Energy Transfer 2015 Annual Report Download - page 98

Table of Contents
All Other
Years Ended December 31,
2014
2013
Change
Revenue $ 3,331
$ 2,597
$ 734
Cost of products sold 2,975
2,337
638
Gross margin 356
260
96
Unrealized gains on commodity risk management activities (14)
(2)
(12)
Operating expenses, excluding non-cash compensation expense (106)
(104)
(2)
Selling, general and administrative expenses, excluding non-cash compensation expense (146)
(139)
(7)
Adjusted EBITDA related to discontinued operations 27
76
(49)
Adjusted EBITDA related to unconsolidated affiliates 146
147
(1)
Other 73
(2)
75
Elimination (8)
(24)
16
Segment Adjusted EBITDA $ 328
$ 212
$ 116
Amounts reflected in our all other segment primarily include:
• our natural gas marketing and compression operations;
• an approximate 33% non-operating interest in PES, a refining joint venture;
• our investment in Coal Handling, an entity that owns and operates end-user coal handling facilities; and
• our investment in AmeriGas until August 2014.
 For the year ended December 31, 2014 compared to the prior year, Segment Adjusted EBITDA increased due to the net impact of
the following:
• an increase of $75 million in management fees, as further described below;
• an increase of $50 million in gross margin related to Regency’s contract service operations due to increased revenue generating horsepower and $58
million related to Regency’s natural resources operations due to the acquisition of those assets in March 2014, offset by an increase of $26 million in
operating expenses;
• a favorable impact of approximately $47 million due to costs associated with certain Sunoco activities that were included in the all other Segment
Adjusted EBITDA in the prior year;
• favorable results and recent acquisitions from our natural gas marketing business of $15 million and $6 million, respectively;
• higher earnings from our investment in PES of $116 million, offset by a decrease of $119 million related to our investment in AmeriGas driven by a
reduction in our investment due to the sale of AmeriGas common units in 2014 and 2013;
• a refund of insurance premiums of $6 million included in the year ended December 31, 2014; and
• Southern Union corporate expenses of $14 million that were no longer included in the all other segment subsequent to the merger of Southern Union,
PEPL Holdings and Panhandle in January 2014; partially offset by
• an increase of $78 million in selling, general and administrative expenses related to Regency’s operations, primarily due to a $33 million increase in
acquisition costs, with the remainder primarily attributable to increased employee-related expenses;
• the recognition of $25 million in merger related costs related to the Susser Merger in the year ended December 31, 2014; and
• a decrease in Adjusted EBITDA related to discontinued operations of $49 million primarily due to the sale of Southern Union’s local distribution
operations in 2013.
In connection with the Lake Charles LNG Transaction, ETP agreed to continue to provide management services for ETE through 2015 in relation to both
Lake Charles LNG’s regasification facility and the development of a liquefaction project at Lake Charles LNG’s facility, for which ETE has agreed to pay
incremental management fees to ETP of $75 million per year for the years ending December 31, 2014 and 2015. These fees were reflected in “Other” in the
“All other” segment and for the year ended December 31, 2014 were reflected as an offset to operating expenses of $25 million and selling, general and
administrative expenses of $50 million in the consolidated statements of operations.
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