A Compelling Investment Opportunity

Use of Non-GAAP Financial Measures (Cont'd) KINDER MORGAN 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. Net Debt and Adjusted Net Debt - Net Debt is calculated by subtracting from debt (i) cash and cash equivalents, (ii) the preferred interest in the general partner of Kinder Morgan Energy Partners L.P., (iii) debt fair value adjustments, (iv) 50% of the outstanding KML preferred equity, and (v) the foreign exchange impact on Euro-denominated bonds for which we have entered into currency swaps. Adjusted Net Debt is Net Debt increased by the amount of cash distributed to KML restricted voting shareholders as a return of capital on January 3, 2018, net of the gain realized on settlement of net investment hedges of our foreign currency risk with respect to our share of the KML return of capital on January 3, 2018. Management believes these measures are useful to investors and other users of our financial information in evaluating our leverage. We believe the most comparable measure to Net Debt and Adjusted Net Debt is debt net of cash and cash equivalents. KMI does not provide budgeted net income available to common stockholders (the GAAP financial measure most directly comparable to DCF and Adjusted EBITDA) or budgeted metrics derived therefrom (such as the portion of net income attributable to an individual capital project, the GAAP financial measure most directly comparable to Project EBITDA) due to the impracticality of predicting certain amounts required by GAAP, such as unrealized gains and losses on derivatives marked to market, and potential changes in estimates for certain contingent liabilities. CO2 Free Cash Flow is calculated by reducing CO2 segment's GAAP earnings before DD&A by (i) Certain Items, (ii) capital expenditures (both sustaining and growth) and (iii) acquisitions. Management uses CO2 Free Cash Flow separately and in conjunction with IRR to evaluate our return on investment for investments made in our CO2 segment. We believe the GAAP measure most directly comparable to CO2 Free Cash Flow is GAAP Segment Earnings before DD&A. Budgeted Segment Earnings before DD&A (the GAAP financial measure most directly comparable to 2019 budgeted CO2 Free Cash Flow) is not provided due to the inherent difficulty and impracticability of predicting certain amounts required by GAAP, such as potential changes in estimates for certain contingent liabilities. CO2 Internal Rate of Return (IRR) is the actual rate of return on the CO2 segment, and its EOR oil production assets and investments. The CO2 IRR is calculated based on each year's Free Cash Flows for the years from 2000 to 2018. Management uses CO2 IRR in conjunction with Free Cash Flow to evaluate our return on investments made in our CO2 segment. JV DD&A is calculated as (i) KMI's share of DD&A from unconsolidated JVs, reduced by (ii) our partners' share of DD&A from JVs consolidated by KMI. JV Sustaining Capex is calculated as KMI's share of sustaining capex made by joint ventures (both unconsolidated JVs and JVS consolidated by KMI). Unconsolidated joint ventures for the periods during which these are accounted for as equity method investments, include Plantation, Cortez, SNG, ELC, MEP, FEP, EagleHawk, Red Cedar, Bear Creek, Cypress, Parkway, Sierrita, Bighorn, Fort Union, Webb / Duvall, Liberty, Double Eagle, Endeavor, WYCO, GLNG, Ruby, Young Gas, Citrus, NGPL and others. KMI's share of DD&A and sustaining capex are included for Plantation and Cortez for the periods presented after 2016. 45

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