Kinder Morgan, Inc.

and of course the Securities and Exchange Act of 1934, as well as certain non-GAAP financial measures. Before making any investment decisions, we strongly encourage you to read our full disclosure on forward-looking statements and use of non-GAAP financial measures set forth at the end of our earnings release, as well as review our latest filings with the SEC for important material assumptions, expectations, and risk factors that may cause actual results to differ materially from those anticipated and described in such forward-looking statements. Before turning the call over to Kim and the team who will report a good quarter at KMI, let me comment on another broader issue. In past quarters, I've talked a lot about the demand for natural gas resulting from this country's LNG export facilities. Today, I want to speak briefly about what I and others in the industry now see as another source of increased demand for our commodity. the tremendous expected growth in the need for electric power. This growth is being driven by a number of factors, most prominently by the increasing demand of new and expanding data centers, especially those required to support AI. One recent survey showed a projected increase in electric demand to power data centers of 13% to 15% compounded annually through 2030. Put another way, Data centers used about 2.5% of U.S. electricity in 2022 and are projected to use about 20% by 2030. AI demand alone is projected at about 15% of demand in 2030. If just 40% of that AI demand is served by natural gas, that would result in incremental demand of 7 to 10 BCF a day. Utilities throughout America are sounding the alarm. One Southeast utility announced its expectation that its winter demand would increase by 37% by 2031. PJM Interconnection, which operates the wholesale power market across part of the Midwest and the Northeast, has doubled its 15-year annual forecast for demand growth and estimates that demand in the region by 2029 will increase by about 10 gigawatts. Now to put that in perspective, 10 gigawatts is about twice the power demand of New York City on a typical day. The overriding question is how to handle this increased demand. To answer that question, it's important to understand the nature of the increased demand. It's become increasingly obvious that reliability and affordability are the key factors. The power needed for AI and the massive data centers being built today and planned for the near future require affordable electricity that is available without interruption 24 hours a day, 365 days a year. This type of need demonstrates that the emphasis on renewables as the only source of power is fatally flawed in terms of meeting the real demands of the market. This is not a knock on renewables. We all know they will play a significant role in the future of electric generation. but it's a reminder to all of us that natural gas and nuclear still have an extremely important role to play in order to provide the uninterrupted power that AI and the data centers will need. The primary user of these data centers is big tech, and I believe they're beginning to recognize the role that natural gas and nuclear must play. They, like the rest of us, realize that the wind doesn't blow all the time, the sun doesn't shine all the time, that the use of batteries to overcome the shortfall is not practically or economically feasible, and finally, that unfortunately, adding significant amounts of new nuclear power to the mix is not going to happen in the foreseeable future. In addition to all these factors, the market is now understanding that building transmission lines to connect distant renewables to the grid typically takes years to complete, and that's a timeframe inconsistent with the need to place these data centers into service as quickly as possible. All this means that natural gas must play an important role in power generation for years to come. I think acceptance of this hypothesis will become even clearer as power demand increases over the coming months and years, and it will be one more significant driver of growth in the demand for natural gas that will benefit all of us in the midstream sector. And with that, I'll turn it over to Kim.

Okay. Thank you. I'm going to make a few overall points, and then I'll turn it over to Tom and David to give you all the details. We had a great quarter. Adjusted EPS increased by 13%. EBITDA was up 7%, and that was driven by strong performance in natural gas and our refined products businesses. This type of growth is tremendous for a stable fee-based set of midstream assets as large as ours. So the balance sheet remains strong. We ended the quarter at 4.1 times debt to EBITDA. And we continue to return significant value to shareholders. Today, our board approved an increase in the dividend of two cents per share. This is the seventh year in a row that we've increased the dividend. Our financial outlook of 14% growth and adjusted EPS for the year, as well as the other budget guidance we provided in January, is unchanged. We've seen much lower gas prices than we anticipated this year, but the long-term fundamentals in natural gas remain very strong. Gas demand is expected to grow significantly between now and 2030, with a more than doubling of LNG exports, as well as a 50% increase in exports to Mexico. And that doesn't include the anticipated substantial increase in gas demand from power associated with AI and data centers that Rich just mentioned. Estimates we've seen range anywhere from 3 BCF to over 10 BCF, and we've seen some estimates as high as 16 BCF. With respect to the LNG pause, we do not think it impacts our planned projects or the growth in the LNG market between now and 2030, although it could impact the mix of projects. We think the LNG pause is an unwise decision and bad policy. Our petroleum products business continues to produce very stable cash flow. Volumes are steady and much of the business has tariff or contract escalators. It will produce nice cash flow for years to come. It's also a capital efficient business and has some nice growth opportunities around the edges in product blending, renewable diesel, and other sustainable fuels. Our backlog of projects increased by about $300 million during the quarter due to new natural gas projects added. The multiple on the backlog remains less than five times. And I also think that we've got significant opportunity to add to the backlog within the next year. In our ETV business, we secured pore space in the Houston Ship Channel for CO2 sequestration. with capacity to store more than 300 million tons. Significant distance between the emitting source and the sequestration site often challenges CCS economics. And we've secured a very strategically located site. So we had a nice quarter in terms of growth. We continue to expect nice growth for the year. We've got a sound balance sheet. We return significant value to our shareholders. And we have nice opportunities to invest in the longer term. With that, I'll turn it over to Tom to give you details on the business performance for the quarter.

Thanks, Kim. Starting with the natural gas business unit, transport volumes increased by 2% for the quarter versus the first quarter of 2023, driven primarily by increased flows eastbound on Iraqi's interstate pipelines into the mid-continent region. the Firmian Highway expansion project being placed into service, and increased flows into our LNG customers in Texas, partially offset by decreased volumes delivered to local distribution companies on the East Coast as we had a warmer winter this quarter compared to the first quarter of 2023. Our natural gas gathering volumes were up 17% for the quarter compared to the first quarter of 2023. driven by the Haynesville and Edelford volumes, which were up 35% and 12% respectively. Given the low price environment, we are now expecting gathering volumes to average 5% below our 2024 plan, but still 7% over 2023, adjusting for asset sales in both cases. We've delayed about 10% of our 2024 budgeted GNP capex spend, until supply growth returns, and we view this slight pullback in gathering volumes as temporary, given higher production volumes will be necessary to meet the demand growth from LNG expected in early 2025. A quick update on our newly acquired South Texas midstream assets and our Texas intrastate market. The integration of the assets and personnel is going well. We are progressing some of the upside opportunities that we assumed in the acquisition sooner than expected. We feel very good about the long-term earnings expectation and valuation multiple for the acquisition. Our experience in other acquisitions has been that we tend to achieve more value over time than we originally expected from acquiring assets that are highly integrated with our existing network. We are already seeing evidence of that with these assets. In our products pipeline segment, we find product and crude and condensate volumes were down 1% for the quarter versus 2023. Gasoline volumes were down 3% partially offset by an increase in diesel and jet fuel, 2% and 1% increases respectively. RD volumes flowing through our assets in California continue to grow. We average 37,000 barrels a day for the quarter. And we're exploring opportunities to expand our RD capabilities in the Pacific Northwest. Our terminal segment, our liquids lease capacity remains high at 94%. Utilization at our key hubs at the Houston Ship Channel and the New York Harbor remain very strong, primarily due to favorable blend margins. Our Jones Act tankers are 100% leased through 2024. and 92% leads through 2025, assuming likely options are exercised. The CO2 business segment experienced 4% lower oil production volumes, 9% higher NGL volumes, and 7% lower CO2 volumes in the quarter versus the first quarter of 2023. With that, I'll turn it over to David Michaels.