Kinder Morgan, Inc. Q2 FY2025 earnings call

• Rich Kinder discussed global gas demand growth, noting global gas demand is expected to increase by 25% over the next 25 years, with U.S. LNG exports playing a critical role. - Kimberly Allen Dang highlighted financial results with adjusted EBITDA up 6% and adjusted EPS up 12% QoQ, project backlog increased to $9.3 billion, and mentioned permitting improvements and tax benefits. - Thomas A. Martin provided segment-specific performance details, including natural gas, products pipeline, terminals, and CO2. - David Patrick Michels discussed dividends, net income, balance sheet, and expected budget outperformance due to Outrigger acquisition and tax reform benefits.

Natural Gas: Transport volumes were up 3% in the quarter versus Q2 2024, primarily due to LNG deliveries. Natural gas gathering volumes were down 6% in the quarter across most assets, with full year expected to average 3% above 2024 but 3% below 2025 budget. Products Pipeline: Refined products volumes were up 2% and crude and condensate volumes were also up 2% in the quarter compared to Q2 2024. Terminals: Liquids lease capacity remains high at 94%, with the Jones Act tanker fleet fully leased through 2025 and expected to be 100% leased through 2026. CO2: Oil volumes were down 3%, NGL volumes were up 13%, and CO2 volumes were down 8% in the quarter versus Q2 2024, with full year oil volumes forecasted to be 4% below 2024 and 1% below 2025 budget.

• Expect to exceed original budget by at least the contribution from the Outrigger acquisition. - 2025 adjusted EBITDA growth is expected to be 5% including the Outrigger acquisition, with adjusted EPS growth at 10% from 2024. - Projects like Evangeline Pass and South Texas to Houston system are in service, and additional projects are sanctioned for future growth.

• Tariffs could impact project economics, currently estimated at 1% of project cost. - Permian overbuild risk regarding pipeline contracts expiring in the late 2020s and potential pressure on rates.

Q: Theresa Chen with Barclays asked about the commercial landscape change and what allows Kinder to win projects.

A: Kimberly Allen Dang said existing asset footprint, trust in building and delivering projects, and good customer service allow Kinder to be competitive.

Q: Michael Blum with Wells Fargo asked about capital allocation between gas pipelines and gathering investments.

A: Kimberly Allen Dang explained investment decisions are based on risk-reward, considering contract stability and creditworthiness.

Q: John Mackay with Goldman Sachs asked about backlog mix and tax reform impact.

A: David Patrick Michels said tax reform benefits start in 2025 with substantial benefits in 2026 and 2027, and incremental cash flow doesn't change investment strategy.

Q: Jeremy Tonet with JPMorgan asked about Arkansas power project and Southeast opportunity set.

A: Sital K. Mody and Kimberly Allen Dang discussed robust opportunities in Arkansas and Southeast, with fundamentals looking sound.

Q: Keith Stanley with Wolfe Research asked about Haynesville project timeline and permitting improvements.

A: Sital K. Mody and Kimberly Allen Dang talked about Haynesville project timeline and permitting improvements' potential to accelerate project timelines.