KMIKinder MorganQ2 FY2026Earnings Analysis

Revenue growth was led by product sales and natural-gas services

Quarterly revenue increased $435M, or 11%, to $4.477B. Management attributed the increase primarily to a $422M rise in product sales from higher commodity prices and volumes, plus a $138M increase in services revenue from higher volumes and expansion projects placed in service, principally in Natural Gas Pipelines; these gains were partly offset by a $49M derivative impact and a $73M decline in natural-gas sales caused by lower prices. Source: 10-Q Item 2 MD&A, pp.34-35.

Source: 10-Q Item 2 MD&A, pp.34-35

Operating income and adjusted EBITDA increased faster than revenue

Operating income rose $194M, or 17%, to $1.346B, while Adjusted EBITDA increased $227M to $2.199B. Management said higher earnings across all business segments were the primary drivers of the $202M increase in adjusted net income attributable to KMI and the Adjusted EBITDA improvement. Source: 10-Q Item 2 MD&A, pp.34, 37.

Source: 10-Q Item 2 MD&A, pp.34, 37

Natural Gas Pipelines benefited from higher volumes, expansions, and demand

Natural Gas Pipelines Adjusted Segment EBDA increased $114M to $1.461B. Midstream benefited from higher Texas intrastate volumes and demand, KinderHawk volumes, and Hiland acquired-asset performance; East benefited from completed expansion projects, lower maintenance costs, and weather-related demand. Source: 10-Q Item 2 MD&A, pp.39-40.

Source: 10-Q Item 2 MD&A, pp.39-40

CO2 segment earnings rose on oil prices, production, and energy-transition activity

CO2 Adjusted Segment EBDA increased $62M to $207M. Management cited higher realized crude oil prices and production volumes, higher realized CO2 sales prices, and greater renewable natural gas production and RIN sales; total net oil production rose to 28.04 MBbl/d from 25.52 MBbl/d and realized oil prices increased to $73.78 per barrel from $67.60. Source: 10-Q Item 2 MD&A, pp.45-46.

Source: 10-Q Item 2 MD&A, pp.45-46

Management outlined capital deployment plans and a Houston-area acquisition

KMI acquired the Monument Pipeline system for $503M in May 2026, adding approximately 225 miles of natural-gas pipeline serving Houston and surrounding areas. Management expects 2026 dividends of $1.19 per share, up 2% from $1.17 in 2025, and expects to invest $4.1B in expansion projects, acquisitions, and joint-venture contributions during 2026. Source: 10-Q Item 2 MD&A, p.31.

Source: 10-Q Item 2 MD&A, p.31

Current assets were $2.588B versus current liabilities of $5.647B, producing a current ratio of 0.46x. Current liabilities increased 55.4% year over year, so KMI depends on continuing operating cash generation and access to financing to meet near-term obligations. Source: 10-Q Balance Sheet (XBRL).

Source: 10-Q Balance Sheet (XBRL)

Long-term debt was $29.805B and debt-to-equity was 1.30x at period end. Although long-term debt declined 6.5% year over year, the debt balance remains large relative to equity and may make earnings and cash flow sensitive to financing costs. Source: 10-Q Balance Sheet (XBRL).

Source: 10-Q Balance Sheet (XBRL)

Year-to-date investing cash outflow was $2.355B, 15.5% greater than the prior-year comparable period, while financing cash outflow was $1.086B. Operating cash flow of $3.451B exceeded investing cash outflow for the six-month period, but continued elevated investment can reduce financial flexibility if operating cash generation weakens. Source: 10-Q Cash Flow Statement (XBRL).

Source: 10-Q Cash Flow Statement (XBRL)

Revenue grew 10.8% year over year, while the filing's income-statement data show costs of sales increased as well; this indicates a meaningful portion of sales activity is linked to purchased commodities rather than solely fee-based revenue. Changes in commodity prices or volumes may therefore affect reported revenue, margins, and cash flow. Source: 10-Q Income Statement (XBRL).

Source: 10-Q Income Statement (XBRL)