Energy Transfer 2015 Annual Report Download - page 81

Table of Contents
In 2014, certain costs previously reported as selling, general and administrative expenses were reclassified to operating expenses. These costs include support
functions such as engineering, environmental services, maintenance and reliability, pipeline integrity, procurement and technical services. Prior period
amounts have been reclassified to conform to the current year presentation.
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:
•and. These amounts represent the amounts included in our consolidated
financial statements that are attributable to each segment.
•and. 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.
•. These amounts represent the total non-cash compensation recorded in operating expenses and selling, general and
administrative expenses. This expense is not included in Segment Adjusted EBITDA and therefore is added back to calculate the segment measure.
•. 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.
For additional information regarding our business segments, see “Item 1. Business” and Notes 1 and 15 to our consolidated financial statements.
Intrastate Transportation and Storage
Years Ended December 31,
2015
2014
Change
Natural gas transported (MMBtu/d) 8,426,818
8,976,978
(550,160)
Revenues $ 2,250
$ 2,857
$ (607)
Cost of products sold 1,554
2,169
(615)
Gross margin 696
688
8
Unrealized (gains) losses on commodity risk management activities (26)
21
(47)
Operating expenses, excluding non-cash compensation expense (163)
(180)
17
Selling, general and administrative expenses, excluding non-cash compensation expense (25)
(27)
2
Adjusted EBITDA related to unconsolidated affiliates 61
57
4
Segment Adjusted EBITDA $ 543
$ 559
$ (16)
 For the year ended December 31, 2015 compared to the prior year, transported volumes decreased primarily due to lower production volume,
primarily in the Barnett Sale region, partially offset by the increased volumes related to significant new long-term transportation contracts.
. The components of our intrastate transportation and storage segment gross margin were as follows:
Years Ended December 31,
2015
2014
Change
Transportation fees $ 502
$ 466
$ 36
Natural gas sales and other 96
100
(4)
Retained fuel revenues 57
98
(41)
Storage margin, including fees 41
24
17
Total gross margin $ 696
$ 688
$ 8
75