Kinder Morgan Q3 2026 Earnings: Net Income Rises 22% as Backlog Reaches $14.4 Billion

Kinder Morgan (NYSE: KMI) reported Q3 2026 net income attributable to the company of $764 million, up 22% from $628 million a year earlier, while EPS rose 21% to $0.34. Adjusted EBITDA increased 9% to $2.18 billion, and the expansion backlog reached $14.4 billion as natural gas demand drove new infrastructure commitments.

Core Earnings Data

KMI reported year-over-year growth in both GAAP and adjusted earnings for the quarter ended September 30, 2026. Adjusted net income rose 22% to $792 million, indicating that earnings growth was not solely the result of GAAP adjustments.

Higher contributions from the operating segments supported what KMI described as a record third quarter. Natural Gas Pipelines benefited from higher transportation and gathering volumes, while Terminals and CO2 also reported improved earnings.

The release did not state the prior-year dollar values for EPS, adjusted net income, adjusted EPS, or adjusted EBITDA; the growth rates above are company-reported.

Business and Segment Performance

Natural Gas Pipelines was a central operating driver. Segment earnings increased on higher contributions from El Paso Natural Gas Pipeline, the KinderHawk gathering system, Tennessee Gas Pipeline, and the Texas Intrastate system. Natural gas transportation volumes rose 3%, primarily because of LNG deliveries on Tennessee Gas Pipeline and stronger service demand in Texas, while gathering volumes increased 14%, led by KinderHawk.

Products Pipelines had favorable contributions from commodity pricing, but legal, environmental, and other expense accruals more than offset those benefits on a reported basis. Refined products volumes declined 3% amid higher commodity prices, while crude and condensate volumes fell 11% because of lower Bakken gathering volumes and the conversion of the Double H pipeline to natural gas liquids service.

Terminals earnings increased due to recently completed expansion projects, higher commodity prices, stronger coal and petroleum coke handling activity, and higher rates for the Jones Act tanker fleet. CO2 segment earnings also rose, supported by commodity prices and volumes; production at SACROC increased 11%, and NGL sales volumes grew 9%.

Profitability, Cash Flow, and the Balance Sheet

Adjusted net income exceeded GAAP net income by $28 million. Certain Items included $138 million of legal, environmental, and other accruals, partly offset by a $71 million gain on the sale of certain Terminals assets and $42 million of income-tax Certain Items.

Cash flow figures in the release were year-to-date rather than quarterly. Through the third quarter, KMI generated $5 billion of cash flow from operations and $230 million of free cash flow after capital expenditures and dividends. The company ended the quarter with a Net Debt-to-Adjusted EBITDA ratio of 3.5 times, at the low end of its targeted range.

During August, KMI issued $1.15 billion of 5.55% senior notes due in 2036 and $600 million of 6.15% senior notes due in 2056. The proceeds were used to repay commercial paper and maturing debt and for general corporate purposes. The board also approved a quarterly dividend of $0.2975 per share, or $1.19 annualized, representing a 2% increase from Q3 2025.

Natural Gas Demand Pushes the Backlog to a Record $13.2 Billion

KMI’s total expansion backlog increased by $4.7 billion from Q2 to $14.4 billion. The company added $5.4 billion of projects while placing $700 million of projects into service. Natural gas projects accounted for a record $13.2 billion, and more than 75% of the total backlog supports power generation and local distribution company demand.

Two large natural gas projects account for a significant portion of the new commitments. The Southeast Connector is designed to transport up to 2.6 Bcf/d, with KMI’s share of expected project costs at $3.1 billion and phased service targeted to begin in Q4 2030. Permian Link is designed for approximately 2.8 Bcf/d, with KMI’s share of the roughly $4.2 billion project estimated at $1.6 billion and service expected in Q3 2030.

Both projects are supported by long-term, take-or-pay agreements. KMI said the $13.7 billion stable, primarily take-or-pay portion of its backlog is expected to generate an aggregate first-full-year Project EBITDA multiple of approximately 5.7 times once the projects are realized.

2026 Guidance

KMI now expects adjusted EBITDA and adjusted EPS to finish materially above its original 2026 budget. The company provided percentage comparisons with budget rather than updated point estimates for those two measures.

The original budget also called for $3.1 billion of net income attributable to KMI and $1.19 per share of declared dividends, but the release did not provide updated comparisons for those measures.

Recent Insider Transactions

The supplied insider data identified two recent direct sales by officer Michael P. Garthwaite. The records should be viewed as transaction disclosures without inferring management’s outlook for the company.

The supplied data labels the final figure as “Value” and does not provide the number of shares sold.

Risks Investors Need to Watch

• Permitting and construction timing: Major backlog projects depend on timely regulatory approvals and permits. The two largest new natural gas projects are not expected to begin service until 2030.
• Products Pipelines volume weakness: Refined products volumes declined 3%, while crude and condensate volumes fell 11%. Continued declines could offset favorable pricing contributions.
• Legal and environmental costs: The quarter included $138 million of legal, environmental, and other accruals, creating a meaningful gap between segment contributions and reported results.
• Capital deployment and project execution: The Southeast Connector and Permian Link alone represent $4.7 billion of expected KMI-share costs. Delays, cost changes, or weaker project economics could affect anticipated returns and cash flow timing.
• Commodity-linked contributions: Higher commodity prices supported Products Pipelines, Terminals, and CO2 results, leaving some of the quarter’s improvement exposed to changes in pricing conditions.

Summary

Kinder Morgan’s Q3 2026 earnings improved across GAAP and adjusted measures, with Natural Gas Pipelines, Terminals, and CO2 providing the main operating support. The larger strategic change was the expansion backlog, particularly the record natural gas project pipeline tied to power generation, LNG, and distribution demand. Investors will need to monitor project approvals and execution, Products Pipelines volumes, legal and environmental costs, and whether KMI converts its higher 2026 outlook into sustained cash flow while maintaining leverage near its target range.