Operating and Maintenance Expense
— Operating and maintenance expense increased in 2011 compared
to 2010 due to planned turnaround activity and environmental remediation at East Texas.
Depreciation and Amortization Expense
— Depreciation and amortization expense remained relatively
constant in 2011 compared to 2010.
Earnings from Unconsolidated Affiliates
— Earnings from unconsolidated affiliates, representing our 40%
ownership of Discovery and 33.33% ownership of Southeast Texas, remained relatively constant in 2011
compared to 2010. 2011 results for Southeast Texas were pursuant to a fee-based arrangement related to storage
capacity and tailgate volumes. 2010 results reflect business interruption insurance recoveries and a different
business structure and cash flow profile at Southeast Texas. Commodity derivative activity related to our
unconsolidated affiliates is included in segment gross margin.
Segment net income attributable to noncontrolling interests —
Segment net income attributable to
noncontrolling interests increased in 2011 compared to 2010, with $4.6 million due to the East Texas recovery
settlement.
Natural Gas Throughput
— Natural gas transported, processed and/or treated decreased in 2011 compared
to 2010 primarily as a result of reduced volumes on our Pelico system.
NGL Gross Production
— NGL production decreased in 2011 compared to 2010 primarily as a result of
differences in gas quality.
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:
• $144.5 million increase attributable to increased commodity prices, which impact both sales and
purchases;
• $58.8 million increase related to commodity derivative activity. This increase includes a decrease in
unrealized losses of $79.4 million due to movements in forward prices of commodities, partially offset
by a decrease in realized cash settlement gains of $20.6 million due to generally higher average prices of
commodities in 2010;
• $30.0 million increase as a result of increased NGL production and a change to a contract with an
affiliate in the Piceance Basin, such that certain revenues changed from a net presentation in
transportation, processing and other to a gross presentation in sales of natural gas, NGLs and
condensate; and
• $14.8 million increase primarily as a result of increased fee-based throughput volumes resulting from
the Michigan acquisition, our organic growth project in the Piceance Basin, as well as the renegotiation
of commodity sensitive contracts to fee-based contracts partially offset by decreases across certain
assets.
These increases were partially offset by:
• $53.5 million decrease due primarily to the impact of changes in contract mix, increased fuel
consumption, differences in gas quality, a decrease in natural gas sales volume across certain of assets,
as well as volume curtailments due to plant shutdowns and producer wellhead freeze offs as a result of
near record cold weather at East Texas and North Louisiana in the first quarter. 2009 results include the
first quarter impact of a third party owned pipeline rupture, resulting in a fire at East Texas, and our
Wyoming pipeline integrity and system enhancement project.
Purchases of Natural Gas and NGLs
— Purchases of natural gas and NGLs increased in 2010 compared to
2009, primarily as a result of increased commodity prices, which impact both sales and purchases, as well as a
change to a contract with an affiliate in the Piceance Basin, such that certain purchases changed from a net
presentation in transportation, processing and other to a gross presentation in purchases of natural gas and
NGLs.
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