Energy Transfer 2015 Annual Report Download - page 85

Table of Contents
. The components of our liquids transportation and services segment gross margin were as follows:
Years Ended December 31,
2015
2014
Change
Transportation margin $ 381
$ 312
$ 69
Processing and fractionation margin 297
247
50
Storage margin 172
157
15
Other margin 36
29
7
Total gross margin $ 886
$ 745
$ 141
   For the year ended December 31, 2015 compared to the prior year, Segment Adjusted EBITDA related to our liquids
transportation and services segment increased due to the net impacts of the following:
• an increase of $69 million in transportation margin primarily due to higher volumes transported out of West Texas and the Eagle Ford producing regions.
Increased volumes out of West Texas led to $47 million in additional transportation fees, while increased volumes from the Eagle Ford region led to $15
million in additional transportation fees for the year ended December 31, 2015. We also realized an increase of $7 million for the year ended December
31, 2015 from our crude pipeline, which was commissioned in the fourth quarter of 2014;
• an increase of $42 million in processing and fractionation margin (excluding changes in unrealized gains of $8 million) due to $9 million increase in
margin from our fractionators due to the ramp-up of our second 100,000 Bbls/d fractionator at Mont Belvieu, Texas, and the additional volumes from
producers in West Texas and the Eagle Ford regions offset by reductions in blending gains due to lower market prices. Additionally, the commissioning
of the Mariner South LPG export project during February 2015 contributed an additional $50 million for the twelve months ended December 31, 2015.
Margin associated with our off-gas fractionator in Geismar, Louisiana decreased by $17 million for the year ended December 31, 2015 as NGL and olefin
market prices decreased significantly for the comparable period;
• an increase of $15 million in storage margin due to a $24 million increase in fee based storage margin for year ended December 31, 2015 from an
increase in demand for leased storage capacity as a result of favorable market conditions and a specific contract negotiated in connection with the
Mariner South LPG export project. The increase in fee based storage margin was offset by lower non-fee based margin of $8 million for the year ended
December 31, 2015 primarily due to lower propane blending gains;
• an increase of $33 million in other margin (excluding changes in unrealized losses of $26 million) primarily due to the withdrawal and sale of physical
storage volumes, primarily propane and butanes; and
• a decrease of $4 million in selling, general and administrative expenses primarily due to lower employee-related costs; partially offset by
• an increase of $24 million in operating expenses primarily due to a $6 million increase in employee expenses, a $4 million increase in ad valorem taxes,
a $3 million increase in utilities expense, a $6 million increase in project costs and materials and supplies expense, and a $5 million increase in overhead
expense allocations.
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