KMIKinder Morgan

On July 14, 2023, we filed a Petition for Review against the EPA and others in the U.S. Court of Appeals for the District of Columbia Circuit (the DC Circuit) seeking review of the EPA’s final action promulgating the EPA’s final rule known as the “Good Neighbor Plan” (the Plan). The case was styled Kinder Morgan, Inc. v. EPA, et al. and has since been consolidated with other cases and is styled Utah, et al. v, EPA, et al. The Plan was published in the Federal Register as a final rule on June 5, 2023. The Plan is a federal implementation plan to address certain interstate transport requirements of the Clean Air Act for the 2015 8-hour Ozone National Ambient Air Quality Standards (NAAQS). We believe that (NAAQS), known as the Plan is deeply flawed and that numerous and substantial bases for challenging the Plan exist. If the Plan were fully implemented, its emission standards would require installation of more stringent air pollution controls on hundreds of existing internal combustion engines used by our Natural Gas Pipelines business segment. On July 27, 2023, in combination with other parties, we filed a Motion to Stay the Plan Pending Review, and on September 25, 2023, the U.S. Court of Appeals denied the Motion. “Good Neighbor Plan” (the Plan) (Kinder Morgan, Inc., et al. v. EPA, et al. consolidated into Utah, et al. v. EPA, et al.). On October 13, 2023, in combination with other parties, we filed an Emergency Application for Stay of Final Agency Action in the United States Supreme Court. The case was styled Kinder Court (Kinder Morgan, Inc, Inc., et al. v. EPA, et al. and has since been consolidated with other cases and is styled Ohio, et al. v. EPA, et al. The Supreme Court issued an order deferring consideration of the Emergency Application for Stay pending oral argument which took place February 21, 2024. On June 27, 2024, the Supreme Court granted the Emergency Application ruling that enforcement of the Plan shall be stayed pending the disposition of the case on the merits by the U.S. Court of Appeals, and any subsequent petition for writ of certiorari to the Supreme Court, if such writ is timely sought. In reaching its decision to grant the Emergency Application, the Supreme Court found that the parties challenging the Plan are likely to prevail on their argument that the Plan was not reasonably explained, that the EPA failed to supply a satisfactory explanation for its action, and that the EPA ignored an important aspect of the problem it was attempting to solve by promulgating the Plan. into

Contract assets and contract liabilities are the result of timing differences between revenue recognition, billings and cash collections. We recognize Our contract assets in those instances where arise when we recognize revenue before billing occurs subsequent to revenue recognition, and our right to invoice the customer payment is conditioned conditional on something factors other than the passage of time. Our contract assets are substantially related time and primarily relate to breakage revenue associated with our under firm service contracts with minimum volume commitment payment obligations where the customer cannot or will not make up deficiency quantities in the specified service period and contracts with increasing fixed rates per volume, where we apply revenue levelization (i.e., contracts with fixed rates per volume that increase and recognize revenue evenly over the life of the contract term. Contract liabilities represent payments received for performance obligations which have not been fulfilled and primarily relate to (i) advanced payments for capital improvements, which we record revenue ratably per unit over the life of the contract based on our performance obligations that are generally unchanged over the life of the contract). Our contract liabilities are substantially related to (i) capital improvements paid for in advance by certain customers generally in our non-regulated businesses, which we subsequently recognize as revenue on a straight-line basis ratably over the initial term of the related customer contracts; contract term; (ii) consideration received from customers payments for temporary deficiency quantities under minimum volume contracts that shortfalls, which we expect will be recognize when the volume shortfalls are made up in a future period, which we subsequently recognize as revenue when the customer makes up the volumes or the likelihood that the customer will exercise its right for deficiency volumes make-up becomes remote (e.g., there is insufficient capacity to make up the volumes, the deficiency makeup period expires); remote; and (iii) contracts with decreasing fixed rates per volume that decrease over the life of the contract volume, where we apply revenue levelization for amounts received for our future performance obligations. We reassess amounts recorded as contract assets or liabilities upon contract modification.

In March 2024, For example, the SEC EPA finalized rules requiring significant new climate-related disclosure methane and volatile organic compound emissions standards in SEC filings, including certain climate-related metrics late 2023 and, although EPA priorities have shifted under the current U.S. presidential administration, several states continue to pursue aggressive climate and GHG emissions data, and third-party attestation requirements. In April 2024, emissions-reduction programs, which could require us to comply with obligations that are more stringent than those imposed by the SEC voluntarily stayed the effectiveness of the new rules, pending judicial review, and on February 11, 2025, the Acting Chairman of the SEC directed the SEC staff to request that the court not schedule the case for argument to provide time for the SEC to deliberate and determine the appropriate next steps in the cases. EPA. The State of California also has enacted legislation requiring climate-related disclosures. disclosures, and the California Air Resources Board (CARB) has begun implementation of such legislation, which requires that certain companies doing business in California submit reporting of GHG emissions. Other U.S. states have announced similar proposed regulations. These types of regulations may expose us to significant additional compliance costs. Some In addition, some customers and other third parties also have begun requesting request disclosures from us related to their own reporting obligations. 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.

We had working capital (defined as current assets less current liabilities) deficits of $2,580 $1,568 million and $4,679 $2,580 million as of December 31, 2024 2025 and 2023, 2024, respectively. The overall $2,099 $1,012 million favorable change from year-end 2023 2024 was primarily due to (i) a $1,658 $425 million decrease in current maturities of senior notes; (ii) a $318 million decrease in commercial paper borrowings resulting partly due to repayments made using proceeds received from refinancing a portion of our short-term borrowings into long-term debt with the issuance of senior notes Eaglehawk divestiture in 2024; (ii) a $400 million decrease in long-term debt maturing in the next twelve months; and 2025; (iii) a $113 million increase in restricted deposits primarily associated with our derivative collateral requirements, partially offset by a $111 $195 million net unfavorable favorable change in our accounts receivables and payables. payables; and (iv) a $140 million favorable change in fair value of our short-term derivative contract assets and liabilities. Generally, our working capital varies due to factors such as the timing of scheduled debt payments, timing differences in the collection and payment of receivables and payables, the change in fair value of our derivative contracts, and changes in our cash and cash equivalents as a result of excess cash from operations after payments for investing and financing activities (discussed below in “—Long-term Financing” and “—Capital Expenditures”).