(d)			$	30					$	(1)					$	(20)					$	50

(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)Amounts for the periods ending September 30, 2023 and 2022 include the following amounts reported within “Earnings from equity investments” on the accompanying consolidated statements of income: (i) $1 million and $(1) million for the three-month periods, respectively, and none and $4 million for the nine-month periods, respectively, included within “Change in fair value of derivative contracts” and (ii) $67 million, for the 2023 nine-month period only, included within “Loss on impairment” for a non-cash impairment related to our investment in Double Eagle Pipeline LLC in our Products Pipelines business segment (see Note 2 “Losses on Impairments*—Impairments*”).

(d)Amounts for the periods ending September 30, 2023 and 2022 include, in the aggregate, $3 million and $15 million for the three-month periods, respectively, and $(10) million and $(46) million for the nine-month periods, respectively, included within “Interest, net” on the accompanying consolidated statements of income which consist of (i) none and $(4) million for the three-month periods, respectively, and none and $(11) million for the nine-month periods, respectively, of “Fair value amortization” and (ii) $3 million and $19 million for the three-month periods, respectively, and $(10) million and $(35) million for the nine-month periods, 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 September 30, 2023, by subtracting the following amounts from our debt balance of $31,001 million: (i) cash and cash equivalents of $80 million; (ii) debt fair value adjustments of $8 million; and (iii) the foreign exchange impact on Euro-denominated bonds of $(14) 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 September 30,
			2023						2022						Earnings increase/(decrease)
			(In millions, except percentages)
Revenues			$	3,907					$	5,177					$	(1,270)					(25)		%
Operating Costs, Expenses and Other
Costs of sales (exclusive of items shown separately below)			(1,405)						(2,717)						1,312						48		%
Operations and maintenance			(738)						(712)						(26)						(4)		%
DD&A			(561)						(551)						(10)						(2)		%
General and administrative			(162)						(162)						—						—		%
Taxes, other than income taxes			(106)						(113)						7						6		%
Gain on divestitures and impairments, net			3						9						(6)						(67)		%
Total Operating Costs, Expenses and Other			(2,969)						(4,246)						1,277						30		%
Operating Income			938						931						7						1		%
Other Income (Expense)
Earnings from equity investments			234						195						39						20		%
Amortization of excess cost of equity investments			(18)						(19)						1						5		%
Interest, net			(457)						(399)						(58)						(15)		%
Other, net			3						21						(18)						(86)		%
Total Other Expense			(238)						(202)						(36)						(18)		%
Income Before Income Taxes			700						729						(29)						(4)		%
Income Tax Expense			(145)						(134)						(11)						(8)		%
Net Income			555						595						(40)						(7)		%
Net Income Attributable to Noncontrolling Interests			(23)						(19)						(4)						(21)		%
Net Income Attributable to Kinder Morgan, Inc.			$	532					$	576					$	(44)					(8)		%
Basic and diluted earnings per share			$	0.24					$	0.25					$	(0.01)					(4)		%
Basic and diluted weighted average shares outstanding			2,230						2,253						(23)						(1)		%
Declared dividends per share			$	0.2825					$	0.2775					$	0.005					2		%

			Nine Months Ended September 30,
			2023						2022						Earnings increase/(decrease)
			(In millions, except percentages)
Revenues			$	11,296					$	14,621					$	(3,325)					(23)		%
Operating Costs, Expenses and Other
Costs of sales (exclusive of items shown separately below)			(3,591)						(7,294)						3,703						51		%
Operations and maintenance			(2,062)						(1,960)						(102)						(5)		%
DD&A			(1,683)						(1,632)						(51)						(3)		%
General and administrative			(497)						(470)						(27)						(6)		%
Taxes, other than income taxes			(319)						(340)						21						6		%
Gain on divestitures and impairments, net			16						30						(14)						(47)		%
Other income, net			2						6						(4)						(67)		%
Total Operating Costs, Expenses and Other			(8,134)						(11,660)						3,526						30		%
Operating Income			3,162						2,961						201						7		%
Other Income (Expense)
Earnings from equity investments			607						564						43						8		%
Amortization of excess cost of equity investments			(54)						(57)						3						5		%
Interest, net			(1,345)						(1,087)						(258)						(24)		%
Other, net			7						63						(56)						(89)		%
Total Other Expense			(785)						(517)						(268)						(52)		%
Income Before Income Taxes			2,377						2,444						(67)						(3)		%
Income Tax Expense			(509)						(512)						3						1		%
Net Income			1,868						1,932						(64)						(3)		%
Net Income Attributable to Noncontrolling Interests			(71)						(54)						(17)						(31)		%
Net Income Attributable to Kinder Morgan, Inc.			$	1,797					$	1,878					$	(81)					(4)		%
Basic and diluted earnings per share			$	0.80					$	0.83					$	(0.03)					(4)		%
Basic and diluted weighted average shares outstanding			2,238						2,262						(24)						(1)		%
Declared dividends per share			$	0.8475					$	0.8325					$	0.015					2		%

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

Below is a discussion of significant changes in our Consolidated Earnings Results for the comparable three and nine-month periods ended September 30, 2023 and 2022:

Revenues

Revenues decreased $1,270 million and $3,325 million for the three and nine months ended September 30, 2023, respectively, as compared to the respective prior year periods. The decreases were primarily due to lower natural gas sales of $1,207 million and $2,965 million, respectively, and lower product sales of $188 million and $989 million, respectively, driven primarily by lower commodity prices partially offset by the impact of derivative contracts used to hedge commodity sales of $67 million and $524 million, respectively, which includes both realized and unrealized gains and losses from derivatives. These decreases in revenues were offset by corresponding decreases in our costs of sales as described below under “Operating Costs, Expenses and Other—Costs of sales.”

Operating Costs, Expenses and Other

Costs of sales

Costs of sales decreased $1,312 million and $3,703 million for the three and nine months ended September 30, 2023, respectively, as compared to the respective prior year periods. The decreases were primarily due to lower costs of sales for natural gas of $1,129 million and $2,860 million, respectively, and for products of $197 million and $646 million, respectively, driven primarily by lower commodity prices. Costs of sales was partially offset by increases of $18 million and further reduced by $157 million, respectively, for the impacts of derivative contracts used to hedge commodity purchases which includes both realized and unrealized gains and losses from derivatives.

Operations and Maintenance

Operations and maintenance increased $26 million and $102 million for the three and nine months ended September 30, 2023, respectively, as compared to the respective prior year periods. The increases were primarily driven by higher labor, fuel costs, materials and supplies and services related to greater activity levels and inflation partially offset by a legal reserve associated with the EPNG pipeline rupture established in the 2022 period.

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 $58 million and $258 million for the three and nine months ended September 30, 2023, respectively, as compared to the respective prior year periods. The increases were primarily due to higher realized Secured Overnight Financing Rates associated with interest rate swaps.

Non-GAAP Financial Measures

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

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(In millions, except per share amounts)
Net income attributable to Kinder Morgan, Inc.			$	532					$	576					$	1,797					$	1,878
Certain Items(a)
Fair value amortization			—						(4)						—						(11)
Legal, environmental and other reserves			—						23						—						23
Change in fair value of derivative contracts			37						(6)						(93)						49
Loss on impairment			—						—						67						—
Income tax Certain Items			(7)						(20)						6						(35)
Other			—						6						—						24
Total Certain Items			30						(1)						(20)						50
Adjusted Earnings			$	562					$	575					$	1,777					$	1,928
Reconciliation of Net Income Attributable to Kinder Morgan, Inc. to DCF
Net income attributable to Kinder Morgan, Inc.			$	532					$	576					$	1,797					$	1,878
Total Certain Items(b)			30						(1)						(20)						50
DD&A			561						551						1,683						1,632
Amortization of excess cost of equity investments			18						19						54						57
Income tax expense(c)			152						154						503						547
Cash taxes			(1)						(3)						(10)						(12)
Sustaining capital expenditures			(242)						(207)						(593)						(498)
Amounts from joint ventures
Unconsolidated joint venture DD&A			80						89						241						242
Remove consolidated joint venture partners’ DD&A			(16)						(12)						(47)						(34)
Unconsolidated joint venture income tax expense(d)(e)			24						13						70						54
Unconsolidated joint venture cash taxes(d)			(21)						(12)						(73)						(51)
Unconsolidated joint venture sustaining capital expenditures			(43)						(38)						(118)						(89)
Remove consolidated joint venture partners’ sustaining capital expenditures			2						2						6						6
Other items(f)			18						(9)						51						(29)
DCF			$	1,094					$	1,122					$	3,544					$	3,753
Adjusted Earnings per share			$	0.25					$	0.25					$	0.79					$	0.85
Weighted average shares outstanding for dividends(g)			2,244						2,267						2,251						2,275
DCF per share			$	0.49					$	0.49					$	1.57					$	1.65
Declared dividends per share			$	0.2825					$	0.2775					$	0.8475					$	0.8325

(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, adjustments for income tax expense for the periods ended September 30, 2023 and 2022 exclude $(7) million and $(20) million for the three-month periods, respectively, and $6 million and $(35) million for the nine-month periods, 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 September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(In millions)
Net income attributable to Kinder Morgan, Inc.			$	532					$	576					$	1,797					$	1,878
Certain Items(a)
Fair value amortization			—						(4)						—						(11)
Legal, environmental and other reserves			—						23						—						23
Change in fair value of derivative contracts			37						(6)						(93)						49
Loss on impairment			—						—						67						—
Income tax Certain Items			(7)						(20)						6						(35)
Other			—						6						—						24
Total Certain Items			30						(1)						(20)						50
DD&A			561						551						1,683						1,632
Amortization of excess cost of equity investments			18						19						54						57
Income tax expense(b)			152						154						503						547
Interest, net(c)			454						384						1,355						1,133
Amounts from joint ventures
Unconsolidated joint venture DD&A			80						89						241						242
Remove consolidated joint venture partners’ DD&A			(16)						(12)						(47)						(34)
Unconsolidated joint venture income tax expense(d)			24						13						70						54
Adjusted EBITDA			$	1,835					$	1,773					$	5,636					$	5,559

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

(b)To avoid duplication, adjustments for income tax expense for the periods ended September 30, 2023 and 2022 exclude $(7) million and $(20) million for the three-month periods, respectively, and $6 million and $(35) million for the nine-month periods, 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, adjustments for interest, net for the periods ended September 30, 2023 and 2022 exclude $3 million and $15 million for the three-month periods, respectively, and $(10) million and $(46) million for the nine-month periods, 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:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(In millions)
Adjusted Earnings			$	562					$	575					$	1,777					$	1,928
DCF			1,094						1,122						3,544						3,753
Adjusted EBITDA			1,835						1,773						5,636						5,559
Change from prior period			Increase/(Decrease)
Adjusted Earnings			$	(13)											$	(151)
DCF			$	(28)											$	(209)
Adjusted EBITDA			$	62											$	77

Adjusted Earnings decreased $13 million and $151 million for the three and nine months ended September 30, 2023, respectively, as compared to the respective prior year periods and were primarily driven by higher interest expense. Higher interest expense also affected DCF. The $28 million and $209 million decreases in DCF for the three and nine months ended September 30, 2023, respectively, as compared to the respective prior year periods were further impacted by increases in sustaining capital expenditures. Adjusted EBITDA increased $62 million and $77 million for the three and nine months ended September 30, 2023, respectively, as compared to the respective prior year periods due to favorable margins from our Natural Gas Pipeline business segment, and for the three-month period, favorable product pricing from our Products Pipelines business segment partially offset by lower commodity prices.

General and Administrative and Corporate Charges

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(In millions)
General and administrative			$	(162)					$	(162)					$	(497)					$	(470)
Corporate (charges) benefit			(14)						13						(37)						32
General and administrative and corporate charges			$	(176)					$	(149)					$	(534)					$	(438)
Change from prior period			Earnings increase/(decrease)
General and administrative			$	—											$	(27)
Corporate (charges) benefit			(27)												(69)
Total			$	(27)											$	(96)

General and administrative expenses were flat and increased $27 million and corporate (charges) benefit increased $27 million and $69 million for the three and nine months ended September 30, 2023, respectively, when compared with the respective prior year periods. The combined changes were primarily due to higher pension costs of $24 million and $72 million, and higher labor and benefit-related costs of $6 million and $30 million, for the three and nine months ended September 30, 2023, respectively.

Reconciliation of Segment EBDA to Adjusted Segment EBDA

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(In millions)
Segment EBDA(a)
Natural Gas Pipelines Segment EBDA			$	1,179					$	1,135					$	3,929					$	3,453
Certain Items(b)
Legal, environmental reserves			—						23						—						23
Change in fair value of derivative contracts			20						(5)						(99)						89
Other			—						6						—						24
Natural Gas Pipelines Adjusted Segment EBDA			$	1,199					$	1,159					$	3,830					$	3,589
Products Pipelines Segment EBDA			$	311					$	257					$	780					$	855
Certain Items(b)
Change in fair value of derivative contracts			2						—						3						—
Loss on impairment			—						—						67						—
Products Pipelines Adjusted Segment EBDA			$	313					$	257					$	850					$	855
Terminals Segment EBDA			$	259					$	240					$	774					$	731
CO2 Segment EBDA			$	163					$	215					$	510					$	619
Certain Items(b)
Change in fair value of derivative contracts			12						(20)						13						(5)
CO2 Adjusted Segment EBDA			$	175					$	195					$	523					$	614

(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 September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(In millions, except operating statistics)
Revenues			$	2,273					$	3,505					$	6,730					$	9,674
Operating expenses			(1,295)						(2,548)						(3,400)						(6,706)
Gain on divestitures and impairments, net			—						8						9						8
Other income			—						—						2						2
Earnings from equity investments			192						168						567						471
Other, net			9						2						21						4
Segment EBDA			1,179						1,135						3,929						3,453
Certain Items:
Legal, environmental and other reserves			—						23						—						23
Change in fair value of derivative contracts			20						(5)						(99)						89
Other			—						6						—						24
Certain Items(a)			20						24						(99)						136
Adjusted Segment EBDA			$	1,199					$	1,159					$	3,830					$	3,589
Change from prior period			Increase/(Decrease)
Segment EBDA			$	44											$	476
Adjusted Segment EBDA			$	40											$	241
Volumetric data(b)
Transport volumes (BBtu/d)			40,201						38,274						39,884						38,349
Sales volumes (BBtu/d)			2,574						2,469						2,306						2,521
Gathering volumes (BBtu/d)			3,474						3,128						3,424						2,948
NGLs (MBbl/d)			35						24						34						29

(a)See table included in “*—Overview—Non-GAAP Financial Measures—*Certain Items” above. For the periods ending September 30, 2023 and 2022 Certain Items of (i) $19 million and $(4) million for the three-month periods, respectively, and $(99) million and $85 million for the nine-month periods, respectively, are associated with our Midstream business; (ii) $1 million and $(1) million for the three-month periods, respectively, and none and $4 million for the nine-month periods, respectively, are associated with our East business; and (iii) none and $29 million for the three-month periods, respectively, and none and $47 million for the nine-month periods, respectively, are associated with our West business. For more detail of significant Certain Items, see the discussion of changes in Segment EBDA below.

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

Below are the changes in Segment EBDA:

			Three Months Ended September 30,
			2023						2022						increase/ (decrease)
			(In millions)
West			$	228					$	184					$	44
East			624						596						28
Midstream			327						355						(28)
Total Natural Gas Pipelines Segment EBDA			$	1,179					$	1,135					$	44

			Nine Months Ended September 30,
			2023						2022						increase/ (decrease)
			(In millions)
West			$	703					$	633					$	70
East			1,965						1,842						123
Midstream			1,261						978						283
Total Natural Gas Pipelines Segment EBDA			$	3,929					$	3,453					$	476

The changes in Segment EBDA for our Natural Gas Pipelines business segment in the comparable three and nine-month periods ended September 30, 2023 and 2022 are explained by the following discussion:

• The $44 million (24%) and $70 million (11%) increases, respectively, in West were primarily due to higher earnings from EPNG due to (i) increased revenues from favorable pricing on its services and the return of a pipeline segment to service in February 2023 and (ii) an increase in gas sales margin, partially offset by (i) increased pipeline maintenance costs on EPNG and (ii) lower revenues from Cheyenne Plains Gas Pipeline Company, L.L.C. and Wyoming Interstate Company, L.L.C., principally resulting from contract expirations in December 2022.

In addition, the West was affected by costs associated with the EPNG pipeline rupture and related litigation reserve for the 2022 periods only, which we treated as Certain Items.

• The $28 million (5%) and $123 million (7%) increases, respectively, in East were primarily due to higher equity earnings from Midcontinent Express Pipeline LLC, driven by favorable pricing on new customer contracts entered into in the later part of 2022, higher revenues on our Stagecoach assets as a result of increased demand in its services and favorable pricing, higher revenues on TGP due to increased rates on capacity sales, increased demand for its services and favorable pricing partially offset by higher pipeline maintenance costs.

• The $28 million (8%) decrease and $283 million (29%) increase, respectively, in Midstream were affected by decreases in revenues and, largely in the nine-month period, costs of sales 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 impacted by (i) higher sales margins on our Texas intrastate natural gas pipeline operations largely driven by realized gains on sales hedges partially offset by lower commodity prices and (ii) higher earnings from our Hiland Midstream systems primarily due to higher services fees resulting from higher volumes and increased rates partially offset by (i) lower service fee revenues as a result of renegotiated contracts at lower rates on our South Texas assets; and (ii) lower commodity sales margin driven primarily by lower prices on our Altamont asset to a greater extent in the three-month period. The year-to-date increase was further impacted by higher commodity sales margin due to increased volumes on our Altamont asset partially offset by lower sales volumes on our Texas intrastate natural gas pipeline operations.

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

Products Pipelines

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(In millions, except operating statistics)
Revenues			$	862					$	872					$	2,265					$	2,634
Operating expenses			(584)						(632)						(1,498)						(1,846)
Gain on divestitures and impairments, net			—						—						—						12
Earnings from equity investments			32						17						12						55
Other, net			1						—						1						—
Segment EBDA			311						257						780						855
Certain Items:
Change in fair value of derivative contracts			2						—						3						—
Loss on impairment			—						—						67						—
Certain Items(a)			2						—						70						—
Adjusted Segment EBDA			$	313					$	257					$	850					$	855
Change from prior period			Increase/(Decrease)
Segment EBDA			$	54											$	(75)
Adjusted Segment EBDA			$	56											$	(5)
Volumetric data(b)
Gasoline(c)			1,002						989						985						982
Diesel fuel			362						368						349						370
Jet fuel			292						278						285						262
Total refined product volumes			1,656						1,635						1,619						1,614
Crude and condensate			490						467						481						477
Total delivery volumes (MBbl/d)			2,146						2,102						2,100						2,091

(a)See table included in “*—Overview—Non-GAAP Financial Measures—*Certain Items” above. For the periods ending September 30, 2023 and 2022 Certain Items of (i) none and $1 million for the three-month periods, respectively, and $1 million and none for the nine-month periods, respectively, are associated with our Southeast Refined Products business and (ii) $2 million and $(1) million for the three-month periods, respectively, and $69 million and none for the nine-month periods, respectively, are associated with our Crude and Condensate business. For more detail of significant Certain Items, see the discussion of changes in Segment EBDA below.

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

(c)Volumes include ethanol pipeline volumes.

Below are the changes in Segment EBDA:

			Three Months Ended September 30,
			2023						2022						increase/ (decrease)
			(In millions)
Southeast Refined Products			$	82					$	56					$	26
Crude and Condensate			91						73						18
West Coast Refined Products			138						128						10
Total Products Pipelines Segment EBDA			$	311					$	257					$	54

			Nine Months Ended September 30,
			2023						2022						increase/ (decrease)
			(In millions)
Southeast Refined Products			$	216					$	209					$	7
Crude and Condensate			183						250						(67)
West Coast Refined Products			381						396						(15)
Total Products Pipelines Segment EBDA			$	780					$	855					$	(75)

The changes in Segment EBDA for our Products Pipelines business segment in the comparable three and nine-month periods ended September 30, 2023 and 2022 are explained by the following discussion:

• The $26 million (46%) and $7 million (3%) increases, respectively, in Southeast Refined Products were driven by higher earnings at our Transmix processing operations primarily due to favorable product pricing to a greater extent in the three-month period, an increase in equity earnings from Products (SE) Pipe Line primarily due to increased revenues driven by higher rates, volumes and blending activities and higher volumes on Central Florida Pipeline LLC.

• The $18 million (25%) increase and $67 million (27%) decrease, respectively, in Crude and Condensate was affected by a year-to-date decrease of $67 million to equity earnings for a non-cash impairment related to our investment in Double Eagle Pipeline LLC, which we treated as a Certain Item.

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

• The $10 million (8%) increase and $15 million (4%) decrease, respectively, in West Coast Refined Products were impacted by increased revenues from our Pacific operations as a result of new contracts and higher rates reduced by higher operating costs to a greater extent in the nine-month period and increased revenues from Calnev Pipe Line LLC driven by higher rates. The year-to-date decrease was further impacted by a gain on sale of land in the 2022 period at Calnev Pipe Line LLC.

Terminals

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(In millions, except operating statistics)
Revenues			$	484					$	457					$	1,423					$	1,337
Operating expenses			(230)						(222)						(664)						(637)
Gain on divestitures and impairments, net			—						—						3						9
Other income			—						1						—						5
Earnings from equity investments			2						3						6						11
Other, net			3						1						6						6
Segment EBDA			$	259					$	240					$	774					$	731
Change from prior period			Increase/(Decrease)
Segment EBDA			$	19											$	43
Volumetric data(a)
Liquids leasable capacity (MMBbl)			78.7						78.2						78.7						78.2
Liquids leased capacity %(b)			94.6		%				90.8		%				93.6		%				90.9		%
Bulk transload tonnage (MMtons)			12.6						13.4						39.7						40.0

(a)Volumes for assets 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:

			Three Months Ended September 30,
			2023						2022						increase/ (decrease)
			(In millions)
Marine operations			$	46					$	33					$	13
Gulf Liquids			76						66						10
Gulf Central			36						35						1
Mid Atlantic			20						30						(10)
All others (including intrasegment eliminations)			81						76						5
Total Terminals Segment EBDA			$	259					$	240					$	19

			Nine Months Ended September 30,
			2023						2022						increase/ (decrease)
			(In millions)
Marine operations			$	131					$	105					$	26
Gulf Liquids			225						217						8
Gulf Central			112						102						10
Mid Atlantic			70						76						(6)
All others (including intrasegment eliminations)			236						231						5
Total Terminals Segment EBDA			$	774					$	731					$	43

The changes in Segment EBDA for our Terminals business segment in the comparable three and nine-month periods ended September 30, 2023 and 2022 are explained by the following discussion:

• The $13 million (39%) and $26 million (25%) increases, respectively, in Marine operations were primarily due to higher average charter rates.

• The $10 million (15%) and $8 million (4%) increases, respectively, in the Gulf Liquids terminals were primarily due to increased revenues from contractual rate escalations and higher volumes.

• The $1 million (3%) and $10 million (10%) increases, respectively, in the Gulf Central terminals were primarily due to higher revenues resulting from contractual rate escalations and higher volumes for petroleum coke handling activities partially offset by higher property tax expense at our Battleground Oil Specialty Terminal Company LLC.

• The $10 million (33%) and $6 million (8%) decreases, respectively, in the Mid Atlantic terminals were primarily due to lower earnings from coal handling activities at our Pier IX facility.

CO**2

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(In millions, except operating statistics)
Revenues			$	297					$	351					$	896					$	999
Operating expenses			(142)						(143)						(409)						(408)
Gain on divestitures and impairments, net			—						—						1						1
Earnings from equity investments			8						7						22						27
Segment EBDA			163						215						510						619
Certain Items:
Change in fair value of derivative contracts			12						(20)						13						(5)
Certain Items(a)			12						(20)						13						(5)
Adjusted Segment EBDA			$	175					$	195					$	523					$	614
Change from prior period			Increase/(Decrease)
Segment EBDA			$	(52)											$	(109)
Adjusted Segment EBDA			$	(20)											$	(91)
Volumetric data(b)
SACROC oil production			19.59						19.91						20.10						19.62
Yates oil production			6.66						6.43						6.65						6.52
Other			2.52						3.10						2.80						3.21
Total oil production, net (MBbl/d)(c)			28.77						29.44						29.55						29.35
NGL sales volumes, net (MBbl/d)(c)			8.98						9.74						8.79						9.47
CO2 sales volumes, net (Bcf/d)			0.311						0.335						0.338						0.352
Realized weighted average oil price ($ per Bbl)			$	67.60					$	66.34					$	67.49					$	67.91
Realized weighted average NGL price ($ per Bbl)			$	30.74					$	37.68					$	31.87					$	41.01

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

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

(c)Net of royalties and outside working interests.

Below are the changes in Segment EBDA:

			Three Months Ended September 30,
			2023						2022						increase/ (decrease)
			(In millions)
Oil and Gas Producing activities			$	100					$	152					$	(52)
Source and Transportation activities			49						59						(10)
Subtotal			149						211						(62)
Energy Transition Ventures			14						4						10
Total CO2 Segment EBDA			$	163					$	215					$	(52)

			Nine Months Ended September 30,
			2023						2022						increase/ (decrease)
			(In millions)
Oil and Gas Producing activities			$	353					$	415					$	(62)
Source and Transportation activities			137						190						(53)
Subtotal			490						605						(115)
Energy Transition Ventures			20						14						6
Total CO2 Segment EBDA			$	510					$	619					$	(109)

The changes in Segment EBDA for our CO2 business segment in the comparable three and nine-month periods ended September 30, 2023 and 2022 are explained by the following discussion:

• The $52 million (34%) and $62 million (15%) decreases, respectively, in Oil and Gas Producing activities were affected by unfavorable changes in revenues related to non-cash mark-to-market derivative hedge contracts, which we treated as Certain Items.

In addition, Oil and Gas Producing activities were impacted by decreases in revenues related to lower realized NGL prices and volumes and higher operating expenses.

• The $10 million (17%) and $53 million (28%) decreases, respectively, in Source and Transportation activities were primarily due to lower revenues related to lower CO2 sales prices and volumes.

• The $10 million (250%) and $6 million (43%) increases, respectively, in Energy Transition Ventures were primarily due to higher RNG margins as a result of higher volumes, partially offset by higher operating expenses.

We believe that our existing hedge contracts in place within our CO2 business segment substantially mitigate commodity price sensitivities in the near-term and to a 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, 2023:

			Remaining 2023						2024						2025						2026						2027
Crude Oil(a)
Price ($ per Bbl)			$	65.66					$	65.04					$	63.19					$	65.16					$	64.14
Volume (MBbl/d)			26.90						20.40						11.45						8.60						2.60
NGLs
Price ($ per Bbl)			$	49.95					$	53.72
Volume (MBbl/d)			5.11						2.68

(a)Includes West Texas Intermediate hedges.

Liquidity and Capital Resources

General

As of September 30, 2023, we had $80 million of “Cash and cash equivalents,” a decrease of $665 million from December 31, 2022. Additionally, as of September 30, 2023, we had borrowing capacity of approximately $3.6 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 $4,169 million and $3,563 million in the first nine months of 2023 and 2022, respectively. The period-to-period increase is discussed below in “—Cash Flows—Operating Activities.” We primarily rely on cash flows from operations to fund our 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. Additionally, from time to time, our short-term debt balances may include borrowings used to initially finance our long-term debt maturities and/or expansion capital expenditures, which we may periodically replace with long-term financing and/or pay down using retained cash from operations.

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, 2023 and December 31, 2022, approximately $3,739 million (12%) and $6,314 million (20%), respectively, of the principal amount of our debt balances were subject to variable interest rates—either as short-term or long-term variable-rate debt obligations or as fixed-rate debt converted to variable rates through the use of interest rate swaps. The percentage at September 30, 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 third quarter of 2023, a 2% increase over the dividend declared for the third 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 nine months ended September 30, 2023, upon maturity, we repaid our 3.15% senior notes, our floating rate senior notes, our 3.45% senior notes and our 3.50% senior notes.

Short-term Liquidity

As of September 30, 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 $3.6 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 September 30, 2023, our $3,130 million of short-term debt consisted primarily of senior notes that mature in the next twelve months and outstanding commercial paper borrowings. 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 as of December 31, 2022 was $3,385 million.

We had working capital (defined as current assets less current liabilities) deficits of $3,818 million and $3,127 million as of September 30, 2023 and December 31, 2022, respectively. The overall $691 million increase in deficit from year-end 2022 was primarily due to (i) a $665 million decrease in cash and cash equivalents primarily resulting from using cash on hand as of December 31, 2022 to repay a portion of our senior notes that matured in the first quarter of 2023; (ii) a $324 million net unfavorable change in our accounts receivables and payables; (iii) a $320 million increase in commercial paper borrowings to partially fund the repayment of our senior notes that matured in the third quarter; (iv) a $114 million decrease in other current assets, primarily in exchange gas receivables and regulatory assets; (v) a $69 million decrease in inventories, primarily associated with gas in underground storage, partially offset by (i) a $575 million decrease in senior notes that mature in the next twelve months; (ii) a $163 million decrease in other current liabilities, primarily related to reductions in exchange gas payables and accrued contingencies; and (iii) a $128 million decrease in accrued interest. Generally, our working capital varies due to factors such as the timing of scheduled debt payments, timing differences in the collection and payment of receivables and payables, the change in fair value of our derivative contracts and changes in our cash and cash equivalents 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 nine months ended September 30, 2023, and the amount we expect to spend for the remainder of 2023 to sustain our assets and expand our business are as follows:

			Nine Months Ended September 30, 2023						2023 Remaining						Total 2023
			(In millions)
Capital expenditures:
Sustaining capital expenditures			$	593					$	271					$	864
Expansion capital expenditures			1,227						431						1,658
Accrued capital expenditures, contractor retainage and other			(131)						—						—
Capital expenditures			$	1,689					$	702					$	2,522
Add:
Sustaining capital expenditures of unconsolidated joint ventures(a)			$	118					$	44					$	162
Investments in unconsolidated joint ventures(b)			178						73						251
Less: Consolidated joint venture partners’ sustaining capital expenditures			(6)						(5)						(11)
Less: Consolidated joint venture partners’ expansion capital expenditures			(14)						(6)						(20)
Acquisition			13						—						13
Accrued capital expenditures, contractor retainage and other			131						—						—
Total capital investments			$	2,109					$	808					$	2,917

(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:

						Nine Months Ended September 30, 2023						2023 Remaining						Total 2023
						(In millions)
Sustaining capital investments
Capital expenditures for property, plant and equipment						$	593					$	271					$	864
Sustaining capital expenditures of unconsolidated joint ventures(a)						118						44						162
Less: Consolidated joint venture partners’ sustaining capital expenditures						(6)						(5)						(11)
Total sustaining capital investments						705						310						1,015
Expansion capital investments
Capital expenditures for property, plant and equipment						1,227						431						1,658
Investments in unconsolidated joint ventures(b)						178						73						251
Less: Consolidated joint venture partners’ expansion capital expenditures						(14)						(6)						(20)
Acquisition						13						—						13
Total expansion capital investments						1,404						498						1,902
Total capital investments						$	2,109					$	808					$	2,917

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

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

Impact of Regulation

The trend toward increasingly stringent regulations creates uncertainty regarding our capital and operating expenditure requirements over the longer term. For example, on June 5, 2023, the EPA’s final rule known as the “Good Neighbor Plan” (the Plan) was published in the federal register as a final rule. As part of the Plan, the EPA disapproved 19 state implementation plans (SIPs) under the interstate transport (good neighbor) provisions of the Clean Air Act for the 2015 Ozone National Ambient Air Quality Standards and issued prescriptive emission standards for several sectors, including new and existing internal combustion engines of a certain size used in pipeline transportation of natural gas.

Multiple legal challenges have already been filed, including by us. See Note 9, “Litigation and Environmental—Environmental Matters—Challenge to Federal “Good Neighbor Plan,” to our consolidated financial statements. While we are unable to predict whether any legal challenges will result in changes to the Plan or how those changes, if any, would impact us, we believe that the EPA’s disapprovals of the SIPs were improper, that the Plan is deeply flawed and that numerous and substantial bases for challenging the Plan exist. Several states in which we have affected assets, including Arkansas, Kentucky, Louisiana, Mississippi, Missouri, Oklahoma and Texas, have appealed the EPA’s disapprovals of SIPs and requested stays pending appeal. The criteria for a stay pending appeal include a requirement that the applicant show likelihood of success on the merits. Stays pending appeal have been granted with respect to the EPA’s disapprovals of SIPs submitted by Alabama, Arkansas, Kentucky, Louisiana, Minnesota, Mississippi, Missouri, Nevada, Oklahoma Texas, Utah and West Virginia (pending oral argument on October 27, 2023) meaning that (for as long as the stays remain in place) the EPA no longer has a legal basis to enforce the Plan in these states. In response to those stays, on July 31, 2023, the EPA published an interim final rule acknowledging that the Plan requirements in those states were suspended and indicating that the Plan compliance deadlines in those states may be extended. The guidance afforded by the EPA in the interim final rule is uncertain so we filed a petition seeking review of the interim final rule. If the Plan were fully implemented, its emission standards would require installation of more stringent air pollution controls on hundreds of existing internal combustion engines used by our Natural Gas Pipelines business segment. The Plan would require that all impacted engines meet the stringent emission limits by May 1, 2026 unless compliance schedule extensions are granted by the EPA, which would need to be supported by us and approved by the EPA on an engine-by-engine basis. If the Plan were to remain in effect in its current form (including full compliance by its May 1, 2026 compliance deadline, and assuming failure of all pending challenges to SIP disapprovals and no successful challenge to the Plan), we currently estimate that it would have a material impact on us, including estimated costs necessary to comply with the

Plan ranging from $1.5 billion to $1.8 billion (including costs for joint ventures that we operate, net to our interests in such joint ventures), potential shortages of equipment resulting in our inability to comply with the Plan, and operational disruptions. However, impacts are difficult to predict, particularly given the extensive pending litigation. The outcomes of these numerous lawsuits may significantly decrease our exposure. For example, our currently estimated costs necessary to comply with the Plan associated with states that have not been granted stays with respect to the EPA’s disapproval of their SIPs range from $200 million to $300 million. However, successful challenges to the Plan would impact all states. In addition, we would seek to mitigate the impacts and to recover expenditures through adjustments to our rates on our regulated assets where available.

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

Off Balance Sheet Arrangements

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 September 30, 2023 and December 31, 2022 were $447 million and $527 million, respectively. The decrease of $80 million was driven by an overall decrease of capital commitments.

Cash Flows

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

						Nine Months Ended September 30,
						2023						2022						Changes
						(In millions)
Net Cash Provided by (Used in)
Operating activities						$	4,169					$	3,563					$	606
Investing activities						(1,733)						(1,545)						(188)
Financing activities						(3,133)						(2,442)						(691)
Net Decrease in Cash, Cash Equivalents and Restricted Deposits						$	(697)					$	(424)					$	(273)

Operating Activities

$606 million more cash provided by operating activities in the comparable nine-month periods ended September 30, 2023 and 2022 is explained by the following discussion:

• a $793 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) the sale of natural gas inventories and higher settlements associated with commodity hedges in 2023, both related to gas in underground storage; (ii) lower litigation payments in the 2023 period compared with 2022; and (iii) net favorable changes related to the timing of accounts receivable collections and trade payable payments, largely in our Natural Gas Pipelines business segment, partially offset by,

• a $187 million decrease in cash after adjusting the $64 million decrease in net income by $123 million for the combined effects of the period-to-period net changes in non-cash items.

Investing Activities

$188 million more cash used in investing activities in the comparable nine-month periods ended September 30, 2023 and 2022 is explained by the following discussion:

• a $545 million increase in capital expenditures primarily driven by the expansion projects in our Natural Gas Pipelines and Products Pipelines business segments, partially offset by a decrease in expansion projects in our Terminals business segment; and

• a $119 million increase in cash used for contributions to equity investees driven primarily by higher contributions to Permian Highway Pipeline LLC in the 2023 period compared with the 2022 period, and contributions in 2023 to our newly formed equity investment, Greenholly Gathering Pipeline LLC, partially offset by

• a $475 million decrease in cash used for acquisitions of assets, net of cash acquired, primarily driven by a combined $488 million of net cash used for our acquisitions of Mas Ranger, LLC and North American Natural Resources, Inc. in 2022.

Financing Activities

$691 million more cash used in financing activities in the comparable nine-month periods ended September 30, 2023 and 2022 is explained by the following discussion:

• a decrease of $557 million in cash due to net proceeds received from the sale of a 25.5% ownership interest in Elba Liquefaction Company, L.L.C. in 2022; and

• a $57 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
June 30, 2023						0.2825						July 19, 2023						July 31, 2023						August 15, 2023
September 30, 2023						0.2825						October 18, 2023						October 31, 2023						November 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 KMI and certain of its subsidiaries, with schedules updated as of September 30, 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 September 30, 2023 and December 31, 2022, the Obligated Group had $30,225 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			September 30, 2023						December 31, 2022
			(In millions)
Current assets			$	2,184					$	3,514
Current assets - affiliates			649						618
Noncurrent assets			61,703						61,523
Noncurrent assets - affiliates			530						516
Total Assets			$	65,066					$	66,171
Current liabilities			$	5,922					$	6,612
Current liabilities - affiliates			711						707
Noncurrent liabilities			30,651						30,668
Noncurrent liabilities - affiliates			1,260						1,096
Total Liabilities			38,544						39,083
Kinder Morgan, Inc.’s stockholders’ equity			26,522						27,088
Total Liabilities and Stockholders’ Equity			$	65,066					$	66,171

Summarized Combined Income Statement Information			Three Months Ended September 30, 2023						Nine Months Ended September 30, 2023
			(In millions)
Revenues			$	3,580					$	10,403
Operating income			823						2,843
Net income			430						1,530