“The natural gas story has legs and Kinder Morgan's strong start to 2026 that Kim and the team will explain supports that view.”
— Richard Kinder
03Detailed Report
2KD.DE
Company 2KD.DE
Period
Q1 2026
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 27, 2026
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Executive Summary
Kinder Morgan delivered a standout start to 2026 with strong EBITDA expansion and a material step-up in adjusted earnings per share, led by the Natural Gas Pipelines segment and aided by favorable winter weather. The quarter featured a 41% increase in adjusted EPS and an 18% rise in EBITDA versus Q1 2025, with all segments posting year-over-year growth and beating budget. A key strategic highlight was the Monument pipeline acquisition (~$500 million) which is expected to be modestly accretive to EBITDA and adds valuable storage access and long-dated contractual commitments to the network. Net debt to adjusted EBITDA remained disciplined at 3.6x, and management reaffirmed a continued, disciplined approach to capital allocation, aiming to finish 2026 at about 3.7x (below the midpoint of the target range) while delivering more than 3% incremental EBITDA above the budget, excluding Monument effects.
Looking forward, Kinder Morgan emphasized a constructive macro backdrop for gas demand—supported by LNG feed gas growth, gas-fired generation, and an expanding North American pipeline footprint. The company highlighted a sizable backlog of $10.1 billion that sits below a 6x multiple and is increasingly anchored by large, long-term projects (with average in-service around 2028). Management also signaled potential upside from continued gas demand growth, higher oil prices affecting CO2 volumes, and ongoing expansion opportunities in both traditional pipelines and storage. Near-term catalysts include advancing the Western Gateway joint venture (subject to definitive agreements and project FID in the coming months) and leveraging internally generated cash flow to finance projects on-time and on-budget, while maintaining a strong balance sheet and dividend growth trajectory.
Balance Sheet and Cash Flow
- Net Debt / Adjusted EBITDA: 3.6x (down from 3.8x start of year; management expects a slight increase toward 3.7x by year-end).
- CFO: $1.491B generated in the quarter.
- Capex: $0.804B; Dividends Paid: $0.654B; Other Cash Uses: $0.120B.
- Free Cash Flow (FCF): $0.687B.
- Cash at End of Period: $0.180B; Cash at Beginning: $0.109B.
- Backlog: $10.1B (up $0.145B QoQ); average in-service date: Q1 2028; backlog multiple remains <6x.
Strategic and Operating Highlights
- Monument acquisition: $500M asset, long-term contracts >90% utilities/industrials, with anticipated expansion CAPEX post-close; HSR termination cleared; expected to close by month-end.
- Backlog and growth: 78,000 miles of pipelines and 136 terminals; three largest projects constitute >50% of backlog; continued development of >10 Bcf/d of natural gas demand opportunities in power generation; expect new projects to convert into approved activity in 2026.
- Segment performance: Natural Gas midstream led growth due to winter weather and increased LNG feed gas deliveries; Products Pipeline volumes down modestly due to the Double H shift but crude volumes showed resilience excluding the Double H impact; Terminals remained highly utilized with strong tank occupancy and productive rate structures; CO2 volumes grew, with RNG volumes up 63% on higher uptime and improved operations.
Dividend and Guidance
- Quarterly dividend: $0.2975 per share; annualized $1.19, up 2% vs 2025.
- 2026 guidance: Expect to be more than 3% favorable to budgeted adjusted EBITDA, driven by ongoing demand for natural gas midstream services and Monument contribution (partial year).
- Leverage outlook: End-2026 leverage targeted at 3.7x (versus a 3.8x plan prior); debt profile remains well below the target midpoint; Moody’s upgrade to Baa1 supports a stronger credit profile.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
4.83B
13.49%
7.10%
Gross Profit
2.37B
53.57%
-22.64%
Operating Income
1.44B
16.17%
5.87%
Net Income
976.00M
36.12%
-2.01%
EPS
0.44
37.50%
-2.22%
Key Financial Ratios
Management Insights Available for Members
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