KINDER MORGAN INC

General

As of March 31, 2024, we had $119 million of “Cash and cash equivalents,” an increase of $36 million from December 31, 2023. Additionally, as of March 31, 2024, we had borrowing capacity of approximately $2.9 billion under our credit facility (discussed below in “—Short-term Liquidity”). As discussed further below, we believe our cash flows from operating activities, cash position and remaining borrowing capacity on our credit facility is more than adequate to allow us to manage our day-to-day cash requirements and anticipated obligations.

We have consistently generated substantial cash flows from operations, providing a source of funds of $1,189 million and $1,333 million in the first three months of 2024 and 2023, respectively. The period-to-period decrease is discussed below in “—Cash Flows—Operating Activities.” We primarily rely on cash flow provided by 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. From time to time, our short-term debt borrowings are used to finance our expansion capital expenditures, which we may periodically replace with long-term financing and/or pay down using retained cash from operations.

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, 2024 and December 31, 2023, approximately $6,539 million (20%) and $8,253 million (26%), 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 amounts at March 31, 2024 and December 31, 2023 include $525 million and $1,989 million of commercial paper notes, respectively. For more information on our interest rate swaps, see Note 6 “Risk Management—Interest Rate Risk Management” to our consolidated financial statem ents.

Our board of directors declared a quarterly dividend of $0.2875 per share for the first quarter of 2024, a 2% increase over the dividend declared for the first quarter of 2023.

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

During the three months ended March 31, 2024, upon maturity, we repaid our 4.15% senior notes.

Short-term Liquidity

As of March 31, 2024, our principal sources of short-term liquidity are (i) cash from operations; and (ii) our $3.5 billion credit facility with an available capacity of approximately $2.9 billion and an associated $3.5 billion commercial paper program. The loan commitments under our credit facility can be used for working capital and other general corporate purposes and as a backup to our commercial paper program. Commercial paper borrowings and letters of credit reduce borrowings allowed under our $3.5 billion credit facility. We provide for liquidity by maintaining a sizable amount of excess borrowing capacity under our credit facility and, as previously discussed, have consistently generated strong cash flows from operations.

As of March 31, 2024, our $1,975 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, 2023 was $4,049 million.

We had working capital (defined as current assets less current liabilities) deficits of $2,268 million and $4,679 million as of March 31, 2024 and December 31, 2023, respectively. The overall $2,411 million favorable change from year-end 2023 was primarily due to (i) a $1,464 million decrease in commercial paper borrowings resulting from refinancing of a portion of our short-term borrowings into long-term debt with the issuance of senior notes in 2024; (ii) a $650 million decrease in senior notes that mature in the next twelve months; (iii) a $148 million decrease in accrued interest; (iv) a $121 million decrease in other current liabilities, primarily related to reductions in bonus accruals and cash margins; and (v) a $108 million net favorable change in our accounts receivables and payables, partially offset by unfavorable net short-term fair value adjustments of $136 million on derivative contract assets and liabilities in 2024. 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:

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

Our capital expenditures for the three months ended March 31, 2024, and the amount we expect to spend for the remainder of 2024 to sustain our assets and expand our business are as follows:

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

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

Our capital investments consist of the following:

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

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

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, 2023 in our 2023 Form 10-K.

Commitments for the purchase of property, plant and equipment as of March 31, 2024 and December 31, 2023 were $525 million and $469 million, respectively. The increase of $56 million was primarily driven by capital commitments related to our Terminals, Natural Gas Pipelines and CO 2 business segments.

Cash Flows

The following table summarizes our net cash flows provided by (used in) operating, investing and financing activities between 2024 and 2023.

Operating Activities

$144 million less cash provided by operating activities in the comparable three-month periods ended March 31, 2024 and 2023 is explained by the following discussion:

•a $245 million decrease in cash associated with net changes in working capital items and other non-current assets and liabilities. The decrease was primarily driven by (i) net unfavorable changes related to the timing of accounts receivable collections and trade payable payments, largely in our Natural Gas Pipelines business segment; and (ii) settlements associated with commodity hedges in the 2023 period related to gas in underground storage.

Investing Activities

$64 million more cash used in investing activities in the comparable three-month periods ended March 31, 2024 and 2023 is explained by the following discussion:

•a $112 million increase in capital expenditures primarily driven by expansion projects in our Natural Gas Pipelines business segment; partially offset by

•a $47 million increase in cash in Other, net, primarily driven by net proceeds received from a sale of assets in our Natural Gas Pipelines business segment in the 2024 period.

Financing Activities

$611 million less cash used in financing activities in the comparable three-month periods ended March 31, 2024 and 2023 is explained by the following discussion:

•a $507 million decrease in cash used related to debt activity as a result of net issuances in the 2024 period compared to net payments in the 2023 period; and

•a $106 million decrease in cash used for share repurchases under our share buy-back program.

Dividends

We expect to declare dividends of $1.15 per share on our stock for 2024. The table below reflects our 2024 dividends declared:

The actual amount of dividends to be paid on our capital stock will depend on many factors, including our financial condition and results of operations, liquidity requirements, business prospects, capital requirements, legal, regulatory and contractual constraints, tax laws, Delaware laws and other factors. See Item 1A. “Risk Factors—Risks Related to Ownership of Our Capital Stock—The guidance we provide for our anticipated dividends is based on estimates. Circumstances may arise that lead to conflicts between using funds to pay anticipated dividends or to invest in our business.” of our 2023 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.