KMI: 2020 Guidance - Published Budget

Use of Non-GAAP Financial Measures KINDER MORGAN The non-GAAP financial measures of distributable cash flow (DCF), both in the aggregate and per share, Adjusted Segment EBDA, Adjusted EBITDA, Adjusted Earnings, both in the aggregate and per share, and Net Debt and Adjusted Net Debt, and CO2 Free Cash Flow are presented herein. Our non-GAAP measures have important limitations as analytical tools and should not be considered alternatives to GAAP net income or other GAAP measures. Our non-GAAP measures may differ from similarly titled measures used by others. You should not consider these non-GAAP measures in isolation or as substitutes for an analysis of our results as reported under GAAP. DCF should not be used as an alternative to net cash provided by operating activities computed under GAAP. Management compensates for the limitations of these non-GAAP measures by reviewing our comparable GAAP measures, understanding the differences between the measures and taking this information into account in its analysis and its decision making processes. Reconciliations of historical Non-GAAP financial measures of DCF, Adjusted Segment EBDA, Adjusted EBITDA, Adjusted Earnings, and Free Cash Flow to their most directly comparable GAAP financial measures for 2018 are included herein. Certain Items, as used to calculate our non-GAAP measures, are items that are required by GAAP to be reflected in net income, but typically either (1) do not have a cash impact (for example, asset impairments), or (2) by their nature are separately identifiable from our normal business operations and in our view are likely to occur only sporadically (for example, certain legal settlements, enactment of new tax legislation and casualty losses). Adjusted Earnings - Adjusted Earnings are calculated by adjusting net income available to common stockholders for Certain Items, and Adjusted Earnings per share is Adjusted Earnings divided by average adjusted common shares which include KMI's weighted average common shares outstanding, including restricted stock awards that participate in dividends. Adjusted Earnings is used by certain external users of our financial statements to assess the earnings of our business excluding Certain Items as another reflection of our business's ability to generate earnings. We believe the GAAP measure most directly comparable to Adjusted Earnings is net income available to common stockholders. DCF - DCF is calculated by adjusting net income available to common stockholders before Certain Items (or Adjusted Earnings as defined above) for depreciation, depletion and amortization, or "DD&A," total book and cash taxes, sustaining capital expenditures and other items. DCF is a significant performance measure useful to management and external users of our financial statements in evaluating our performance and measuring and estimating the ability of our assets to generate cash earnings after servicing our debt and preferred stock dividends, paying cash taxes and expending sustaining capital, that could be used for discretionary purposes such as common stock dividends, stock repurchases, retirement of debt, or expansion capital expenditures. We believe the GAAP measure most directly comparable to DCF is net income available to common stockholders. DCF per share is DCF divided by KMI's weighted average common shares outstanding, including restricted stock awards that participate in dividends. Adjusted Segment EBDA is calculated by adjusting segment earnings before DD&A for Certain Items attributable to a segment. General and administrative expenses are generally not under the control of our segment operating managers, and therefore, are excluded when we measure business segment operating performance. Adjusted Segment EBDA is a significant performance measure useful to management, investors, and other external users of our financial statements to evaluate segment performance and to provide additional insight into the ability of our segments to generate segment cash earnings on an ongoing basis. Additionally, management uses this measure, among others, to allocate resources to our segments. We believe the GAAP measure most directly comparable to Adjusted Segment EBDA is segment earnings before DD&A (Segment EBDA). Adjusted EBITDA is calculated by adjusting net income before interest expense, taxes, and DD&A (EBITDA) for Certain Items, net income attributable to noncontrolling interests other than KML, and our share, if any, of unconsolidated JV DD&A and book taxes. Adjusted EBITDA is useful to management, investors, and other external users of our financial statements to evaluate, in conjunction with our net debt, certain leverage metrics. We believe the GAAP measure most directly comparable to Adjusted EBITDA is net income. 44

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