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 and RNG), products (includes NGL, crude oil, CO 2 and transmix) and other (includes RINs). 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, CO 2, and RINs 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 2024 and 2023:

Revenues

Revenues decreased $234 million in 2024 compared to 2023. The decrease was primarily due to (i) a $398 million decrease in product sales driven by lower volumes resulting primarily from contractual changes and an asset divestiture and (ii) a $326 million decrease innatural gas sales due to lower commodity prices partially offset by higher volumes. These decreases in sales revenues were partially offset by a $45 million increase in other sales driven by higher RIN sales. Revenues were further reduced by $151 million for the impacts of derivative contracts used to hedge commodity sales which includes both realized and unrealized gains and losses from derivatives. Services revenues increased $515 million driven by (i) higher volumes, including from expansion projects; (ii) our late 2023 acquisition of the STX Midstream assets partially offset by a reduction in revenues related to divested assets; and (iii) higher rate escalations. The decrease in sales revenues had a corresponding decrease 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$601 million in 2024 compared to 2023. The decrease, which includes the impact of our divested assets, was primarily due to lower costs of sales for (i) natural gas of $447 million primarily due to lower commodity prices partially offset by higher volumes; and (ii) products of $269 million driven primarily by lower volumes partially offset by an increase of $145 million related to 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 $165 million in 2024 compared to 2023. Increased costs were primarily driven by greater activity levels and inflation, including for service, integrity, labor and fuel costs.

DD&A

DD&A increased $104 million in 2024 compared to 2023. The increase was primarily due to our late 2023 acquisition of the STX Midstream assets and an increase in SACROC’s unit of production rate partially offset by the impact of our divested assets.

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 $47 million in 2024 compared to 2023. The increase was primarily due to (i) higher average short-term and long-term debt balances driven by funding our STX Midstream acquisition; and (ii) higher interest rates associated with our fixed-to-variable interest rate swap agreements and our long-term debt; partially offset by a reduction in the notional balances associated with our fixed-to-variable interest rate swap agreements.