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What changed in Kinder Morgan's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Kinder Morgan's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+293 added−284 removedSource: 10-K (2025-02-13) vs 10-K (2024-02-20)

Top changes in Kinder Morgan's 2024 10-K

293 paragraphs added · 284 removed · 238 edited across 7 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

91 edited+20 added−7 removed127 unchanged
Biggest changeIn addition to environmental and pipeline safety matters, we are subject to regulations extending to such matters as (i) federal, state and local taxation; (ii) rates (which include reservation, commodity, surcharges, fuel and gas lost and unaccounted for), operating terms and conditions of service; (iii) the types of services we may offer to our customers; (iv) the contracts for service entered into with our customers; (v) the certification and construction of new facilities; (vi) the integrity, safety and security (including against cyber-attacks) of facilities and operations; (vii) the acquisition of other businesses; (viii) the acquisition, extension, disposition or abandonment of services or facilities; (ix) reporting and information posting requirements; (x) the maintenance of accounts and records; and (xi) relationships with affiliated companies involved in various aspects of the natural gas and energy businesses. 32 Should we fail to comply with any applicable statutes, rules, regulations, and orders of such regulatory authorities, we could be subject to substantial penalties and fines and potential loss of government contracts.
Biggest changeIn addition to environmental and pipeline safety matters, we are subject to regulations extending to such matters as (i) federal, state, local and foreign taxation; (ii) rates (which include reservation, commodity, surcharges, fuel and gas lost and unaccounted for), operating terms and conditions of service; (iii) the types of services we may offer to our customers; (iv) the contracts for service entered into with our customers; (v) the certification and construction of new facilities; (vi) the costs of raw materials, such as steel, which may be affected by tariffs (such as those proposed by the new U.S. presidential administration) or otherwise; (vii) the integrity, safety and security (including against cyber-attacks) of facilities and operations; (viii) the acquisition of other businesses; (ix) the acquisition, extension, disposition or abandonment of services or facilities; (x) reporting and information posting requirements; (xi) the maintenance of accounts and records; and (xii) relationships with affiliated companies involved in various aspects of the natural gas and energy businesses.
Our and our customers’ access to capital could be affected by evolving financial institutions’ policies concerning businesses linked to fossil fuels. Our and our customers’ access to capital could be affected by financial institutions’ evolving policies concerning businesses linked to fossil fuels.
Our and our customers’ access to capital could be affected by financial institutions’ evolving policies concerning businesses linked to fossil fuels.
Liability under such laws and regulations may be incurred without regard to fault under CERCLA, the Resource Conservation and Recovery Act, the Federal Clean Water Act, the Oil Pollution Act, or analogous state laws, as a result of the presence or release of hydrocarbons and other hazardous substances into or through the environment, and these laws may require response actions and remediation and may impose liability for natural resource and other damages.
Liability under such laws and regulations may be incurred without regard to fault under CERCLA, the Resource Conservation and Recovery Act, the Federal Clean Water Act, the Oil Pollution Act, or analogous state laws, as a result of the presence or release of hydrocarbons or hazardous substances into or through the environment, and these laws may require response actions and remediation and may impose liability for natural resource and other damages.
For example, if a leak, release or spill of liquid petroleum products, chemicals or other hazardous substances occurs at or from our pipelines, shipping vessels or storage or other facilities, we may experience significant operational disruptions, and we may have to pay a significant amount to clean up or otherwise respond to the leak, release or spill, pay government penalties, address natural resource damage, compensate for human exposure or property damage, install costly pollution control equipment or undertake a combination of these and other measures.
For example, if a leak, release or spill of liquid petroleum products, chemicals or hazardous substances occurs at or from our pipelines, shipping vessels or storage or other facilities, we may experience significant operational disruptions, and we may have to pay a significant amount to clean up or otherwise respond to the leak, release or spill, pay government penalties, address natural resource damage, compensate for human exposure or property damage, install costly pollution control equipment or undertake a combination of these and other measures.
Pipeline safety regulations or changes to such regulations may require additional leak detection, reporting, the replacement of certain pipeline segments, addition of monitoring equipment and more frequent monitoring, inspection or testing of our pipeline facilities. Repair, remediation, and preventative or mitigating actions may require significant capital and operating expenditures.
Pipeline safety regulations or changes to such regulations may require additional leak detection, reporting, the replacement of certain pipeline segments or equipment, addition of monitoring equipment and more frequent monitoring, inspection or testing of our pipeline facilities. Repair, remediation, and preventative or mitigating actions may require significant capital and operating expenditures.
Adverse changes to the availability, terms and cost of capital, interest rates or our credit ratings (which would have a corresponding impact on the credit ratings of our 30 subsidiaries that are party to the cross guarantee agreement) could cause our cost of doing business to increase by limiting our access to capital, including our ability to refinance maturities of existing indebtedness on similar terms, which could in turn reduce our cash flows, and could limit our ability to pursue acquisition or expansion opportunities.
Adverse changes to the availability, terms and cost of capital, interest rates or our credit ratings (which would have a corresponding impact on the credit ratings of our subsidiaries that are party to the cross guarantee agreement) could cause our cost of doing business to increase by limiting our access to capital, including our ability to refinance maturities of existing indebtedness on similar terms, which could in turn reduce our cash flows, and could limit our ability to pursue acquisition or expansion opportunities.
Negative impacts from a compromised reputation or changes in public opinion (including with respect to the production, transportation and use of hydrocarbons generally) could include increased regulatory oversight and costs, difficulty obtaining rights-of-way and delays in obtaining, or challenges to, regulatory approvals with respect to growth projects, blockades, project cancellations, difficulty securing financing, revenue loss, reduction in customer base, and decreased value of our securities and our business.
Negative impacts from a compromised reputation or changes in public opinion (including with respect to the production, transportation and use of hydrocarbons generally) could include increased 26 regulatory oversight and costs, difficulty obtaining rights-of-way and delays in obtaining, or challenges to, regulatory approvals with respect to growth projects, blockades, project cancellations, difficulty securing financing, revenue loss, reduction in customer base, and decreased value of our securities and our business.
See “ —Financial distress experienced by our customers or other counterparties could have an adverse impact on us in the event they are unable to pay us for the products or services we provide or otherwise fulfill their obligations to us. ” In addition, decreases in the prices of crude oil, NGL and natural gas are likely to have a negative impact on 25 our operating results and cash flow.
See “ —Financial distress experienced by our customers or other counterparties could have an adverse impact on us in the event they are unable to pay us for the products or services we provide or otherwise fulfill their obligations to us. ” In addition, decreases in the prices of crude oil, NGL and natural gas are likely to have a negative impact on our operating results and cash flow.
If we do not comply with any of these requirements, we would be prohibited from operating our vessels in the U.S. coastwise trade and, under certain circumstances, we could be deemed to have undertaken an unapproved transfer to non-U.S. citizens that could result in severe penalties, including permanent loss of U.S. coastwise trading rights for our vessels, fines or forfeiture of vessels.
If we do not comply with any of these requirements, we would be prohibited from operating our vessels in the U.S. coastwise trade and, under certain circumstances, we could be deemed to have undertaken an unapproved transfer to non-U.S. citizens that could result in severe penalties, including permanent loss of U.S. coastwise 35 trading rights for our vessels, fines or forfeiture of vessels.
In addition, public concern about the potential risks posed by climate change has resulted in increased demand for energy efficiency and a transition to energy provided from renewable energy sources rather than fossil fuels, fuel-efficient alternatives such as hybrid and electric vehicles, and pursuit of other technologies to reduce GHG emissions, such as carbon capture and sequestration.
Public concern about the potential risks posed by climate change has resulted in increased demand for energy efficiency and a transition to energy provided from renewable energy sources rather than fossil fuels, fuel-efficient alternatives such as hybrid and electric vehicles, and pursuit of other technologies to reduce GHG emissions, such as carbon capture and sequestration.
Our business could be adversely affected if the Jones Act were to be modified or repealed so as to permit foreign competition that is not subject to the same U.S. government imposed burdens. 35 Risks Related to Ownership of Our Capital Stock The guidance we provide for our anticipated dividends is based on estimates.
Our business could be adversely affected if the Jones Act were to be modified or repealed so as to permit foreign competition that is not subject to the same U.S. government-imposed burdens. Risks Related to Ownership of Our Capital Stock The guidance we provide for our anticipated dividends is based on estimates.
Without successful development activities, the reserves, revenues and cash flows of the oil and gas producing assets within our CO 2 business segment will decline. We may not be able to develop or acquire additional reserves at an acceptable cost or have necessary 29 financing for these activities in the future.
Without successful development activities, the reserves, revenues and cash flows of the oil and gas producing assets within our CO 2 business segment will decline. We may not be able to develop or acquire additional reserves at an acceptable cost or have necessary financing for these activities in the future.
New laws or regulations, or different interpretations of existing laws or regulations, including unexpected policy changes, applicable to our income, operations, assets or another aspect of our business could have a material adverse impact on our earnings, cash flow, financial condition and results of operations. For more information, see Items 1 and 2.
New laws or regulations, or different 32 interpretations of existing laws or regulations, including unexpected policy changes, applicable to our income, operations, assets or another aspect of our business could have a material adverse impact on our earnings, cash flow, financial condition and results of operations. For more information, see Items 1 and 2.
While we believe we have utilized operating, handling and disposal practices that were consistent with industry practices at the time, hydrocarbons or other hazardous substances may have been released at or from properties and equipment owned, operated or used by us or our predecessors, or at or from properties where our or our predecessors’ wastes have been taken for disposal.
While we believe we have utilized operating, handling and disposal practices that were consistent with industry practices at the time, hydrocarbons or hazardous substances may have been released at or from properties and equipment owned, operated or used by us or our predecessors, or at or from properties where our or our predecessors’ wastes have been taken for disposal.
These hedging arrangements expose us to risk of financial loss in some circumstances, including when production is less than expected, when the counterparty to the hedging contract defaults on its contract obligations, or when there is a change in the expected differential between the underlying price in the hedging 26 agreement and the actual price received.
These hedging arrangements expose us to risk of financial loss in some circumstances, including when production is less than expected, when the counterparty to the hedging contract defaults on its contract obligations, or when there is a change in the expected differential between the underlying price in the hedging agreement and the actual price received.
These climate-related changes could result in damage to our physical assets, especially operations located in low-lying areas near coasts and river banks, and facilities situated in hurricane-prone and rain-susceptible regions. Natural disasters can similarly affect the facilities of our customers.
These 28 climate-related changes could result in damage to our physical assets, especially operations located in low-lying areas near coasts and river banks, and facilities situated in hurricane-prone and rain-susceptible regions. Natural disasters can similarly affect the facilities of our customers.
A breach of information security or the failure of one or more key information technology (IT) or operational (OT) systems, or those of third parties, may adversely affect our business, results of operations or business reputation. Our business is dependent upon our operational systems to process a large amount of data and complex transactions.
A breach of information security or the failure of one or more key IT or operational (OT) systems, or those of third parties, may adversely affect our business, results of operations or business reputation. Our business is dependent upon our operational systems to process a large amount of data and complex transactions.
Efforts by us and our vendors to develop, implement and maintain security measures, including malware and anti-virus software and controls, may not be successful in preventing these events, and any network and information systems-related events could require us to expend significant remedial resources.
Efforts by us and our vendors to develop, 27 implement and maintain security measures, including malware and anti-virus software and controls, may not be successful in preventing these events, and any network and information systems-related events could require us to expend significant remedial resources.
Also, sustained lower demand for hydrocarbons, or changes in the regulatory environment or applicable governmental policies, including in relation to climate change or other environmental concerns, may have a negative impact on the supply of crude oil and other products.
Also, sustained lower demand for hydrocarbons, or changes in the regulatory environment or applicable governmental 23 policies, including in relation to climate change or other environmental concerns, may have a negative impact on the supply of crude oil and other products.
Some shippers on our pipelines have filed complaints with the regulators seeking prospective reductions in the tariff rates and, in the 31 case of a protest to a rate filing, seeking substantial refunds for alleged overcharges during the years in question.
Some shippers on our pipelines have filed complaints with the regulators seeking prospective reductions in the tariff rates and, in the case of a protest to a rate filing, seeking substantial refunds for alleged overcharges during the years in question.
We could be required to install new emission controls on our facilities, acquire allowances for our GHG emissions, pay taxes related to our GHG emissions and administer and manage a GHG emissions program, and such increased costs could be significant.
We could be required to install new emission controls on our facilities, acquire allowances for our GHG emissions, pay taxes related to our GHG emissions and administer and manage a GHG emissions reduction program, and such increased costs could be significant.
Recovery of such increased costs from our customers is uncertain in all cases and may depend on events beyond our control, including the outcome of future rate proceedings before the FERC.
Recovery of such increased costs from our customers is uncertain in all 34 cases and may depend on events beyond our control, including the outcome of future rate proceedings before the FERC.
In addition, many of these properties have been owned and/or operated by third parties whose management, handling and disposal of hydrocarbons or other hazardous substances were not under our control.
In addition, many of these properties have been owned and/or operated by third parties whose management, handling and disposal of hydrocarbons or hazardous substances were not under our control.
We own and/or operate numerous properties and equipment that have been used for many years in connection with our business activities and contain hydrocarbons or other hazardous substances.
We own and/or operate numerous properties and equipment that have been used for many years in connection with our business activities and contain hydrocarbons or hazardous substances.
For example, the Federal Clean Air Act and other similar federal and state laws and regulations are subject to periodic review and amendment, which could result in more stringent emission control requirements obligating us to make significant capital expenditures at our facilities. Several state and federal agencies have also increased their daily and maximum penalty amounts in recent years.
For example, the Federal Clean Air Act and other similar federal and state laws and regulations are subject to amendment, which could result in more stringent emission control requirements obligating us to make significant capital expenditures at our facilities. Several state and federal agencies have also increased their daily and maximum penalty amounts in recent years.
Significant increases in costs of construction materials, cost overruns or delays, or our inability to obtain a required permit or right-of-way, could have a material adverse effect on our return on investment, results of operations and cash flows, and could result in project cancellations or limit our ability to pursue other growth opportunities.
Significant increases in costs of construction materials, cost overruns or delays, or our inability to obtain a required permit or right-of-way, could have a material adverse effect on our return on investment, results of operations and cash flows, and could result in project cancellations or otherwise limit our ability to pursue growth opportunities.
Further, the FERC has initiated and may continue to initiate investigations to determine whether our interstate natural gas pipeline rates are just and reasonable. Please read Note 18 “Litigation and Environmental” to our consolidated financial statements for a description of material pending challenges to the rates we charge on our pipelines.
Further, the FERC has initiated and may continue to initiate investigations to determine whether our interstate natural gas pipeline rates are just and reasonable. Please read Note 17 “Litigation and Environmental” to our consolidated financial statements for a description of material pending challenges to the rates we charge on our pipelines.
In any case, we must compensate landowners for the use of their property, and in eminent domain actions, such compensation may be determined by a court. If we are unable to obtain rights-of-way on acceptable terms, our ability to complete construction projects on time, on budget, or at all, could be adversely affected.
In addition, we must compensate landowners for the use of their property and, in eminent domain actions, such compensation may be determined by a court. If we are unable to obtain rights-of-way on acceptable terms, our ability to complete construction projects on time, on budget, or at all, could be adversely affected.
We may not be able to effect any of these actions on satisfactory terms or at all. For more information about our debt, see Note 9 “Debt” to our consolidated financial statements.
We may not be able to effect any of these actions on satisfactory terms or at all. For more information about our debt, see Note 8 “Debt” to our consolidated financial statements.
For more information about our hedging activities, see Item 7A. “ Quantitative and Qualitative Disclosures About Market Risk ” and Note 14 “Risk Management” to our consolidated financial statements.
For more information about our hedging activities, see Item 7A. “ Quantitative and Qualitative Disclosures About Market Risk ” and Note 13 “Risk Management” to our consolidated financial statements.
Furthermore, such unfavorable conditions may compound the adverse effects of larger disruptions, such as COVID-19. See “ —Financial distress experienced by our customers or other counterparties could have an adverse impact on us in the event they are unable to pay us for the products or services we provide or otherwise fulfill their obligations to us. ” below.
See “ —Financial distress experienced by our customers or other counterparties could have an adverse impact on us in the event they are unable to pay us for the products or services we provide or otherwise fulfill their obligations to us. ” below. Furthermore, such unfavorable conditions may compound the adverse effects of larger economic disruptions.
Such laws or regulations could also lead to reduced demand for hydrocarbon products that are deemed to contribute to emissions of GHGs, or restrictions on their use, which in turn could adversely affect demand for our products and services.
Such laws or regulations could also lead to reduced demand for hydrocarbon products that are deemed to contribute to emissions of GHGs, increases in the costs for such products or restrictions on their use, which in turn could adversely affect demand for our products and services.
Since 2021, the federal government has deprioritized onshore leasing and its review of applications for permits to drill. Third-party interest groups and members of the oil and gas industry have initiated litigation challenging decisions to approve or prohibit oil and gas activities on federally managed lands.
From 2021 to 2024, the federal government deprioritized onshore leasing and its review of applications for permits to drill. Third-party interest groups and members of the oil and gas industry have initiated litigation challenging decisions to approve or prohibit oil and gas activities on federally managed lands.
Our business, operations or financial condition generally may be negatively impacted as a result of negative public opinion towards our industry sector, the products we handle, or us specifically. Public opinion may be influenced by negative portrayals of the industry in which we operate as well as opposition to development projects.
Our business, operations or financial condition generally may be negatively impacted as a result of negative public opinion towards our industry sector, the products we handle, or us specifically. Public opinion may be influenced by negative portrayals of the energy industry as well as opposition to development projects.
Risks Related to Financing Our Business Our substantial debt could adversely affect our financial health and make us more vulnerable to adverse economic conditions. As of December 31, 2023, we had approximately $31.9 billion of consolidated debt (excluding debt fair value adjustments).
Risks Related to Financing Our Business Our substantial debt could adversely affect our financial health and make us more vulnerable to adverse economic conditions. As of December 31, 2024, we had approximately $31.8 billion of consolidated debt (excluding debt fair value adjustments).
The volatility of crude oil, NGL and natural gas prices could adversely affect our business. The revenues, cash flows, profitability and future growth of some of our businesses (and the carrying values of certain of their respective assets, which include related goodwill) depend to a large degree on prevailing crude oil, NGL and natural gas prices.
The revenues, cash flows, profitability and future growth of some of our businesses (and the carrying values of certain of their respective assets, which include related goodwill) depend to a large degree on prevailing crude oil, NGL and natural gas prices.
Congress is working on the reauthorization of the Pipeline Safety Act, which is expected to be enacted during 2024 and to further expand PHMSA’s current rulemaking agenda and/or statutory authority in certain areas.
Congress is working on the reauthorization of the Pipeline Safety Act, which is expected to be enacted in 2025 and could further expand PHMSA’s current rulemaking agenda and/or statutory authority in certain areas.
See “ —We are subject to reputational risks and risks relating to public opinion. ” Inclement weather, natural disasters and delays in performance by third-party contractors have also resulted in, and may continue to result in, increased costs or delays in construction. In addition, we may experience increasing costs for construction materials.
See “— We are subject to reputational risks and risks relating to public opinion. ” Inclement weather, natural disasters and delays in performance by third-party contractors have also resulted in, and may continue to result in, increased costs or delays in construction.
Our business also depends in part on the levels of demand for natural gas, crude oil, NGL, refined petroleum products, CO 2 , steel, chemicals and other products in the geographic areas to which our pipelines, terminals, shipping vessels and other facilities deliver or provide service, and the ability and willingness of our shippers and other customers to supply such demand. 23 Decreases in the supply of or demand for natural gas, crude oil and other products could adversely impact the utilization of our assets.
Our business also depends in part on the levels of demand for natural gas, crude oil, NGL, refined petroleum products, CO 2 , steel, chemicals and other products in the geographic areas to which our pipelines, terminals, shipping vessels and other facilities deliver or provide service, and the ability and willingness of our shippers and other customers to supply such demand.
For more information about our interest rate risk, see Item 7A. “ Quantitative and Qualitative Disclosures About Market Risk—Interest Rate Risk. ” Our debt instruments may limit our financial flexibility and increase our financing costs. The instruments governing our debt contain restrictive covenants that may prevent us from engaging in certain transactions that may be beneficial to us.
“ Quantitative and Qualitative Disclosures About Market Risk—Interest Rate Risk. ” Our debt instruments may limit our financial flexibility and increase our financing costs. The instruments governing our debt contain restrictive covenants that may prevent us from engaging in certain transactions that may be beneficial to us.
See also “ —Business Risks—We are subject to reputational risks and risks relating to public opinion. ” and “ —Business Risks—Hurricanes, earthquakes, flooding and other natural disasters, as well as subsidence and coastal erosion and climate-related physical risks, could have an adverse effect on our business, financial condition and results of operations .” In March 2022, the SEC proposed new climate-related disclosure rules, which if adopted as proposed, would require significant new climate-related disclosure in SEC filings, including certain climate-related metrics and GHG emissions data, and third-party attestation requirements.
See also “ —Business Risks—We are subject to reputational risks and risks relating to public opinion. ” and “ —Business Risks—Hurricanes, earthquakes, flooding and other natural disasters, as well as subsidence and coastal erosion and climate-related physical risks, could have an adverse effect on our business, financial condition and results of operations .” In March 2024, the SEC finalized rules requiring significant new climate-related disclosure in SEC filings, including certain climate-related metrics and GHG emissions data, and third-party attestation requirements.
Our operating results may be adversely affected by unfavorable economic and market conditions. Unfavorable conditions such as a general slowdown of the global or U.S. economy, uncertainty and volatility in the financial markets, or inflation and rising interest rates, could materially adversely affect our operating results. For example, COVID-19 resulted in a global economic downturn in 2020.
Our operating results may be adversely affected by unfavorable economic and market conditions. Unfavorable conditions such as a general slowdown of the global or U.S. economy, uncertainty and volatility in the financial markets, or inflation and rising interest rates, could materially adversely affect our operating results.
For more information, see Items 1 and 2. “ Business and Properties—Narrative Description of Business—Environmental Matters. ” Increased regulatory requirements relating to the safety and integrity of our pipelines may require us to incur significant capital and operating expenses. We are subject to extensive laws and regulations related to pipeline safety and integrity at the federal and state levels.
“ Business and Properties—Narrative Description of Business—Environmental Matters. ” 33 Increased regulatory requirements relating to the safety and integrity of our pipelines may require us to incur significant capital and operating expenses. We are subject to extensive laws and regulations related to pipeline safety and integrity at the federal and state levels.
It is possible that costs associated with complying with the aforementioned laws will increase as a result of the emphasis regulatory authorities are placing on protection of the environment and environmental justice considerations.
It is possible that costs associated with complying with the aforementioned laws will change depending on the emphasis regulatory authorities are placing on protection of the environment and environmental justice considerations.
If the Plan remains 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 the Plan would have a material adverse impact on us. See Item 7.
If the Plan were to remain in effect in its current form (including full compliance by a revised compliance deadline accounting for the stays, and assuming failure of all pending challenges to SIP disapprovals and no successful challenge to the Plan), we currently estimate that the Plan would have a material adverse impact on us. See Item 7.
The risk of a disruption or breach of our operational systems, or the compromise of the data processed in connection with our operations, has increased as attempted attacks, including acts of terrorism or cyber sabotage, have advanced in sophistication and number around the world.
The risk of a disruption or breach of our operational systems, or the compromise of the data processed in connection with our operations, has increased as attempted attacks, including acts of terrorism or cyber sabotage, which may be escalated during periods of heightened geopolitical tensions, have advanced in sophistication and number around the world.
A variety of factors outside of our control, such as difficulties in obtaining rights-of-way and permits or other regulatory approvals, have caused, and may continue to cause, delays in or cancellations of our construction projects.
A variety of factors outside of our control, such as difficulties in obtaining rights-of-way and permits or other regulatory approvals, have caused, and may continue to cause, delays in or cancellations of our construction projects. Regulatory authorities may modify their permitting policies in ways that disadvantage our construction projects.
The majority of compliance costs relate to pipeline integrity management regulations, which include assessment and repair requirements. Technological advances in in-line inspection tools, identification of additional threats to a pipeline’s integrity and changes to the amount of pipeline determined to be located in HCAs or MCAs can have a significant impact on integrity testing and repair costs.
Technological advances in in-line inspection tools, identification of additional threats to a pipeline’s integrity and changes to the amount of pipeline determined to be located in HCAs or MCAs can have a significant impact on integrity testing and repair costs.
Overall, we have seen an increase in the efforts of regulatory authorities to issue new regulations and guidance and to interpret existing laws and regulations in ways that promote the use of renewable energy sources and further protection of the environment, call upon companies to increase monitoring and emissions reduction efforts, and increase investigations and enforcement actions for potential violations of environmental laws.
In recent years, we saw an increase in the efforts of regulatory authorities to issue new regulations and guidance and to interpret existing laws and regulations in ways that promoted the use of renewable energy sources and further protection of the environment, called upon companies to increase monitoring and emissions reduction efforts, and increased investigations and enforcement actions for potential violations of environmental laws.
Federal regulators may also expand existing regulatory requirements, such as PHMSA’s recent expansion of gas gathering pipeline regulation and PHMSA’s consideration of regulating the transportation of gaseous CO 2 . Such factors can be exacerbated by public opposition to our projects.
Federal regulators may also expand existing regulatory requirements, such as PHMSA’s recent expansion of gas gathering pipeline regulation and the Congressional mandate under the Pipeline Safety Act that PHMSA regulate the transportation of gaseous CO 2 . Such factors can be exacerbated by public opposition to our projects.
If we were to lose these rights, our operations could be disrupted or we could be required to relocate the affected pipelines, which could cause a substantial decrease in our revenues and cash flows and a substantial increase in our costs. The acquisition of additional businesses and assets is part of our growth strategy.
If we were to lose these rights, our operations could be disrupted or we could be required to relocate the affected pipelines, which could cause a substantial decrease in our revenues and cash flows and a substantial increase in our costs.
In addition, our business requires the retention and recruitment of a skilled workforce, including engineers, technical personnel and other professionals. We and our affiliates compete with other companies in the energy industry for this skilled workforce. In addition, many of our current employees are retirement eligible and have significant institutional knowledge that must be transferred to other employees.
We and our affiliates compete with other companies in the energy industry for this skilled workforce. In addition, many of our current employees are retirement eligible and have significant institutional knowledge that must be transferred to other employees.
Potential targets include our pipeline systems, terminals, processing plants, databases or operating systems. The occurrence of an attack could cause a substantial decrease in revenues and cash flows, increased costs to respond 27 or other financial loss, significant reporting requirements, damage to our reputation, increased regulation or litigation or inaccurate information reported from our operations.
The occurrence of an attack could cause a substantial decrease in revenues and cash flows, increased costs to respond or other financial loss, significant reporting requirements, damage to our reputation, increased regulation or litigation or inaccurate information reported from our operations.
We regularly undertake construction projects to expand our existing assets and to construct new assets. New growth projects generally will be subject to, among other things, the receipt of regulatory approvals, feasibility and cost analyses, funding availability and industry, market and demand conditions, and environmental justice considerations.
New growth projects generally will be subject to, among other things, the receipt of regulatory approvals, feasibility and cost analyses, funding availability, industry, market and demand conditions, and environmental justice considerations.
Such expenditures will vary depending on the number of repairs determined to be necessary as a result of integrity assessments and other testing. We also anticipate incurring substantial costs associated with PHMSA’s requirements for reconfirming the maximum allowable operating pressure of certain gas pipelines. We expect to increase expenditures in the future to comply with PHMSA regulations.
Such expenditures will vary depending on the number of repairs determined to be necessary as a result of integrity assessments and other testing. We also anticipate incurring substantial costs associated with PHMSA’s requirements for reconfirming the MAOP of certain gas pipelines.
We cannot predict the impact of future economic conditions, fuel conservation measures, alternative fuel requirements, governmental regulation and/or tax incentives or technological advances in fuel economy and energy generation devices, all of which could reduce the production of and/or demand for the products we handle.
See “ —Our operating results may be adversely affected by unfavorable economic and market conditions. ” We cannot predict the impact of future economic conditions, fuel conservation measures, alternative fuel requirements, governmental regulation and/or tax incentives or technological advances in fuel economy and energy generation devices, all of which could reduce the production of and/or demand for the products we handle.
Also, disruptions and volatility in the global financial markets may lead to an increase in interest rates or a contraction in credit availability, impacting our ability to finance our operations and strategy on favorable terms. A significant reduction in the availability of credit could materially and adversely affect our business, financial condition and results of operations.
Also, disruptions and volatility in the global financial markets may lead to an increase in interest rates or a contraction in credit availability, impacting our ability to finance our operations and strategy on favorable terms.
At this time, we cannot predict the costs of compliance with, or any potential adverse impacts resulting from, the new rules if adopted as proposed. Any of the foregoing could have adverse effects on our business, financial position, results of operations or cash flows.
At this time, we cannot predict the costs of compliance with, or other potential adverse impacts resulting from, these or similar future rules that may be adopted. Any of the foregoing could have adverse effects on our business, financial position, results of operations or cash flows.
For more information about climate change regulation, see Items 1 and 2. “ Business and Properties—Narrative Description of Business—Environmental Matters—Climate Change. ” 34 Adoption of any such laws or regulations could increase our costs to operate and maintain our facilities, expand existing facilities or construct new facilities.
“ Business and Properties—Narrative Description of Business—Environmental Matters—Climate Change .” Adoption of any such laws or regulations could increase our costs to operate and maintain our facilities, expand existing facilities or construct new facilities.
The slowdown resulting from the pandemic affected numerous industries, including the crude oil and gas industry, the steel industry and specific segments and markets in which we operate, resulting in reduced demand and increased price competition for our products and services.
For example, the 25 global economic downturn caused by the coronavirus pandemic in 2020 affected numerous industries, including the crude oil and gas industry, the steel industry and specific segments and markets in which we operate, resulting in reduced demand and increased price competition for our products and services.
Technology failures or incidents of misuse could result in significant adverse effects on our operations, results of operations, financial condition and cash flows. Hurricanes, earthquakes, flooding and other natural disasters, as well as subsidence and coastal erosion and climate-related physical risks, could have an adverse effect on our business, financial condition and results of operations.
Hurricanes, earthquakes, flooding and other natural disasters, as well as subsidence and coastal erosion and climate-related physical risks, could have an adverse effect on our business, financial condition and results of operations.
Various laws and regulations exist or are under development that seek to regulate the emission of GHGs such as methane and CO 2 , including the EPA programs to control GHG emissions, PHMSA’s existing and anticipated leak detection and repair requirements, and state actions to develop statewide or regional programs.
Various laws and regulations exist or are under development that seek to regulate the emission of GHGs such as methane and CO 2 , including the EPA programs to control GHG emissions, PHMSA’s existing leak detection and repair requirements and additional requirements proposed by PHMSA in accordance with its Congressional mandate, state actions to develop statewide or regional programs, and regulations by foreign governments that restrict imports.
If we pursue joint ventures with third parties, those parties may share approval rights over major decisions, and may act in their own interests.
If we pursue joint ventures with third parties, those parties may share approval rights over major decisions and may act in their own interests, which may differ from our interests or our views of the interests of the venture.
In addition, PHMSA is working on a number of proposed rulemakings that are now projected for publication in 2024, including those related to (i) updating regulations for LNG facilities; (ii) requirements for idled gas and liquid pipelines; (iii) revising requirements for transportation of CO 2 in the liquid phase as well as establishing regulation of the transportation of gaseous CO 2 ; and (iv) requirements for responding to changes in class location for gas pipelines.
In addition, PHMSA is working on a number of proposed rulemakings, including those related to (i) updating regulations for LNG facilities; (ii) requirements for idled gas and liquid pipelines; (iii) revising requirements for transportation of CO 2 in the liquid phase as well as establishing regulation of the transportation of gaseous CO 2 ; (iv) oil spill response plans; and (v) liquid pipeline repair criteria.
We are unable to predict the extent to which these proceedings will result in lower transportation rates on our pipelines, and in the case of a protest, refunds for alleged overcharges. Any successful challenge to our rates could materially adversely affect our future earnings, cash flows and financial condition.
We are unable to predict the extent to which these proceedings will result in lower transportation rates on our pipelines, and in the case of a protest, refunds for alleged overcharges.
Our large amount of variable rate debt makes us vulnerable to increases in interest rates.
Our large amount of debt makes us vulnerable to increases in interest rates to the extent we have variable-rate debt and maturing fixed-rate debt.
We engage in hedging arrangements to reduce our direct exposure to fluctuations in the prices of crude oil, natural gas and NGL, including differentials between regional markets.
Our use of hedging arrangements does not eliminate our exposure to commodity price risks and could result in financial losses or volatility in our income. We engage in hedging arrangements to reduce our direct exposure to fluctuations in the prices of crude oil, natural gas and NGL, including differentials between regional markets.
For example, in December 2023, the EPA finalized a rule containing standards of performance for GHG emissions, in the form of methane limitations, and volatile organic compound emissions for crude oil and natural gas sources, including the production, processing, and transmission and storage segments.
For example, in December 2023, the EPA finalized a rule containing standards of performance for methane and volatile organic compound emissions from crude oil and natural gas sources, including the production, processing, and transmission and storage segments. In addition, a certain degree of regulatory uncertainty is created by the recent change in U.S. presidential administrations.
The Plan imposes prescriptive emission standards for several sectors, including new and existing reciprocating internal combustion engines of a certain size used in pipeline transportation of natural gas. The Plan’s 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 imposes prescriptive emission standards for several sectors, including new and existing reciprocating internal combustion engines of a certain size used in pipeline transportation of natural gas.
Economic disruptions, such as those which occurred during the COVID-19 pandemic, or conditions in the business environment generally, such as declining or sustained low commodity prices, supply disruptions, or higher development or production costs, could result in a slowing of supply to our pipelines, terminals and other assets.
Decreases in the supply of or demand for natural gas, crude oil and other products could adversely impact the utilization of our assets. Conditions in the business environment generally, such as declining or sustained low commodity prices, supply disruptions, or higher development or production costs, could result in a slowing of supply to our pipelines, terminals and other assets.
The unavailability of adequate insurance coverage to cover events in which we suffer significant losses could have a material adverse effect on our business, financial condition and results of operations. Expanding our existing assets and constructing new assets is part of our growth strategy.
The unavailability of adequate insurance coverage to cover events in which we suffer significant losses could have a material adverse effect on our business, financial condition and results of operations. Substantially all of the land on which our pipelines are located is owned by third parties.
There can be no assurance as to the amount or timing of future expenditures for environmental compliance or remediation, and actual future expenditures may be different from the amounts we currently anticipate. 33 New or revised regulations that result in increased compliance costs or additional operating restrictions, particularly if those costs are not fully recoverable from our customers, as well as increased penalty amounts for inadvertent non-compliance, such as a pipeline leak, could have a material adverse effect on our business, financial position, results of operations and prospects.
New or revised regulations that result in increased compliance costs or additional operating restrictions, particularly if those costs are not fully recoverable from our customers, as well as increased penalty amounts for inadvertent non-compliance, could have a material adverse effect on our business, financial position, results of operations and prospects. For more information, see Items 1 and 2.
We depend on our executive officers to develop and execute our business strategy. If we are not successful in retaining our executive officers, or replacing them, our business, financial condition or results of operations could be adversely affected. We do not maintain key personnel insurance.
If we are not successful in retaining our executive officers, or replacing them, our business, financial condition or results of operations could be adversely affected. We do not maintain key personnel insurance. In addition, our business requires the retention and recruitment of a skilled workforce, including engineers, technical personnel and other professionals.
Legislative changes, as well as regulatory actions taken by these authorities, have the potential to adversely affect our profitability. Additional regulatory burdens and uncertainties will be created if and to the extent that more stringent energy and environmental and pipeline safety policies are enacted.
Additional regulatory burdens and uncertainties will be created if and to the extent that more stringent energy and environmental and pipeline safety policies are enacted.
We are unable to predict whether any legal challenges will ultimately result in changes to the Plan or how those changes, if any, would impact us.
“ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Capital Expenditures—Impact of Regulation .” We are unable to predict whether pending legal challenges will ultimately result in changes to the Plan or how those changes, if any, would impact us.
Our ability to begin and complete expansion and new-build projects may be inhibited by difficulties in obtaining permits and rights-of-way, public opposition, increases in costs of construction materials, cost overruns, inclement weather and other delays. If we pursue projects through joint ventures with others, we will share control of and any benefits from those projects.
Expanding our existing assets and constructing new assets is part of our growth strategy. Our ability to begin and complete expansion and new-build projects may be inhibited by difficulties in obtaining permits and rights-of-way, public opposition, increases in costs of construction materials, cost overruns, inclement weather and other delays.
Proposed approaches to further address GHG emissions include establishing GHG “cap-and-trade” programs, a fee on methane emissions from petroleum and natural gas systems, increased efficiency standards, participation in international climate agreements, issuance of executive orders by the U.S. presidential administration and incentives or mandates for pollution reduction, use of renewable energy sources, or use of alternative fuels with lower carbon content.
Proposed approaches to further address GHG emissions include establishing GHG “cap-and-trade” programs, increased efficiency standards, participation in international climate agreements and incentives or mandates for pollution reduction, use of renewable energy sources or use of alternative fuels with lower carbon content. For more information about climate change regulation, see Items 1 and 2.
Please read “— Our use of hedging arrangements does not eliminate our exposure to commodity price risks and could result in financial losses or volatility in our income. ” In addition, wide fluctuations in commodity prices can impact the accuracy of assumptions used in our budgeting process. 24 If commodity prices fall substantially or remain low for a sustained period and we are not sufficiently protected through hedging arrangements, we may be unable to realize a profit from these businesses and would operate at a loss.
Please read “— Our use of hedging arrangements does not eliminate our exposure to commodity price risks and could result in financial losses or volatility in our income. ” In addition, wide fluctuations in commodity prices can impact the accuracy of assumptions used in our budgeting process.
Our business requires the retention and recruitment of a skilled executive team and workforce, and difficulties recruiting and retaining executives and other key personnel could impair our ability to develop and implement our business strategy. Our success depends in part on the performance of and our ability to attract, retain and effectively manage the succession of a skilled executive team.
Our success depends in part on the performance of and our ability to attract, retain and effectively manage the succession of a skilled executive team. We depend on our executive officers to develop and execute our business strategy.
As of December 31, 2023, approximately $8.3 billion of our approximately $31.9 billion of consolidated debt (excluding debt fair value adjustments) was subject to variable interest rates, either as short-term or long-term variable-rate debt obligations, or as long-term fixed-rate debt effectively converted to variable rates through the use of interest rate swaps. In response to increasing inflation, the U.S.
As of December 31, 2024, we had approximately $31.8 billion of consolidated debt (excluding debt fair value adjustments), including $1.5 billion of senior notes maturing within the next 12 months, and approximately $3.6 billion of debt subject to variable interest rates, either as short-term or long-term variable-rate debt obligations, or as long-term fixed-rate debt effectively converted to variable rates through the use of interest rate swaps.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeItem 1C. Cybersecurity. Cybersecurity Risk Management and Strategy We employ a comprehensive strategy for identifying and addressing cybersecurity risks that is aligned with the U.S. Department of Commerce’s National Institute of Standards and Technology Framework for Improving Critical Infrastructure Cybersecurity. This framework outlines standards and practices to promote the protection of critical infrastructure.
Biggest changeItem 1C. Cybersecurity. Cybersecurity Risk Management and Strategy We employ a comprehensive strategy for identifying and addressing cybersecurity risks that is consistent with the security directives issued by TSA where required and aligned with the U.S. Department of Commerce’s National Institute of Standards and Technology Framework for Improving Critical Infrastructure Cybersecurity.
We perform cybersecurity assessments with respect to third parties who provide critical services or who have access to or store critical confidential data. 36 We have not identified any cybersecurity threats that have materially impaired or are reasonably likely to materially impair our operations or financial standing. Please read Item 1A.
We perform 36 cybersecurity assessments with respect to third parties who provide critical services or who have access to or store critical confidential data. We have not identified any cybersecurity threats that have materially impaired or are reasonably likely to materially impair our operations or financial standing. Please read Item 1A.
“ Risk Factors—Risks Related to Our Business—A breach of information security or the failure of one or more key information technology (IT) or operational (OT) systems, or those of third parties, may adversely affect our business, results of operations or business reputation. ” and “ Attacks, including acts of terrorism or cyber sabotage, or the threat of such attacks, may adversely affect our business or reputation. ” for discussions of risks from cybersecurity threats we face.
“ Risk Factors—Risks Related to Our Business—A breach of information security or the failure of one or more key IT or operational (OT) systems, or those of third parties, may adversely affect our business, results of operations or business reputation. ” and “ Attacks, including acts of terrorism or cyber sabotage, or the threat of such attacks, may adversely affect our business or reputation. ” for discussions of risks from cybersecurity threats we face.
This senior management team is involved in all significant cybersecurity decisions, including efforts undertaken to comply with the security directives issued by the TSA. Our Chief Executive Officer, General Counsel and our Chief Information Officer have attended classified briefings on cybersecurity in Washington, D.C.
This senior management team is involved in all significant cybersecurity decisions, including efforts undertaken to comply with the security directives issued by the TSA. Our Chief Information Officer and, occasionally, our Chief Executive Officer and our General Counsel have attended classified briefings on cybersecurity in Washington, D.C.
This group provides a quarterly cybersecurity report to our senior management, including the Chief Executive Officer, President, Chief Financial Officer, Chief Operating Officer, Chief 37 Administrative Officer, Chief Information Officer, General Counsel, business segment Presidents and the Vice President—Corporate Security.
This group provides a quarterly cybersecurity report to our senior management, including the Chief Executive Officer, President, Chief Financial Officer, Chief Operating Officer, Chief Administrative Officer, Chief Information Officer, General Counsel, business segment Presidents and the Vice President—Corporate Security.
In the event of a significant cybersecurity incident, our Chief Executive Officer will notify the Chairman of the Board or, in that person’s absence, the lead independent director of the Board. Item 3. Legal Proceedings. See Note 18 “Litigation and Environmental” to our consolidated financial statements.
In the event of a significant cybersecurity incident, our Chief Executive Officer will notify the Chairman of the Board or, in that person’s absence, the lead independent director of the Board. Item 3. Legal Proceedings. See Note 17 “Litigation and Environmental” to our consolidated financial statements.
These leaders hold top-secret clearance from the U.S. federal government and have attended classified briefings from relevant federal agencies. Our cybersecurity team has in excess of 120 years of combined cybersecurity experience as of year-end 2023, and members of the team hold various specialized certifications related to cybersecurity, including training related to penetration testing and information system auditing.
These leaders hold top-secret clearance from the U.S. federal government and have attended classified briefings from relevant federal agencies. Our cybersecurity team has in excess of 100 years of combined cybersecurity experience as of year-end 2024, and members of the team hold various specialized certifications related to cybersecurity, including training related to penetration testing and information system auditing.
Employees are tested on this training and cybersecurity performance is considered in annual employee performance reviews. Cybersecurity Governance Structures Management’s Role in Managing Cybersecurity Risk We are committed to protecting sensitive information and have a dedicated cybersecurity group within our IT department that is overseen by our Chief Information Officer.
Employees are tested regularly on cybersecurity, and cybersecurity performance is considered in annual employee performance reviews. 37 Cybersecurity Governance Structures Management’s Role in Managing Cybersecurity Risk We are committed to protecting sensitive information and have a dedicated cybersecurity group within our IT department that is overseen by our Chief Information Officer.
We utilize a risk-based approach that focuses on critical systems where failure or exploitation could potentially impact the safety or reliability of our key assets or operations.
This framework outlines standards and practices to promote the protection of critical infrastructure. We utilize a risk-based approach that focuses on critical systems where failure or exploitation could potentially impact the safety or reliability of our key assets or operations.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeWe have not received any specified health and safety violations, orders or citations, related assessments or legal actions, mining-related fatalities, or similar events requiring disclosure pursuant to the mine safety disclosure requirements of the Dodd-Frank Act for the year ended December 31, 2023. 38 PART II
Biggest changeWe have not received any specified health and safety violations, orders or citations, related assessments or legal actions, mining-related fatalities, or similar events requiring disclosure pursuant to the mine safety disclosure requirements of the Dodd-Frank Act for the year ended December 31, 2024. 38 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFor information on our equity compensation plans, see Note 10 “Share-based Compensation and Employee Benefits —Share-based Compensation ” to our consolidated financial statements. For information about our expectations regarding dividends, please see Item 7.
Biggest changeFor information on our equity compensation plans, see Note 9 “Share-based Compensation and Employee Benefits —Share-based Compensation ” to our consolidated financial statements. For information about our expectations regarding dividends, please see Item 7. “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—General—2025 Dividends and Discretionary Capital .” Item 6. [Reserved]
Our Class P common stock is listed for trading on the NYSE under the symbol “KMI.” As of February 15, 2024, we had 9,540 holders of record of our Class P common stock, which does not include beneficial owners whose shares are held by a nominee, such as a broker or bank.
Our Class P common stock is listed for trading on the NYSE under the symbol “KMI.” As of February 12, 2025, we had 9,082 holders of record of our Class P common stock, which does not include beneficial owners whose shares are held by a nominee, such as a broker or bank.
Removed
“ Management’s Discussion and Analysis of Financial Condition and Results of Operations—General—2024 Dividends and Discretionary Capital .” Our Purchases of Our Class P Stock (During the quarter ended December 31, 2023) Settlement Period Total number of securities purchased(a) Average price paid per security(b) Total number of securities purchased as part of publicly announced plans(a) Approximate dollar value of securities that may yet be purchased under the plans or programs(a) October 1 to October 31, 2023 5,706,428 $ 16.41 5,706,428 $ 1,574,253,794 November 1 to November 30, 2023 2,386,705 16.26 2,386,705 1,535,434,677 December 1 to December 31, 2023 — — — 1,535,434,677 Total 8,093,133 $ 16.37 8,093,133 $ 1,535,434,677 (a) On July 19, 2017, our Board approved a $2 billion common share buy-back program.
Removed
On January 18, 2023, our Board approved an increase in our share repurchase authorization to $3 billion from $2 billion. A fter repurchase, the shares are canceled and no longer outstanding. (b) Amount includes any commission or other costs to repurchase shares.
Removed
Subsequent to December 31, 2023 and through February 16, 2024, we repurchased less than 1 million shares at an average price of $16.50 for $7 million. Item 6. [Reserved]

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. [Reserved] 39 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 39 General 40 Critical Accounting Estimates 40 Results of Operations 42 Overview 42 Consolidated Earnings Results 46 Non-GAAP Financial Measures 48 Segment Earnings Results 52 Liquidity and Capital Resources 58 General 58 Short-term Liquidity 59 KINDER MORGAN, INC.
Biggest changeItem 6. [Reserved] 39 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 39 General 39 Critical Accounting Estimates 40 Results of Operations 41 Overview 41 Consolidated Earnings Results 45 Non-GAAP Financial Measures 47 Segment Earnings Results 50 Liquidity and Capital Resources 56 General 56 Short-term Liquidity 57 KINDER MORGAN, INC.
AND SUBSIDIARIES (continued) TABLE OF CONTENTS Page Number Long-term Financing 60 Capital Expenditures 60 Off Balance Sheet Arrangements 63 Contractual Obligations and Commercial Commitments 63 Cash Flows 64 Dividends and Stock Buy-back Program 65 Summarized Combined Financial Information for Guarantee of Securities of Subsidiaries 66 Recent Accounting Pronouncements 67 Item 7A.
AND SUBSIDIARIES (continued) TABLE OF CONTENTS Page Number Long-term Financing 58 Capital Expenditures 58 Off Balance Sheet Arrangements 61 Contractual Obligations and Commercial Commitments 61 Cash Flows 62 Dividends and Stock Buy-back Program 63 Summarized Combined Financial Information for Guarantee of Securities of Subsidiaries 64 Recent Accounting Pronouncements 65 Item 7A.
Quantitative and Qualitative Disclosures About Market Risk 67 Energy Commodity Market Risk 67 Interest Rate Risk 68 Foreign Currency Risk 69 Item 8. Financial Statements and Supplementary Data 70 Index to Financial Statements 70
Quantitative and Qualitative Disclosures About Market Risk 65 Energy Commodity Market Risk 65 Interest Rate Risk 66 Foreign Currency Risk 67 Item 8. Financial Statements and Supplementary Data 68 Index to Financial Statements 68

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOur Crude and Condensate business also had lower revenues with a corresponding decrease in costs of sales, resulting primarily from decreased commodity pricing and volumes. • The $13 million (5%) increase in Southeast Refined Products was driven by (i) an increase in equity earnings from Products (SE) Pipe Line primarily due to increased revenues driven by higher rates, volumes and blending activities partially offset by unfavorable net changes in product gains and losses and (ii) higher revenues on Central Florida Pipeline LLC due to higher volumes and rates partially offset by lower earnings at our Transmix processing operations primarily due to unfavorable product pricing. • The $8 million (2%) increase in West Coast Refined Products was impacted by increased revenues from our Pacific operations as a result of renewable diesel growth projects and higher rates partially offset by higher operating costs driven by unfavorable net changes in product gains and losses, higher fuel rates, and increased labor costs and increased revenues from Calnev Pipe Line LLC driven by higher rates partially offset by a gain on sale of land in the 2022 period. 55 Terminals Year Ended December 31, 2023 2022 (In millions, except operating statistics) Revenues $ 1,917 $ 1,792 Costs of sales (33) (26) Other operating expenses (863) (827) Gain on divestitures and impairments, net 1 9 Other income 1 5 Earnings from equity investments 9 14 Other, net 8 8 Segment EBDA $ 1,040 $ 975 Change from prior period Increase/(Decrease) Segment EBDA $ 65 Volumetric data(a) Liquids leasable capacity (MMBbl) 78.7 78.2 Liquids utilization %(b) 93.6 % 91.3 % Bulk transload tonnage (MMtons) 53.3 53.2 (a) Volumes for facilities divested, idled, and/or held for sale are excluded for all periods presented.
Biggest changeOur Crude and Condensate business also had lower revenues with a corresponding decrease in costs of sales, resulting primarily from decreased sales volumes. • The $11 million (4%) increase in Southeast Refined Products was driven by an increase in equity earnings from Products (SE) Pipe Line primarily due to higher rates and higher butane blending sales volumes at our South East Terminals. 53 Terminals Year Ended December 31, 2024 2023 (In millions, except operating statistics) Revenues $ 2,022 $ 1,917 Costs of sales (42) (33) Other operating expenses (904) (863) Other income 5 2 Earnings from equity investments 8 9 Other, net 10 8 Segment EBDA $ 1,099 $ 1,040 Change from prior period Increase/(Decrease) Segment EBDA $ 59 Volumetric data(a) Liquids leasable capacity (MMBbl) 78.6 78.7 Liquids utilization %(b) 94.6 % 93.6 % Bulk transload tonnage (MMtons) 53.7 53.3 (a) Volumes for facilities divested, idled, and/or held for sale are excluded for all periods presented.
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.
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, to fund maturing debt and for general corporate purposes.
Generally, our working capital varies due to factors such as the timing of scheduled debt payments, timing differences in the collection and payment of receivables and payables, the change in fair value of our derivative contracts and changes in our cash and cash equivalent balances as a result of excess cash from operations after payments for investing and financing activities (discussed below in “ —Long-term Financing ” and “ —Capital Expenditures ”).
Generally, our working capital varies due to factors such as the timing of scheduled debt payments, timing 57 differences in the collection and payment of receivables and payables, the change in fair value of our derivative contracts and changes in our cash and cash equivalent balances as a result of excess cash from operations after payments for investing and financing activities (discussed below in “ —Long-term Financing ” and “ —Capital Expenditures ”).
Fair value calculated for the purpose of testing our long-lived assets, including intangible assets, goodwill and equity method investments, 40 for impairment involves the use of significant estimates and assumptions regarding the timing and amounts of future cash inflows and outflows, discount rates, market prices and asset lives, among other items.
Fair value calculated for the purpose of testing our long-lived assets, including intangible assets, goodwill and equity method investments, for impairment involves the use of significant estimates and assumptions regarding the timing and amounts of future cash inflows and outflows, discount rates, market prices and asset lives, among other items.
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 CO 2 segment, which produces, instead of purchases, the crude oil and CO 2 it sells.
Our consolidated sales revenue will fluctuate with commodity prices and volumes, and the costs of sales associated with purchases will usually have a commensurate and offsetting impact, except for the CO 2 segment, which produces, instead of purchases, the crude oil, CO 2, and RINs it sells.
Management compensates for the limitations of our consolidated non-GAAP financial measures by reviewing our 42 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.
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.
For each of our assets, we budget for and make those sustaining capital expenditures that are necessary to 60 maintain safe and efficient operations, meet customer needs and comply with our operating policies and applicable law.
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.
(f) Associated with our Citrus, NGPL Holdings and Products (SE) Pipe Line equity investments. (g) Includes the tax provision on Certain Items recognized by the investees that are taxable entities.
(f) Includes the 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.
S ince December 2017, in total, we have repurchased approximately 86 million shares of our Class P common stock under the program at an average price of $17.09 per share for $1,472 million, leaving a remaining capacity of approximately $1.5 billion . For information on our stock buy-back program, see Note 11 “Stockholders’ Equity” to our consolidated financial statements.
S ince December 2017, in total, we have repurchased approximately 86 million shares of our Class P common stock under the program at an average price of $17.09 per share for $1,472 million, leaving a remaining capacity of approximately $1.5 billion . For information on our stock buy-back program, see Note 10 “Stockholders’ Equity” to our consolidated financial statements.
Furthermore, we and almost all of our direct and indirect wholly owned domestic subsidiaries are parties to a cross guaranty wherein each party guarantees each other party’s debt.
We and almost all of our direct and indirect wholly owned domestic subsidiaries are parties to a cross guaranty wherein each party guarantees each other party’s debt.
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.
We 58 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.
For discussion on our hedging activities and related sensitivities to our estimates, see Note 14 “Risk Management” to our consolidated financial statements and Item 7A. “ Quantitative and Qualitative Disclosures About Market Risk ,” respectively. Impairments In addition to our annual testing of impairment for goodwill, we evaluate impairment of our long-lived assets when a triggering event occurs.
For discussion on our hedging activities and related sensitivities to our estimates, see Note 13 “Risk Management” to our consolidated financial statements and Item 7A. “ Quantitative and Qualitative Disclosures About Market Risk ,” respectively. Impairments In addition to our annual testing of impairment for goodwill, we evaluate impairment of our long-lived assets when a triggering event occurs.
Also, see Exhibit 10.11 to this Report “ Cross Guarantee Agreement, dated as of November 26, 2014, among KMI and certain of its subsidiaries, with schedules updated as of December 31, 2023. ” All significant intercompany items among the Obligated Group have been eliminated in the supplemental summarized combined financial information.
Also, see Exhibit 10.11 to this report “ Cross Guarantee Agreement, dated as of November 26, 2014, among KMI and certain of its subsidiaries, with schedules updated as of December 31, 2024. ” All significant intercompany items among the Obligated Group have been eliminated in the supplemental summarized combined financial information.
For more information on regulatory matters, see Part I, Items 1 and 2. “ Business and Properties—Narrative Description of Business—Industry Regulation. ” For more information on legal proceedings, see Note 18 “Litigation and Environmental” to our consolidated financial statements. Employee Benefit Plans Our pension and OPEB obligations and net benefit costs are primarily based on actuarial calculations.
For more information on regulatory matters, see Part I, Items 1 and 2. “ Business and Properties—Narrative Description of Business—Industry Regulation. ” For more information on legal proceedings, see Note 17 “Litigation and Environmental” to our consolidated financial statements. Employee Benefit Plans Our pension and OPEB obligations and net benefit costs are primarily based on actuarial calculations.
Numerous and complex judgments and assumptions are inherent in the estimation of future taxable income when determining a valuation allowance, including factors such as future operating conditions and the apportionment of income by state. For more information, see Note 5 “Income Taxes” to our consolidated financial statements.
Numerous and complex judgments and assumptions are inherent in the estimation of future taxable income when determining a valuation allowance, including factors such as future operating conditions and the apportionment of income by state. For more information, see Note 4 “Income Taxes” to our consolidated financial statements.
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.
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.
A significant assumption we utilize is the discount rate used in calculating our benefit obligations. The selection of assumptions used in the actuarial calculations of our pension and OPEB plans is further discussed in Note 10 “ Share-based Compensation and Employee Benefits” to our consolidated financial statements.
A significant assumption we utilize is the discount rate used in calculating our benefit obligations. The selection of assumptions used in the actuarial calculations of our pension and OPEB plans is further discussed in Note 9 “ Share-based Compensation and Employee Benefits” to our consolidated financial statements.
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. 45 Consolidated Earnings Results The following tables summarize the key components of our consolidated earnings results.
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. 44 Consolidated Earnings Results The following tables summarize the key components of our consolidated earnings results.
Off Balance Sheet Arrangements We have invested in entities that are not consolidated in our financial statements. For information on our obligations with respect to these investments, as well as our obligations with respect to related letters of credit, see Note 13 “Commitments and Contingent Liabilities” to our consolidated financial statements.
Off Balance Sheet Arrangements We have invested in entities that are not consolidated in our financial statements. For information on our obligations with respect to these investments, as well as our obligations with respect to related letters of credit, see Note 12 “Commitments and Contingent Liabilities” to our consolidated financial statements.
Additional sections in this report which should be helpful to the reading of our discussion and analysis include the following: (i) a description of our business strategy found in Items 1 and 2. “ Business and Properties—Narrative Description of Business—Business Strategy; ” (ii) a description of developments during 2023, found in Items 1 and 2.
Additional sections in this report which should be helpful to the reading of our discussion and analysis include the following: (i) a description of our business strategy found in Items 1 and 2. “ Business and Properties—Narrative Description of Business—Business Strategy; ” (ii) a description of developments during 2024, found in Items 1 and 2.
We believe the GAAP measure most directly comparable to Adjusted Net Income Attributable to Kinder Morgan, Inc. is Net income attributable to Kinder Morgan, Inc.
We believe the GAAP measure most directly comparable to Adjusted EBITDA is Net income attributable to Kinder Morgan, Inc.
(b) Interest payment obligations exclude adjustments for interest rate swap agreements and assume no change in variable interest rates from those in effect at December 31, 2023. (c) Represents commitments pursuant to the terms of operating lease agreements as of December 31, 2023.
(b) Interest payment obligations exclude adjustments for interest rate swap agreements and assume no change in variable interest rates from those in effect at December 31, 2024. (c) Represents commitments pursuant to the terms of operating lease agreements as of December 31, 2024.
Our dividends generally will be paid on or about the 15th day of each February, May, August and November. 65 Summarized Combined Financial Information for Guarantee of Securities of Subsidiaries KMI and certain subsidiaries (Subsidiary Issuers) are issuers of certain debt securities.
Our dividends generally will be paid on or about the 15th day of each February, May, August and November. 63 Summarized Combined Financial Information for Guarantee of Securities of Subsidiaries KMI and certain subsidiaries (Subsidiary Issuers) are issuers of certain debt securities.
Additional information regarding the nature and business purpose of our investments is included in Note 7 “Investments” to our consolidated financial statements. Contractual Obligations and Commercial Commitments The table below provides a summary of our material cash requirements.
Additional information regarding the nature and business purpose of our investments is included in Note 6 “Investments” to our consolidated financial statements. Contractual Obligations and Commercial Commitments The table below provides a summary of our material cash requirements.
The year-to-year increase is discussed below in “ —Cash Flows—Operating Activities. ” We primarily rely on cash provided by operations to fund our operations as well as our debt service, sustaining capital expenditures, dividend payments and our growth capital expenditures; however, we may access the debt capital markets from time to time to refinance our maturing long-term debt and finance incremental investments, if any.
The year-to-year decrease is discussed below in “ —Cash Flows—Operating Activities. ” We primarily rely on cash provided by operations to fund our operations as well as our debt service, sustaining 56 capital expenditures, dividend payments and our growth capital expenditures; however, we may access the debt capital markets from time to time to refinance our maturing long-term debt and finance incremental investments, if any.
“ Risk Factors; ” and (v) a discussion of forward-looking statements, found in “ Information Regarding Forward-Looking Statements ” at the beginning of this report. A comparative discussion of our 2022 to 2021 operating results can be found in Item 7.
“ Risk Factors; ” and (v) a discussion of forward-looking statements, found in “ Information Regarding Forward-Looking Statements ” at the beginning of this report. A comparative discussion of our 2023 to 2022 operating results can be found in Item 7.
“ Business and Properties—Narrative Description of Business—Environmental Matters. ” For more information on our environmental disclosures, see Note 18 “Litigation and Environmental” to our consolidated financial statements. Legal and Regulatory Matters Many of our operations are regulated by various U.S. regulatory bodies, and we are subject to legal and regulatory matters as a result of our business operations and transactions.
“ Business and Properties—Narrative Description of Business—Environmental Matters. ” For more information on our environmental disclosures, see Note 17 “Litigation and Environmental” to our consolidated financial statements. 40 Legal and Regulatory Matters Many of our operations are regulated by various U.S. regulatory bodies, and we are subject to legal and regulatory matters as a result of our business operations and transactions.
(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.
(See “—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 calculation of 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.
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 .
We believe the GAAP measure most directly comparable to Adjusted Net Income Attributable to Kinder Morgan, Inc. is Net income attributable to Kinder Morgan, Inc. See “—Non-GAAP Financial Measures—Reconciliation of Net Income Attributable to Kinder Morgan, Inc. to Adjusted Net Income Attributable to Kinder Morgan, Inc.” below.
F2 BBB Stable Long-term Financing Our equity consists of Class P common stock with a par value of $0.01 per share. We do not expect to need to access the equity capital markets to fund our discretionary capital investments for the foreseeable future.
Long-term Financing Our equity consists of Class P common stock with a par value of $0.01 per share. We do not expect to need to access the equity capital markets to fund our discretionary capital investments for the foreseeable future.
These environmental liabilities are included within “Other current liabilities” and “Other long-term liabilities and deferred credits” in our consolidated balance sheet as of December 31, 2023.
These environmental liabilities are included within “Other current liabilities” and “Other long-term liabilities and deferred credits” in our consolidated balance sheet as of December 31, 2024.
GAAP Financial Measures The Consolidated Earnings Results for the years ended December 31, 2023 and 2022 present Net income attributable to Kinder Morgan, Inc., as prepared and presented in accordance with GAAP, and Segment EBDA, which is disclosed in Note 16 “Reportable Segments” pursuant to FASB ASC 280.
GAAP Financial Measures The Consolidated Earnings Results for the years ended December 31, 2024 and 2023 present Net income attributable to Kinder Morgan, Inc., as prepared and presented in accordance with GAAP, and Segment EBDA, which is disclosed in Note 15 “Reportable Segments” pursuant to FASB ASC 280.
Additionally, fluctuations in revenues and costs of sales may be further impacted by gains or losses from derivative contracts that we use to manage our commodity price risk. Below is a discussion of significant changes in our Consolidated Earnings Results for the comparable years ended 2023 and 2022: Revenues Revenue s decreas ed $3,866 million in 2023 compared to 2022.
Additionally, fluctuations in revenues and costs of sales may be further impacted by gains or losses from derivative contracts that we use to manage our commodity price risk. Below is a discussion of significant changes in our Consolidated Earnings Results for the comparable years ended 2024 and 2023: Revenues Revenue s decreas ed $234 million in 2024 compared to 2023.
We also include adjustments related to joint ventures (see “Amounts from Joint Ventures” below). The following table summarizes our Certain Items for the years ended December 31, 2023 and 2022, which are also described in more detail in the footnotes to tables included in “—Segment Earnings Results” below.
We also include adjustments related to joint ventures (see “ — Amounts from Joint Ventures” below). The following table summarizes our Certain Items for the years ended December 31, 2024 and 2023, which are also described in more detail in the footnotes to tables included in “—Segment Earnings Results” below.
As a result of the cross guarantee agreement, a holder of any of the Guaranteed Notes issued by KMI or Subsidiary Issuers are in the same position with respect to the net assets, and income of KMI and the Subsidiary Issuers and Guarantors.
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.
(d) Represents the amount by which the benefit obligations exceeded the fair value of plan assets at year-end for pension and OPEB plans whose accumulated postretirement benefit obligations exceeded the fair value of plan assets. The payments by period include expected contributions in 2024 and estimated benefit payments for underfunded plans in the other years.
(d) Represents the amount by which the benefit obligations exceeded the fair value of plan assets at year-end for pension and OPEB plans whose accumulated postretirement benefit obligations exceeded the fair value of plan assets. The payments by period include expected pension contributions in 2025 and estimated benefit payments for underfunded plans in all years.
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.
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, IT, human resources and legal services.
We provide for liquidity by maintaining a sizable amount of excess borrowing capacity under our credit facility and, as previously discussed, have consistently generated strong cash flows from operations. As of December 31, 2023, our $4,049 million of short-term debt consisted primarily of commercial paper borrowings and senior notes that mature in the next twelve months.
We provide for liquidity by maintaining a sizable amount of excess borrowing capacity under our credit facility and, as previously discussed, have consistently generated strong cash flows from operations. As of December 31, 2024, our $2,009 million of short-term debt consisted primarily of senior notes that mature in the next twelve months and commercial paper borrowings.
(h) Represents commitments for the purchase of plant, property and equipment as of December 31, 2023. 63 Cash Flows The following table summarizes our net cash flows provided by (used in) operating, investing and financing activities between 2023 and 2022.
(h) Represents commitments for the purchase of plant, property and equipment as of December 31, 2024. 61 Cash Flows The following table summarizes our net cash flows provided by (used in) operating, investing and financing activities between 2024 and 2023.
(See the tables included in “—Non-GAAP Financial Measures—Reconciliation of Net Income Attributable to Kinder Morgan, Inc. to Adjusted Net Income Attributable to Kinder Morgan, Inc.,” “—Non-GAAP Financial Measures—Reconciliation of Net Income Attributable to Kinder Morgan, Inc. to DCF” and “—Non-GAAP Financial Measures—Reconciliation of Net Income Attributable to Kinder Morgan, Inc. to Adjusted EBITDA” below).
(See the tables included in “—Non-GAAP Financial Measures—Reconciliation of Net Income Attributable to Kinder Morgan, Inc. to Adjusted Net Income Attributable to Kinder Morgan, Inc.,” “—Non-GAAP Financial Measures—Reconciliation of Net Income Attributable to Kinder Morgan, Inc. to Adjusted Net Income Attributable to Common Stock” and “—Non-GAAP Financial Measures—Reconciliation of Net Income Attributable to Kinder Morgan, Inc. to Adjusted EBITDA” below).
(e) Primarily represents transportation agreements of $310 million, storage agreements for capacity of $189 million and NGL volume agreements of $109 million. (f) Primarily includes (i) rights-of-way obligations; and (ii) environmental liabilities related to sites that we own or have a contractual or legal obligation with a regulatory agency or property owner upon which we will perform remediation activities.
(e) Primarily represents transportation agreements of $277 million, storage agreements for capacity of $230 million and NGL volume agreements of $68 million. (f) Primarily includes (i) rights-of-way obligations; and (ii) environmental liabilities related to sites that we own or have a contractual or legal obligation with a regulatory agency or property owner upon which we will perform remediation activities.
Results of Operations Overview As described in further detail below, our management evaluates our performance primarily using Net income attributable to Kinder Morgan, Inc. and Segment earnings before DD&A expenses, including amortization of excess cost of equity investments, (EBDA) (as presented in Note 16 “Reportable Segments”) along with the non-GAAP financial measures of Adjusted Net income attributable to Common Stock, and distributable cash flow (DCF), both in the aggregate and per share for each, Adjusted Segment EBDA, Adjusted Net income attributable to Kinder Morgan, Inc., Adjusted earnings before interest, income taxes, DD&A expenses, including amortization of excess cost of equity investments, (EBITDA) and Net Debt.
Results of Operations Overview As described in further detail below, our management evaluates our performance primarily using Net income attributable to Kinder Morgan, Inc. and Segment earnings before DD&A expenses including amortization of excess cost of equity investments (EBDA) (as presented in Note 15 “Reportable Segments”), along with the non-GAAP financial measures of Adjusted Net 41 Income Attributable to Common Stock, in the aggregate and per share, Adjusted Segment EBDA, Adjusted Net Income Attributable to Kinder Morgan, Inc., Adjusted earnings before interest, income taxes, DD&A expenses including amortization of excess cost of equity investments (EBITDA), and Net Debt.
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.
If the Plan ultimately were to take effect in its current form (including full compliance by a revised compliance deadline (originally May 1, 2026) accounting for the stays, and assuming failure of all challenges to SIP disapprovals and 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.
(b) To avoid duplication, adjustments for income tax expense for 2023 and 2022 exclude $33 million and $(37) million, which amounts are already included within “Certain Items.” See table included in “ —Overview—Non-GAAP Financial Measures— Cer tain Items” above.
(d) To avoid duplication, adjustments for income tax expense for 2024 and 2023 exclude $(52) million and $33 million, which amounts are already included within “Certain Items.” See table included in “ —Overview—Non-GAAP Financial Measures— Cer tain Items” above.
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 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, 2023 was $4,049 million.
(c) To avoid duplication, adjustments for interest, net for 2023 and 2022 exclude $(7) million and $(11) million, respectively, whic h amounts are already included within “Certain Items.” See table included in “ —Overview—Non-GAAP Financial Measures— Certain Items,” above.
(e) To avoid duplication, adjustments for interest, net for 2024 and 2023 exclude $(5) million and $(7) million, respectively, whic h amounts are already included within “Certain Items.” See table included in “ —Overview—Non-GAAP Financial Measures— Certain Items,” above.
See “—Non-GAAP Financial Measures—Reconciliation of Net Income Attributable to Kinder Morgan, Inc. to Adjusted Net Income Attributable to Kinder Morgan, Inc.” Adjusted Net Income Attributable to Common Stock and Adjusted EPS Adjusted Net Income Attributable to Common Stock is calculated by adjusting Net income attributable to Kinder Morgan, Inc., the most comparable GAAP measure, for Certain Items, and further for net income allocated to participating securities and adjusted net income in excess of distributions for participating securities.
Adjusted Net Income Attributable to Common Stock and Adjusted EPS Adjusted Net Income Attributable to Common Stock is calculated by adjusting Net income attributable to Kinder Morgan, Inc., the most comparable GAAP measure, for Certain Items, and further for net income allocated to participating securities and adjusted net income in excess of distributions for participating securities.
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.
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.
Net Debt Net Debt is calculated, based on amounts as of December 31, 2023, by subtracting the following amounts from our debt balance of $32,116 million: (i) cash and cash equivalents of $83 million; (ii) debt fair value adjustments of $187 million; and (iii) the foreign exchange impact on Euro-denominated bonds of $9 million f or which we have entered into currency swaps to convert that debt to U.S. dollars.
Net Debt Net Debt is calculated, based on amounts as of December 31, 2024, by subtracting the following amounts from our debt balance of $31,890 million: (i) cash and cash equivalents of $88 million; (ii) debt fair value adjustments of $102 million; and (iii) the foreign exchange impact on Euro-denominated bonds of $(25) million f or which we have entered into currency swaps to convert that debt to U.S. dollars.
For m ore detail of significant Certain Items, see the discussion of changes in Segment EBDA below. (b) Volumes for acquired assets are included for all periods presente d, however, EBDA contributions from acquisitions are included only for the periods subsequent to their acquisition. (c) Includes volumetric data for Diamond M.
For m ore detail of significant Certain Items, see the discussion of changes in Segment EBDA below. (b) Volumes for acquired assets are included for all periods presente d, however, EBDA contributions from acquisitions are included only for the periods subsequent to their acquisition. Volumes for assets sold are excluded for all periods presented.
However, successful challenges to the Plan would impact all affected states. In addition, we would seek to mitigate the impacts and to recover expenditures through adjustments to our rates on our regulated assets where available. The cost estimates discussed above are preliminary, based on a number of assumptions and subject to significant variation, including outside of the ranges provided.
In addition, we would seek to mitigate the impacts and to recover expenditures through adjustments to our rates on our regulated assets where available. 60 The cost estimates discussed above are preliminary, based on a number of assumptions and subject to significant variation, including outside of the ranges provided.
For purposes of the following tables and related discussions, the results of operations of our terminals are reclassified for all periods presented from the historical business grouping. Terminals held for sale or divested, including any associated gain or loss on sale, are included within the Other group.
(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 and included within the Other group.
Excluding fair value adjustments, as of December 31, 2023 and 2022, the Obligated Group had $31,167 million and $30,886 million, respectively, of Guaranteed Notes outstanding.
Excluding fair value adjustments, as of December 31, 2024 and 2023, the Obligated Group had $31,052 million and $31,167 million, respectively, of Guaranteed Notes outstanding.
As of December 31, 2023 and 2022, approximately $8,253 million (26%) and $6,314 million (20%), respectively, of the principal amount of our debt balances were subject to variable interest rates—either as short-term or long-term variable-rate debt obligations or as fixed-rate debt converted to variable rates through the use of interest rate swaps.
As of December 31, 2024 and 2023, $3,621 million (11%) 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.
“ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations ” included in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 7, 2022. 39 General Acquisitions Following are acquisitions we made during the reporting period. See Note 3.
“ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations ” included in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 20, 2024. General Acquisitions and Divestitures Following are acquisitions and divestitures we made during the 2024 reporting period.
Adjusted EPS is used by us, investors and other external users of our financial statements as a per-share supplemental measure that provides decision-useful information regarding our period-over-period performance and ability to generate earnings that are core to our ongoing operations.
Adjusted EPS applies the same two-class method used in arriving at basic earnings per share. Adjusted EPS is used by us, investors and other external users of our financial statements as a per-share supplemental measure that provides decision-useful information regarding our period-over-period performance and ability to generate earnings that are core to our ongoing operations.
We have consistently generated substantial cash flow from operations, providing a source of funds of $6,491 million and $4,967 million in 2023 and 2022, respectively.
We have consistently generated substantial cash flow from operations, providing a source of funds of $5,635 million and $6,491 million in 2024 and 2023, respectively.
We had working capital (defined as current assets less current liabilities) deficits of $4,679 million and $3,127 million as of December 31, 2023 and 2022, respectively.
We had working capital (defined as current assets less current liabilities) deficits of $2,580 million and $4,679 million as of December 31, 2024 and 2023, respectively.
Adjusted Net Income Attributable to Kinder Morgan, Inc. (previously referred to as “Adjusted Earnings”) is calculated by adjusting Net income attributable to Kinder Morgan, Inc. for Certain Items.
Adjusted Net Income Attributable to Kinder Morgan, Inc. is calculated by adjusting Net income attributable to Kinder Morgan, Inc. for Certain Items.
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 44 non-controlling interests.
The calculation of Adjusted EBITDA related to our unconsolidated and consolidated joint ventures include DD&A and income tax expense) with respect to the joint ventures as those included in the calculation of Adjusted EBITDA for our wholly-owned consolidated subsidiaries; further, we remove the portion of these adjustments attributable to non-controlling interests.
See Note 15 “Revenue Recognition” to our consolidated financial statements for further information regarding this prepayment; and • an $896 million increase in cash associated with net changes in working capital items and other non-current assets and liabilities, excluding the change in deferred revenues discussed above.
See Note 14 “Revenue Recognition” to our consolidated financial statements for further information regarding this prepayment; and • a $359 million decrease in cash associated with net changes in working capital items and other non-current assets and liabilities, excluding the customer prepayment discussed above.
The impact of KMI’s income tax provision on Certain Items affecting earnings from equity investments is included within “Certain Items” above. 49 Below is a discussion of significant changes in our Adjusted Net Income Attributable to Kinder Morgan, Inc., DCF and Adjusted EBITDA : Year Ended December 31, 2023 2022 (In millions) Adjusted Net Income Attributable to Kinder Morgan, Inc. $ 2,410 $ 2,636 DCF 4,715 4,970 Adjusted EBITDA 7,561 7,516 Change from prior period Increase/(Decrease) Adjusted Net Income Attributable to Kinder Morgan, Inc. $ (226) DCF $ (255) Adjusted EBITDA $ 45 Adjusted Net Income Attributable to Kinder Morgan, Inc. decreased $226 mill ion in 2023 compared to 2022.
The impact of KMI’s income tax provision on Certain Items affecting earnings from equity investments is included within “Certain Items” above. 47 Below is a discussion of significant changes in our Adjusted Net Income Attributable to Kinder Morgan, Inc. and Adjusted EBITDA : Year Ended December 31, 2024 2023 (In millions) Adjusted Net Income Attributable to Kinder Morgan, Inc. $ 2,571 $ 2,410 Adjusted EBITDA 7,938 7,561 Change from prior period Increase/(Decrease) Adjusted Net Income Attributable to Kinder Morgan, Inc. $ 161 Adjusted EBITDA $ 377 Adjusted Net Income Attributable to Kinder Morgan, Inc. increased $161 mill ion in 2024 compared to 2023.
The income statement impact of the changes in the assumptions on our related benefit obligations are deferred and amortized into income over either the period of expected future service of active participants, or over the expected future lives of inactive plan participants. 41 The following sensitivity analysis shows the estimated impact of a 1% change in the primary assumptions used in our actuarial calculations associated with our pension and OPEB plans for the year ended December 31, 2023: Pension Benefits OPEB Net benefit cost (credit) Funded status Net benefit cost (credit) Funded status(a) (In millions) One percent increase in: Discount rates $ (9) $ 133 $ — $ 10 Expected return on plan assets (17) — (3) — Rate of compensation increase 2 (10) — — One percent decrease in: Discount rates 11 (155) — (11) Expected return on plan assets 17 — 3 — Rate of compensation increase (2) 9 — — (a) Includes amounts deferred as either accumulated other comprehensive income (loss) or as a regulatory asset or liability for certain of our regulated operations.
The following sensitivity analysis shows the estimated impact of a 1% change in the primary assumptions used in our actuarial calculations associated with our pension and OPEB plans for the year ended December 31, 2024: Pension Benefits OPEB Net benefit cost (credit) Funded status Net benefit cost (credit) Funded status(a) (In millions) One percent increase in: Discount rates $ (9) $ 118 $ — $ 10 Expected return on plan assets (15) — (3) — Rate of compensation increase 2 (9) 1 (5) One percent decrease in: Discount rates 11 (137) — (11) Expected return on plan assets 15 — 3 — Rate of compensation increase (2) 8 (1) 5 (a) Includes amounts deferred as either accumulated other comprehensive income (loss) or as a regulatory asset or liability for certain of our regulated operations.
Liquidity and Capital Resources General As of December 31, 2023, we had $83 million of “Cash and cash equivalents,” a decrease of $662 million from December 31, 2022. Additionally, as of December 31, 2023, we had borrowing capacity of approximately $1.4 billion under our credit facility (discussed below in “ —Short-term Liquidity ”).
Liquidity and Capital Resources General As of December 31, 2024, we had $88 million of “Cash and cash equivalents,” an increase of $5 million from December 31, 2023. Additionally, as of December 31, 2024, we had borrowing capacity of approximately $3.1 billion under our credit facility (discussed below in “ —Short-term Liquidity ”).
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, ne t increa sed $284 million in 2023 compared to 2022.
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 to tal interest expense to arrive at one interest amount. Our interest expense, net increased $47 million in 2024 compared to 2023.
Short-term Liquidity As of December 31, 2023, our principal sources of short-term liquidity are (i) cash from operations; and (ii) our $3.5 billion credit facility with an available capacity of approximately $1.4 billion and an associated $3.5 billion commercial paper program.
“ Quantitative and Qualitative Disclosures About Market Risk—Interest Rate Risk. ” Short-term Liquidity As of December 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 $3.1 billion and an associated $3.5 billion commercial paper program.
See “ —Summarized Combined Financial Information for Guarantee of Securities of Subsidiaries .” As of December 31, 2023 and 2022, the aggregate principal amount outstanding of our various long-term debt obligations (excluding current maturities) was $27,880 million and $28,288 million, respectively.
See “ —Summarized Combined Financial Information for Guarantee of Securities of Subsidiaries .” As of December 31, 2024 and 2023, the aggregate principal amount outstanding of our various long-term debt obligations (excluding current maturities) was $29,779 million and $27,880 million, respectively. Capital Expenditures We account for our capital expenditures in accordance with GAAP.
(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.
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. (d) 2023 amount represents pension cost adjustments related to settlements made by our pension plans.
(g) The $157 million in letters of credit outstanding as of December 31, 2023 consisted of the following (i) $51 million under six letters of credit for insurance purposes; (ii) a $46 million letter of credit supporting our International Marine Terminals Partnership Plaquemines Bond; (iii) a $24 million letter of credit supporting our Kinder Morgan Operating LLC “B” tax-exempt bonds; and (iv) a combined $36 million in thirty-four letters of credit supporting environmental and other obligations of us and our subsidiaries.
(g) The $132 million in letters of credit outstanding as of December 31, 2024 consisted of the following (i) $51 million under six letters of credit for insurance purposes; (ii) a $46 million letter of credit supporting our International Marine Terminals Partnership Plaquemines Bond; and (iii) a combined $35 million in thirty-two letters of credit supporting environmental and other obligations of us and our subsidiaries.
In addition, the combined changes include the impact of increased pension costs of $45 million in 2023 related to settlements made by our pension plans and increased costs of $6 million in 2022 associated with the Ruby bankruptcy, which we treated as Certain Items. 50 Reconciliation of Segment EBDA to Adjusted Segment EBDA Year Ended December 31, 2023 2022 (In millions) Segment EBDA(a) Natural Gas Pipelines Segment EBDA $ 5,282 $ 4,801 Certain Items(b) Legal, environmental and other reserves — 51 Change in fair value of derivative contracts (122) 64 Other — 26 Natural Gas Pipelines Adjusted Segment EBDA $ 5,160 $ 4,942 Products Pipelines Segment EBDA $ 1,062 $ 1,107 Certain Items(b) Change in fair value of derivative contracts (1) — Loss on impairment 67 — Products Pipelines Adjusted Segment EBDA $ 1,128 $ 1,107 Terminals Segment EBDA $ 1,040 $ 975 CO 2 Segment EBDA $ 689 $ 819 Certain Items(b) Change in fair value of derivative contracts 4 (11) CO 2 Adjusted Segment EBDA $ 693 $ 808 (a) Includes revenues, earnings from equity investments, operating expense s, gain on divestitures and impairments, net, other (expense) income, net, and other, net.
In addition, the combined changes described above include $7 million of costs in 2024 and the impact of increased pension costs of $45 million in 2023 related to settlements made by our pension plans, which we treated as Certain Items. 48 Reconciliation of Segment EBDA to Adjusted Segment EBDA Year Ended December 31, 2024 2023 (In millions) Segment EBDA(a) Natural Gas Pipelines Segment EBDA $ 5,427 $ 5,282 Certain Items(b) Change in fair value of derivative contracts 75 (122) Gain on divestiture (29) — Natural Gas Pipelines Adjusted Segment EBDA $ 5,473 $ 5,160 Products Pipelines Segment EBDA $ 1,173 $ 1,062 Certain Items(b) Change in fair value of derivative contracts — (1) Loss on impairment — 67 Products Pipelines Adjusted Segment EBDA $ 1,173 $ 1,128 Terminals Segment EBDA $ 1,099 $ 1,040 CO 2 Segment EBDA $ 692 $ 689 Certain Items(b) Change in fair value of derivative contracts 2 4 Gain on divestitures (40) — CO 2 Adjusted Segment EBDA $ 654 $ 693 (a) Includes revenues, earnings from equity investments, operating expense s, other income, net, and other, net.
(e) 2023 and 2022 amounts include, in the aggregate, $(7) million and $(11) million, respectively, included within “Interest, net” on the accompanying consolidated statements of income which consist of none and $(15) million, respectively, of “Fair value amortization” and $(7) million and $4 million, respectively, of “Change in fair value of derivative contracts.” Adjusted Net Income Attributable to Kinder Morgan, Inc.
(e) 2024 and 2023 amounts include the following amounts reported within “Interest, net” on the accompanying consolidated statements of income: $(5) million and $(7) million, respectively, of “Change in fair value of derivative contracts.” Adjusted Net Income Attributable to Kinder Morgan, Inc.
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.
On July 31, 2024, we issued, in a registered offering, two series of senior notes consisting of $500 million aggregate principal amount of 5.10% senior notes due 2029 and $750 million aggregate principal amount of 5.95% senior notes due 2054 and received combined net proceeds of $1,235 million, which were used to repay short-term borrowings, to fund maturing debt and for general corporate purposes.
We place no material restrictions on the ability to move cash between entities, payment of intercompany balances or the ability to upstream dividends to KMI other than restrictions that may be contained in agreements governing the indebtedness of those entities. 59 Credit Ratings and Capital Market Liquidity We believe that our capital structure will continue to allow us to achieve our business objectives.
We place no material restrictions on the ability to move cash between entities, payment of intercompany balances or the ability to upstream dividends to KMI other than restrictions that may be contained in agreements governing the indebtedness of those entities.
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.
Adjusted Segment EBDA is used by management in its analysis of segment performance and management of our business.
Year Ended December 31, 2023 2022 Changes (In millions) Net Cash Provided by (Used in) Operating activities $ 6,491 $ 4,967 $ 1,524 Investing activities (4,175) (2,175) (2,000) Financing activities (3,014) (3,145) 131 Net Decrease in Cash, Cash Equivalents and Restricted Deposits $ (698) $ (353) $ (345) Operating Activities $1,524 million more cash provided by operating activities in the comparable years of 2023 and 2022 is explained by the following discussion. • an $894 million increase in cash related to changes in deferred revenues primarily driven by an $843 million prepayment received for certain fixed reservation charges under long-term transportation and terminaling contracts in the 2023 period.
Year Ended December 31, 2024 2023 Changes (In millions) Net Cash Provided by (Used in) Operating Activities $ 5,635 $ 6,491 $ (856) Investing Activities (2,629) (4,175) 1,546 Financing Activities (2,887) (3,014) 127 Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Deposits (1) — (1) Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Deposits $ 118 $ (698) $ 816 Operating Activities $856 million less cash provided by operating activities in the comparable years of 2024 and 2023 is explained by the following discussion. • an $843 million decrease in cash related to a prepayment received of certain fixed reservation charges under long-term transportation and terminaling contracts in 2023.
CO 2 Year Ended December 31, 2023 2022 (In millions, except operating statistics) Revenues $ 1,209 $ 1,334 Costs of sales (77) (109) Other operating expenses (473) (445) Gain on divestitures and impairments, net 1 1 Other expense (1) — Earnings from equity investments 30 38 Segment EBDA 689 819 Certain Items: Change in fair value of derivative contracts 4 (11) Certain Items(a) 4 (11) Adjusted Segment EBDA $ 693 $ 808 Change from prior period Increase/(Decrease) Segment EBDA $ (130) Adjusted Segment EBDA $ (115) Volumetric data(b) SACROC oil production(c) 20.22 20.29 Yates oil production 6.63 6.52 Other 2.32 2.75 Total oil production, net (MBbl/d)(d) 29.17 29.56 NGL sales volumes, net (MBbl/d)(d) 8.97 9.40 CO 2 sales volumes, net (Bcf/d) 0.336 0.358 RNG sales volumes (BBtu/d) 6 3 Realized weighted average oil price ($ per Bbl) $ 67.42 $ 66.78 Realized weighted average NGL price ($ per Bbl) $ 30.84 $ 39.59 (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.
These increases were partially offset by higher labor and maintenance expenses and demurrage costs incurred at our International Marine Terminal. 54 CO 2 Year Ended December 31, 2024 2023 (In millions, except operating statistics) Revenues $ 1,204 $ 1,209 Costs of sales (82) (77) Other operating expenses (504) (473) Other income 40 — Earnings from equity investments 34 30 Segment EBDA 692 689 Certain Items: Change in fair value of derivative contracts 2 4 Gain of divestitures (40) — Certain Items(a) (38) 4 Adjusted Segment EBDA $ 654 $ 693 Change from prior period Increase/(Decrease) Segment EBDA $ 3 Adjusted Segment EBDA $ (39) Volumetric data(b) SACROC oil production 19.01 20.22 Yates oil production 6.13 6.63 Other 1.02 1.08 Total oil production, net (MBbl/d)(c) 26.16 27.93 NGL sales volumes, net (MBbl/d)(c) 8.57 8.97 CO 2 sales volumes, net (Bcf/d) 0.322 0.336 RNG sales volumes (BBtu/d) 9 6 Realized weighted average oil price ($ per Bbl) $ 68.46 $ 67.42 Realized weighted average NGL price ($ per Bbl) $ 30.83 $ 30.84 (a) See table included in “ —Overview—Non-GAAP Financial Measures— Certain Items” above. 2024 and 2023 Certain Items are associated with our Oil and Gas Producing activities.
We are adopting Adjusted Net Income Attributable to 43 Common Stock because we believe it allows for calculation of adjusted earnings per share (Adjusted EPS) on the most comparable basis with earnings per share, the most comparable GAAP measure to Adjusted EPS.
We believe Adjusted Net Income Attributable to Common Stock allows for calculation of adjusted earnings per share (Adjusted EPS) on the most comparable basis with earnings per share, the most comparable GAAP measure to Adjusted EPS. Adjusted EPS is calculated as Adjusted Net Income Attributable to Common Stock divided by our weighted average shares outstanding.
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.
See “—Non-GAAP Financial Measures—Reconciliation of Net Income Attributable to Kinder Morgan, Inc. to Adjusted EBITDA” below . 43 Amounts from Joint Ventures Certain Items 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.
We expect that our short-term liquidity needs will be met primarily through retained cash from operations or short-term borrowings. Generally, we anticipate re-financing maturing long-term debt obligations in the debt capital markets and are therefore subject to certain market conditions which could result in higher costs or negatively affect our and/or our subsidiaries’ credit ratings.
Generally, we anticipate re-financing maturing long-term debt obligations in the debt capital markets and are therefore subject to certain market conditions which could result in higher costs or negatively affect our and/or our subsidiaries’ credit ratings. A decrease in our credit ratings could negatively impact our borrowing costs and could limit our access to capital.
Summarized combined balance sheet and income statement information for the Obligated Group follows: December 31, Summarized Combined Balance Sheet Information 2023 2022 (In millions) Current assets $ 2,246 $ 3,514 Current assets - affiliates 760 618 Noncurrent assets 62,877 61,523 Noncurrent assets - affiliates 903 516 Total Assets $ 66,786 $ 66,171 Current liabilities $ 6,907 $ 6,612 Current liabilities - affiliates 734 707 Noncurrent liabilities 31,681 30,668 Noncurrent liabilities - affiliates 1,306 1,096 Total Liabilities 40,628 39,083 Kinder Morgan, Inc.’s stockholders’ equity 26,158 27,088 Total Liabilities and Stockholders’ Equity $ 66,786 $ 66,171 Summarized Combined Income Statement Information Year Ended December 31, 2023 (In millions) Revenues $ 14,131 Operating income 3,832 Net income 2,032 66 Recent Accounting Pronouncements Please refer to Note 19 “Recent Accounting Pronouncements” to our consolidated financial statements for information concerning recent accounting pronouncements.
Summarized combined balance sheet and income statement information for the Obligated Group follows: December 31, Summarized Combined Balance Sheet Information 2024 2023 (In millions) Current assets $ 2,216 $ 2,246 Current assets - affiliates 735 760 Noncurrent assets 63,267 62,877 Noncurrent assets - affiliates 813 903 Total Assets $ 67,031 $ 66,786 Current liabilities $ 4,737 $ 6,907 Current liabilities - affiliates 758 734 Noncurrent liabilities 34,052 31,681 Noncurrent liabilities - affiliates 1,561 1,306 Total Liabilities 41,108 40,628 Kinder Morgan, Inc.’s stockholders’ equity 25,923 26,158 Total Liabilities and Stockholders’ Equity $ 67,031 $ 66,786 Summarized Combined Income Statement Information Year Ended December 31, 2024 (In millions) Revenues $ 13,678 Operating income 3,827 Net income 2,131 64 Recent Accounting Pronouncements Please refer to Note 18 “Recent Accounting Pronouncements” to our consolidated financial statements for information concerning recent accounting pronouncements.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

10 edited+1 added−1 removed18 unchanged
Biggest changeConversely, for variable rate debt, changes in interest rates generally do not impact the fair value of the debt instrument, but may affect our future earnings and cash flows.
Biggest changeConversely, for variable-rate debt, changes in interest rates generally do not impact the fair value of the debt instrument, but may affect our future earnings and cash flows. Generally, there is not an obligation to prepay fixed-rate debt prior to maturity and, as a result, changes in fair value should not have a significant impact on the fixed-rate debt.
Energy Commodity Market Risk We enter into certain energy commodity derivative contracts in order to reduce and minimize the risks encountered in the ordinary course of business associated with unfavorable changes in the market price of crude oil, natural gas and NGL.
Energy Commodity Market Risk We enter into certain energy commodity derivative contracts in order to reduce risks encountered in the ordinary course of business associated with unfavorable changes in the market price of crude oil, natural gas and NGL.
For more information on our interest rate risk management and on our interest rate swap agreements, see Note 14 “Risk Management” to our consolidated financial statements. 68 Foreign Currency Risk As of December 31, 2023, we had a notional principal amount of $543 million of cross-currency swap agreements that effectively convert all of our fixed-rate Euro denominated debt, including annual interest payments and the payment of principal at maturity, to U.S. dollar denominated debt at fixed rates.
For more information on our interest rate risk management and on our interest rate swap agreements, see Note 13 “Risk Management” to our consolidated financial statements. 66 Foreign Currency Risk As of December 31, 2024, we had a notional principal amount of $543 million of cross-currency swap agreements that effectively convert all of our fixed-rate Euro denominated debt, including annual interest payments and the payment of principal at maturity, to U.S. dollar denominated debt at fixed rates.
(d) A hypothetical 10% change in the weighted average interest rate on all of our borrowings (approximately 58 and 48 basis points in 2023 and 2022, respectively) when applied to our outstanding balance of variable rate debt as of December 31, 2023 and 2022, including adjustments for the notional swap amounts described in the table above, would result in changes of approximately $48 million and $30 million, respectively.
(c) A hypothetical 10% change in the weighted average interest rate on all of our borrowings (approximately 58 basis points in both 2024 and 2023) when applied to our outstanding balance of variable rate debt as of December 31, 2024 and 2023, including adjustments for the notional swap amounts described in the table above, would result in changes of approximately $21 million and $48 million, respectively.
As of December 31, 2023, including debt converted to variable rates through the use of interest rate swaps but excluding our debt fair value adjustments, approximately 26% of our debt balances were subject to variable interest rates.
As of December 31, 2024, including debt converted to variable rates through the use of interest rate swaps but excluding our debt fair value adjustments, approximately 11% of our debt balances were subject to variable interest rates.
As presented in the table above, we monitor the mix of fixed rate and variable rate debt obligations in light of changing market conditions and from time to time, may alter that mix by, for example, refinancing outstanding balances of variable rate debt with fixed rate debt (or vice versa) or by entering into interest rate swap agreements or other interest rate hedging agreements.
We monitor our mix of fixed-rate and variable-rate debt obligations in light of changing market conditions, and we may alter that mix from time to time by, for example, refinancing outstanding balances of variable rate debt with fixed rate debt (or vice versa) or by entering into interest rate swap agreements or other interest rate hedging agreements.
These swaps eliminate the foreign currency risk associated with our foreign currency denominated debt. 69
These swaps eliminate the foreign currency risk associated with our foreign currency denominated debt. 67
A hypothetical 10% movement in the underlying commodity prices would have the following effect on the associated derivative contracts’ estimated fair value: As of December 31, Commodity derivative 2023 2022 (In millions) Crude oil $ 127 $ 157 Natural gas 28 49 NGL 4 5 Total $ 159 $ 211 Our sensitivity analysis represents an estimate of the reasonably possible gains and losses that would be recognized on the crude oil, natural gas and NGL portfolios of derivative contracts assuming hypothetical movements in future market rates and is 67 not necessarily indicative of actual results that may occur.
A hypothetical 10% movement in the underlying commodity prices would have the following effect on the associated derivative contracts’ estimated fair value: As of December 31, Commodity derivative 2024 2023 (In millions) Crude oil $ 120 $ 127 Natural gas 76 28 NGL 4 4 Total $ 200 $ 159 Our sensitivity analysis represents an estimate of the reasonably possible gains and losses that would be recognized on the crude oil, natural gas and NGL portfolios of derivative contracts assuming hypothetical movements in future market rates and is 65 not necessarily indicative of actual results that may occur.
Below are our debt balances, including debt fair value adjustments, and sensitivity to interest rates: December 31, 2023 December 31, 2022 Carrying value Estimated fair value(a) Carrying value Estimated fair value(a) (In millions) Fixed rate debt(b) $ 30,063 $ 29,317 $ 31,474 $ 29,756 Variable rate debt $ 2,053 $ 2,053 $ 314 $ 314 Notional principal amount of variable-to-fixed interest rate swap agreements(c) — (1,500) Notional principal amount of fixed-to-variable interest rate swap agreements 6,200 7,500 Debt balances subject to variable interest rates(d) $ 8,253 $ 6,314 (a) Fair values were determined using Level 2 inputs.
Below are our debt balances, including debt fair value adjustments, and sensitivity to interest rates: December 31, 2024 December 31, 2023 Carrying value Estimated fair value(a) Carrying value Estimated fair value(a) (In millions) Fixed rate debt(b) $ 31,519 $ 30,423 $ 30,063 $ 29,317 Variable rate debt $ 371 $ 371 $ 2,053 $ 2,053 Notional principal amount of variable-to-fixed interest rate swap agreements (1,500) — Notional principal amount of fixed-to-variable interest rate swap agreements 4,750 6,200 Debt balances subject to variable interest rates(c) $ 3,621 $ 8,253 (a) Fair values were determined using Level 2 inputs.
(b) A hypothetical 10% change in the average interest rates applicable to such debt as of December 31, 2023 and 2022, would result in changes of approximately $1,889 million and $1,882 million, respectively, in the estimated fair values of these instruments. (c) December 31, 2022 amount includes $1.25 billion that expired in December 2023.
(b) A hypothetical 10% change in the average interest rates applicable to such debt as of December 31, 2024 and 2023, would result in changes of approximately $1,416 million and $1,889 million, respectively, in the estimated fair values of these instruments.
Removed
Generally, there is not an obligation to prepay fixed rate debt prior to maturity and, as a result, changes in fair value should not have a significant impact on the fixed rate debt. We are generally subject to interest rate risk upon refinancing maturing debt.
Added
We are generally subject to interest rate risk upon refinancing maturing debt.

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