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Business Segment Information
 12 Months Ended
Dec. 31, 2012
Segment Reporting [Abstract]  
Business Segment Information
12. Business Segment Information
Our operations consist of three operating segments:
•
Pipeline Transportation – interstate, intrastate and offshore crude oil, and to a lesser extent, CO2;
•
Refinery Services – processing high sulfur (or “sour”) gas streams as part of refining operations to remove the sulfur and selling the related by-product, NaHS and;
•
Supply and Logistics – terminaling, blending, storing, marketing, and transporting crude oil and petroleum products (primarily fuel oil, asphalt, and other heavy refined products) and, on a smaller scale, CO2.
Substantially all of our revenues are derived from, and substantially all of our assets are located in the United States.
We define Segment Margin as revenues less product costs, operating expenses (excluding non-cash charges, such as depreciation and amortization), and segment general and administrative expenses, plus our equity in distributable cash generated by our equity investees. In addition, our Segment Margin definition excludes the non-cash effects of our stock appreciation rights plan and includes the non-income portion of payments received under direct financing leases.
Our chief operating decision maker (our Chief Executive Officer) evaluates segment performance based on a variety of measures including Segment Margin, segment volumes, where relevant, and capital investment.
 
Pipeline
Transportation
 
Refinery
Services
 
Supply &
Logistics
 
Total
Year Ended December 31, 2012
 
 
 
 
 
 
 
Segment margin (a)
$
96,539

 
$
72,883

 
$
92,911

 
$
262,333

Capital expenditures (b)
$
328,710

 
$
2,692

 
$
94,896

 
$
426,298

Revenues:
 
 
 
 
 
 
 
External customers
$
61,706

 
$
205,110

 
$
3,803,241

 
$
4,070,057

Intersegment (c)
14,584

 
(9,093
)
 
(5,491
)
 
—

Total revenues of reportable segments
$
76,290

 
$
196,017

 
$
3,797,750

 
$
4,070,057

Year Ended December 31, 2011
 
 
 
 
 
 
 
Segment margin (a)
$
67,908

 
$
74,618

 
$
59,975

 
$
202,501

Capital expenditures (b)
$
14,501

 
$
1,846

 
$
170,647

 
$
186,994

Revenues:
 
 
 
 
 
 
 
External customers
$
50,391

 
$
210,394

 
$
2,828,884

 
$
3,089,669

Intersegment (c)
11,799

 
(8,683
)
 
(3,116
)
 
—

Total revenues of reportable segments
$
62,190

 
$
201,711

 
$
2,825,768

 
$
3,089,669

Year Ended December 31, 2010
 
 
 
 
 
 
 
Segment margin (a)
$
48,305

 
$
62,923

 
$
38,336

 
$
149,564

Capital expenditures (b)
$
333,557

 
$
1,433

 
$
1,740

 
$
336,730

Revenues:
 
 
 
 
 
 
 
External customers
$
45,367

 
$
158,456

 
$
1,897,501

 
$
2,101,324

Intersegment (c)
10,285

 
(7,396
)
 
(2,889
)
 
—

Total revenues of reportable segments
$
55,652

 
$
151,060

 
$
1,894,612

 
$
2,101,324

Total assets by reportable segment were as follows:
 
December 31, 2012
 
December 31, 2011
 
December 31, 2010
Pipeline transportation
$
890,652

 
$
594,728

 
$
606,980

Refinery services
414,170

 
426,993

 
422,351

Supply and logistics
750,347

 
658,393

 
432,808

Other assets
54,495

 
50,730

 
44,596

Total consolidated assets
$
2,109,664

 
$
1,730,844

 
$
1,506,735

(a)
A reconciliation of Segment Margin to income (loss) before income taxes for each year presented is as follows:
 
Year Ended December 31,
 
2012
 
2011
 
2010
Segment margin
$
262,333

 
$
202,501

 
$
149,564

Corporate general and administrative expenses
(38,372
)
 
(31,685
)
 
(110,058
)
Depreciation, amortization and impairment
(61,166
)
 
(62,190
)
 
(53,569
)
Interest expense
(40,921
)
 
(35,767
)
 
(22,924
)
Distributable cash from equity investees in excess of equity in earnings
(24,464
)
 
(16,681
)
 
(2,284
)
Non-cash items not included in segment margin
(5,280
)
 
(1,531
)
 
(4,479
)
Cash payments from direct financing leases in excess of earnings
(5,016
)
 
(4,615
)
 
(4,203
)
Income (loss) before income taxes
$
87,114

 
$
50,032

 
$
(47,953
)

(b)
Capital expenditures include maintenance and growth capital expenditures, such as fixed asset additions (including enhancements to existing facilities and construction of internal growth projects) as well as acquisitions of businesses and interests in equity investees. Capital spending in our pipeline transportation segment included $63.7 million during the year ended December 31, 2012 representing capital contributions to our SEKCO equity investee to fund our share of the construction costs for its pipeline. During the same period, capital spending in our pipeline transportation segment also included $205.6 million for the acquisition of interests in several Gulf of Mexico pipelines. During 2012, capital spending in our supply and logistics segment also included $30.9 million for the purchase of barge assets.
(c)
Intersegment sales were conducted under terms that we believe were no more or less favorable than then-existing market conditions.