KINDER MORGAN INC

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

Our consolidated revenues primarily consist of services and sales revenue. Our services 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 sales revenues include sales of natural gas (includes natural gas, RNG and RINs) and products (includes NGL, crude oil, CO 2 and transmix). Our consolidated sales revenue will fluctuate with commodity prices and volumes, and the costs of sales associated with purchases 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 three and six-month periods ended June 30, 2024 and 2023:

Revenues

Revenues increased $71 million and $25 million for the three and six months ended June 30, 2024, respectively, as compared to the respective prior year periods. The increases were primarily due to higher services revenues of $131 million and $284 million, respectively, driven by (i) our acquisition of the STX Midstream assets partially offset by a reduction in revenues related to divested assets; (ii) higher volumes, including expansion projects; and (iii) rate escalations, partially offset by lower product sales of $13 million and $28 million, respectively, driven by lower volumes partially offset by higher commodity prices, andlower natural gas sales of $5 million and $178 million, respectively, due to lower commodity prices partially offset by higher commodity volumes and higher RIN sales. Revenues were further reduced by $53 million and $130 million, respectively, for the impacts of derivative contracts used to hedge commodity sales which includes both realized and unrealized gains and losses from derivatives. The decreases in sales revenues, which include the impact of our divested assets, had 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 million and $112 million for the three and six months ended June 30, 2024, respectively, as compared to the respective prior year periods. The decreases, which include the impact of our divested assets, were primarily due to lower costs of sales for products of $63 million and $73 million, respectively, which were driven primarily by lower volumes partially offset by higher commodity prices, and an increase in costs of sales of$51 million and $134 million, respectively, related to derivative contracts used to hedge commodity purchases which includes both realized and unre alized gains and losses from derivatives. The year-to-date decrease was also impacted by lower costs of sales for natural gas of $166 million primarily due to lower commodity prices partially offset by higher volumes.

Operations and Maintenance

Operations and maintenance increased $56 million and $97 million for the three and six months ended June 30, 2024, respectively, as compared to the respective prior year periods. The increases were primarily driven by other expenses, including integrity and service costs, higher labor and fuel costs, related to greater activity levels and inflation.

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 $21 million and $48 million for the three and six months ended June 30, 2024, respectively, as compared to the respective prior year periods. The increases were primarily due to higher average short-term debt balances and higher interest rates associated with our fixed-to-floating interest rate swaps and our long-term debt partially offset by lower fixed-to-floating hedged debt and average long-term debt balances.