Energy Transfer 2010 Annual Report Download - page 73

Volumes. Overall volumes on our transportation pipelines were higher in 2009 principally due to the increased
capacity of our pipeline system as a result of the completion of the Paris Loop, Maypearl to Malone pipeline,
Carthage Loop, Southern Shale pipeline, Cleburne to Tolar pipeline, the Katy expansion and the Texas
Independence Pipeline during 2008 and 2009.
Gross Margin. The components of our intrastate transportation and storage gross margin were as follows:
Years Ended December 31,
2009 2008 Change
Transportation fees $ 639,034 $ 598,025 $ 41,009
Natural gas sales and other 91,879 129,277 (37,398)
Retained fuel revenues 137,840 306,432 (168,592)
Storage margin, including fees 129,496 133,318 (3,822)
Total gross margin $ 998,249 $ 1,167,052 $ (168,803)
Our 2009 margin decreased compared to 2008 due to the net impact of the following factors:
• We recognized $639.0 million in margin from transportation fees during 2009, an increase of
approximately $41.0 million compared to 2008 primarily due to increased volumes through our
transportation pipelines from the additional capacity and additional demand fees charged as a result of
the additional capacity.
• We recognized $91.9 million in margin from the sale of natural gas in 2009, which was a reduction of
$37.6 million compared to 2008, primarily due to the decrease in natural gas sold as a result of lower
natural gas prices, lower price differentials, and lower demand from industrial end-users and local
distribution companies.
• We recognized approximately $137.8 million in margin from retained fuel during 2009. We experienced
an increase in natural gas volumes transported between periods; however, natural gas prices for retained
fuel decreased from an average of $7.90/MMBtu during 2008 to $3.54/MMBtu during 2009, resulting in
a decrease to the retention margin between the periods of $168.6 million.
Storage margin was comprised of the following:
Years Ended December 31,
2009 2008 Change
Withdrawals from storage natural gas
inventory (MMBtu) 23,305,452 39,466,857 (16,161,405)
Margin on physical sales $ 12,113 $ 74,921 $ (62,808)
Fair value adjustments 14,630 (69,513) 84,143
Settlements of financial derivatives 177,949 3,902 174,047
Unrealized gains (losses) on
derivatives (111,171) 89,906 (201,077)
Net impact of natural gas inventory
transactions 93,521 99,216 (5,695)
Revenues from fee-based storage 39,779 34,102 5,677
Other costs (3,804) — (3,804)
Total storage margin $ 129,496 $ 133,318 $ (3,822)
For 2009 compared to 2008, storage margin decreased slightly. The favorable net impact related to physical
inventory was more than offset by a net unfavorable impact from related derivatives, resulting in a $5.7 million
decrease related to natural gas inventory transactions.
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