Kinder Morgan, Inc. Q1 FY2026 earnings call

• Rich Kinder mentioned the positive outlook for natural gas demand, with LNG demand impacted by Middle East events and gas-fired electric generation capacity plans increasing. - Kim reported a remarkable first quarter with adjusted EPS up 41% and EBITDA growing by 18%, every segment delivered growth and outperformed budgets. Entered into an agreement to acquire the Monument Pipeline System in Texas. - Dax provided details on each business unit: natural gas business unit had transport and gathering volume increases; product pipeline segment had volume changes; Western Gateway had successful open season; terminals business segment had high lease capacity and well-contracted tanker fleet; CO2 segment had production volume changes. - David declared a dividend of 29.75 cents per share, annualized $1.19, increase of 2% over 2025; net income and EPS were up; expected to be more than 3% favorable to budgeted adjusted EBITDA for full year 2026; balance sheet strengthening with net debt to adjusted EBITDA ratio down.

Natural gas business unit: Transport volumes up 8% in the quarter vs Q1 2025, primarily due to increased LNG feed gas deliveries on the Tennessee gas pipeline; natural gas gathering volumes up 15% from Q1 2025, with largest impact from rainfall system. Product pipeline segment: Refined product volumes down 2% in the quarter vs Q1 2025; crude and condensate volumes down 12% in the quarter vs Q1 2025, with decline in crude volumes explained by removal of double H pipeline from service for NGL conversion. Terminals business segment: Liquids lease capacity remains high at almost 94%; utilization of tanks available for use is approximately 99% at key hubs. CO2 segment: Oil met oil production volumes 2% higher compared to Q1 2025, led by 5% increase in production at Sac Rock; NGL volumes 5% higher; CO2 volumes 1% higher; RNG volumes increased 63% due to greater uptime and hydrocarbon recovery.

• Now expect to exceed EBITDA budget by more than 3% excluding Monument acquisition contributions. - Most of the outperformance is attributable to the first quarter. - For full-year 2026, expect to be more than 3% favorable to budgeted adjusted EBITDA, with additional outperformance driven by strong demand for natural gas midstream services and Monument acquisition contributions. - Expect leverage to increase slightly by year-end 2026 due to increased capital spend and partial year EBITDA contribution from Monument acquisition, but still comfortably below leveraged target range.

Q: Luke on for Julian DeMolen Smith with Jefferies asked about framing the expected Western Gateway scoping in more detail.

A: Kim and Mike Garthwaite responded on negotiating JV terms, asset and cash contributions, and capacity details.

Q: Teresa Chen with Barclays asked about rationale behind Monument Pipeline acquisition, synergies, valuation, etc.

A: Response on long-term contracts, integration with existing assets, incremental capital and expansion, synergies with storage.

Q: Brandon Begum with Scotiabank asked about dynamics in refined products market, Northeast expansion, impact of Iranian conflict.

A: Response on demand evolution, California product import reliance, limited impact on KMI.

Q: Manav Gupta with UBS asked about GCS expansion, Trident pipe, localized gas markets, NATCAS storage opportunities.

A: Response on project on track, basis dislocation possibility, storage as differentiator.

Q: Michael Bloom with Wells Fargo asked about capital allocation, return on Western Gateway project.

A: Response on capital allocation strategy, return on project.

Q: Jean Ann Salisbury with Bank of America asked about Trident staggered start dates, NGPL 550 MMCFD expansion.

A: Response on Trident schedule, market pull driven by power.

Q: Keith Stanley with Wolf Research asked about Western Gateway project details, impact of Permian gas spreads, winter storm.

A: Response on project assets, impact of gas spreads, winter storm impact.

Q: Olivia Foster with Goldman Sachs asked about gas transmission opportunity set, macro volume changes.

A: Response on project opportunity set, volume change impact.

Q: Jeremy Tonette with JP Morgan asked about tracking more than 3% above budget, carbon capture.

A: Response on one-time nature of some factors, carbon capture mostly gone.

Q: Elvira Scato with RBC Capital Markets asked about oil hedging strategy.

A: Response on hedging percentages and strategy.

Q: Jason Gabelman with TD Cowan asked about Western Gateway project in backlog, FID risk, lessons from Permian.

A: Response on project not in backlog, FID steps, no specific lessons learned.

Q: Zach Van Everen with TPH asked about natural gas demand in Gulf Coast, Kinderhawk expansion.

A: Response on open capacity and Kinderhawk expansion plans