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Share-based Compensation and Employee Benefits (Notes) | 12 Months Ended
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Dec. 31, 2020
Employee Benefit and Share-based Payment Arrangement, Noncash Expense [Abstract] |
Share-based Compensation and Employee Benefits | 10. Share-based Compensation and Employee Benefits Share-based Compensation Class P Shares Kinder Morgan, Inc. Amended and Restated Stock Compensation Plan for Non-Employee Directors We have a Kinder Morgan, Inc. Amended and Restated Stock Compensation Plan for Non-Employee Directors, in which our eligible non-employee directors participate. The plan recognizes that the compensation paid to each eligible non-employee director is fixed by our board of directors, generally annually, and that the compensation is payable in cash. Pursuant to the plan, in lieu of receiving some or all of the cash compensation, each eligible non-employee director may elect to receive shares of Class P common stock. Each election will be generally at or around the first board of directors meeting in January of each calendar year and will be effective for the entire calendar year. An eligible director may make a new election each calendar year. The total number of shares of Class P common stock authorized under the plan is 250,000. During 2020, 2019 and 2018, we made restricted Class P common stock grants to our non-employee directors of 14,570, 23,100 and 25,800, respectively. These grants were valued at time of issuance at $0.3 million, $0.4 million and $0.5 million, respectively. All of the restricted stock awards made to non-employee directors vest during a 6-month period. Kinder Morgan, Inc. 2015 Amended and Restated Stock Incentive Plan The Kinder Morgan, Inc. 2015 Amended and Restated Stock Incentive Plan is an equity awards plan available to eligible employees. The total number of shares of Class P common stock authorized under the plan is 33,000,000. The following table sets forth a summary of activity and related balances of our restricted stock awards excluding that issued to non-employee directors:
| Shares |  | Weighted Average Grant Date Fair Value per Share
| (In thousands, except per share amounts)
Outstanding at December 31, 2019 | 12,414 |  |  | $ | 20.07 |
Granted | 4,532 |  |  | 15.10 |
Vested | (4,035) |  |  | 21.71 |
Forfeited | (229) |  |  | 18.99 |
Outstanding at December 31, 2020 | 12,682 |  |  | $ | 17.79 |
The following table sets forth additional information related to our restricted stock awards excluding that issued to non-employee directors:
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
| (In millions, except per share amounts)
Weighted average grant date fair value per share | $ | 15.10 |  |  | $ | 20.46 |  |  | $ | 17.73 |
Intrinsic value of awards vested during the year | 59 |  |  | 87 |  |  | 42 |
Restricted stock awards made to employees have vesting periods ranging from 1 year up to 10 years. Following is a summary of the future vesting of our outstanding restricted stock awards:
Year |  | Vesting of Restricted Shares
|  | (In thousands)
2021 |  | 4,216 |
2022 |  | 3,051 |
2023 |  | 4,775 |
2024 |  | 127 |
2025 |  | 513 |
Total Outstanding |  | 12,682 |
During 2020, 2019 and 2018, we recorded $73 million, $62 million and $63 million, respectively, in expense related to restricted stock awards and capitalized approximately $11 million, $12 million and $13 million, respectively. We allocate labor and benefit costs to joint ventures that we operate in accordance with our partnership agreements. At December 31, 2020, unrecognized restricted stock awards compensation costs, less estimated forfeitures, was approximately $102 million with a weighted average remaining amortization period of 2.08 years. Pension and Other Postretirement Benefit (OPEB) Plans Savings Plan We maintain a defined contribution plan covering eligible U.S. employees. We contribute 5% of eligible compensation for most of the plan participants. Certain collectively bargained participants receive Company contributions in accordance with collective bargaining agreements. A participant becomes fully vested in Company contributions after two years and may take a distribution upon termination of employment or retirement. The total cost for our savings plan was approximately $53 million, $50 million, and $48 million for the years ended December 31, 2020, 2019 and 2018, respectively. Pension Plans Our pension plans are defined benefit plans that cover substantially all of our U.S. employees and provide benefits under a cash balance formula. A participant in the cash balance formula accrues benefits through contribution credits based on a combination of age and years of service, multiplied by eligible compensation. Interest is also credited to the participant’s plan account. A participant becomes fully vested in the plan after three years and may take a lump sum or annuity distribution upon termination of employment or retirement. Certain collectively bargained and grandfathered employees accrue benefits through career pay or final pay formulas. OPEB Plans We and certain of our subsidiaries provide OPEB benefits, including medical benefits for closed groups of retired employees and certain grandfathered employees and their dependents, and limited postretirement life insurance benefits for retired employees. These plans provide a fixed subsidy to post-age 65 Medicare eligible participants to purchase coverage through a retiree Medicare exchange. Medical benefits under these OPEB plans may be subject to deductibles, co-payment provisions, dollar caps and other limitations on the amount of employer costs, and we reserve the right to change these benefits. Benefit Obligation, Plan Assets and Funded Status. The following table provides information about our pension and OPEB plans as of and for each of the years ended December 31, 2020 and 2019:
| Pension Benefits |  | OPEB
| 2020 |  | 2019 |  | 2020 |  | 2019
| (In millions)
Change in benefit obligation: |  |  |  |  |  |  |
Benefit obligation at beginning of period | $ | 2,696 |  |  | $ | 2,566 |  |  | $ | 333 |  |  | $ | 339 |
Service cost | 59 |  |  | 53 |  |  | 1 |  |  | 1 |
Interest cost | 71 |  |  | 96 |  |  | 8 |  |  | 12 |
Actuarial loss (gain) | 198 |  |  | 159 |  |  | (17) |  |  | 10 |
Benefits paid | (180) |  |  | (178) |  |  | (29) |  |  | (32) |
Participant contributions | — |  |  | — |  |  | 2 |  |  | 2 |
Medicare Part D subsidy receipts | — |  |  | — |  |  | 1 |  |  | 1 |
Benefit obligation at end of period | 2,844 |  |  | 2,696 |  |  | 299 |  |  | 333 |
Change in plan assets: |  |  |  |  |  |  |
Fair value of plan assets at beginning of period | 2,076 |  |  | 1,864 |  |  | 333 |  |  | 306 |
Actual return on plan assets | 178 |  |  | 330 |  |  | 47 |  |  | 49 |
Employer contributions | 125 |  |  | 60 |  |  | 7 |  |  | 7 |
Participant contributions | — |  |  | — |  |  | 2 |  |  | 2 |
Medicare Part D subsidy receipts | — |  |  | — |  |  | 1 |  |  | 1 |
Benefits paid | (180) |  |  | (178) |  |  | (29) |  |  | (32) |
Fair value of plan assets at end of period | 2,199 |  |  | 2,076 |  |  | 361 |  |  | 333 |
Funded status - net (liability) asset at December 31, | $ | (645) |  |  | $ | (620) |  |  | $ | 62 |  |  | $ | — |
The 2020 net actuarial loss for the pension plans was primarily due to a decrease in the weighted average discount rate used to determine the benefit obligation as of December 31, 2020. The 2020 net actuarial gain for the OPEB plans was primarily due to changes in the claims cost and trend assumptions, partially offset by a decrease in the weighted average discount rate used to determine the benefit obligations as of December 31, 2020. The 2019 net actuarial loss for the pension plans was primarily due to a decrease in the weighted average discount rate used to determine the benefit obligations as of December 31, 2019, partially offset by a change in the mortality assumption. The 2019 net actuarial loss for the OPEB plans was primarily due to a decrease in the weighted average discount rate used to determine the benefit obligations as of December 31, 2019, partially offset by a change in the claims cost and mortality assumptions. Components of Funded Status. The following table details the amounts recognized in our balance sheets at December 31, 2020 and 2019 related to our pension and OPEB plans:
| Pension Benefits |  | OPEB
| 2020 |  | 2019 |  | 2020 |  | 2019
| (In millions)
Non-current benefit asset(a) | $ | — |  |  | $ | — |  |  | $ | 269 |  |  | $ | 231 |
Current benefit liability | — |  |  | — |  |  | (19) |  |  | (18) |
Non-current benefit liability | (645) |  |  | (620) |  |  | (188) |  |  | (213) |
Funded status - net (liability) asset at December 31, | $ | (645) |  |  | $ | (620) |  |  | $ | 62 |  |  | $ | — |
(a)2020 and 2019 OPEB amounts include $46 million and $39 million, respectively, of non-current benefit assets related to a plan we sponsor which is associated with employee services provided to an unconsolidated joint venture, and for which we have recorded an offsetting related party deferred credit. Components of Accumulated Other Comprehensive (Loss) Income. The following table details the amounts of pre-tax accumulated other comprehensive (loss) income at December 31, 2020 and 2019 related to our pension and OPEB plans which are included on our accompanying consolidated balance sheets:
| Pension Benefits |  | OPEB
| 2020 |  | 2019 |  | 2020 |  | 2019
| (In millions)
Unrecognized net actuarial (loss) gain | $ | (674) |  |  | $ | (557) |  |  | $ | 153 |  |  | $ | 123 |
Unrecognized prior service (cost) credit | (2) |  |  | (3) |  |  | 9 |  |  | 12 |
Accumulated other comprehensive (loss) income | $ | (676) |  |  | $ | (560) |  |  | $ | 162 |  |  | $ | 135 |
Our accumulated benefit obligation for our pension plans was $2,804 million and $2,659 million at December 31, 2020 and 2019, respectively. Our accumulated postretirement benefit obligation for our OPEB plans, whose accumulated postretirement benefit obligations exceeded the fair value of plan assets, was $255 million and $288 million at December 31, 2020 and 2019, respectively. The fair value of these plans’ assets was approximately $48 million and $57 million at December 31, 2020 and 2019, respectively. Plan Assets. The investment policies and strategies are established by our plan’s fiduciary committee for the assets of each of the pension and OPEB plans, which are responsible for investment decisions and management oversight of the plans. The stated philosophy of the fiduciary committee is to manage these assets in a manner consistent with the purpose for which the plans were established and the time frame over which the plans’ obligations need to be met. The objectives of the investment management program are to (i) meet or exceed plan actuarial earnings assumptions over the long term and (ii) provide a reasonable return on assets within established risk tolerance guidelines and to maintain the liquidity needs of the plans with the goal of paying benefit and expense obligations when due. In seeking to meet these objectives, the fiduciary committee recognizes that prudent investing requires taking reasonable risks in order to raise the likelihood of achieving the targeted investment returns. In order to reduce portfolio risk and volatility, the fiduciary committee has adopted a strategy of using multiple asset classes. As of December 31, 2020, the allowable range for asset allocations in effect for our pension plan were 31% to 55% equity, 37% to 57% fixed income, 0% to 5% cash, 0% to 2% alternative investments and 0% to 10% company securities (KMI Class P common stock and/or debt securities). As of December 31, 2020, the allowable range for asset allocations in effect for our OPEB plans were 46% to 68% equity, 25% to 50% fixed income and 0% to 22% cash. Below are the details of our pension and OPEB plan assets by class and a description of the valuation methodologies used for assets measured at fair value. •Level 1 assets’ fair values are based on quoted market prices for the instruments in actively traded markets. Included in this level are cash, equities and exchange traded mutual funds. These investments are valued at the closing price reported on the active market on which the individual securities are traded. •Level 2 assets’ fair values are primarily based on pricing data representative of quoted prices for similar assets in active markets (or identical assets in less active markets). Included in this level are short-term investment funds, fixed income securities and derivatives. Short-term investment funds are valued at amortized cost, which approximates fair value. The fixed income securities’ fair values are primarily based on an evaluated price which is based on a compilation of primarily observable market information or a broker quote in a non-active market. Derivatives are exchange-traded through clearinghouses and are valued based on these prices. •Plan assets with fair values that are based on the net asset value per share, or its equivalent (NAV), as reported by the issuers are determined based on the fair value of the underlying securities as of the valuation date and include common/collective trust funds, private investment funds and limited partnerships. The plan assets measured at NAV are not categorized within the fair value hierarchy described above, but are separately identified in the following tables. Listed below are the fair values of our pension and OPEB plans’ assets that are recorded at fair value by class and categorized by fair value measurement used at December 31, 2020 and 2019:
| Pension Assets
| 2020 |  | 2019
| Level 1 |  | Level 2 |  | Total |  | Level 1 |  | Level 2 |  | Total
| (In millions)
Measured within fair value hierarchy |  |  |  |  |  |  |  |  |  |  |
Short-term investment funds | $ | — |  |  | $ | 77 |  |  | $ | 77 |  |  | $ | — |  |  | $ | 50 |  |  | $ | 50 |
Equities(a) | 249 |  |  | — |  |  | 249 |  |  | 296 |  |  | — |  |  | 296 |
Fixed income securities(b) | — |  |  | 425 |  |  | 425 |  |  | — |  |  | 405 |  |  | 405 |
Derivatives | — |  |  | 11 |  |  | 11 |  |  | — |  |  | 12 |  |  | 12 |
Subtotal | $ | 249 |  |  | $ | 513 |  |  | 762 |  |  | $ | 296 |  |  | $ | 467 |  |  | 763 |
Measured at NAV(c) |  |  |  |  |  |  |  |  |  |  |
Common/collective trusts(d) |  |  |  |  | 1,184 |  |  |  |  |  |  | 1,069 |
Private investment funds(e) |  |  |  |  | 208 |  |  |  |  |  |  | 200 |
Private limited partnerships(f) |  |  |  |  | 45 |  |  |  |  |  |  | 44 |
Subtotal |  |  |  |  | 1,437 |  |  |  |  |  |  | 1,313 |
Total plan assets fair value |  |  |  |  | $ | 2,199 |  |  |  |  |  |  | $ | 2,076 |
(a)Plan assets include $83 million and $129 million of KMI Class P common stock for 2020 and 2019, respectively. (b)Plan assets include $1 million of KMI debt securities for both 2020 and 2019. (c)Plan assets which used NAV as a practical expedient to measure fair value. (d)Common/collective trust funds were invested in approximately 29% fixed income and 71% equity in 2020 and 32% fixed income and 68% equity in 2019. (e)Private investment funds were invested in approximately 71% fixed income and 29% equity in 2020 and 73% fixed income and 27% equity in 2019. (f)Includes assets invested in real estate, venture and buyout funds.
| OPEB Assets
| 2020 |  | 2019
| Level 1 |  | Level 2 |  |  |  | Total |  | Level 1 |  | Level 2 |  |  |  | Total
| (In millions)
Measured within fair value hierarchy |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash | $ | — |  |  | $ | — |  |  |  |  | $ | — |  |  | $ | 1 |  |  | $ | — |  |  |  |  | $ | 1 |
Short-term investment funds | — |  |  | 5 |  |  |  |  | 5 |  |  | — |  |  | 5 |  |  |  |  | 5 |
Equities | — |  |  | — |  |  |  |  | — |  |  | 25 |  |  | — |  |  |  |  | 25 |
Fixed income securities | — |  |  | — |  |  |  |  | — |  |  | — |  |  | 17 |  |  |  |  | 17 |
Mutual funds(a) | — |  |  | — |  |  |  |  | — |  |  | 11 |  |  | — |  |  |  |  | 11 |
Subtotal | $ | — |  |  | $ | 5 |  |  |  |  | 5 |  |  | $ | 37 |  |  | $ | 22 |  |  |  |  | 59 |
Measured at NAV(b) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common/collective trusts(c) |  |  |  |  |  |  | 356 |  |  |  |  |  |  |  |  | 274 |
Subtotal |  |  |  |  |  |  | 356 |  |  |  |  |  |  |  |  | 274 |
Total plan assets fair value |  |  |  |  |  |  | $ | 361 |  |  |  |  |  |  |  |  | $ | 333 |
(a)Includes mutual funds which are invested in equities and fixed income securities. (b)Plan assets which used NAV as a practical expedient to measure fair value. (c)Common/collective trust funds were invested in approximately 65% equity and 35% fixed income securities for 2020 and 64% equity and 36% fixed income securities for 2019. Expected Payment of Future Benefits and Employer Contributions. As of December 31, 2020, we expect to make the following benefit payments under our plans:
Fiscal year |  | Pension Benefits |  | OPEB(a)
|  | (In millions)
2021 |  | $ | 239 |  |  | $ | 30 |
2022 |  | 238 |  |  | 28 |
2023 |  | 225 |  |  | 27 |
2024 |  | 219 |  |  | 25 |
2025 |  | 211 |  |  | 23 |
2026 - 2030 |  | 902 |  |  | 94 |
(a)Includes a reduction of approximately $1 million in each of the years 2021 through 2025 and approximately $6 million in aggregate for the period 2026 - 2030 for an expected subsidy related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003. In 2021, we expect to contribute approximately $56 million to our pension plans and $7 million, net of anticipated subsidies, to our OPEB plans. Actuarial Assumptions and Sensitivity Analysis. Benefit obligations and net benefit cost are based on actuarial estimates and assumptions. The following table details the weighted-average actuarial assumptions used in determining our benefit obligation and net benefit costs of our pension and OPEB plans for 2020, 2019 and 2018:
|  | Pension Benefits |  | OPEB
|  | 2020 |  | 2019 |  | 2018 |  | 2020 |  | 2019 |  | 2018
|  | (In millions)
Assumptions related to benefit obligations: |  |  |  |  |  |  |  |  |  |  |  |
Discount rate |  | 2.27 | % |  | 3.17 | % |  | 4.26 | % |  | 2.08 | % |  | 3.03 | % |  | 4.16 | %
Rate of compensation increase |  | 3.50 | % |  | 3.50 | % |  | 3.50 | % |  | n/a |  | n/a |  | n/a
Interest crediting rate |  | 2.57 | % |  | 3.71 | % |  | 3.90 | % |  | n/a |  | n/a |  | n/a
Assumptions related to benefit costs: |  |  |  |  |  |  |  |  |  |  |  |
Discount rate for benefit obligations |  | 3.17 | % |  | 4.26 | % |  | 3.56 | % |  | 3.03 | % |  | 4.16 | % |  | 3.48 | %
Discount rate for interest on benefit obligations |  | 2.71 | % |  | 3.89 | % |  | 3.13 | % |  | 2.63 | % |  | 3.83 | % |  | 3.08 | %
Discount rate for service cost |  | 3.24 | % |  | 4.28 | % |  | 3.56 | % |  | 3.48 | % |  | 4.51 | % |  | 3.82 | %
Discount rate for interest on service cost |  | 2.80 | % |  | 3.93 | % |  | 3.14 | % |  | 3.39 | % |  | 4.46 | % |  | 3.76 | %
Expected return on plan assets(a) |  | 6.75 | % |  | 7.25 | % |  | 7.25 | % |  | 6.50 | % |  | 6.50 | % |  | 7.08 | %
Rate of compensation increase |  | 3.50 | % |  | 3.50 | % |  | 3.50 | % |  | n/a |  | n/a |  | n/a
Interest crediting rate |  | 3.71 | % |  | 3.90 | % |  | 2.71 | % |  | n/a |  | n/a |  | n/a
(a)The expected return on plan assets listed in the table above is a pre-tax rate of return based on our targeted portfolio of investments. For the OPEB assets subject to unrelated business income taxes (UBIT), we utilize an after-tax expected return on plan assets to determine our benefit costs, which is based on UBIT rates of 27%, 27% and 21% for 2020, 2019 and 2018, respectively. We utilize a full yield curve approach in the estimation of the service and interest cost components of net periodic benefit cost (credit) for our retirement benefit plans by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to their underlying projected cash flows. The expected long-term rates of return on plan assets were determined by combining a review of the historical returns realized within the portfolio, the investment strategy included in the plans’ investment policy, and capital market projections for the asset classes in which the portfolio is invested and the target weightings of each asset class. Actuarial estimates for our OPEB plans assume an annual increase in the per capita cost of covered health care benefits; the initial annual rate of increase is 5.80% which gradually decreases to 4.50% by the year 2038. Components of Net Benefit Cost and Other Amounts Recognized in Other Comprehensive Income. For each of the years ended December 31, the components of net benefit cost and other amounts recognized in pre-tax other comprehensive income related to our pension and OPEB plans are as follows:
|  | Pension Benefits |  | OPEB
|  | 2020 |  | 2019 |  | 2018 |  | 2020 |  | 2019 |  | 2018
|  | (In millions)
Components of net benefit cost (credit): |  |  |  |  |  |  |  |  |  |  |  |
Service cost |  | $ | 59 |  |  | $ | 53 |  |  | $ | 52 |  |  | $ | 1 |  |  | $ | 1 |  |  | $ | 1 |
Interest cost |  | 71 |  |  | 96 |  |  | 84 |  |  | 8 |  |  | 12 |  |  | 12 |
Expected return on assets |  | (137) |  |  | (129) |  |  | (149) |  |  | (16) |  |  | (16) |  |  | (20) |
Amortization of prior service cost (credit) |  | 1 |  |  | — |  |  | — |  |  | (5) |  |  | (4) |  |  | (4) |
Amortization of net actuarial loss (gain) |  | 40 |  |  | 54 |  |  | 40 |  |  | (13) |  |  | (11) |  |  | (6) |
Net benefit cost (credit) |  | 34 |  |  | 74 |  |  | 27 |  |  | (25) |  |  | (18) |  |  | (17) |
Other changes in plan assets and benefit obligations recognized in other comprehensive (income) loss: |  |  |  |  |  |  |  |  |  |  |  |
Net loss (gain) arising during period |  | 157 |  |  | (42) |  |  | 105 |  |  | (43) |  |  | (17) |  |  | (32) |
Amortization or settlement recognition of net actuarial (loss) gain |  | (40) |  |  | (54) |  |  | (87) |  |  | 13 |  |  | 11 |  |  | 3 |
Amortization of prior service (cost) credit |  | (1) |  |  | — |  |  | (1) |  |  | 3 |  |  | 2 |  |  | 3 |
Total recognized in total other comprehensive loss (income)(a) |  | 116 |  |  | (96) |  |  | 17 |  |  | (27) |  |  | (4) |  |  | (26) |
Total recognized in net benefit cost (credit) and other comprehensive loss (income) |  | $ | 150 |  |  | $ | (22) |  |  | $ | 44 |  |  | $ | (52) |  |  | $ | (22) |  |  | $ | (43) |
(a)Excludes $2 million for the year ended December 31, 2020 associated with other plans. Multiemployer Plans We participate in several multi-employer pension plans for the benefit of employees who are union members. We do not administer these plans and contribute to them in accordance with the provisions of negotiated labor contracts. Other benefits include a self-insured health and welfare insurance plan and an employee health plan where employees may contribute for their dependents’ health care costs. Amounts charged to expense for these plans were approximately $6 million for the year ended December 31, 2020 and $8 million for each of the years ended December 31, 2019 and 2018. We consider the overall multi-employer pension plan liability exposure to be immaterial in relation to the value of its total consolidated assets and net income.

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- Definition The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 712 -URI http://asc.fasb.org/topic&trid=2197446 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 710 -URI http://asc.fasb.org/topic&trid=2127225 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
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