KINDER MORGAN INC

The following tables summarize the key components of our consolidated earnings results.

Our consolidated revenues include fees for transportation and other midstream services that we perform. Fluctuations in our consolidated services revenue largely reflect changes in volumes and/or in the rates we charge. Our consolidated costs of sales and sales revenues also include purchases and sales of natural gas and products (which means, collectively, NGL, crude oil, CO 2 and transmix) and related derivative activity. Our consolidated sales revenue will fluctuate with commodity prices and volumes, and the associated costs of sales will usually have a commensurate and offsetting impact, except for the CO 2 segment, which produces, instead of purchases, the crude oil and CO 2 it sells. Additionally, fluctuations in revenues and costs of sales may be further impacted by gains or losses from derivative contracts that we use to manage our commodity price risk.

Below is a discussion of significant changes in our Consolidated Earnings Results for the comparable years ended 2023 and 2022:

Revenues

Revenues decreased $3,866 million in 2023 compared to 2022. The decrease was primarily due to lower natural gas sales of $3,616 million and lower product sales of $1,029 million driven primarily by lower commodity prices partially offset by the impact of derivative contracts used to hedge commodity sales of $532 million, which includes both realized and unrealized gains and losses from derivatives. These decreases in revenues were offset by corresponding decreases in our costs of sales as described below under “Operating Costs, Expenses and Other—Costs of sales.”

Operating Costs, Expenses and Other

Costs of Sales

Costs of sales decreased$4,317 million in 2023 compared to 2022. The decrease was primarily due to lower costs of sales for natural gas of $3,587 million and for products of $622 million driven primarily by lower commodity prices. Costs of sales was further reduced by $73 million for the impacts of derivative contracts used to hedge commodity purchases which includes both realized and unrealized gains and losses from derivatives.

Operations and Maintenance

Operations and maintenance increased $152 million in 2023 compared to 2022. The increase was primarily driven by higher labor and other expenses, including integrity costs and services, fuel costs and materials and supplies, related to greater activity levels and inflation, partially offset by lower legal costs due to a legal reserve established in the 2022 period associated with the EPNG pipeline rupture.

Other Income (Expense)

Interest, net

In the table above, we report our interest expense as “net,” meaning that we have subtracted interest income and capitalized interest from our total interest expense to arrive at one interest amount. Our interest expense, net increased $284 million in 2023 compared to 2022. The increase was primarily due to higher interest rates associated with fixed-to-floating interest rate swaps.

Other, net

Other, net changed $92 million in 2023 compared to 2022. The unfavorable change was primarily due to increased pension costs resulting from higher interest rates, declining pension asset performance and adjustments related to settlements made by our pension plans partially offset by a payment made in the 2022 period associated with the bankruptcy settlement involving our former equity investee, Ruby.