Energy Transfer 2015 Annual Report Download - page 84

Table of Contents
. The components of our midstream segment gross margin were as follows:
Years Ended December 31,
2015
2014
Change
Gathering and processing fee-based revenues $ 1,547
$ 1,278
$ 269
Non fee-based contracts and processing 258
652
(394)
Total gross margin $ 1,805
$ 1,930
$ (125)
 For the year ended December 31, 2015 compared to the prior year, Segment Adjusted EBITDA related to our midstream segment
decreased due to the net impacts of the following:
• a decrease of $88 million in non-fee based margins for natural gas and a $200 million decrease in non-fee based margins for crude oil and NGL due to
lower natural gas prices and lower crude oil and NGL prices; and
• an increase of $135 million in operating expenses primarily due to assets recently placed in service, including the Rebel system in west Texas and the
King Ranch system in South Texas, as well as the acquisition of Eagle Rock midstream assets in July 2014; partially offset by
• an increase of $136 million in fee-based revenues primarily due to increased production and increased capacity from assets placed in service in the
Marcellus Shale, Eagle Ford Shale, Permian Basin and Cotton Valley;
• an increase of $120 million in fee-based margin from the acquisitions of the Eagle Rock, PVR, and King Ranch midstream assets;
• an increase of $80 million in realized derivatives;
• an increase of $8 million of Adjusted EBITDA related to unconsolidated affiliates due to the addition of the Mi Vida JV asset in the Permian Basin; and
• a decrease of $10 million in selling, general and administration expenses due to increased capitalized overhead and higher management fees.
Liquids Transportation and Services
Years Ended December 31,
2015
2014
Change
Liquids transportation volumes (Bbls/d) 437,226
335,140
102,086
NGL fractionation volumes (Bbls/d) 235,800
189,931
45,869
Revenues $ 3,481
$ 3,911
$ (430)
Cost of products sold 2,595
3,166
(571)
Gross margin 886
745
141
Unrealized (gains) losses on commodity risk management activities 6
(12)
18
Operating expenses, excluding non-cash compensation expense (152)
(128)
(24)
Selling, general and administrative expenses, excluding non-cash compensation expense (16)
(20)
4
Adjusted EBITDA related to unconsolidated affiliates 7
6
1
Segment Adjusted EBITDA $ 731
$ 591
$ 140
 The increase in liquids transportation volumes for the year ended December 31, 2015 compared to the prior year reflected an increase of
approximately 71,000 Bbls/d on our NGL pipelines. For the year ended December 31, 2015, we experienced increases in volumes from the Eagle Ford,
Permian, and Southeast Texas producing regions, offset by lower volumes from North Texas. Additionally, we commissioned a crude transportation pipeline
in the fourth quarter of 2014 that transported approximately 39,000 Bbls/d for the year ended December 31, 2015 as compared to 8,000 Bbls/d in the prior
year.
Average daily fractionated volumes increased approximately 46,000 Bbls/d for the year ended December 31, 2015 compared to the prior year primarily due
to the ramp-up of our second 100,000 Bbls/d fractionator at Mont Belvieu, Texas, which was commissioned in October 2013. These volumes include all
physical and contractual volumes where we collected a fee.
78