Stockholders' Equity (Notes)

12 Months Ended

Dec. 31, 2019

Stockholders' Equity Note [Abstract]

Stockholders' Equity

11. 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 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.

Common Equity

As of December 31, 2019, 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, 2019, 2018 and 2017, we repurchased approximately 0.1 million, 15 million and 14 million, respectively, of our Class P shares for approximately $2 million, $273 million and $250 million, respectively. Since December 2017, in total, we have repurchased approximately 29 million of our Class P shares under the program at an average price of approximately $18.18 per share for approximately $525 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, 2019, 2018 and 2017 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,
	2019		2018		2017
Per common share cash dividend declared for the period	$	1.00	$	0.80	$	0.50
Per common share cash dividend paid in the period	0.95		0.725		0.50

On January 22, 2020, our board of directors declared a cash dividend of $0.25 per common share for the quarterly period ended December 31, 2019, which is payable on February 18, 2020 to shareholders of record as of February 3, 2020.

Accumulated Other Comprehensive Loss

Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Loss

Cumulative revenues, expenses, gains and losses that under GAAP are included within our comprehensive income but excluded from our earnings are reported as “Accumulated other comprehensive loss” within “Stockholders’ Equity” in our consolidated balance sheets. Changes in the components of our “Accumulated other comprehensive loss” not including non-controlling interests are summarized as follows (in millions):

	Net unrealized gains/(losses) on cash flow hedge derivatives			Foreign currency translation adjustments			Pension and other postretirement liability adjustments			Total Accumulated other comprehensive loss
Balance at December 31, 2016	$	(1	)	$	(288	)	$	(372	)	$	(661	)
Other comprehensive gain before reclassifications	145			55			40			240
Gain reclassified from accumulated other comprehensive loss	(171		)	—			—			(171		)
KML IPO	—			44			7			51
Net current-period change in accumulated other comprehensive (loss) income	(26		)	99			47			120
Balance at December 31, 2017	(27		)	(189		)	(325		)	(541		)
Other comprehensive gain (loss) before reclassifications	111			(89		)	(31		)	(9		)
Losses reclassified from accumulated other comprehensive loss(a)	84			223			22			329
Impact of adoption of ASU 2018-02 (see below)	(4		)	(36		)	(69		)	(109		)
Net current-period change in accumulated other comprehensive income (loss)	191			98			(78		)	211
Balance at December 31, 2018	164			(91		)	(403		)	(330		)
Other comprehensive (loss) gain before reclassifications	(177		)	—			77			(100		)
Losses reclassified from accumulated other comprehensive loss(a)	6			91			—			97
Net current-period change in accumulated other comprehensive (loss) income	(171		)	91			77			(3		)
Balance at December 31, 2019	$	(7	)	$	—		$	(326	)	$	(333	)

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(a) Amounts for foreign currency translation adjustments and pension and other postretirement liability adjustments reflect the deferred losses recognized in income during the year ended December 31, 2018 related to the TMPL Sale. Amount for foreign currency translation adjustments reflect the deferred losses recognized in income during the year ended December 31, 2019 related to the sale of KML.

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,
	2019		2018
KML(a)	$	—	$	514
Others	344		339
	$	344	$	853

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(a) On December 16, 2019, we completed the sale of all the outstanding common equity of KML, including our 70% interest, to Pembina. See Note 3 for more information.

KML Contributions

Restricted Voting Shares

On May 30, 2017 our former 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 represented an approximate 30% interest in our Canadian operations and was reflected within “Noncontrolling interests” in our consolidated financial statements as of and for the periods presented after May 30, 2017 through the date of the KML Sale. See Note 3.

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 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

In accordance with KML’s dividend policy, KML paid dividends during the years ended December 31, 2019, 2018 and 2017, on its restricted voting shares to the public valued at $17 million, $52 million and $18 million, respectively, of which $17 million, $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 preferred shares of $22 million, $21 million and $3 million for the years ended December 31, 2019, 2018 and 2017.

On January 3, 2019, KML distributed approximately $0.9 billion of the net proceeds from the TMPL Sale to its public held restricted voting shareholders as a return of capital.

Adoption of Accounting Pronouncements

On January 1, 2018, we adopted ASU No. 2017-05, “Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.”  This ASU clarifies the scope and application of ASC 610-20 on contracts for the sale or transfer of nonfinancial assets and in substance nonfinancial assets to noncustomers, including partial sales. This ASU also clarifies that the derecognition of all businesses is in the scope of ASC 810 and defines an “in substance nonfinancial asset.” We utilized the modified retrospective method to adopt the provisions of this ASU, which required us to apply the new standard to (i) all new contracts entered into after January 1, 2018, and (ii) to contracts that were not completed contracts as of January 1, 2018 through a cumulative adjustment to our “Accumulated deficit” balance. The cumulative effect of the adoption of this ASU was a $66 million, net of income taxes, adjustment to our beginning “Accumulated deficit” balance as presented in our consolidated statement of stockholders’ equity for the year ended December 31, 2018.  This ASU also required us to classify EIG Global Energy Partners’ (EIG) cumulative contribution to ELC as mezzanine equity, which we have included as “Redeemable Noncontrolling Interest” on our consolidated balance sheets as of December 31, 2019 and 2018, as EIG has the right to redeem their interests for cash under certain conditions.

On January 1, 2018, we adopted ASU No. 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.”  Our accounting policy for the release of stranded tax effects in accumulated other comprehensive income is on an aggregate portfolio basis. This ASU permits companies to reclassify the income tax effects of the 2017 Tax Reform on items within accumulated other comprehensive income to retained earnings.  The FASB refers to these amounts as “stranded tax effects.”  Only the stranded tax effects resulting from the 2017 Tax Reform are eligible for reclassification.  The adoption of this ASU resulted in a $109 million reclassification adjustment of stranded income tax effects from “Accumulated

other comprehensive loss” to “Accumulated deficit” on our consolidated statement of stockholders’ equity for the year ended December 31, 2018.