Kinder Morgan, Inc.

calls, I've emphasized the positive attributes of the natural gas story, concentrating primarily on the rapidly growing demand in America. But as we all know, the gas market is international in nature, and a great deal of the growth potential for U.S. production is driven by that worldwide increase in demand. So I thought today I would spend a bit of time sharing some thoughts on what's driving that overseas growth. Chief economist of a major oil company recently estimated that global gas demand is expected to increase by 25% over the next 25 years. And I don't believe that that projection is unreasonable. And it affirms my belief that natural gas will inevitably remain a key source of energy for the long term around the globe. The factors underpinning that growth are pretty easy to understand. Demographers project continued substantial growth in worldwide population over that time period in the range of 2 billion additions by 2050. A great bulk of that increase will occur in the emerging markets of Asia and Africa, where the need for energy is particularly acute as large portions of the population move into the middle class, which drives additional energy consumption. Because there is a lack of local production and an inability to access gas by land-based delivery in most of those nations, it will be LNG which will satisfy the bulk of this additional demand, and I think it will grow faster than the overall demand for natural gas. Now, what's the impact of all this international growth on the U.S. energy segment? I believe that American exports of LNG will play a critical role in supplying this international LNG demand. The U.S. has been the top global producer of natural gas for 15 consecutive years and the world's top exporter of LNG since 2023. I believe the U.S. role becomes even more important in light of recent developments in the Middle East. Customers on the receiving end want security of supply without undue worries about disruptions caused by military actions, and this benefits the position of U.S. supply. This makes us confident that a major portion of the LNG required will move through America's rapidly growing liquefaction terminals. Consistent with this view is the recent estimate of S&P Global Commodity Insights that LNG feed gas demand in America will increase by 3.5 BCF a day this summer compared to the summer of 2024, and that it will more than double by 2030. That should be a real positive for Kendra Morgan in as much as we move about 40% of all the feed gas for those facilities. When you add the international LNG growth to the robust need for gas to satisfy U.S. domestic power and industrial demand, examples of which are reflected in the new expansions that Kim and the team will be discussing on this call, it signals to me that the positive natural gas story has legs and will last for decades to come. With that, I'll turn it over to Kim and the team.

Okay. Thanks, Bruce. Our financial results for the quarter show strong growth over the second quarter of 24 with adjusted EBITDA increasing by 6% and adjusted EPS increasing by 12%. For the year, we currently expect to exceed our original budget, which already reflected very nice growth by at least the contribution from the Outrigger acquisition. It's an amazing time to be in the natural gas industry. This is certainly the best opportunity set I've seen during my 24 years in this industry. The underlying market fundamentals are strong with U.S. natural gas demand expected to grow by 20% between now and 2030 by Woodmax estimates. The federal permitting environment has improved. The U.S. Army Corps of Engineers is issuing permits very quickly. We've seen some recent at FERC action, which is helpful, including a 50% increase in the prior notice limit and a one year waiver of the five month waiting period between the time, uh, before you can start construction between the time the permit is issued and, uh, and you can start construction. So the Supreme court ruling on NEPA should help narrow the scope of the NEPA reviews and make nuisance lawsuits more difficult. The recent budget reconciliation bill delivers nice tax benefit, including incentives for investment and expanded interest deduction. As a result, we expect significant cash tax benefits in 2026 and 2027 and do not expect KMI to be a material cash taxpayer until 2028. The one fly in the ointment is tariffs. However, at this point, we still do not believe that the tariffs will have a significant impact on project economics. For our large projects, MSX, South System 4, Trident, GCX, and Bridge, that together comprise almost two-thirds of our backlog, we currently estimate that the impact of tariffs to be roughly 1% of project costs, which has not changed from our estimate last quarter. Our project backlog increased from 8.8 to 9.3 billion during the quarter. We added 1.3 in new projects and placed approximately 750 million of projects in service. The projects we added included Trident Phase 2 and the Louisiana Line Texas Access Project, which include moving natural gas from Katy, Texas into the Louisiana LNG market. We also added two NGPL projects to serve power plants. All these projects are underpinned by long-term contracts and have attractive returns. We also approved approximately $500 million of CapEx for Kinderhawk, which is supported by life of lease contracts to accommodate a significant volume ramp up by our customers. Currently, approximately 50% of the projects in our backlog will serve power demand. The multiple on the backlog is around 5.6 times, slightly improved from Q1 as the projects we placed in service were at a lower, that we placed in the backlog were at a lower multiple than the projects we placed in service. Overall, despite $6 billion in project additions to our backlog in the past year, we continue to see very nice future investment opportunities. As Tom Martin said to me the other day, we aren't in the first inning anymore, but we aren't anywhere near the seventh inning stretch. Our strategy remains unchanged. We own and operate stable fee-based assets, which are core to the energy infrastructure. We use our significant cash flow generated by these assets to invest in attractive return projects, and we return money to our shareholders, all while maintaining a solid balance sheet. With that, I'll turn it over to Tom.

Thanks, Kim. Starting with the natural gas business unit, transport volumes were up 3% in the quarter versus the second quarter of 2024, primarily due to LNG deliveries on Tennessee gas pipeline, as well as new contracts and LNG deliveries on our Texas intrastate system. Natural gas gathering volumes were down 6% in the quarter versus second quarter of 24, across most of our GNP assets, the biggest impact being in our Haynesville system. Sequentially, total gathering volumes were down 1%. Our producer customers are still ramping back up after lower gas prices in the second half of 2024. For the full year, we expect our gathering volumes to average 3% above 2024, but 3% below our 2025 budget. We anticipate gathering volumes will grow over the balance of the year given the higher price environment than in 2024 and the need for increased production to meet LNG demand growth that is ramping up throughout the remainder of the year. Looking forward, we continue to see significant incremental project opportunities across our natural gas pipeline network to expand our transportation and storage capabilities in support of the growing natural gas market. In our products pipeline segment, refined products volumes were up 2% and crude and condensate volumes were also up 2% in the quarter compared to the second quarter of 2024. For the full year 2025, refined products volumes were forecasted to be approximately 2% higher than in 2024 and flat to our budget. In our terminals business segment, our liquids lease capacity remains high at 94%. Market conditions continue to remain supportive of strong rates and high utilization at our key hubs at Houston Ship Channel and the New York Harbor. Our Jones Act tanker fleet is fully leased today and through the remainder of 2025. Assuming likely options are exercised, the fleet is 100% leased through 2026 and 97% leased through 2027. We have opportunistically chartered a significant percentage of the fleet at higher market rates and have extended the average length of our firm contract commitments to four years. The CO2 segment experienced slightly lower oil production volumes at 3%, higher NGL volumes at 13%, and lower CO2 volumes at 8% in the quarter versus second quarter of 2024. For the full year, oil volumes are forecasted to be 4% below 2024 and 1% below our 2025 budget. With that, I'll turn it over to David.