Kinder Morgan's board approved a $0.2975 per share dividend for the second quarter, a 2% increase over a year earlier, as the pipeline operator posted a record $867 million in net income for the period. The dividend is payable August 17, 2026, to shareholders of record as of August 3, 2026, and works out to $1.19 on an annualized basis.

Second-quarter net income attributable to Kinder Morgan climbed from $715 million in the second quarter of 2025, an all-time high for the quarter. Adjusted net income, which strips out one-time items, reached $821 million, up 33% year over year. Adjusted EBITDA hit $2,199 million, also a Q2 record, up 12%. Earnings per share came in at $0.39, up 22%, while adjusted EPS rose 32% to $0.37.

CEO Kim Dang credited the results to internally funded capital projects alongside strong operating cash flow. The company generated $2 billion in cash flow from operations and $1 billion in free cash flow after capital spending. Net debt stood at 3.6 times adjusted EBITDA, the low end of the company's target range. "Our balance sheet remains healthy," Dang said.

Guidance tracks ahead of budget

Kinder Morgan had budgeted 2026 net income of $3.1 billion, adjusted EPS of $1.36, adjusted EBITDA of $8.6 billion and a year-end net debt-to-adjusted EBITDA ratio of 3.8 times. Based on results through the second quarter, the company now expects to beat that budget by more than 5% on adjusted EBITDA and more than 12% on adjusted EPS, and to end the year with an improved net debt ratio of 3.6 times.

Backlog shrinks as projects go live

The company placed about $660 million (Kinder Morgan's share) of expansion projects into service during the quarter: Tennessee Gas Pipeline's Cumberland Project, which will serve a new gas-fired power plant in Tennessee; Hiland Express, a conversion of the Double H Pipeline from crude oil to natural gas liquids service; and an expansion of the Gulf Coast Express pipeline that adds gas flow capacity from the Permian Basin to South Texas markets.

With those projects now generating revenue, the project backlog fell to $9.6 billion at quarter end, down $500 million from the first quarter. The board also gave contingent approval to almost $400 million in projects not yet counted in that backlog. Natural gas projects make up about 92% of the backlog, and more than 60% is tied to power generation and local utility demand. Kinder Morgan expects the remaining $8.5 billion of backlog, excluding its CO2 enhanced oil recovery and gathering and processing projects, to generate a first-full-year EBITDA multiple of about 5.6 times once in service.

Segment results were mixed

Natural Gas Pipelines earnings rose on higher contributions from the Texas Intrastate system and gathering assets. Gas transport volumes were up 7% year over year on LNG deliveries via Tennessee Gas Pipeline, higher Texas Intrastate demand, more exports to Mexico and higher power-generation demand in Arizona on the El Paso Natural Gas Pipeline. Gathering volumes rose 26%, led by the KinderHawk system.

Products Pipelines earnings rose on higher commodity prices, even as total refined products volumes fell 5% on West Coast supply disruptions and crude and condensate volumes dropped 16% following the Double H conversion. Terminals earnings rose, led by higher rates and fees at the company's Houston Ship Channel liquids terminals and higher charter rates on its fully contracted Jones Act tanker fleet; bulk terminals earnings fell despite higher volumes because of one-time items in the year-earlier quarter. The CO2 segment, which includes the Energy Transition Ventures group, posted higher earnings on commodity prices and volumes, with output at its largest field, SACROC, up 15%.

Two pipeline projects near approval

On June 26, 2026, FERC issued a final environmental review covering Southern Natural Gas and Elba Express's South System Expansion 4 project and Tennessee Gas Pipeline's Mississippi Crossing project. FERC has said it expects to issue certificates for both by the end of July 2026. South System Expansion 4, an approximately $3.5 billion project (about $1.8 billion is Kinder Morgan's share, including Elba Express), would add roughly 1.3 billion cubic feet a day of capacity to Southern Natural Gas's South Main Line; the first phase is expected in service in the fourth quarter of 2028 and the second in the fourth quarter of 2029. The roughly $1.7 billion Mississippi Crossing project could enter service as early as the second quarter of 2028.

Separately, Tennessee Gas Pipeline filed a FERC application on June 5, 2026, for a roughly $90 million South Texas Enhancement Project to add firm natural gas transport capacity in the region.