Energy Transfer 2013 Annual Report Download - page 89

Table of Contents
Midstream gross margin increased between the periods due to the net impact of the following:
•. Increased volumes from production in the Eagle Ford Shale resulted in increased fee-based revenues of
$70 million in 2012 as compared to 2011, partially offset by declines in the Fort Worth Basin that affected our North Texas system resulting in a $5
million decline from 2012 to 2011. Additionally, Southern Union's gathering and processing segment contributed $20 million of fee-based revenue during
March 26, 2012 through December 31, 2012.
• We recorded $125 million of incremental non-fee based revenue in connection with the consolidation
of Southern Union's gathering and processing business from March 26, 2012 through December 31, 2012. Excluding these incremental revenues from
Southern Union's gathering and processing business, our non fee-based gross margins decreased $24 million primarily due to lower NGL prices. The
composite NGL price for 2012 was $0.96 per gallon as compared to $1.30 per gallon in 2011.
 Midstream operating expenses increased primarily due to the consolidation of Southern
Union's gathering and processing operations effective March 26, 2012. In addition, growth in the Eagle Ford Shale region resulted in $6 million of additional
operating expenses.
 Midstream selling, general and administrative expenses
increased primarily due to consolidation of Southern Union's gathering and processing operations effective March 26, 2012. For the periods presented, selling,
general and administrative expenses increased approximately $38 million due to consolidation of Southern Union's gathering and processing operations. In
addition, growth from assets placed into service in the Eagle Ford Shale resulted in $8 million of additional selling, general and administrative expenses.
NGL Transportation and Services
Years Ended December 31,
2012
2011
Change
NGL transportation volumes (Bbls/d) 172,569
132,862
39,707
NGL fractionation volumes (Bbls/d) 17,754
16,475
1,279
Revenues $650
$ 397
$ 253
Cost of products sold 361
218
143
Gross margin 289
179
110
Operating expenses, excluding non-cash compensation expense (66)
(43)
(23)
Selling, general and administrative, excluding non-cash compensation expense (14)
(9)
(5)
Adjusted EBITDA related to unconsolidated affiliates —
—
—
Segment Adjusted EBITDA $ 209
$ 127
$ 82
Our NGL Transportation and Services segment reflected the results from Lone Star, which was formed in 2011 and acquired all of the membership interests
in LDH on May 2, 2011, as well as multiple other wholly-owned or joint venture pipelines that have recently become operational.
 The volumes reflected above for the year ended December 31, 2012 represent average daily volumes for the period from May 2, 2011 to December
31, 2012. NGL transportation volumes increased for the year ended December 31, 2012 as compared to the same period in the prior year primarily due to an
increase in volumes transported on our wholly-owned and joint venture NGL pipelines originating from our La Grange and Chisholm processing plants as a
result of more production from the Eagle Ford area. Average daily fractionated volumes increased for the year ended December 31, 2012 as compared to the
year ended December 31, 2011 at our Geismar fractionation complex in Louisiana due to less refinery downtime in 2012 as compared to the comparable prior
year period.
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