PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Kinder Morgan's unaudited consolidated financial statements for Q2 2025 and 2024, along with detailed notes on key financial aspects [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) Kinder Morgan's Q2 2025 net income attributable to KMI increased 24% to $715 million, driven by a 13% rise in total revenues to $4.04 billion Consolidated Statements of Income Highlights (Q2 2025 vs Q2 2024) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | $4,042 | $3,572 | +13.2% | | **Operating Income** | $1,152 | $1,038 | +11.0% | | **Net Income Attributable to KMI** | $715 | $575 | +24.3% | | **Diluted EPS** | $0.32 | $0.26 | +23.1% | Consolidated Statements of Income Highlights (Six Months 2025 vs 2024) | Metric | Six Months 2025 (in millions) | Six Months 2024 (in millions) | Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | $8,283 | $7,414 | +11.7% | | **Operating Income** | $2,297 | $2,261 | +1.6% | | **Net Income Attributable to KMI** | $1,432 | $1,321 | +8.4% | | **Diluted EPS** | $0.64 | $0.59 | +8.5% | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to $72.37 billion, while total liabilities rose to $40.29 billion, primarily due to long-term debt Consolidated Balance Sheet Summary | Metric | June 30, 2025 (in millions) | Dec 31, 2024 (in millions) | | :--- | :--- | :--- | | **Total Current Assets** | $2,486 | $2,521 | | **Total Assets** | $72,371 | $71,407 | | **Total Current Liabilities** | $3,633 | $5,101 | | **Total Long-term Debt** | $31,871 | $29,881 | | **Total Liabilities** | $40,290 | $39,540 | | **Total Stockholders' Equity** | $32,081 | $31,867 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations slightly decreased to $2.81 billion, while investing activities significantly increased to $2.04 billion due to acquisitions and capital expenditures Cash Flow Summary (Six Months Ended June 30) | Activity | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $2,811 | $2,876 | | **Net Cash Used in Investing Activities** | $(2,039) | $(1,172) | | **Net Cash Used in Financing Activities** | $(789) | $(1,676) | | **Net (Decrease) Increase in Cash** | $(17) | $28 | [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail accounting policies, recent acquisitions like Outrigger Energy for $648 million, debt structure, risk management, and ongoing litigation - On February 18, 2025, the company acquired a natural gas gathering and processing system in North Dakota from Outrigger Energy II LLC for **$648 million**[43](index=43&type=chunk) - On May 1, 2025, the company issued two series of senior notes for combined net proceeds of **$1,834 million**[52](index=52&type=chunk) - The board of directors declared a Q2 2025 cash dividend of **$0.2925 per share**, payable on August 15, 2025[57](index=57&type=chunk) - As of June 30, 2025, the company had contractually committed revenue of **$36.1 billion** to be recognized in future periods[80](index=80&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 and H1 2025 financial performance, highlighting a 24% increase in net income, segment results, non-GAAP measures, liquidity, and capital expenditure plans - The company expects to declare dividends of **$1.17 per share** for 2025, a **2% increase** from 2024[124](index=124&type=chunk) - KMI anticipates investing **$3.0 billion** in expansion projects, acquisitions, and contributions to joint ventures during 2025[124](index=124&type=chunk) Non-GAAP Financial Measures (Q2 2025 vs Q2 2024) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change | | :--- | :--- | :--- | :--- | | **Adjusted Net Income Attributable to KMI** | $619 | $548 | +13.0% | | **Adjusted EBITDA** | $1,972 | $1,858 | +6.1% | | **Adjusted EPS** | $0.28 | $0.25 | +12.0% | [Results of Operations](index=39&type=section&id=Results%20of%20Operations) Q2 2025 consolidated revenues increased 13% to $4.04 billion, driven by natural gas sales and services, with Natural Gas Pipelines leading earnings growth - Q2 2025 revenue increased by **$470 million** year-over-year, driven by a **$415 million** increase in natural gas sales and a **$119 million** increase in services revenues[146](index=146&type=chunk)[147](index=147&type=chunk) - The Natural Gas Pipelines segment's EBDA increased by **$217 million** in Q2 2025 compared to Q2 2024, driven by strong performance in its Midstream and East business units[161](index=161&type=chunk)[166](index=166&type=chunk) - The Terminals segment's EBDA grew by **$19 million** in Q2 2025, largely due to higher charter rates for its Jones Act tankers[172](index=172&type=chunk)[175](index=175&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, KMI had **$82 million** cash and **$2.8 billion** credit availability, with projected 2025 capital investments of **$4.09 billion** - As of June 30, 2025, the company had **$82 million** in cash and approximately **$2.8 billion** in available borrowing capacity under its credit facility[182](index=182&type=chunk)[187](index=187&type=chunk) - On June 16, 2025, Moody's Investor Services upgraded KMI's rating outlook to positive[186](index=186&type=chunk) Expected 2025 Capital Investments | Category | Expected 2025 (in millions) | | :--- | :--- | | **Total Sustaining Capital Investments** | $1,098 | | **Total Expansion Capital Investments** | $2,988 | | **Total Capital Investments** | $4,086 | [Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk exposures have occurred since the 2024 Form 10-K, with further details in Note 5 of the financial statements - There have been no material changes in market risk exposures from those disclosed in the 2024 Form 10-K[209](index=209&type=chunk) [Controls and Procedures](index=59&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[210](index=210&type=chunk) - No material changes were made to the internal control over financial reporting during the second quarter of 2025[210](index=210&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference Note 9 of the financial statements, detailing various legal and environmental matters - The company refers to Note 9, "Litigation and Environmental," for details on legal proceedings[211](index=211&type=chunk) [Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the 2024 Annual Report on Form 10-K and Q1 2025 Quarterly Report - No material changes in risk factors have occurred since the last quarterly report[212](index=212&type=chunk) [Other Information](index=60&type=section&id=Item%205.%20Other%20Information) This section discloses a Rule 10b5-1 trading plan adopted by a Vice President and a restricted stock unit grant to Dax Sanders for his promotion - On May 7, 2025, a Vice President adopted a Rule 10b5-1 trading plan for the sale of up to **73,992 shares** of KMI common stock[216](index=216&type=chunk) - On July 15, 2025, Dax Sanders was granted **98,426 restricted stock units** in connection with his promotion to President, effective January 31, 2026[217](index=217&type=chunk)

Core Viewpoint - Kinder Morgan reported earnings highlighting a growing project backlog and a positive outlook driven by increasing demand for natural gas [2] Company Summary - Kinder Morgan is a midstream company that plays a significant role in the liquefied natural gas sector [2] - The company emphasized the importance of its projects in response to the rising demand for natural gas [2]

Investment Returns - The total return on the Fund's net asset value for the first half of 2025 was 2.3%, with dividends and capital gains reinvested [1] - The S&P Energy Sector and the S&P 500 Materials Sector had returns of 0.8% and 6.0%, respectively, while the benchmark (S&P 500 Energy Sector 80% and S&P 500 Materials Sector 20%) returned 1.8% [1] - The total return on the Fund's market price for the same period was 3.1% [1] Annualized Comparative Returns - For the 1-year period, the Fund's net asset value (NAV) decreased by 2.2%, while the market price increased by 1.7% [4] - Over 3 years, the NAV returned 10.7% and the market price returned 12.3% [4] - The 5-year returns were 21.2% for NAV and 22.1% for market price, while the 10-year returns were 6.1% for NAV and 6.8% for market price [4] Net Asset Value - As of June 30, 2025, the Fund's net assets were $634.74 million, down from $689.99 million a year earlier [6] - The number of shares outstanding increased to 26,888,697 from 25,453,641 [6] - The net asset value per share decreased to $23.61 from $27.11 [6] Largest Equity Portfolio Holdings - The top ten equity holdings accounted for 62.9% of net assets, with Exxon Mobil Corporation at 22.7% and Chevron Corporation at 11.5% [7] - Other significant holdings included ConocoPhilips (5.3%), Linde plc (4.7%), and EOG Resources, Inc. (3.8%) [7] Industry Weightings - The Fund's net assets were allocated primarily to the energy sector, with Integrated Oil & Gas at 35.1% and Exploration & Production at 19.8% [9] - Other allocations included Storage & Transportation (11.6%), Chemicals (13.6%), and Metals & Mining (3.6%) [10]

Core Insights - Kinder Morgan, Inc. (KMI) reported second-quarter 2025 adjusted earnings per share of 28 cents, meeting the Zacks Consensus Estimate and increasing from 25 cents year over year [1][9] - Total quarterly revenues reached $4.04 billion, surpassing the Zacks Consensus Estimate of $3.88 billion and up from $3.57 billion in the prior-year quarter, driven by strong natural gas demand and segment performance [1][2][9] Segmental Analysis - **Natural Gas Pipelines**: Adjusted earnings before depreciation, depletion, and amortization (EBDA) increased to $1.35 billion from $1.22 billion a year ago, benefiting from higher contributions from the Texas Intrastate system and Tennessee Gas Pipeline [3] - **Product Pipelines**: EBDA decreased to $289 million from $298 million year over year, primarily due to weak commodity prices and the expiration of legacy contracts, although higher transport rates and increased volumes partially offset the decline [4] - **Terminals**: Generated quarterly EBDA of $300 million, up from $281 million a year ago, due to higher rates from the Jones Act tanker fleet, partially offset by lower coal handling earnings [5] - **CO2**: EBDA was $145 million, down from $162 million year over year, attributed to higher renewable natural gas sales volumes, partially offset by lower CO2 and D3 RIN prices [5] Operational Highlights - Operations and maintenance expenses totaled $773 million, up from $741 million year over year, while total operating costs increased to $2,890 million from $2,534 million [6] - KMI's project backlog rose nearly 6% to $9.3 billion, net of about $750 million in completed projects, up from $8.8 billion at the end of the first quarter [6] Balance Sheet - As of June 30, 2025, KMI reported $82 million in cash and cash equivalents, with long-term debt amounting to $31.7 billion [7] Outlook - For 2025, Kinder Morgan projected net income of $2.8 billion (up 8% from 2024) and adjusted EPS of $1.27 (up 10%), with expected dividends of $1.17 per share (up 2% from the prior year) [8] - Anticipated budgeted adjusted EBITDA of $8.3 billion, up 4% from the previous year's level [8] - KMI forecasts a net debt-to-adjusted EBITDA of 3.8x, excluding potential contributions from the Outrigger Energy II acquisition, assuming average 2025 prices of $68 per barrel for WTI crude and $3.00/MMBtu for Henry Hub natural gas [10]

Group 1 - Kinder Morgan reported quarterly earnings of $0.28 per share, matching the Zacks Consensus Estimate, and an increase from $0.25 per share a year ago [1] - The company posted revenues of $4.04 billion for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 4.11%, compared to $3.57 billion in the same quarter last year [2] - Kinder Morgan has not surpassed consensus EPS estimates in the last four quarters, but has topped revenue estimates twice during that period [2] Group 2 - The stock has gained about 2% since the beginning of the year, underperforming the S&P 500, which has increased by 6.2% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4] - The current consensus EPS estimate for the next quarter is $0.30 on revenues of $4.02 billion, and for the current fiscal year, it is $1.29 on revenues of $16.52 billion [7] Group 3 - The Zacks Industry Rank for Oil and Gas - Production and Pipelines is in the top 22% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5] - The estimate revisions trend for Kinder Morgan was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, suggesting it will perform in line with the market [6]

Financial Data and Key Metrics Changes - Adjusted EBITDA increased by 6% and adjusted EPS increased by 12% compared to the previous year [7] - Net income attributable to Kinder Morgan was $715 million, a 24% increase from the second quarter of 2024 [19] - Adjusted net income was $619 million, with adjusted EPS of $0.28, reflecting a 13% increase from the previous year [20] - The company ended the quarter with $32.3 billion in net debt and a net debt to adjusted EBITDA ratio of 4.0x, down from 4.1x in the previous quarter [21] Business Line Data and Key Metrics Changes - Natural gas transport volumes were up 3% due to LNG deliveries, while natural gas gathering volumes were down 6% [14] - Refined products and crude volumes were both up 2% compared to the previous year [15] - The CO2 segment saw a 3% decrease in oil production volumes but a 13% increase in NGL volumes [18] Market Data and Key Metrics Changes - U.S. natural gas demand is expected to grow by 20% by 2030 according to Wood Mackenzie estimates [9] - LNG feed gas demand in the U.S. is projected to increase by 3.5 BCF per day this summer compared to 2024, and more than double by 2030 [5] Company Strategy and Development Direction - The company aims to own and operate stable fee-based assets core to energy infrastructure, using cash flow to invest in attractive return projects while maintaining a solid balance sheet [13] - The strategy remains focused on expanding natural gas pipeline networks to support growing demand, particularly in LNG and power sectors [15][49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth of natural gas, driven by increasing global demand and U.S. LNG exports [3][5] - The federal permitting environment has improved, allowing for quicker project approvals, which is expected to benefit future growth [10][90] Other Important Information - The project backlog increased from $8.8 billion to $9.3 billion during the quarter, with $1.3 billion in new projects added [11] - The company expects significant cash tax benefits in 2026 and 2027 due to recent tax reforms [10][52] Q&A Session Summary Question: Changes in the commercial landscape and competitive advantages - Management highlighted the existing asset footprint and a strong track record in project delivery as key competitive advantages [28][29] Question: Progress on natural gas infrastructure expansion in Arizona - Management acknowledged the need for more natural gas in Arizona and mentioned ongoing discussions regarding potential projects [31] Question: Capital allocation between gas pipelines and gathering investments - Management reiterated that investment decisions are based on risk-reward assessments, with no changes in their approach [36] Question: Update on behind-the-meter opportunities - Management noted that most activity is seen from regulated utilities, with potential for independent power producers to announce projects [40] Question: Trends in gas demand and project mix - Management indicated that while LNG is a significant driver of demand growth, power demand is also expected to grow substantially [49] Question: Impact of tax reform on cash flow and project financing - Management confirmed that tax reform will provide benefits starting in 2025, but it will not change their investment strategy or return thresholds [54] Question: Concerns about potential oversupply in the LNG market - Management stated that they have not seen a slowdown in discussions with LNG customers and continue to see new projects being announced [105][106]

Financial Data and Key Metrics Changes - Adjusted EBITDA increased by 6% and adjusted EPS increased by 12% compared to the previous year [9] - Net income attributable to Kinder Morgan was $715 million, a 24% increase from the second quarter of 2024 [20] - Adjusted net income was $619 million, with adjusted EPS of $0.28, reflecting a 13% increase from the previous year [21] - Net debt at the end of the quarter was $32.3 billion, with a net debt to adjusted EBITDA ratio of 4.0x, down from 4.1x in the previous quarter [22] Business Line Data and Key Metrics Changes - Natural gas transportation volumes were up 3% due to LNG deliveries, while natural gas gathering volumes decreased by 6% [16] - Refined products and crude volumes both increased by 2% compared to the previous year [17] - The CO2 segment saw a 3% decrease in oil production volumes but a 13% increase in NGL volumes [19] Market Data and Key Metrics Changes - U.S. natural gas demand is expected to grow by 20% by 2030, with significant contributions from LNG exports [10] - LNG feed gas demand in the U.S. is projected to increase by 3.5 BCF per day this summer compared to 2024, and more than double by 2030 [7] Company Strategy and Development Direction - The company aims to own and operate stable fee-based assets, using cash flow to invest in attractive return projects while maintaining a solid balance sheet [14] - The project backlog increased from $8.8 billion to $9.3 billion, with new projects added and existing projects placed in service [12] - The company is focused on expanding its natural gas pipeline network to support growing demand [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth of natural gas demand, driven by population growth and the transition to cleaner energy sources [4] - The federal permitting environment has improved, allowing for quicker project approvals [10] - Management expects significant cash tax benefits from recent tax reforms, with no material cash tax liability anticipated until 2028 [11] Other Important Information - The company declared a quarterly dividend of $0.29 per share, an increase of 2% from the previous year [20] - Moody's and S&P have placed the company's credit rating on a positive outlook [25] Q&A Session Summary Question: Has the commercial landscape changed with demand tailwinds? - Management noted that their existing asset footprint and track record in project delivery have allowed them to remain competitive in securing projects [28] Question: What is the progress on building additional natural gas infrastructure in Arizona? - Management acknowledged the need for more natural gas in Arizona and mentioned ongoing discussions regarding potential projects [31] Question: How does the company view capital allocation between gas pipelines and gathering investments? - Management emphasized that investment decisions are based on risk-reward assessments, with no change in their approach to capital allocation [36] Question: What is the outlook for behind-the-meter opportunities? - Management indicated that most activity is seen from regulated utilities, with potential for future projects as IPPs secure contracts [40] Question: How does the company view the risk of Permian overbuild? - Management expressed confidence in their existing contracts and the ability to extract value from their pipelines, viewing the risk as low [80][82] Question: What is the expected timeline for the Haynesville gathering project? - Management plans to have facilities in service by the end of the fourth quarter next year, with volume ramp-up expected [87]

Kinder Morgan, Inc. KMI released its second-quarter results after Wednesday's closing bell. Here's a look at the key figures from the quarter. The Details: Kinder Morgan reported quarterly earnings of 28 cents per share, which beat the analyst consensus estimate of 27 cents, according to Benzinga Pro.Quarterly revenue came in at $4.04 billion, which beat the analyst consensus estimate of $3.74 billion and is an over revenue of $3.572 billion from the same period last year.Read Next: Rare Earth Royalty: Meet ...

[Second Quarter 2025 Financial Results](index=1&type=section&id=KINDER%20MORGAN%20REPORTS%20SECOND%20QUARTER%202025%20FINANCIAL%20RESULTS) [Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) Kinder Morgan reported strong second quarter 2025 results with a 24% increase in net income and a 6% rise in Adjusted EBITDA compared to Q2 2024, driven by the Natural Gas Pipelines and Terminals segments, while increasing its project backlog by $1.3 billion, declaring a 2% higher dividend, maintaining a healthy balance sheet with a 4.0x Net Debt-to-Adjusted EBITDA ratio, and expressing a highly positive outlook citing growing natural gas demand, particularly for LNG exports Q2 2025 Key Financial Metrics vs. Q2 2024 | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Income Attributable to KMI | $715 million | $575 million | +24% | | Earnings Per Share (EPS) | $0.32 | $0.26 | +23% | | Adjusted EPS | $0.28 | $0.25 | +12% | | Adjusted EBITDA | $1,972 million | $1,858 million | +6% | | Dividend per share | $0.2925 | $0.2875 | +2% | - The company added **$1.3 billion** to its project backlog during the quarter, bringing the total to **$9.3 billion**, with approximately **93%** consisting of natural gas projects[1](index=1&type=chunk)[9](index=9&type=chunk) - Management highlights the strong outlook for natural gas, driven by a **20%** projected demand growth through 2030, led by LNG exports, with contracts to move almost **8 Bcf/d** to LNG facilities, expected to grow to nearly **12 Bcf/d** by 2028[7](index=7&type=chunk)[8](index=8&type=chunk) - The company generated **$1.6 billion** in cash flow from operations and **$1.0 billion** in free cash flow (FCF), ending the quarter with a Net Debt-to-Adjusted EBITDA ratio of **4.0 times**[5](index=5&type=chunk) [2025 Full-Year Outlook](index=2&type=section&id=2025%20Outlook) Kinder Morgan anticipates exceeding its original 2025 budget, primarily due to contributions from the Outrigger Energy II acquisition, with the initial budget projecting an 8% increase in net income and a 10% increase in Adjusted EPS compared to 2024, and a target year-end Net Debt-to-Adjusted EBITDA ratio of 3.8 times - The company expects to exceed its 2025 budget, factoring in contributions from the Outrigger Energy II acquisition which closed in Q1 2025[12](index=12&type=chunk) 2025 Budgeted Financial Targets (vs. 2024) | Metric | 2025 Budget | % Change vs. 2024 | | :--- | :--- | :--- | | Net Income Attributable to KMI | $2.8 billion | +8% | | Adjusted EPS | $1.27 | +10% | | Dividends per share | $1.17 | +2% | | Adjusted EBITDA | $8.3 billion | +4% | | Year-End Net Debt-to-Adjusted EBITDA | 3.8 times | N/A | - The budget is based on assumed average annual prices of **$68/barrel** for WTI crude oil and **$3.00/MMBtu** for Henry Hub natural gas[13](index=13&type=chunk) [Business Segment Overview](index=3&type=section&id=Overview%20of%20Business%20Segments) In Q2 2025, financial performance improved in the Natural Gas Pipelines and Terminals segments compared to the prior year, benefiting from higher contributions from key pipeline systems and gains from the Jones Act tanker fleet, while Products Pipelines and CO2 segments experienced earnings declines due to weak commodity prices and other factors [Natural Gas Pipelines](index=3&type=section&id=Natural%20Gas%20Pipelines) The segment's financial performance improved due to higher contributions from the Texas Intrastate system and Tennessee Gas Pipeline (TGP), with overall transport volumes rising 3% year-over-year, driven by LNG deliveries, which offset a 6% decline in natural gas gathering volumes - Improved financial performance was primarily driven by the Texas Intrastate system and Tennessee Gas Pipeline (TGP)[15](index=15&type=chunk) Natural Gas Pipelines Volume Changes (Q2 2025 vs Q2 2024) | Volume Type | % Change | | :--- | :--- | | Transport Volumes | +3% | | Gathering Volumes | -6% | [Products Pipelines](index=3&type=section&id=Products%20Pipelines) Segment contributions declined compared to Q2 2024, despite a 2% increase in both refined products and crude/condensate volumes, attributed to weak commodity prices and the expiration of legacy contracts ahead of a pipeline conversion - Segment contributions were down due to weak commodity prices and the expiration of legacy contracts[17](index=17&type=chunk) - Total refined products volumes and crude and condensate volumes both increased by **2%** compared to Q2 2024[17](index=17&type=chunk) [Terminals](index=3&type=section&id=Terminals) Earnings in the Terminals segment increased year-over-year, led by higher rates in its fully contracted Jones Act tanker fleet, with liquids terminals also benefiting from expansion projects and higher rates, particularly at the Houston Ship Channel facilities - The Jones Act tanker fleet led the increase with higher rates and remains fully contracted[18](index=18&type=chunk) - Liquids terminals benefited from expansion projects and higher rates, especially at Houston Ship Channel facilities[18](index=18&type=chunk) [CO2 Segment](index=3&type=section&id=CO2%20Segment) The CO2 segment, which includes Energy Transition Ventures (ETV), reported lower earnings compared to Q2 2024, caused by lower prices for CO2 and D3 RINs, which was partially offset by higher D3 RIN volumes from increased renewable natural gas (RNG) sales - Earnings were down due to lower CO2 and D3 RIN prices[19](index=19&type=chunk) - The negative impact was partially offset by higher D3 RIN volumes generated through increased renewable natural gas sales[19](index=19&type=chunk) [Other News and Project Updates](index=4&type=section&id=Other%20News%20and%20Project%20Updates) Kinder Morgan announced positive corporate developments, including a ratings outlook change to positive from Moody's and a new debt issuance at favorable rates, detailing a multi-billion dollar slate of new and progressing capital projects, overwhelmingly focused on expanding its natural gas infrastructure to meet demand from LNG and power generation sectors [Corporate Updates](index=4&type=section&id=Corporate%20Updates) Moody's revised Kinder Morgan's rating outlook to positive, aligning with S&P's existing positive outlook, and the company successfully issued $1.85 billion in senior notes in May 2025 at interest rates more favorable than budgeted - On June 16, 2025, Moody's changed KMI's rating outlook to **positive**, citing continued earnings growth, a conservative approach to funding, and favorable leverage levels, aligning with S&P's existing positive outlook[22](index=22&type=chunk) - On May 1, 2025, KMI issued **$1.1 billion** of **5.15%** senior notes due 2030 and **$750 million** of **5.85%** senior notes due 2035 at favorable rates[22](index=22&type=chunk) [Natural Gas Pipelines Projects](index=4&type=section&id=Natural%20Gas%20Pipelines%20Projects) The company is advancing numerous significant natural gas projects, including expanding the Trident Intrastate Pipeline to 2.0 Bcf/d, launching the $112 million Texas Access Project (TAP), and investing over $500 million in the KinderHawk gathering system, with other major projects like Mississippi Crossing (MSX) and South System Expansion 4 (SSE4) moving through regulatory processes, representing billions in future investment to serve growing demand - The Trident Intrastate Pipeline project was expanded to **2.0 Bcf/d** capacity at a cost of approximately **$1.8 billion**, expected in service in Q1 2027[22](index=22&type=chunk) - The Mississippi Crossing (MSX) project, a **~$1.7 billion** pipeline to transport up to **2.1 Bcf/d**, has filed its certificate application with FERC and is expected to be in service in Q4 2028[24](index=24&type=chunk) - The South System Expansion 4 (SSE4) project, a **~$3.5 billion** project to increase SNG's capacity by **~1.3 Bcf/d**, has also filed its FERC application, with a phased in-service schedule for Q4 2028 and Q4 2029[24](index=24&type=chunk) [Products Pipelines Projects](index=5&type=section&id=Products%20Pipelines%20Projects) On July 1, 2025, the company placed its SFPP East Line Expansion project into service, adding 2,500 barrels per day of capacity to Tucson, Arizona, fully supported by a five-year take-or-pay agreement - The SFPP East Line Expansion project to Tucson, Arizona was placed in service on July 1, 2025, adding **2,500 barrels per day** of capacity[23](index=23&type=chunk)[25](index=25&type=chunk) [Financial Statements and Reconciliations](index=11&type=section&id=Financial%20Statements%20and%20Reconciliations) This section presents the unaudited consolidated financial statements for the second quarter and first six months of 2025, including the income statement, balance sheet, and supplemental data, along with detailed reconciliations of GAAP metrics to the non-GAAP measures used for management analysis, such as Adjusted EBITDA and Free Cash Flow [Consolidated Statements of Income (Table 1)](index=11&type=section&id=Table%201%20Consolidated%20Statements%20of%20Income) For the second quarter of 2025, Kinder Morgan reported revenues of $4.04 billion, a 24% increase in Net Income Attributable to KMI to $715 million, and a 23% increase in basic and diluted EPS to $0.32 compared to the same period in 2024 Q2 2025 Income Statement Highlights (vs. Q2 2024) | Line Item | Q2 2025 (millions) | Q2 2024 (millions) | % Change | | :--- | :--- | :--- | :--- | | Revenues | $4,042 | $3,572 | +13.2% | | Operating Income | $1,152 | $1,038 | +11.0% | | Net Income Attributable to KMI | $715 | $575 | +24.3% | | Basic and Diluted EPS | $0.32 | $0.26 | +23.1% | [Non-GAAP Reconciliations (Tables 2 & 3)](index=12&type=section&id=Tables%202%20%26%203%20Non-GAAP%20Reconciliations) These tables reconcile GAAP Net Income to key non-GAAP metrics, showing that for Q2 2025, Net Income of $715 million was adjusted to $619 million of Adjusted Net Income and $1.972 billion of Adjusted EBITDA, with the Natural Gas Pipelines segment being the largest contributor to Adjusted Segment EBDA at $1.347 billion for the quarter Q2 2025 Reconciliation of Net Income to Adjusted EBITDA | Item | Amount (millions) | | :--- | :--- | | Net income attributable to KMI | $715 | | Total Certain Items | $(96) | | DD&A | $616 | | Income tax expense | $179 | | Interest, net | $453 | | Amounts associated with joint ventures | $105 | | **Adjusted EBITDA** | **$1,972** | Q2 2025 Adjusted Segment EBDA (millions) | Segment | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Natural Gas Pipelines | $1,347 | $1,223 | | Products Pipelines | $289 | $298 | | Terminals | $300 | $281 | | CO2 | $145 | $162 | [Segment Volumes and Hedges (Table 4)](index=14&type=section&id=Table%204%20Segment%20Volume%20and%20CO2%20Segment%20Hedges%20Highlights) This table details operational volumes by segment for Q2 2025, showing Natural Gas transport volumes rose 3% YoY to 44,585 BBtu/d, while gathering volumes fell 6%, and total refined product delivery volumes increased by 2%, also disclosing the company's crude oil and NGL hedge positions through 2028 Q2 2025 vs Q2 2024 Key Volume Changes | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Natural Gas Transport (BBtu/d) | 44,585 | 43,123 | +3.4% | | Natural Gas Gathering (BBtu/d) | 3,931 | 4,203 | -6.5% | | Total Products Delivery (MBbl/d) | 2,213 | 2,169 | +2.0% | | Total Oil Production - net (MBbl/d) | 25.52 | 26.20 | -2.6% | - The company has hedged crude oil volumes at weighted average prices ranging from **$64.51** to **$66.98 per barrel** for the remainder of 2025 through 2028[57](index=57&type=chunk) [Consolidated Balance Sheets (Table 5)](index=15&type=section&id=Table%205%20Preliminary%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Kinder Morgan reported total assets of $72.4 billion and total liabilities of $40.3 billion, with Net Debt standing at $32.3 billion and the Net Debt-to-Adjusted EBITDA ratio at 4.0x, unchanged from the end of 2024 Balance Sheet Highlights (as of June 30, 2025) | Item | Amount (millions) | | :--- | :--- | | Total Assets | $72,371 | | Total Liabilities | $40,290 | | Total KMI Stockholders' Equity | $30,770 | | Net Debt | $32,348 | - The Net Debt-to-Adjusted EBITDA ratio was **4.0x** as of June 30, 2025, consistent with the ratio at year-end 2024[61](index=61&type=chunk) [Supplemental Information (Table 6)](index=16&type=section&id=Table%206%20Preliminary%20Supplemental%20Information) This table provides a reconciliation to Free Cash Flow (FCF), showing that for the second quarter of 2025, the company generated $1.65 billion in cash flow from operations, resulting in $1.0 billion of FCF, and after paying $654 million in dividends, FCF after dividends was $348 million Q2 2025 Free Cash Flow Calculation (millions) | Item | Amount | | :--- | :--- | | Cash flow from operations | $1,649 | | Capital expenditures (GAAP) | $(647) | | **FCF** | **$1,002** | | Dividends paid | $(654) | | **FCF after dividends** | **$348** | [Non-GAAP Financial Measures and Forward-Looking Statements](index=6&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Forward-Looking%20Statements) This section provides detailed definitions for the non-GAAP financial measures used in the report, such as Adjusted EBITDA, Adjusted EPS, Net Debt, and Free Cash Flow (FCF), explaining their calculation and management's rationale for their use, and contains a standard safe harbor statement, cautioning that forward-looking statements are subject to various risks and uncertainties and are not guarantees of future performance - Management evaluates performance using non-GAAP measures including Adjusted Net Income, Adjusted EPS, Adjusted Segment EBDA, Adjusted EBITDA, Net Debt, and FCF[14](index=14&type=chunk)[27](index=27&type=chunk) - The report defines "Certain Items" as adjustments used to calculate non-GAAP measures, which typically do not have a cash impact or are not part of normal business operations[29](index=29&type=chunk) - The forward-looking statements section cautions investors about risks and uncertainties related to supply/demand, commodity prices, counterparty risk, and tariffs that could cause actual results to differ from expectations[40](index=40&type=chunk)[41](index=41&type=chunk)

Group 1: Legislative Impact - The One Big Beautiful Bill Act (BBB) is expected to release approximately $3 trillion in stimulus, benefiting the oil and gas sector, particularly pipeline operators like Kinder Morgan (KMI) [3][9] - The BBB allows oil and gas producers to write off capital expenses immediately and delays fees on methane emissions until 2035, which is likely to increase production [5][10] Group 2: Company Overview - Kinder Morgan operates as a corporation, avoiding the complexities associated with master limited partnerships (MLPs), and offers a 4.2% dividend that grows annually [4][8] - KMI manages 79,000 miles of pipelines in North America, with 40% of U.S. natural gas production flowing through its systems, positioning it favorably in the energy market [11][12] Group 3: Financial Stability - KMI's revenue is largely secured through "take-or-pay" contracts (64%) and fee-based agreements (26%), providing stability against fluctuations in oil and gas prices [14] - The company anticipates $5.2 billion in distributable cash flow for 2025, significantly exceeding its $2.6 billion dividend obligations, allowing for growth investments and debt repayment [16] Group 4: Market Position and Growth Potential - KMI has outperformed major MLPs like Enterprise Products Partners (EPD) in total return over the past three years, despite EPD offering a higher yield [15] - The company's focus on natural gas aligns with growing trends such as reshoring industrial production and increasing energy demands from AI [12][13]