Stockholders’ Equity

Mandatory Convertible Preferred Stock

As of October 26, 2018, all of our issued and outstanding 1,600,000 shares of 9.75% Series A mandatory convertible preferred stock, with a liquidating preference of $1,000 per share were converted into common stock either at the option of the holders before or automatically on October 26, 2018. Based on the current market price of our common stock at the time of conversion, our Series A Preferred Shares converted into approximately 58 million common shares.

Preferred Stock Dividends

Dividends on our mandatory convertible preferred stock were 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. Prior to the October 26, 2018 conversion of our Series A Preferred Shares into common shares, we paid all dividends on our mandatory convertible preferred stock in cash. 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, 2018 through April 25, 2018	$24.375	January 17, 2018	April 11, 2018	April 26, 2018
April 26, 2018 through July 25, 2018	24.375	April 18, 2018	July 11, 2018	July 26, 2018
July 26, 2018 through October 25, 2018	24.375	July 18, 2018	October 11, 2018	October 26, 2018

Common Equity

As of December 31, 2018, 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 years ended December 31, 2018 and 2017, we repurchased approximately 15 million and 14 million, respectively, of our Class P shares for approximately $273 million and $250 million, respectively. 2018 amounts exclude repurchases made in December 2018 of approximately 0.1 million of our Class P shares for approximately $2 million which settled on January 2, 2019.

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, 2018, 2017 and 2016 we did not issue any Class P common stock under this agreement.

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,
	2018		2017		2016
Per common share cash dividend declared for the period	$	0.80	$	0.50	$	0.50
Per common share cash dividend paid in the period	0.725		0.50		0.50

On January 16, 2019, our board of directors declared a cash dividend of $0.20 per common share for the quarterly period ended December 31, 2018, which is payable on February 15, 2019 to shareholders of record as of January 31, 2019.

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.

Noncontrolling Interests

The caption “Noncontrolling interests” in our accompanying consolidated balance sheets consists of interests that we do not own in the following subsidiaries (in millions):



	December 31,
	2018		2017
KML(a)	$	514	$	1,163
Others	339		325
	$	853	$	1,488

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(a)	The reduction in the noncontrolling interests associated with KML is primarily attributable to the accrual of the return of capital distribution for the net proceeds from the TMPL Sale paid to KML’s Restricted Voting Shareholders on January 3, 2019 of approximately $0.9 billion.

KML Contributions

KML Restricted Voting Shares

As discussed in Note 3, 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 has 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).

Subsequent Event

On January 16, 2019, KML’s board of directors announced that it would suspend KML’s DRIP, effective with the payment of the fourth quarter 2018 dividend noted above, in light of KML’s reduced need for capital.

KML also pays dividends on its Series 1 Preferred Shares and Series 3 Preferred Shares, which are fixed, cumulative, preferential, and payable quarterly in the annual amount of C$1.3125 per share and C$1.3000 per share, respectively, on the 15th day of February, May, August and November, as and when declared by KML’s board of directors, for the initial fixed rate period to but excluding November 15, 2022 and February 15, 2023, respectively.

During the years ended December 31, 2018 and 2017, KML paid dividends on its Restricted Voting Shares to the public valued at $52 million and $18 million, respectively, of which $38 million and $13 million, respectively, was paid in cash. The remaining value of $14 million and $5 million for the years ended December 31, 2018 and 2017, respectively, was paid in 1,092,791 and 418,989, respectively, KML Restricted Voting Shares. KML also paid dividends to the public on its Series 1 and Series 3 Preferred Shares of $21 million for the year ended December 31, 2018 and on its Series 1 Preferred Shares of $3 million for the year ended December 31, 2017.