KINDER MORGAN, INC. Q2 FY26 Results

Our fee-based business model, strategically located network of assets, and portfolio of long-term contracts with financially strong customers continue to support stable and predictable cash flows. At the same time, demand for natural gas infrastructure continues to grow. Increasing LNG exports, rising power demand, and industrial expansion make our existing highly utilized assets more valuable and create significant opportunities for investment across our footprint. The company’s stable cash flows provide the financial flexibility to fund virtually all of our project backlog internally, support a growing dividend and maintain a strong balance sheet. We expect those projects to generate attractive returns, driving future earnings and cash flow growth while helping meet the nation's growing energy infrastructure needs.

Strong financial contributions from our business segments resulted in a record second quarter. The company delivered second quarter 2026 net income attributable to KMI of $867 million, 21% higher than the second quarter of 2025, while Adjusted EPS and Adjusted EBITDA were 32% and 12% higher, respectively, than the second quarter of 2025. In the second quarter, we continued to internally fund high-quality capital projects while generating cash flow from operations of $2 billion and free cash flow (FCF), which is after capital expenditures, of $1 billion. Our balance sheet remains healthy, as we ended the quarter with a Net Debt-to-Adjusted EBITDA ratio of 3.6 times, at the low end of our targeted range. We also achieved very strong results from capital expansion project execution this quarter, placing approximately $660 million (KM-share) in expansion projects into service. These included Tennessee Gas Pipeline’s (TGP) Cumberland Project that will serve a new natural gas-fired power plant in Tennessee; Hiland Express, a conversion of our Double H Pipeline system from crude oil to natural gas liquids service; and the eagerly anticipated Gulf Coast Express pipeline expansion to increase natural gas flows from the Permian Basin to South Texas markets. These revenue-generating expansion projects now join our strong base business, adding to our unparalleled network of pipeline and storage assets. As a result of placing those large projects into service, our project backlog at the end of the second quarter of 2026 was $9.6 billion, down $500 million from the first quarter of 2026, although the board today provided contingent approval on almost $400 million in projects that are not yet in the backlog. Natural gas projects account for approximately 92% of our project backlog, and more than 60% of the backlog is associated with projects supporting power generation and local distribution company demand. Even beyond the backlog, we continue to see strong interest from our customers in developing additional natural gas infrastructure. In calculating backlog Project EBITDA multiples, we exclude both the capital and EBITDA from our CO2 enhanced oil recovery projects and our gathering and processing projects where first-full-year multiples are more favorable, but the earnings are more uneven than with our other business segments. We expect the remaining $8.5 billion of projects in the backlog, when realized, to generate an aggregate first-full-year Project EBITDA multiple of approximately 5.6 times.

The Natural Gas Pipelines business segment’s financial performance was up in the second quarter of 2026 relative to the second quarter of 2025, on higher contributions from our Texas Intrastate system and our gathering assets. Natural gas transport volumes were up 7% compared to the second quarter of 2025, primarily due to LNG deliveries on TGP, increased demand for services on our Texas Intrastate system, and increased exports to Mexico as well as higher power generation demand in Arizona on El Paso Natural Gas Pipeline. Natural gas gathering volumes were up 26% from the second quarter of 2025 across our assets, with our KinderHawk system experiencing the largest growth. Contributions from the Products Pipelines business segment were up compared to the second quarter of 2025 due primarily to higher commodity prices. Total refined products volumes were down 5% compared to the second quarter of 2025 due to temporary West Coast supply disruptions, as well as a higher commodity price environment over the quarter. Crude and condensate volumes were down 16% compared to the second quarter of 2025, largely due to the conversion of our Double H pipeline to natural gas liquids service. Terminals business segment earnings were up compared to the second quarter of 2025. The increase was led by our liquids terminals business, which benefited from higher rates and ancillary fees at our Houston Ship Channel hub facilities as well as favorable commodity pricing. Earnings from our Jones Act tanker fleet, which remains fully contracted under term charter agreements, were also up versus the prior year period on higher average charter rates. Contributions from our bulk terminals business were down despite higher volumes owing to one-time events in the prior year period. CO2 business segment earnings, which include the Energy Transition Ventures group, were up compared to the second quarter of 2025 due primarily to higher commodity prices and volumes. Volumes at SACROC, our largest field, were up 15% compared to the prior year period.