Kinder Morgan NYSE: KMI reported second-quarter 2026 results that executives said exceeded both year-earlier levels and the company’s internal budget, as stronger natural gas volumes, higher commodity-related contributions and broad-based segment performance supported the quarter.
Executive Chairman Rich Kinder said the company’s adjusted EBITDA and earnings per share continued to exceed both prior-year results and Kinder Morgan’s 2026 budget “by significant margins.” He said the company continues to benefit from rising demand tied to LNG exports and natural gas-fired power generation, creating additional opportunities for midstream infrastructure backed by long-term contracts.
CEO Kim Allen Dang called the quarter “another fantastic quarter” and said adjusted EBITDA increased 12% from the second quarter of 2025, while adjusted earnings per share rose 32%. Dang said every business segment contributed positively to the year-over-year performance.
Kinder Morgan Raises 2026 Outlook
Dang said Kinder Morgan is raising its full-year guidance after a strong first half and confidence in the remainder of 2026. The company now expects full-year adjusted EBITDA to be at least 5% above its 2026 budget and adjusted EPS to be at least 11% above the original budget.
CFO David Michels said second-quarter net income attributable to Kinder Morgan was $867 million, with EPS of $0.39. Those figures were up 21% and 22%, respectively, from the second quarter of 2025. Adjusted EPS was $0.37, up 32% year over year, and adjusted EBITDA rose 12%.
Michels said EPS came in more than 24% above budget for the quarter, while adjusted EBITDA was more than 9% above budget. Year to date, he said EBITDA has grown 15% and adjusted EPS has grown 35% compared with 2025.
The company declared a quarterly dividend of $0.2975 per share, or $1.19 annualized, representing a 2% increase over 2025.
Natural Gas Demand Drives Growth Opportunities
Dang said the fundamentals supporting Kinder Morgan’s natural gas business “have never been stronger.” Citing Wood Mackenzie’s latest outlook, she said U.S. natural gas demand is expected to exceed 160 billion cubic feet per day by 2035, an increase of about 46 Bcf per day compared with 2025. Dang said the primary drivers are increased LNG export capacity and rapidly growing power demand.
President Dax Sanders said natural gas transport volumes increased 7% from the second quarter of 2025. He cited several drivers, including increased LNG feed gas deliveries on Tennessee Gas Pipeline, higher demand on Kinder Morgan’s intrastate system, increased power demand along the El Paso pipeline and greater exports to Mexico.
Sanders said natural gas gathering volumes increased 26% year over year, with the largest contribution from the KinderHawk system in the Haynesville, where volumes rose 54%.
Sanders said Kinder Morgan is evaluating projects to serve more than 10 Bcf per day of natural gas demand in the power generation sector and about 3 Bcf per day in the LNG sector.
Backlog Remains Near Historic Highs
Dang said Kinder Morgan’s project backlog stood at approximately $9.6 billion at the end of the quarter, down from about $10.1 billion. The decline was mainly due to the company placing more than $650 million of projects into service, partly offset by about $200 million of new project additions.
Dang said the board contingently approved nearly $400 million of projects that are in advanced contract negotiations. Those projects will be added to the backlog upon contract execution, which she said would “virtually” offset the quarter’s backlog decline.
Dang also said the company expects to add significant projects from its more than $10 billion opportunity set before year-end, likely more than offsetting the roughly $1 billion of projects expected to enter service during the second half of 2026.
Kinder Morgan’s three largest natural gas expansion projects — Mississippi Crossing, South System Expansion Four and Trident — remain on schedule and on budget, Dang said. Mississippi Crossing and South System Expansion Four received final FERC environmental impact statements in June, and the company expects FERC certificates by the end of the month. Trident is about 60% complete.
During the question-and-answer session, Dang said Kinder Morgan has room to fund additional capital spending while remaining within its leverage targets. She said the company ended the quarter at 3.6 times leverage and could add $3.4 billion of balance sheet capacity if leverage moved to 4.0 times.
Segment Performance Mixed Outside Natural Gas
In products pipelines, Sanders said refined product volumes declined 5% compared with the second quarter of 2025. Crude and condensate volumes were down 16% from the first quarter of 2025, mostly due to the removal of Double H from service for an NGL conversion early in the third quarter of 2025. Excluding Double H volumes in both periods, crude and condensate volumes were down about 5% year over year.
Sanders said Kinder Morgan and Phillips 66 continue to move forward on Western Gateway. He said partnership agreements have taken longer than expected because of the complexity of the proposed arrangement, but the company aims to complete documents within the next month or two and, assuming progress continues, move to a final investment decision.
In terminals, Sanders said liquids lease capacity remained high at 93%, and utilization of tanks available for use was about 99% at key hubs on the Houston Ship Channel and at Carteret. He said the tanker fleet remains well contracted, assuming likely options are exercised, with 100% leased through 2026, 97% leased through 2027 and 80% leased through 2028.
The CO₂ segment reported 10% higher net oil production volumes compared with the second quarter of 2025, led by a 15% increase at SACROC. NGL volumes rose 9%, while CO₂ volumes increased 5%. Renewable natural gas volumes increased 8% as improved operations drove higher uptime and hydrocarbon recovery.
Balance Sheet and Capital Allocation
Michels said Kinder Morgan ended the quarter with net debt to adjusted EBITDA of 3.6 times, down from 3.8 times at the beginning of the year and below the company’s budget. He said Kinder Morgan now expects to end 2026 at 3.6 times leverage, compared with a budgeted 3.8 times, despite higher spending tied to the Monument acquisition and increased growth capital.
Year to date, Michels said Kinder Morgan generated $3.45 billion of cash flow from operations, paid $1.315 billion in dividends, spent $1.92 billion on total capital and completed the $500 million Monument acquisition. Net debt increased $311 million over that period.
Dang said Kinder Morgan does not currently view itself as capital constrained. She said acquisitions compete with expansion projects for capital, but noted that acquisitions include immediate cash flow, while expansion projects typically involve a timing drag before generating returns.
About Kinder Morgan (NYSE:KMI)
Kinder Morgan NYSE: KMI is a large energy infrastructure company that owns and operates an extensive network of pipelines and terminals across North America. Its core activities center on the transportation, storage and handling of energy products, including natural gas, natural gas liquids (NGLs), crude oil, refined petroleum products and carbon dioxide. The company's assets include long-haul and gathering pipelines, storage facilities, and multi-modal terminals that serve producers, refiners, utilities and industrial customers.
Kinder Morgan's operations deliver midstream services such as pipeline transportation, terminaling, storage and related logistics and maintenance.
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