Energy Transfer 2012 Annual Report Download - page 91

83
Supplemental Information on Unconsolidated Affiliates
The following table presents equity in earnings of unconsolidated affiliates, the proportionate share of unconsolidated affiliates'
interest, depreciation, amortization, non-cash compensation expense, loss on debt extinguishment and taxes by unconsolidated
affiliate, Adjusted EBITDA related to unconsolidated affiliates and distributions received from affiliates for the years ended
December 31, 2011 and 2010:
Years Ended December 31,
2011 2010 Change
Equity in earnings of unconsolidated affiliates:
FEP $ 24 $ — $ 24
MEP — 9 (9)
Other 2 3 (1)
Total equity in earnings of unconsolidated affiliates $ 26 $ 12 $ 14
Proportionate share of interest, depreciation, amortization, non-cash
compensation expense, loss on debt extinguishment and taxes:
FEP $ 29 $ — $ 29
MEP — 23 (23)
Other 1 — 1
Total proportionate share of interest, depreciation, amortization, non-cash
compensation expense, loss on debt extinguishment and taxes $ 30 $ 23 $ 7
Adjusted EBITDA related to unconsolidated affiliates:
FEP $ 53 $ — $ 53
MEP — 32 (32)
Other 3 3 —
Total Adjusted EBITDA related to unconsolidated affiliates $ 56 $ 35 $ 21
Distributions received from unconsolidated affiliates:
FEP $ 46 $ — $ 46
MEP — 29 (29)
Other 5 4 1
Total distributions received from unconsolidated affiliates $ 51 $ 33 $ 18
Segment Operating Results
Our reportable segments are discussed below. “All other” includes our compression and wholesale propane businesses.
We evaluate segment performance based on Segment Adjusted EBITDA, which we believe is an important performance measure
of the core profitability of our operations. This measure represents the basis of our internal financial reporting and is one of the
performance measures used by senior management in deciding how to allocate capital resources among business segments.
The tables below identify the components of Segment Adjusted EBITDA, which is calculated as follows:
• Gross margin, operating expenses, and selling, general and administrative. These line items are the amounts included
in our consolidated financial statements that are attributable to each segment.
• Unrealized gains or losses on commodity risk management activities. These are the unrealized amounts that are included
in cost of products sold to calculate gross margin. These amounts are not included in Segment Adjusted EBITDA;
therefore, the unrealized losses are added back and the unrealized gains are subtracted to calculate the segment measure.
• Non-cash compensation expense. These amounts represent the total non-cash compensation recorded in operating
expenses and selling, general and administrative. This expense is not included in Segment Adjusted EBITDA and therefore
is added back to calculate the segment measure.
• Adjusted EBITDA related to unconsolidated affiliates. These amounts represent our proportionate share of the Adjusted
EBITDA of our unconsolidated affiliates. Amounts reflected are calculated consistently with our definition of Adjusted
EBITDA above.
Table of Contents