The $6.7 million increase in gross margin reflects higher revenue of $138.7 million offset by higher product purchase costs of $132.0 million.
For additional information regarding the period to period changes in gross margin, see "Targa Resources Partners - Review of Segment Performance"
The $17.0 million increase in operating expenses was primarily due to increased compensation and benefit costs, increased non-capitalized maintenance costs, and higher professional services fees.
The increase in depreciation and amortization expense is primarily attributable to an impairment taken on an asset in the fourth quarter of 2010 as well as incremental depreciation on capital expenditures in 2010.
The increase in general and administrative expense reflects primarily higher compensation costs and higher professional fees.
The decrease in interest expense was primarily due to lower interest rates on third party debt than on affiliate debt associated with predecessor operations.
Targa Resources Partners - Review of Consolidated Full Year Results
Year Ended December 31, 2010 Compared to Year Ended December 31, 2009
Revenues increased $956.4 million due to higher realized commodity prices of $1,221.9 million, lower NGL and condensate sales volumes of $364.1 million, partially offset by higher natural gas sales volumes of $117.4 million, lower fee-based and other revenues of $5.5 million, and lower business interruption insurance proceeds of $13.3 million.
The increase in gross margin reflects higher revenue of $956.4 million partially offset by an increase in product purchase costs of $895.1 million. For information regarding period to period changes in gross margin, see "Targa Resources Partners - Review of Segment Performance".
The increase in operating expenses of $25.1 million was primarily due to increased compensation and benefits expenses, increased maintenance costs and environmental spending, partially offset by lower contract services and professional fees. See "Targa Resources Partners – Review of Segment Performance" for additional discussion regarding changes in operating expenses.