Group 1: Value Investing Insights - Long-term value investing focuses on total return, which includes healthy, growing dividends, and requires discipline from investors to avoid overreacting to market fluctuations [1] - Many value investors are currently looking at high-yield dividend stocks priced under $50 per share [2] Group 2: Pfizer Inc. (PFE) - Pfizer has a dividend yield of 6.85% with an annual dividend of $1.72 and a dividend payout ratio of 91.49% [2] - Despite a negative total return of 13% over the last five years, Pfizer's long-term performance has been strong, supported by a diversified portfolio and a promising pipeline of new drugs [3][4] - Following a recent earnings report, Pfizer raised its full-year EPS expectations, contributing to a 1.4% increase in stock price [4][5] Group 3: Verizon Communications Inc. (VZ) - Verizon offers a dividend yield of 6.23% with an annual dividend of $2.71 and a payout ratio of 63.17% [6] - The company has experienced a total return of just over 1% in the last five years, primarily due to investments in 5G technology [7] - Recent earnings reports indicate that 5G adoption is leading to recurring revenue growth and improved margins, with stock up nearly 10% since mid-July [8][9] Group 4: Kinder Morgan Inc. (KMI) - Kinder Morgan has a dividend yield of 4.36% with an annual dividend of $1.17 and a payout ratio of 95.90% [10] - The company has delivered a total return of approximately 152% over the last five years, attributed to its extensive pipeline network and steady revenue model [10][11] - Analysts project a 17% upside for Kinder Morgan stock, supported by anticipated increases in oil and natural gas prices as the economy grows [12]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The global economy is on a stable growth track, with the OPEC raising its 2025 US economic growth forecast from 1.7% to 1.8% and maintaining the 2026 forecast at 2.1% [4]. - The bond market is under pressure, with stock and commodity markets remaining strong. The long - end of the bond market has seen the largest adjustment, but the bank - to - bank money market remains stable and loose [25]. - The A - share market continues its slow - bull pattern, with the three major indices hitting new highs for the year. The semiconductor industry chain has boomed, while some anti - involution sectors have declined [35]. 3. Summary by Directory 3.1 Macro Data Quick View - In June 2025, GDP at constant prices grew 5.2% year - on - year, down from 5.4% in the previous quarter but up from 4.7% in the same period last year [1]. - In July 2025, the manufacturing PMI was 49.3%, down from 49.7% in the previous month and 49.4% in the same period last year; the non - manufacturing PMI for business activities was 50.1%, down from 50.5% in the previous month but up from 50.2% in the same period last year [1]. - In June 2025, social financing scale increment was 41993 billion yuan, compared with 22899 billion yuan in the previous month and 32985 billion yuan in the same period last year [1]. 3.2 Commodity Investment Reference 3.2.1 Comprehensive - Two loan discount policies were released on the 12th to stimulate consumption and boost the economy [2]. - China and the US agreed to continue suspending the implementation of 24% reciprocal tariffs for 90 days starting from August 12 [2]. - The US is likely to see interest rate cuts in September and October, according to CME "FedWatch" data [3]. 3.2.2 Metals - As of August 12, the gold holdings of SPDR Gold Trust remained unchanged from the previous trading day [5]. - The lithium industry branch of the China Non - Ferrous Metals Industry Association issued an initiative to resist "involution - style" competition [5]. - London's basic metals mostly rose, and the market may remain volatile in the short term [5]. 3.2.3 Coal, Coke, Steel, and Minerals - A coking enterprise in Shandong plans to cut production by 30% from August 16 - 25 and 50% from August 26 - September 3, with an estimated impact on coke output of about 41,000 tons [6]. - Indonesia's annual demand for nickel ore is expected to reach 800 million tons due to the development of the nickel processing industry [6]. 3.2.4 Energy and Chemicals - On August 12, US crude oil futures fell due to an unexpected increase in US API crude oil inventories and OPEC +'s production increase [8]. - The US Energy Information Administration adjusted its forecasts for Brent crude oil prices, global oil demand, and US oil production and demand for 2025 and 2026 [8][9]. - OPEC raised its 2026 global crude oil demand growth forecast from 128,000 barrels per day to 138,000 barrels per day [11]. 3.2.5 Agricultural Products - Malaysia's palm oil exports and production increased in July 2025 [12]. - The prices of white - feather chickens and chicken chicks have fluctuated significantly recently, and farmers are increasing their stocking due to price increases and expected demand growth [12]. - The US Department of Agriculture released data on crop subsidy registration areas and soybean production and inventory expectations for 2025/2026 [13][14]. 3.3 Financial News Compilation 3.3.1 Open Market - On August 12, the central bank conducted 114.6 billion yuan of 7 - day reverse repurchase operations, with a net withdrawal of 46.1 billion yuan [15]. 3.3.2 Key News - China and the US agreed to adjust tariff policies and suspend relevant measures for 90 days [16]. - Two loan discount policies were issued to support personal consumption and service - industry business entities [16]. - The issuance scale of science - and - technology innovation bonds has exceeded 800 billion yuan in just over three months [18]. 3.3.3 Bond Market Summary - The bond market continued to adjust, with most bond yields rising, and the 30 - year Treasury bond yield breaking through 2% [25]. - Some exchange - traded bonds rose or fell significantly, and the convertible bond index closed down [25][26]. - European and US bond yields showed different trends, with European bond yields rising overall and US bond yields showing mixed performance [28]. 3.3.4 Foreign Exchange Market Express - The on - shore RMB against the US dollar closed down 93 basis points at 7.1911 on August 12 [29]. - The US dollar index fell 0.44% in New York trading, and most non - US currencies rose [29]. 3.3.5 Research Report Highlights - CITIC Securities expects the annual bond fund scale to exceed 11 trillion yuan [31]. - CICC Fixed Income believes that the risk of a continuous widening of credit spreads in August is relatively small [31]. - Guosen Macroeconomic Fixed Income believes that the bond market will fluctuate narrowly in the short term [31]. 3.3.6 Today's Reminder - On August 13, 196 bonds will be listed, 103 bonds will be issued, 105 bonds will make payments, and 97 bonds will pay principal and interest [33][34]. 3.4 Stock Market Key News - The A - share market continued its slow - bull trend, with the semiconductor industry chain booming and some sectors declining [35]. - The Hong Kong stock market showed mixed performance, with the Hang Seng Index rising and the Hang Seng Tech Index falling [35]. - A - share margin financing balance exceeded 2 trillion yuan for the first time in ten years, and many industries received more margin funds [35].

Core Insights - Las Vegas is currently experiencing one of the worst periods for visitor numbers in the past 22 years, indicating a significant contraction in tourism [1]. Group 1 - The article highlights a chart that illustrates the decline in Las Vegas visitors, emphasizing the severity of the current downturn [1].

Core Viewpoint - Kinder Morgan is experiencing significant growth driven by a projected 20% increase in U.S. gas demand by 2030, leading to new expansion opportunities and a $1.3 billion investment in expansion projects during the second quarter [1][5]. Expansion Projects - The company has approved several major expansion projects, including: - Trident Phase 2, increasing capacity from 1.5 Bcf/d to 2 Bcf/d with an estimated cost of $1.8 billion, expected completion in Q1 2027 [5]. - Texas Access Project, a $112 million expansion with a projected in-service date in Q4 2028 [5]. - KinderHawk Expansion, with over $500 million expected investment [5]. - NGPL joint venture expansions totaling $264 million, expected to enter service in 2028 [6]. Growth Backlog - Kinder Morgan's growth project backlog has increased to $9.3 billion through 2030, up from $8.1 billion at the end of the previous year and $3 billion at the end of 2023 [6]. Earnings Visibility - The majority of the projects are backed by long-term contracts and government-regulated rate structures, providing significant visibility into earnings growth over the coming years [7]. Future Growth Catalysts - Analysts predict that U.S. LNG export capacity will more than double by 2030, with Kinder Morgan's contracts to supply gas to LNG facilities increasing from 8 Bcf/d to 12 Bcf/d by 2028 [8]. - Rising power demand from AI data centers, reshoring of manufacturing, and electrification is driving the need for more gas-fired power plants, with half of Kinder Morgan's backlog supporting this demand [9]. Acquisition Strategy - The company has made strategic acquisitions, such as a $640 million purchase of a natural gas gathering and processing system in North Dakota, which enhances income and allows for capital reallocation [10]. Dividend Growth - Kinder Morgan is positioned to continue increasing its dividend, having achieved eight consecutive years of growth, supported by new projects entering commercial service [11].

Core Insights - Kinder Morgan reported revenue of $4.04 billion for the quarter ended June 2025, reflecting a 13.2% increase year-over-year and surpassing the Zacks Consensus Estimate of $3.88 billion by 4.11% [1] - The company's EPS for the quarter was $0.28, consistent with the consensus estimate, compared to $0.25 in the same quarter last year [1] Financial Performance Metrics - Realized weighted average oil price was $67.60, exceeding the average estimate of $66.45 [4] - Bulk transload tonnage at terminals was 12.80 million metric tons, slightly above the estimated 12.76 million metric tons [4] - Liquids leasable capacity at terminals was 78.70 million barrels, marginally higher than the estimated 78.68 million barrels [4] - Realized weighted average NGL price was $32.08, surpassing the average estimate of $30.26 [4] - Segment EBDA for Products Pipelines was $289 million, slightly below the average estimate of $292.43 million [4] - Segment EBDA for Terminals was $300 million, significantly above the estimated $276.23 million [4] - Segment EBDA for Natural Gas Pipelines was $1.44 billion, exceeding the average estimate of $1.32 billion [4] - Segment EBDA for CO2 was $150 million, below the average estimate of $178.58 million [4] Stock Performance - Kinder Morgan's shares returned -0.3% over the past month, while the Zacks S&P 500 composite increased by 5.4% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

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)

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]

[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)