Financial Data and Key Metrics Changes - TC Energy reported a 12% year-over-year increase in comparable EBITDA for Q2 2025, raising its 2025 comparable EBITDA outlook to between $10.8 billion and $11 billion, which represents a 9% increase over 2024 [7][20][22] - The company has completed or placed into service approximately $5.8 billion of capacity projects, including the Southeast Gateway and East Lateral Express projects [7][10] Business Line Data and Key Metrics Changes - Canada Gas EBITDA increased due to contributions from Coastal GasLink and higher flow-through regulated costs [18] - The U.S. business saw EBITDA growth primarily from the Columbia Gas settlement and new customer contracts [18] - The Mexico business experienced higher earnings from TGNH, driven by the Southeast Gateway pipeline completion, although offset by lower equity earnings from Sur de Tejas [19] Market Data and Key Metrics Changes - North American natural gas demand is now forecasted to grow by 45 Bcf per day by 2035, up from a previous forecast of 40 Bcf per day, driven by LNG exports, power generation, and industrial demand [8][9] - The company is engaged in commercial discussions with over 30 counterparties across the data center value chain, indicating strong customer demand for incremental service [9] Company Strategy and Development Direction - The company aims to maximize asset value through safety and operational excellence, execute a high-quality capital-efficient growth portfolio, and maintain financial strength for long-term value creation [24] - TC Energy is focusing on brownfield expansions and corridor projects, with an average project size of around $450 million, which allows for better capital efficiency [56][57] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the execution plan for the remainder of the year, expecting to place approximately $8.5 billion of assets into service, which is about 15% below budget [10][20] - The company anticipates further deleveraging to approximately 4.75 times by 2026, supported by cash flow from new projects [20][63] Other Important Information - The company released its 2025 sustainability report, highlighting a 12% reduction in absolute methane emissions over the last five years while increasing throughput by 15% [22][23] - The report also sets a new methane intensity reduction target of 40% to 55% by 2035, based on 2019 levels [23] Q&A Session Summary Question: Details on Columbia Gas settlement rates - Management confirmed a 26% increase in pre-filed firm transportation rates due to the Columbia Gas settlement, with further details to be provided in final filings [27][29] Question: Capacity availability for Meta's data center in Ohio - Management indicated strong positioning to serve capacity needs in the New Albany area, with ongoing optimization efforts [31][32] Question: 2027 EBITDA guidance considerations - Management remains confident in the 2027 EBITDA guidance range of $11.7 billion to $11.9 billion, with ongoing rate cases and project execution being key factors [37][39] Question: Canadian pipeline assets and potential toll revisions - Management does not foresee downward pressure on returns for Canadian pipeline assets, emphasizing the need for capacity expansion to meet market demands [40][42] Question: Project announcements in Pennsylvania - Management highlighted the potential for increased market share in Pennsylvania due to rising demand and ongoing project discussions [49][51] Question: Future project partnerships - Management expressed openness to partnerships for future projects, focusing on capital efficiency and leveraging existing capabilities [110]

Core Viewpoint - Kinder Morgan is positioned for robust growth driven by an expanding natural gas pipeline network and increasing demand for natural gas resources [1][2][3] Group 1: Growth and Demand - Demand for natural gas is forecasted to grow by 20% through the end of the decade, linked to decarbonization and the expansion of natural gas infrastructure [2] - The company expects to exceed its original net income growth forecast of 8%, supported by a growing project backlog of $9.3 billion, which represents a 6% net increase [10] Group 2: Financial Performance - Kinder Morgan reported Q2 revenue of $4.04 billion, a 13.2% increase, surpassing consensus forecasts by 550 basis points, primarily due to strength in natural gas and LNG export segments [8] - The adjusted earnings of $0.28 met expectations despite the strong revenue performance [9] Group 3: Dividend and Payout - The dividend yield stands at 4.28%, with expectations for future increases, and the payout ratio is nearly 100%, although the business model supports this through long-term contracts [4][6] - The company maintains a payout ratio of 65% in FQ2 2025, indicating a sustainable dividend payment structure [6] Group 4: Balance Sheet and Credit Ratings - The balance sheet shows increased total assets and rising equity, with low leverage as long-term debt is approximately one times the equity [7] - Credit ratings have improved, with two major agencies lifting their outlook to positive, indicating potential for upgrades [7] Group 5: Analyst Ratings and Price Forecast - Analysts have a 12-month stock price forecast of $31.00, indicating an 11.15% upside, with a high forecast of $38.00 representing a 38% upside when combined with the dividend yield [11][12] - Institutional ownership exceeds 60%, with buying activity at a multi-year high, indicating strong support for the stock [13]

Summary of Kinder Morgan Conference Call Company Overview - **Company**: Kinder Morgan - **Industry**: Natural Gas and Energy Infrastructure Key Points Industry and Market Dynamics - **Natural Gas Demand Growth**: Forecasted growth of natural gas demand is 28 billion cubic feet (BCF) per day, representing a 25% increase over the next four years, which is above consensus estimates [5][6][7] - **Drivers of Growth**: Growth is primarily driven by LNG exports (15-18 BCF per day), incremental power demand, industrial demand, and exports to Mexico [7][8] - **Pipeline Capacity**: Existing pipeline systems are highly utilized, with significant price increases in storage services noted [8] - **Backlog of Projects**: Kinder Morgan has an $8.8 billion backlog, with 90% related to natural gas, largely backed by take-or-pay contracts [9][10] Demand Drivers - **LNG Exports**: LNG export facilities require pipeline capacity, leading to increased demand for upstream connections [12][13] - **Power Demand**: 50% of Kinder Morgan's backlog is associated with power demand, driven by population migration, industrial growth, and coal retirements [17][18][21] - **Geographic Focus**: 85% of expected natural gas demand growth is in the Southern and Southeastern United States [21] Financial Performance and Strategy - **Revenue Sources**: 64% of EBITDA comes from take-or-pay contracts, with 26% from fee-for-service businesses, indicating low sensitivity to commodity prices [25][26] - **Capital Allocation**: Maintenance capital is around $1 billion, with growth CapEx at approximately $2.5 billion. The company aims to maintain and modestly grow dividends while investing in high-return projects [76][77] - **Debt Management**: Net debt to EBITDA is targeted at 3.5 to 4.5 times, with a focus on maintaining a strong balance sheet [78][79] Regulatory Environment - **Permitting Process**: The federal permitting process is improving, with recent regulatory changes aimed at expediting permits [33][34][36] - **Judicial Challenges**: There is a need for clarity in the judicial process regarding permit challenges, which can impact project timelines [37][39] Growth Opportunities - **M&A Strategy**: Kinder Morgan maintains a strong appetite for mergers and acquisitions, focusing on stable fee-based assets that meet specific criteria [49][50] - **Technological Advancements**: The company is exploring AI applications to enhance operational efficiency and decision-making [52][54] Refined Products and CO2 Business - **Refined Products Outlook**: Demand for refined products is expected to stabilize, with a modest price increase due to tariff escalators, despite a slight volume decline [56][59] - **CO2 Business**: Kinder Morgan's CO2 business involves enhanced oil recovery methods, contributing to 9% of overall business, with a focus on existing infrastructure [61][66] Conclusion - **Investment Proposition**: Kinder Morgan offers stable cash flow backed by long-term contracts, an attractive dividend, and a significant project backlog, positioning the company for growth in the natural gas sector [87][88]

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $280 million for Q1 2025, an increase of $45 million from the previous quarter [13] - The pipeline segment results were $39 million higher than Q4 2024, reflecting a full quarter contribution from acquired interstate pipelines [13] - Gathering segment results increased by $6 million compared to Q4 2024, driven by lower expenses and growing volumes in the Haynesville [13] Business Line Data and Key Metrics Changes - Total gathering volumes in the Haynesville averaged 1.67 Bcf per day, an increase from the previous quarter due to new volumes and the return of offline production [13] - In the Northeast, volumes averaged 1.3 Bcf per day, a decrease from the previous quarter due to timing of producer activity [14] Market Data and Key Metrics Changes - The first quarter of 2025 experienced significant market volatility, with natural gas prices rising due to cold weather in January, followed by a decline as markets adjusted to tariff announcements [8] - Total U.S. natural gas supply and demand are expected to grow by approximately 19 Bcf per day through 2030, primarily driven by LNG exports and utility-scale power generation [10] Company Strategy and Development Direction - The company is focused on executing a $2.3 billion organic growth project backlog and integrating newly acquired interstate pipelines [6][9] - There is a strong emphasis on the long-term outlook for natural gas infrastructure, with expected demand growth from LNG exports and industrial onshoring [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in reaffirming 2025 adjusted EBITDA guidance and early outlook for 2026, citing a durable contract structure and minimal commodity exposure [9][15] - The company remains optimistic about the Haynesville activity and expects continued ramp-up throughout the year [22] Other Important Information - The company announced a first-quarter dividend of $0.82 per share, unchanged from the prior quarter, with a commitment to grow the dividend by 5% to 7% per year [15] - Management highlighted the positive political and regulatory support for natural gas and energy infrastructure, which is expected to benefit the sector [11] Q&A Session Summary Question: Gathering volumes in Q1 - Management noted that the uptick in Haynesville volumes aligns with large public producers and increased activity from private producers [21] Question: Data center projects - Management confirmed ongoing commercial conversations for data center power demand and utility-scale power generation projects [26] Question: Millennium pipeline open season - Management indicated strong interest in incremental capacity and the potential for synergies with existing assets [32][34] Question: Impact of tariffs on propane prices - Management stated that very little of their Appalachian gathering footprint is exposed to the wet side of the Marcellus or NGL side of the Utica, viewing it as a non-risk [98] Question: Confidence in 2025 and 2026 guidance - Management emphasized the durability of their portfolio, with no commodity exposure and minimal volumetric exposure, contributing to their confidence [106][108] Question: Changes in demand for power due to data center spending - Management reported robust demand for both site-specific and utility-scale power generation, with ongoing projects advancing [113][116]

Financial Data and Key Metrics Changes - In Q1 2025, the company reported adjusted EBITDA of $280 million, an increase of $45 million from the previous quarter [11] - The pipeline segment results were $39 million higher than Q4 2024, reflecting a full quarter contribution from acquired interstate pipelines [11] - Gathering segment results increased by $6 million compared to Q4 2024, driven by lower overall expenses and growing volumes in the Haynesville [11] Business Line Data and Key Metrics Changes - Total gathering volumes in the Haynesville averaged 1.67 Bcf per day, an increase from the previous quarter due to new volumes and the return of offline production [11] - In the Northeast, volumes averaged 1.3 Bcf per day, a decrease from the previous quarter due to timing of producer activity [12] Market Data and Key Metrics Changes - The first quarter of 2025 experienced significant market volatility, with natural gas prices rising due to cold weather in January, followed by a decline as markets adjusted to tariff announcements [6] - Total U.S. natural gas supply and demand are expected to grow by approximately 19 Bcf per day through 2030, primarily driven by LNG exports and utility-scale power generation [8] Company Strategy and Development Direction - The company is focused on executing a $2.3 billion organic growth project backlog and integrating newly acquired interstate pipelines [5] - The company remains bullish about the long-term outlook for natural gas infrastructure, supported by growing demand from LNG exports and utility-scale power generation [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in reaffirming 2025 and 2026 adjusted EBITDA guidance, citing a durable contract structure and minimal commodity exposure [7] - The company highlighted the positive political and regulatory support for natural gas infrastructure, recognizing the need for streamlined processes to build necessary infrastructure [9] Other Important Information - The company announced a first-quarter dividend of $0.82 per share, unchanged from the prior quarter, with a commitment to grow the dividend by 5% to 7% per year [13] - The company is currently investment grade with Fitch ratings and on a positive outlook with Moody's and S&P [13] Q&A Session Summary Question: Gathering volumes in Q1 - Management noted that the uptick in Haynesville volumes aligns with large public producers' activity, while private producers have also become more active [20] Question: Update on data center projects - Management confirmed ongoing advanced commercial conversations for data center power demand and utility-scale power generation projects [24] Question: Outlook on Millennium project - Management indicated strong interest in incremental capacity and noted that the Millennium pipeline is well-positioned to meet market demands [32] Question: Local and state-level energy infrastructure sentiment - Management observed a shift in sentiment among utilities and stakeholders, recognizing the need for reliable energy supply [40] Question: LNG demand and Woodside FID - Management expressed optimism about expansion opportunities stemming from Woodside's FID, which includes a header system connected to the company's assets [44] Question: Backlog and CapEx guidance - Management reassured that the backlog is growing and highlighted several projects progressing towards FID [88] Question: Impact of China tariffs on propane prices - Management clarified that the company has minimal exposure to the wet side of the Marcellus and views potential ethane rejection as an opportunity rather than a risk [96][98] Question: Confidence in navigating macro uncertainty - Management emphasized the durability of the portfolio, with no commodity exposure and a strong balance sheet, allowing confidence in meeting 2025 and 2026 goals [104][106] Question: Data center demand and utility-scale generation - Management reported robust underlying demand for both site-specific and utility-scale power generation, with ongoing projects advancing towards commercialization [112][114]

Core Viewpoint - Kinder Morgan demonstrates resilience amid market volatility, showcasing a stable business model and strong cash flow, making it a safe investment option during uncertain economic times [2][3][13] Financial Performance - Kinder Morgan reported nearly $2.2 billion in adjusted EBITDA for the first quarter, reflecting a 1% increase from the previous year [4] - The company generated approximately $1.2 billion in cash flow from operations, sufficient to cover its dividend payment of $642 million [6] - A 2% increase in dividends marks the eighth consecutive year of dividend growth for Kinder Morgan [7] Business Segments - Strong operational performance was noted in natural gas pipelines, carbon dioxide, and terminals, while the products pipelines segment experienced a decline due to scheduled maintenance [5] - The company closed a $640 million acquisition of a natural gas gathering and processing system in the Bakken Formation, contributing to its growth strategy [6] Growth Outlook - Kinder Morgan's backlog of expansion projects reached $8.8 billion, an increase of nearly 8% from the end of the previous year, indicating a robust growth trajectory [9] - The addition of approximately $900 million in new projects during the quarter, including the $431 million Bridge pipeline project, enhances the company's growth outlook [10] - The company anticipates continued demand growth for natural gas, driven by LNG exports and increasing power demand [8] Investment Proposition - Kinder Morgan's stable cash flow, supported by long-term fee-based contracts, positions it as a reliable investment during economic turbulence [13] - The company's expansion projects are expected to provide incremental stable cash flow over the next five years, further supporting dividend growth [11][12]