Kinder Morgan, Inc. Q4 FY2025 earnings call

• Finished 2025 very strong with adjusted EBITDA up 10% QoQ and adjusted EPS up 22%; project backlog increased to $10B from $8.1B.
• S&P upgraded KMI to BBB+; balance sheet strengthened with net debt to adjusted EBITDA ratio at 3.8x.
• Tom Martin to retire, Dax stepping into President role; key projects: Trident construction started, MSX and South System 4 received FERC scheduling order with final certificate expected by July 31.
• Natural gas demand expected to grow strongly, with feed gas demand averaging 19.8 Bcf per day in 2026 and over 34 Bcf per day by 2030.

Natural Gas:

• Transport volumes: Up 9% in Q4 2025 vs Q4 2024, 5% YoY; full-year 2025 transport volumes up 5% vs 2024.
• Gathering volumes: Up 19% in Q4 2025 vs Q4 2024, driven by Haynesville system; full-year 2025 gathering volumes up 4% vs 2024.

Products Pipeline:

• Refined products volumes: Down 2% in Q4 2025 vs Q4 2024; full-year 2025 volumes equal to 2024.
• Crude and condensate volumes: Down 8% in Q4 2025 vs Q4 2024; up 6% ex HH volumes in Q4 2025 vs Q4 2024.

Terminals:

• Liquids lease capacity: 93% high; utilization at key hubs (Houston Ship Channel, Carteret, NJ) 99%.
• Jones Act tanker fleet: 100% leased through 2026, 97% through 2027, 80% through 2028.

CO2:

• Volumes: 1% lower oil production, 2% lower NGL, 2% lower CO2 in Q4 2025 vs Q4 2024; full-year 2025 oil volumes ~2% below 2024 but strong in Q4.

• Expect strong performance in 2026; backlog multiple below 6x to drive growth.
• Tax reform expected to generate cash flow benefits and additional investment capacity.
• Natural gas demand projected to grow significantly, with feed gas demand at record levels in 2026 and continuing to rise to over 34 Bcf per day by 2030.

• Macro environment and regulatory uncertainties could impact project timelines and demand.
• Continental Resources' actions in the Bakken could have manageable impact on Kinder Morgan's EBITDA, but monitored.
• Volatility in gas transportation market and potential dislocations in supplier demand could affect operations.

Q: Kick it off more on the data center front. How do you think about the 70% number and regional data points?

A: Not exactly sure about the 70%, but ~60% of backlog is power-related; example in Georgia with Georgia Power's revised IRP projecting 53 GW power demand by early 2030s driving gas projects.

Q: Next steps on Western Gateway following second open season launch. How to allocate capital vs natural gas opportunity set?

A: Evaluate projects based on risk, return, stability, duration, and creditworthiness of cash flows; Western Gateway has long-term shipper contracts with creditworthy counterparties and is part of 50-50 joint venture with P66.

Q: Leverage ended around 3.8x. How to maintain leverage levels vs multiple CapEx opportunities?

A: Can fund ~$3B annual CapEx out of cash flow; backlog projects coming online reduce debt-to-EBITDA over time, creating balance sheet capacity; no intention to get close to high end of 3.5-4.5x range.

Q: Progress on HH conversion and impact of Bakken upstream developments on NGL throughput?

A: Project to come on late first quarter/early second quarter; Phase 1 well contracted with volumes from plants; monitor macro situation for next phases.

Q: Thoughts on industry at large and Waha egress opportunities?

A: Leverage basis dislocations; storage portfolio allows leveraging opportunities; storm not as significant as Uri, but gas transportation market tight presents opportunities.

Q: NGPL and data center-driven opportunities in Midwest?

A: Significant discussions; early on projects with binding commitments to convert to FID as they develop; opportunity set exists in corridor with concentration in market and producing regions.

Q: MSX in-service timing and read across to faster permitting?

A: FERC process speeding up, but project-specific; earlier regulatory approval doesn't directly translate to earlier in-service; project-by-project analysis.

Q: Interest in U.S. LNG terminal investment?

A: Returns not where needed; sticking to knitting serving LNG demand via pipelines; 40% of current LNG demand served, expecting to capture future demand.

Q: CapEx update and impact of earlier regulatory on project in-service?

A: CapEx at least $3B annually; project-by-project analysis; earlier regulatory approval doesn't directly translate to day-for-day earlier in-service; customers can elect to take capacity but not required.