Kinder Morgan third-quarter profit rises to $764 million on record results

Kinder Morgan, Inc. (KMI) said Wednesday that preliminary results for the quarter ended Sept. 30 were all-time records for a third quarter. A regulatory filing showed the results were released in a press release attached to an 8-K.

Net income attributable to the company rose to $764 million from $628 million a year earlier. Adjusted Net Income Attributable to Kinder Morgan, Inc., which strips out what the company calls Certain Items, was $792 million, 22% higher than the year-earlier period.

Certain Items are adjustments for things such as legal, environmental and other accruals, gains on divestitures, and unsettled commodity hedges.

Here's how the company did:

• Revenues: $4,531 million vs. $4,146 million a year earlier
• Net income attributable to Kinder Morgan, Inc.: $764 million vs. $628 million a year earlier
• Earnings per share: $0.34 vs. $0.28 a year earlier, up 21%
• Adjusted EPS: $0.35 vs. $0.29 a year earlier, up 21%
• Adjusted EBITDA: $2,180 million vs. $1,991 million a year earlier, up 9%

Adjusted EBITDA is net income adjusted for Certain Items, before interest, income taxes and depreciation, depletion and amortization, which the company calls DD&A.

For the first nine months of 2026, earnings per share were $1.17 vs. $0.92 a year earlier, up 27%. Adjusted EPS was $1.20 vs. $0.91, up 32%.

Nine-month revenue was $13,836 million vs. $12,429 million, and nine-month Adjusted EBITDA was $6,918 million vs. $6,120 million, up 13%.

Executive Chairman Richard D. Kinder said, “Our natural gas business in particular is benefiting from increasing LNG exports, rising power demand, and industrial expansion and is capitalizing on significant opportunities for investment across our footprint.” He added that the company expects those investments to generate attractive returns.

Expansion project backlog

The expansion project backlog stood at $14.4 billion at the end of the quarter, up $4.7 billion from the second quarter of 2026. The company said it added $5.4 billion of projects, net of $700 million in projects placed in service.

Of the total, $13.2 billion is natural gas, which the company described as the largest natural gas project backlog in its history. More than 75% of the total backlog is tied to power generation and local distribution company demand.

CEO Kim Dang said, “The Southeast Connector Project is especially transformative in that it will deliver abundant Marcellus/Utica supply to the Southeast, one of the fastest growing demand centers in the country.”

Two projects were added. Southern Natural Gas Company’s (SNG) Southeast Connector and Natural Gas Pipeline Company of America’s (NGPL) Permian Link are each designed to transport over 2.5 billion cubic feet per day of natural gas.

The Southeast Connector has reached a final investment decision and includes about 470 miles of new pipeline. The company’s share of its total cost is expected to be $3.1 billion, and service is expected to begin in phases in the fourth quarter of 2030, subject to permits.

The Permian Link Project is an approximately $4.2 billion project with a KMI share of about $1.6 billion. It is designed to provide about 2.8 billion cubic feet per day of capacity through about 434 miles of new pipeline and is expected to be in service in the third quarter of 2030, subject to permits.

The company said the larger $13.7 billion portion of the backlog represents stable, primarily take-or-pay cash flows. Take-or-pay contracts require the customer to pay for reserved capacity whether or not it is used. The company expects those projects to generate an aggregate first-full-year Project EBITDA multiple of approximately 5.7 times, a measure of earnings before interest, taxes, DD&A and general and administrative costs compared with project capital spending.

Segment results

In natural gas pipelines, adjusted segment earnings before DD&A, interest and taxes were $1,489 million vs. $1,403 million a year earlier. Natural gas transport volumes were up 3%, mainly on LNG deliveries on Tennessee Gas Pipeline, and gathering volumes rose 14%, mainly on the KinderHawk system.

In products pipelines, adjusted segment earnings were $313 million vs. $288 million. Before adjustments, segment earnings were $172 million, and the company booked $138 million of legal, environmental and other accruals as a Certain Item. Refined products volumes were down 3%, and crude and condensate volumes fell 11%, due to lower gathered volumes in the Bakken and the conversion of the Double H pipeline to natural gas liquids service.

In terminals, adjusted segment earnings were $314 million vs. $274 million, after excluding a $71 million gain on divestiture. The company completed the sale of three dry bulk terminals in Tampa, Florida, to affiliates of Watco Companies LLC for $139 million, paid in cash and additional preferred equity interests in Watco.

In CO2, adjusted segment earnings were $184 million vs. $136 million. Volumes at the SACROC field were up 11%, and NGL sales volumes were up 9%.

Cash flow and balance sheet

Cash flow from operations was $5,041 million for the first nine months, vs. $4,225 million a year earlier. Free cash flow after dividends was $226 million for the period, vs. $69 million.

Net debt was $32,229 million at Sept. 30, vs. $31,716 million at Dec. 31, 2025. The company ended the quarter with a Net Debt-to-Adjusted EBITDA ratio of 3.5 times, at the low end of its target range, after 3.8 times at year-end 2025.

The filing also recapped $1.15 billion of 5.55% senior notes due 2036 and $600 million of 6.15% senior notes due 2056, both issued Aug. 6, with proceeds used to repay commercial paper and maturing debt.

Dividend

The board approved a cash dividend of $0.2975 per share for the third quarter, or $1.19 annualized. It is payable Nov. 16, 2026, to holders of record at the close of business on Nov. 2, 2026.

The dividend is 2% higher than the $0.2925 per share declared for the third quarter of 2025. Declared dividends for the first nine months were $0.8925 per share, vs. $0.8775 a year earlier.

2026 outlook

The company’s 2026 budget calls for net income attributable to the company of $3.1 billion, Adjusted EPS of $1.36, declared dividends of $1.19 per share, Adjusted EBITDA of $8.6 billion, and year-end Net Debt-to-Adjusted EBITDA of 3.8 times.

The company currently expects Adjusted EBITDA to be more than 6% favorable to budget and Adjusted EPS to be more than 13% favorable to budget for the year. It also expects year-end leverage of 3.6 times, 0.2 times better than budget. The filing gives percentages rather than revised dollar totals for those measures.

Management is scheduled to discuss the results on a webcast at 4:30 p.m. ET on Wednesday.