Stockholders’ Equity

Common Equity

As of December 31, 2017, our common equity consisted of our Class P common stock.

On July 19, 2017, our board of directors approved a $2 billion common share buy-back program that began in December 2017. During the year ended December 31, 2017, we repurchased approximately 14 million of our Class P shares for approximately $250 million. Subsequent to December 31, 2017 and through February 8, 2018, we repurchased approximately 13 million of our Class P shares for approximately $250 million.

On December 19, 2014, we entered into an equity distribution agreement authorizing us to issue and sell through or to the managers party thereto, as sales agents and/or principals, shares of our Class P common stock having an aggregate offering of up to $5.0 billion from time to time during the term of this agreement. During the years ended December 31, 2017 and 2016 we did not issue any Class P common stock under this agreement. During the year ended December 31, 2015, we issued and sold 102,614,508 shares of our Class P common stock pursuant to the equity distribution agreement resulting in net proceeds of $3.9 billion.

KMI Common Stock Dividends

Holders of our common stock participate in any dividend declared by our board of directors, subject to the rights of the holders of any outstanding preferred stock. The following table provides information about our per share dividends:



	Year Ended December 31,
	2017		2016		2015
Per common share cash dividend declared for the period	$	0.50	$	0.50	$	1.605
Per common share cash dividend paid in the period	0.50		0.50		1.93

On January 17, 2018, our board of directors declared a cash dividend of $0.125 per common share for the quarterly period ended December 31, 2017, which is payable on February 15, 2018 to shareholders of record as of January 31, 2018.

Warrants

During the year ended December 31, 2015, we paid a total of $12 million for the repurchases of warrants. The warrant repurchase program dated June 12, 2015, which authorized us to repurchase up to $100 million of warrants, expired along with the warrants on May 25, 2017, at which time 293 million of unexercised warrants to buy KMI common stock expired without the issuance of Class P common stock. Prior to expiration, each of the warrants entitled the holder to purchase one share of our common stock for an exercise price of $40 per share, payable in cash or by cashless exercise.

Mandatory Convertible Preferred Stock

On October 30, 2015, we completed an offering of 32,000,000 depositary shares, each of which represents a 1/20th interest in a share of our 1,600,000 shares of 9.75% Series A mandatory convertible preferred stock, with a liquidating preference of $1,000 per share (equal to a $50 liquidation preference per depositary share). Net proceeds, after underwriting discount and expenses, from the depositary share offering were approximately $1,541 million. The proceeds from the offering were used to repay borrowings under our revolving credit facility and commercial paper debt and for general corporate purposes.

Unless converted earlier at the option of the holders, on or around October 26, 2018, each share of convertible preferred stock will automatically convert into between 30.8800 and 36.2840 shares of our common stock (and, correspondingly, each depositary share will convert into between 1.5440 and 1.8142 shares of our common stock), subject to customary anti-dilution adjustments. The conversion range depends on the volume-weighted average price of our common stock over a 20 trading day averaging period immediately prior to that date (Applicable Market Value). If the Applicable Market Value for our common stock is greater than $32.38 or less than $27.56, the conversion rate per preferred stock will be 30.8800 or 36.2840, respectively. If the Applicable Market Value is between $32.38 and $27.56, the conversion rate per preferred stock will be between 30.8800 and 36.2840.

Preferred Stock Dividends

Dividends on our mandatory convertible preferred stock are payable on a cumulative basis when, as and if declared by our board of directors (or an authorized committee thereof) at an annual rate of 9.75% of the liquidation preference of $1,000 per share on January 26, April 26, July 26 and October 26 of each year, commencing on January 26, 2016 to, and including, October 26, 2018. We may pay dividends in cash or, subject to certain limitations, in shares of common stock or any combination of cash and shares of common stock. The terms of the mandatory convertible preferred stock provide that, unless full cumulative dividends have been paid or set aside for payment on all outstanding mandatory convertible preferred stock for all prior dividend periods, no dividends may be declared or paid on common stock. The following table provides information regarding our preferred stock dividends:



Period	Total dividend per share for the period	Date of declaration	Date of record	Date of dividend
January 26, 2017 through April 25, 2017	$24.375	January 18, 2017	April 11, 2017	April 26, 2017
April 26, 2017 through July 25, 2017	24.375	April 19, 2017	July 11, 2017	July 26, 2017
July 26, 2017 through October 25, 2017	24.375	July 19, 2017	October 11, 2017	October 26, 2017
October 26, 2017 through January 25, 2018	24.375	October 18, 2017	January 11, 2018	January 26, 2018

The cash dividend of $24.375 per share of our mandatory convertible preferred stock is equivalent to $1.21875 per depository share.

Noncontrolling Interests

KML Restricted Voting Shares

As discussed in Note 3 “Acquisitions and Divestitures,” on May 30, 2017 our indirect subsidiary, KML, issued 102,942,000 restricted voting shares in a public offering listed on the Toronto Stock Exchange. The public ownership of the KML restricted voting shares represents an approximate 30% interest in our Canadian operations and is reflected within “Noncontrolling interests” in our consolidated financial statements as of and for the period presented after May 30, 2017.

KML Preferred Share Offerings

On August 15, 2017, KML completed an offering of 12,000,000 cumulative redeemable minimum rate reset preferred shares, Series 1 (Series 1 Preferred Shares) on the Toronto Stock Exchange at a price to the public of C$25.00 per Series 1 Preferred Share for total gross proceeds of C$300 million (U.S.$235 million). On December 15, 2017, KML completed an offering of 10,000,000 cumulative redeemable minimum rate reset preferred shares, Series 3 (Series 3 Preferred Shares) on the Toronto Stock Exchange at a price to the public of C$25.00 per Series 3 Preferred Share for total gross proceeds of C$250 million (U.S.$195 million). The net proceeds from the Series 1 and Series 3 Preferred Share offerings of C$293 million (U.S. $230 million) and C$243 million (U.S.$189 million), respectively, were used by KML to indirectly subscribe for preferred units in KMC LP, which in turn were used by KMC LP to repay the KML Credit Facility indebtedness recently incurred to, directly or indirectly, finance the development, construction and completion of the TMEP and Base Line Terminal project, and for its general corporate purposes.

KML Distributions

KML established a dividend policy pursuant to which it may pay a quarterly dividend on its restricted voting shares in an amount based on a portion of its DCF. The payment of dividends is not guaranteed and the amount and timing of any dividends payable will be at the discretion of KML’s board of directors. If declared by KML’s board of directors, KML will pay quarterly dividends, on or about the 45th day (or next business day) following the end of each calendar quarter to holders of its restricted voting shares of record as of the close of business on or about the last business day of the month following the end of each calendar quarter. KML also established a Dividend Reinvestment Plan (DRIP) which allows holders (excluding holders not resident in Canada) of restricted voting shares to elect to have any or all cash dividends payable to such shareholder automatically reinvested in additional restricted voting shares at a price per share calculated by reference to the volume-weighted average of the closing price of the restricted voting shares on the stock exchange on which the restricted voting shares are then listed for the five trading days immediately preceding the relevant dividend payment date, less a discount of between 0% and 5% (as determined from time to time by KML’s board of directors, in its sole discretion).

Dividends on the Series 1 Preferred Shares are fixed, cumulative, preferential and C$1.3125 per share annually, payable quarterly on the 15th day of February, May, August and November, as and when declared by the KML’s board of directors, for the initial fixed rate period to but excluding November 15, 2022.

Dividends on the Series 3 Preferred Shares are fixed, cumulative, preferential and C$1.3000 per share annually, payable quarterly on the 15th day of February, May, August and November, as and when declared by the KML’s board of directors, for the initial fixed rate period to but excluding February 15, 2023.

The following table provides information regarding distributions to our noncontrolling interests (in millions except per share and share distribution amounts):



	Year Ended December 31, 2017
	Shares	U.S.$	C$
KML Restricted Voting Shares(a)
Per restricted voting share declared for the period(b)			$0.3821
Per restricted voting share paid in the period		$0.1739	0.2196
Total value of distributions paid in the period		18	23
Cash distributions paid in the period to the public		13	16
Share distributions paid in the period to the public under KML’s DRIP	418,989
KML Series 1 Preferred Shares(c)
Per Series 1 Preferred Share paid in the period		$0.2624	$0.3308
Cash distributions paid in the period to the public		3	4

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(a)	Represents dividends subsequent to KML’s May 30, 2017 IPO.


(b)	The U.S.$ equivalent of the dividends declared is calculated based on the exchange rate on the dividend payment date, therefore, the U.S.$ equivalent of the dividend declared for the fourth quarter of 2017 will be calculated using the exchange rate on February 15, 2018.

The combined U.S.$ equivalent of the dividends declared for the second and third quarters of 2017 was $0.1739.


(c)	Represents dividends subsequent to the issuance of KML’s Series 1 Preferred Shares.

On January 17, 2018, KML’s board of directors declared a cash dividend of C$0.328125 per share of its Series 1 Preferred Shares for the period from and including November 15, 2017 through and including February 14, 2018, which is payable on February 15, 2018 to Series 1 Preferred Shareholders of record as of the close of business on January 31, 2018.

On January 17, 2018, KML’s board of directors declared a cash dividend of C$0.22082 per share of its Series 3 Preferred Shares for the period from and including December 15, 2017 through and including February 14, 2018, which is payable on February 15, 2018 to Series 3 Preferred Shareholders of record as of the close of business on January 31, 2018.