Energy Transfer 2015 Annual Report Download - page 96

Table of Contents
• an increase of $18 million in operating expenses primarily due to the start-up of Lone Star’s second fractionator in Mont Belvieu, Texas in October
2013; and
• an increase of $4 million in selling, general and administrative expenses primarily due to an increase in employee-related costs.
Investment in Sunoco Logistics
Years Ended December 31,
2014
2013
Change
Revenue $ 18,088
$ 16,639
$ 1,449
Cost of products sold 17,135
15,600
1,535
Gross margin 953
1,039
(86)
Unrealized gains on commodity risk management activities (17)
(1)
(16)
Operating expenses, excluding non-cash compensation expense (167)
(122)
(45)
Selling, general and administrative expenses, excluding non-cash compensation expense (107)
(79)
(28)
Inventory valuation adjustments 258
—
258
Adjusted EBITDA related to unconsolidated affiliates 49
41
8
Other 2
(7)
9
Segment Adjusted EBITDA $ 971
$ 871
$ 100
  For the year ended December 31, 2014 compared to the prior year, Segment Adjusted EBITDA related to Sunoco Logistics
increased due to the net impacts of the following:
• an increase of $130 million from Sunoco Logistics’ NGLs operations, primarily due to improved results from Sunoco Logistics’ NGLs acquisition and
marketing activities of $101 million driven by higher volumes which benefited from a full year of results from the Marcus Hook Industrial Complex,
increased margins, and favorable inventory timing compared to the prior year period. Higher contributions from Sunoco Logistics’ NGLs pipelines of
$38 million were largely driven by Sunoco Logistics’ Mariner West project which commenced operations in late 2013. NGLs terminalling activities at
Sunoco Logistics’ Marcus Hook Industrial Complex of $8 million also contributed to the increase. These positive impacts were partially offset by
increased selling, general and administrative expenses of $16 million attributable to growth projects; and
• an increase of $2 million from Sunoco Logistics’ refined products operations, primarily due to higher contributions from Sunoco Logistics’ joint venture
interests of $8 million and lower selling, general and administrative expenses of $10 million. These positive impacts were largely offset by lower results
from Sunoco Logistics’ refined products pipelines $13 million largely driven by reduced throughput volumes and decreased contributions from Sunoco
Logistics’ refined products terminalling activities of $4 million; offset by
• a decrease of $32 million from Sunoco Logistics’ crude oil operations, primarily due to lower results from Sunoco Logistics’ crude oil acquisition and
marketing activities of $66 million driven by reduced margins which were negatively impacted by contracted crude oil differentials compared to the
prior year period. Increased selling, general and administrative expenses attributable to growth projects of $3 million also contributed to the decrease.
This impact was partially offset by improved contributions from Sunoco Logistics’ crude oil pipelines of $29 million which benefited from expansion
projects placed into service in 2014 and 2013, and higher results attributable to crude oil terminal activities of $8 million.
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