XML 80 R14.htm IDEA: XBRL DOCUMENT v2.4.0.8
Business Segment Information
 6 Months Ended
Jun. 30, 2013
Segment Reporting [Abstract]  
Business Segment Information
8. 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.
 
Segment information for the periods presented below was as follows:
 
Pipeline
Transportation
 
Refinery
Services
 
Supply &
Logistics
 
Total
Three Months Ended June 30, 2013
 
 
 
 
 
 
 
Segment margin (a)
$
26,456

 
$
18,696

 
$
25,290

 
$
70,442

Capital expenditures (b)
$
37,556

 
$
1,312

 
$
38,448

 
$
77,316

Revenues:
 
 
 
 
 
 
 
External customers
$
19,180

 
$
54,288

 
$
1,140,189

 
$
1,213,657

Intersegment (c)
3,357

 
(2,812
)
 
(545
)
 
—

Total revenues of reportable segments
$
22,537

 
$
51,476

 
$
1,139,644

 
$
1,213,657

Three Months Ended June 30, 2012
 
 
 
 
 
 
 
Segment margin (a)
$
20,785

 
$
17,278

 
$
24,768

 
$
62,831

Capital expenditures (b)
$
31,901

 
$
360

 
$
22,173

 
$
54,434

Revenues:
 
 
 
 
 
 
 
External customers
$
13,398

 
$
50,575

 
$
949,458

 
$
1,013,431

Intersegment (c)
3,823

 
(2,255
)
 
(1,568
)
 
—

Total revenues of reportable segments
$
17,221

 
$
48,320

 
$
947,890

 
$
1,013,431

Six Months Ended June 30, 2013
 
 
 
 
 
 
 
Segment margin (a)
$
51,652

 
$
36,661

 
$
54,194

 
$
142,507

Capital expenditures (b)
$
121,408

 
$
1,664

 
$
56,059

 
$
179,131

Revenues:
 
 
 
 
 
 
 
External customers
$
36,485

 
$
106,467

 
$
2,217,919

 
$
2,360,871

Intersegment (c)
6,831

 
(5,507
)
 
(1,324
)
 
—

Total revenues of reportable segments
$
43,316

 
$
100,960

 
$
2,216,595

 
$
2,360,871

Six Months Ended June 30, 2012
 
 
 
 
 
 
 
Segment margin (a)
$
46,132

 
$
34,527

 
$
42,424

 
$
123,083

Capital expenditures (b)
$
278,329

 
$
1,270

 
$
63,004

 
$
342,603

Revenues:
 
 
 
 
 
 
 
External customers
$
28,374

 
$
100,948

 
$
1,844,826

 
$
1,974,148

Intersegment (c)
8,256

 
(4,583
)
 
(3,673
)
 
—

Total revenues of reportable segments
$
36,630

 
$
96,365

 
$
1,841,153

 
$
1,974,148

Total assets by reportable segment were as follows:
 
June 30,
2013
 
December 31,
2012
Pipeline transportation
$
994,009

 
$
890,652

Refinery services
419,137

 
414,170

Supply and logistics
857,068

 
750,347

Other assets
62,838

 
54,495

Total consolidated assets
$
2,333,052

 
$
2,109,664


 
(a)
A reconciliation of Segment Margin to income before income taxes for the periods presented is as follows:
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2013
 
2012
 
2013
 
2012
Segment Margin
$
70,442

 
$
62,831

 
$
142,507

 
$
123,083

Corporate general and administrative expenses
(10,305
)
 
(8,707
)
 
(21,142
)
 
(17,328
)
Depreciation and amortization
(15,670
)
 
(15,830
)
 
(30,723
)
 
(30,609
)
Interest expense
(12,254
)
 
(10,228
)
 
(23,695
)
 
(20,824
)
Distributable cash from equity investees in excess of equity in earnings
(4,891
)
 
(6,752
)
 
(11,455
)
 
(13,485
)
Non-cash items not included in segment margin
960

 
(1,577
)
 
(3,335
)
 
(253
)
Cash payments from direct financing leases in excess of earnings
(1,263
)
 
(1,249
)
 
(2,495
)
 
(2,470
)
Income before income taxes
$
27,019

 
$
18,488

 
$
49,662

 
$
38,114


 
(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. In addition to construction of internal growth projects, capital spending in our pipeline transportation segment included $1.7 million and $66.2 million during the three and six months ended June 30, 2013 and $17.9 million and $51.4 million during the three and six months ended June 30, 2012 representing capital contributions to our SEKCO equity investee to fund our share of the construction costs for its pipeline. For the six months ended June 30, 2012, capital spending in our pipeline transportation segment also included $205.6 million for the acquisition of interests in several Gulf of Mexico pipelines.
(c)
Intersegment sales were conducted under terms that we believe were no more or less favorable than then-existing market conditions.