Financial Trends -- 7/10

Every cash-relevant trend line is accelerating into 2026Q1 -- revenue YoY up from ~10% to 13.8%, adjusted EBITDA YoY from ~1% to 17.7%, DCF/share YoY from 3% to 30%, and operating income YoY to 26%. Margins are firm-to-expanding (~290 bps YoY) and the share count is roughly flat (no dilution). Leverage is falling 4.1x→3.6x net debt/EBITDA. The cap on the score is rising capital-expenditure intensity (free-and-clear cash after all capex is thin) and the fact that the headline revenue line is heavily commodity-pass-through, so growth must be read through segment EBDA / DCF rather than the top line. Weight: 25%

Q1'26 Revenue

$4.83B

src | +13.8% YoY | Accelerating

Adj EBITDA

+17.7%

YoY, accelerating | Cash signal

DCF / Share

+30%

YoY | Best trend in the model

Leverage

3.6x

Net debt/EBITDA | Falling from 4.1x

Quarterly Metrics -- 8 quarters (2024Q2 → 2026Q1)

Revenue, operating income (GAAP), and Total Segment EBDA from Daloopa reported financials; Adjusted EBITDA and DCF/share are the company's non-GAAP cash metrics. Operating margin = GAAP operating income / revenue. KMI does not report a conventional gross margin (cost-of-sales is dominated by commodity pass-through); Total Segment EBDA margin and operating margin are the relevant profitability gauges. YoY is computed on comparable prior-year quarters.

Metric	Q2'24	Q3'24	Q4'24	Q1'25	Q2'25	Q3'25	Q4'25	Q1'26
Revenue ($M)	3,572	3,699	3,987	4,241	4,042	4,146	4,508	4,828
Rev YoY	+2.0%	-5.3%	-1.3%	+10.4%	+13.2%	+12.1%	+13.1%	+13.8%
Adj EBITDA ($M)	1,858	1,880	2,063	2,157	1,972	1,991	2,271	2,539
EBITDA YoY	—	—	—	+0.9%	+6.1%	+5.9%	+10.1%	+17.7%
DCF/share ($)	0.49	0.49	0.57	0.66	0.52	0.56	0.68	0.86
DCF/sh YoY	—	—	—	+3.1%	+6.1%	+14.3%	+19.3%	+30.3%
Op Margin (GAAP)	29.1%	27.4%	27.8%	27.0%	28.5%	25.6%	30.3%	29.9%

Every cash metric accelerating. DCF/share YoY runs +3.1% → +6.1% → +14.3% → +19.3% → +30.3% over the last five comparable quarters -- the single best trend in the model. Adjusted EBITDA YoY has climbed +1,680 bps over four quarters (+0.9% to +17.7%), and operating income YoY reached +26.1% in Q1'26 off a soft early-2025 base. Read EBDA/DCF, not the commodity-pass-through top line.

Operating Margin Trajectory

Metric	Q3'25 (trough)	Q1'25	Q1'26	Change
GAAP Operating Margin	25.6%	27.0%	29.9%	+290 bps YoY

Margins expanding, not compressing. Operating margin bottomed at 24.0% (Q3'23) and 25.6% (Q3'25) and ran 29.9-30.3% in the most recent two quarters -- +430 bps off the Q3'25 trough and +290 bps YoY in Q1'26. Share count is essentially flat (2,220M FY2024 to ~2,225M Q1'26, ~+0.1% YoY) -- KMI funds growth with retained DCF and debt, not equity issuance. No meaningful dilution.

Annual Metrics -- 5 years (FY2021 → FY2025, FY ends December)

Metric	FY2021	FY2022	FY2023	FY2024	FY2025
Revenue ($M)	16,610	19,200	15,334	15,100	16,937
Rev YoY	—	+15.6%	-20.1%	-1.5%	+12.2%
Operating Income ($M)	2,916	4,065	4,263	4,384	4,724
Operating Margin	17.6%	21.2%	27.8%	29.0%	27.9%
Total Segment EBDA ($M)	6,547	7,702	8,073	8,391	8,992
EBDA YoY	—	+17.6%	+4.8%	+3.9%	+7.2%
Adj EPS ($)	1.32	1.16	1.07	1.15	1.30
Adj EPS YoY	—	-12.1%	-7.8%	+7.5%	+13.0%
Capex ($M)	(1,281)	(1,621)	(2,317)	(2,629)	(3,026)
Total Debt ($M)	32,418	31,673	31,929	31,788	31,823
Wtd Diluted Shares (M)	2,266	2,258	2,234	2,220	2,223

Key trends

Read the durable lines, not the top line: the -20% FY2023 revenue drop was gas-price-driven pass-through. Operating income grew every year (2,916 → 4,724, +62%) and Total Segment EBDA grew every year (6,547 → 8,992, +37%)
Adjusted EPS inflected worse→better: declining in 2022/2023 (-12.1%, -7.8%), then growing +7.5% (FY24) and +13.0% (FY25)
Operating margin lifted from 17.6% to ~28% over five years as the mix shifted toward higher-margin gas transport
Leverage falling while debt is flat: total debt held ~$31.7-32.4B across five years while EBDA grew, so net debt/adj EBITDA dropped from 4.1x to 3.6x at Q1'26
Capex is the watch item: more than doubled (1,281 → 3,026) funding the power/data-center-driven growth backlog

Segment EBDA Mix (FY2025)

Natural Gas Pipelines dominates the economics -- ~65% of external revenue and ~68% of segment EBDA. EBDA is the better lens for a midstream business because revenue includes pass-through commodity costs.

Segment	FY2025 Revenue	FY2025 EBDA	% of EBDA
Natural Gas Pipelines	$10,990M	$6,080M	67.6%
Products Pipelines	$2,686M	$1,157M	12.9%
Terminals	$2,094M	$1,143M	12.7%
CO2 / EOR	$1,167M	$612M	6.8%
Total	$16,937M	$8,992M	100%

2026Q1 confirms the same shape: NatGas EBDA $1,711M of total $2,528M = 67.7%; Products $320M, Terminals $329M, CO2 $168M.

Free Cash Flow / DCF assessment

DCF is positive and growing; free-and-clear cash after all capex is thin. KMI's governing cash metric is Distributable Cash Flow (DCF = cash after sustaining capex, the dividend-coverage base). DCF/share rose FY2024 ~$2.19 → FY2025 $2.42, and 2026Q1 DCF/share of $0.86 is +30% YoY. But on a post-all-capex basis (operating cash flow minus total capex of $3,026M in FY2025, still climbing in 2026), true after-growth-capex FCF is thin -- KMI deliberately reinvests into its $10B backlog. This is the reason the score is held at 7 rather than 9-10 despite uniformly accelerating P&L trends.

Score Rationale

Score of 7/10 reflects a midstream business firmly in the worse→better, accelerating camp -- but capped below the top tier by capital intensity.

Scoring logic: Base case starts at an 8 -- revenue YoY accelerating + margins expanding (~290 bps YoY) + share count flat (no dilution) + DCF/EBITDA YoY accelerating. Penalty modifiers: negative FCF N/A (DCF positive and growing); share dilution N/A (shares +0.1% YoY); revenue-up/op-income-down N/A (op income +26% YoY); debt-faster-than-revenue not triggered (leverage falling 4.1x → 3.6x). Discretionary -1 for rising growth-capex intensity (thin post-all-capex FCF) and commodity-pass-through distortion in reported revenue. Final: 7/10.

Supports the strong-7:

Adjusted EBITDA YoY accelerating +0.9% → +17.7% over five quarters (+1,680 bps)
DCF/share YoY +3% → +30% -- the single best trend in the model
Operating income +26.1% YoY in Q1'26; grew every annual period (2,916 → 4,724)
Margins expanding ~290 bps YoY; leverage falling to 3.6x even while self-funding a large backlog
Share count flat -- no dilution

Why not 9-10:

Growth capex more than doubled to $3.0B+ and is still climbing, so free-and-clear cash after all capex is thin
Headline revenue is heavily natural-gas commodity-sales pass-through -- double-digit "growth" overstates the durable fee/volume signal

Composite quality gate -- positiveGrowingFcf: YES. DCF is positive every year and accelerating; DCF/share +30% YoY in 2026Q1.

Data sourced from Daloopa. Fiscal year ends December 31. Price $33.19 / market cap $73.84B (market data, not fabricated). All financials in USD.