• $46.1 million increase in transportation, processing and other revenue, which represents our fee-based
revenues, primarily as a result of our acquisitions of the Marysville NGL storage facility, the DJ Basin
NGL Fractionators and an additional 50% interest in Black Lake, and the Wattenberg capital expansion
project; and
• $1.8 million increase related to commodity derivative activity. This includes an increase of $27.9
million in unrealized gains due to movements in forward prices of commodities, offset by an increase in
cash settlement losses of $26.1 million.
Gross Margin —
Gross margin increased in 2011 compared to 2010, primarily as a result of the following:
• $41.8 million increase for our Natural Gas Services segment primarily as a result of higher crude oil and
NGL prices, commodity derivative activities, the East Texas recovery settlement, and increased volumes
and NGL production across certain assets, partially offset by planned turnaround activity at East Texas
and an extended planned third party outage at our Wyoming asset;
• $39.1 million increase for our NGL Logistics segment primarily as a result of our acquisitions of the
Marysville NGL storage facility, the DJ Basin NGL Fractionators and an additional 50% interest in
Black Lake, and the Wattenberg capital expansion project; and
• $22.2 million increase for our Wholesale Propane Logistics segment primarily as a result of higher unit
margins, increased volumes and our acquisition of Atlantic Energy. 2010 results reflect a planned
outage related to our Providence terminal inspection.
Operating and Maintenance Expense
— Operating and maintenance expense increased in 2011 compared
to 2010, primarily as a result of our acquisitions of the Marysville NGL storage facility, Atlantic Energy, an
additional 50% interest in Black Lake and the DJ Basin NGL Fractionators, the Wattenberg capital expansion
project, and planned turnaround activity and environmental remediation at East Texas.
Depreciation and Amortization Expense
— Depreciation and amortization expense increased in 2011
compared to 2010, primarily as a result of our acquisitions of the Marysville NGL storage facility, an additional
50% interest in Black Lake, the DJ Basin NGL Fractionators, Atlantic Energy, and the Wattenberg capital
expansion project.
Step acquisition — equity interest re-measurement gain
— The non-cash step acquisition — equity interest
re-measurement gain in 2010 resulted from our acquisition of an additional 50% interest in Black Lake bringing
our ownership interest in Black Lake to 100% in our NGL Logistics segment. Prior to our acquisition of an
additional 50% interest in Black Lake, we accounted for Black Lake under the equity method of accounting.
Subsequent to this transaction we account for Black Lake as a consolidated subsidiary. As a result of acquiring
an additional 50% interest in Black Lake, we remeasured our initial 50% equity interest in Black Lake to its fair
value, and recognized a non-cash gain of $9.1 million.
Other income — affiliates
— Other income — affiliates results for 2010 reflect a $3.0 million payment
received in the second quarter from Spectra Energy, a supplier for our Wholesale Propane Logistics segment,
related to an amendment of a supply agreement to shorten the term of the agreement by two years.
Earnings from Unconsolidated Affiliates
— Earnings from unconsolidated affiliates decreased in 2011
compared to 2010 primarily due to our additional interest in Black Lake. Prior to our acquisition of an
additional 50% interest in Black Lake, we accounted for Black Lake under the equity method of accounting.
Subsequent to this transaction, we account for Black Lake as a consolidated subsidiary. Commodity derivative
activity related to our unconsolidated affiliates is included in segment gross margin.
Net income attributable to noncontrolling interests
— Net income attributable to noncontrolling interests
increased in 2011 compared to 2010 as a result of the East Texas recovery settlement.
Year Ended December 31, 2010 vs. Year Ended December 31, 2009
Total Operating Revenues
— Total operating revenues increased in 2010 compared to 2009, primarily as a
result of the following:
• $126.6 million increase primarily attributable to higher propane prices and our acquisition of Atlantic
Energy in July 2010, which impact both sales and purchases, partially offset by a planned outage related
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