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%. 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.
Earnings from Unconsolidated Affiliates
— Earnings from unconsolidated affiliates decreased in 2011
compared to 2010 reflecting the impact of 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.
NGL Pipelines Throughput
— NGL pipelines throughput increased in 2011 compared to 2010 as a result
of the Wattenberg capital expansion project, volume growth on our pipelines and our acquisition an additional
50% interest in Black Lake.
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 Wattenberg pipeline acquisition, our acquisition of an additional 50% interest in Black Lake. 2009
results include the first quarter impact of decreased throughput volumes resulting from ethane rejection and
lower volumes at certain connected processing plants.
Segment Gross Margin
— Segment gross margin increased in 2010 compared to 2009, as a result of higher
volumes from the Wattenberg pipeline acquisition and our acquisition of an additional 50% interest in Black
Lake, as well as higher per unit margins.
Operating and Maintenance Expense
— Operating and maintenance expense increased in 2010 compared
to 2009, primarily as a result of the Wattenberg pipeline acquisition and our acquisition of an additional 50%
interest in Black Lake.
Depreciation and Amortization Expense
— Depreciation and amortization expense increased in 2010
compared to 2009, primarily as a result of the Wattenberg pipeline acquisition and our acquisition of an
additional 50% interest in Black Lake.
Step acquisition — equity interest re-measurement gain
— Step acquisition — equity interest
re-measurement gain results from our acquisition of an additional 50% interest in Black Lake bringing our
ownership interest in Black Lake to 100%. 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 gain of $9.1
million.
NGL Pipelines Throughput
— NGL pipelines throughput increased in 2010 compared to 2009, as a result
of increased volumes from the Wattenberg pipeline acquisition and our acquisition of an additional 50%
interest in Black Lake. 2009 results include the first quarter impact of ethane rejection and lower volumes at
certain connected processing plants.
80