Kinder Morgan, Inc.

Welcome to the quarterly earnings conference call. At this time, all participants are in a listen-only mode. During the Q&A session, if you'd like to ask a question, you may press star 1 on your phone. Today's call is being recorded. If you have any objections, please disconnect at this time. I'll now turn the call over to Mr. Rich Kinder, Executive Chairman of Kinder Morgan.

Okay, thank you, Ted. Before we begin, as usual, I'd like to remind you that KMI's earnings release today and this call include forward-looking statements within the meeting of the Private Securities Litigation Reform Act of 1995 and 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. Over the past few quarters, I've talked about our view of the future demand for natural gas, with strong growth being driven by LNG exports, exports to Mexico, and electric generation, which is benefiting from the tremendous needs of AI and data centers. Our viewpoint is consistent with most other energy leaders and analysts in the field. So the next question is, what's the impact of this growth on a midstream company like Kinder Morgan? We believe it's substantial and positive. In fact, in my decades of experience in the midterm arena, I've never seen a macro environment so rich with opportunities for incremental build out of natural gas infrastructure. And at Kendra Morgan, we expect to be a major player in developing that infrastructure. In July, we announced the approximate $3 billion South System Expansion 4 project, which is underpinned by long-term shipper commitments and designed to increase our southern natural gas south line capacity by approximately 1.2 BCF per day, helping to meet growing power generation and residential commercial demand in the southeastern U.S. market. Today, we are announcing the expansion of our GCX system in Texas, which will enable our customers who have signed long-term throughput agreements to move substantial additional gas out of the Permian Basin. We expect to announce additional significant projects over the next several months that will allow us to expand and extend our network to better serve the needs of our customers and benefit our bottom line. As these projects come online, we should be able to grow our EPS, EBITDA, and DCF on a consistent and sustainable basis for years to come. And with that, I'll turn it over to Kim.

Okay. Thanks, Rich. I'll make a few points, and then I'll turn it over to Tom and David to give you more details. But for the third quarter, earnings per share was unchanged. EBITDA grew by 2% versus the third quarter of last year. For the year, we expect EBITDA growth of 5% and EPS growth of 9% versus 2023, despite our expectation to be slightly below our budget due to lower commodity prices and slow startup of our RNG facilities. Debt to EBITDA remains at 4.1 times. During the quarter, we added roughly $450 million of projects to the backlog, which includes the GCX expansion that Rich mentioned, but also includes a storage expansion on NGPL and a new lateral to serve a natural gas power plant. We placed roughly 500 million of projects in service, resulting in a current backlog of 5.1 billion. As we look to the future, we continue to see large opportunities for growth in natural gas between LNG exports to Mexico, power, and industrial growth. Current discussions on power opportunities total well north of the five BCF a day we mentioned in the second quarter. Our internal number for growth in the overall natural gas market is roughly 25 BCF a day over the next five years. On the power side, there are numerous drivers of that demand. We see population and business migration to the southern United States from Arizona to Texas to Georgia and Florida in what were already tight energy markets. The CHIPS Act, cheap feedstock prices, and national security are leading to on-shoring and near-shoring. Renewables are leading to the need for more natural gas peaker plants to back up intermittent demand. Coal plants are moving forward with conversion. And of course, data center demand has skyrocketed. Regardless of the demand driver, one project often creates a need for a subsequent project. For example, An LNG facility initially builds or contracts for a header pipe to get natural gas to its facility from the closest liquid market. Over time, it contracts for capacity upstream of that liquid point to secure more attractively priced molecules. In addition, we have seen some of these companies subscribe for capacity on an entirely separate path to achieve diversity of supply. We see somewhat similar dynamics on the LDC and power demand side. projects to expand existing pipeline capacity within the demand areas, and then a desire to reach further back to ensure sufficient and diverse supply. Kind of reminds me of the old song by the six, one thing leads to another. As we look at our future opportunity set, a few of the potential projects are very large, one and a half to two billion. Most are singles and doubles. As I said last quarter, not all the projects will come to fruition and the larger projects can take longer to develop, but the opportunity set has continued to increase over the course of this year and the conversations are becoming more focused and specific. As Rich mentioned, we've already approved two large projects totaling $3.6 billion aid aids, $1.8 billion to KM share between the Southern Natural Gas South System 4 project and the GCX expansion. And I expect, as Rich said, we'll continue to add to this backlog. It's an exciting time to be in the midstream business. And with that, I'll turn it over to Tom to give you more details.