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Business Segment Information
9 Months Ended
Sep. 30, 2011
Business Segment Information [Abstract] 
Business Segment Information

9. Business Segment Information

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. Our Segment Margin definition also excludes the non-cash effects of our stock appreciation rights compensation 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 maintenance capital investment.

 

In the first quarter of 2011, we reorganized our operating segments as a result of a change in the way our Chief Executive Officer evaluates the performance of operations, develops strategy and allocates capital resources. The results of our CO2 marketing activities and processing of syngas through a joint venture, formerly reported in the industrial gases segment, are now included in our supply and logistics segment. The change in operating segments had no impact on our reportable units for goodwill purposes. The historical segment disclosures have been recast to be consistent with the current presentation. This recast also included combining revenues and costs and expenses for our industrial gases activities shown separately in our Unaudited Condensed Consolidated Statements of Operations in the 2010 period with revenues and costs and expenses for our supply and logistics activities.

 

      Pipeline
Transportation		      Refinery
Services		     Supply &
Logistics		     Total  

Three Months Ended September 30, 2011

          

Segment margin (a)

   $ 16,030       $ 17,992      $ 18,909      $ 52,931   
  

 

 

     

 

 

    

 

 

    

 

 

  

Maintenance capital expenditures

    $ 5       $ 852      $ 1,387      $ 2,244   
  

 

 

     

 

 

    

 

 

    

 

 

  

Revenues:

          

External customers

    $ 12,658       $ 50,982      $ 766,560      $ 830,200   

Intersegment (b)

     3,436         (2,590 )      (846 )      —     
  

 

 

     

 

 

    

 

 

    

 

 

  

Total revenues of reportable segments

    $ 16,094       $ 48,392      $ 765,714      $ 830,200   
  

 

 

     

 

 

    

 

 

    

 

 

  

Three Months Ended September 30, 2010

          

Segment margin (a)

   $ 11,920       $ 16,218      $ 11,235      $ 39,373   
  

 

 

     

 

 

    

 

 

    

 

 

  

Maintenance capital expenditures

    $ 161       $ 354      $ 201      $ 716   
  

 

 

     

 

 

    

 

 

    

 

 

  

Revenues:

          

External customers

    $ 11,059       $ 40,246      $ 524,707      $ 576,012   

Intersegment (b)

     3,028         (1,809 )      (1,219 )      —     
  

 

 

     

 

 

    

 

 

    

 

 

  

Total revenues of reportable segments

    $ 14,087       $ 38,437      $ 523,488      $ 576,012   
  

 

 

     

 

 

    

 

 

    

 

 

  

 

      Pipeline
Transportation		      Refinery
Services		     Supply &
Logistics		     Total  

Nine Months Ended September 30, 2011

          

Segment margin (a)

   $ 50,639       $ 54,887      $ 44,233      $ 149,759   
  

 

 

     

 

 

    

 

 

    

 

 

  

Maintenance capital expenditures

    $ 231       $ 1,219      $ 2,183      $ 3,633   
  

 

 

     

 

 

    

 

 

    

 

 

  

Revenues:

          

External customers

    $ 37,302       $ 151,899      $ 2,093,587      $ 2,282,788   

Intersegment (b)

     8,331         (6,598 )      (1,733 )      —     
  

 

 

     

 

 

    

 

 

    

 

 

  

Total revenues of reportable segments

    $ 45,633       $ 145,301      $ 2,091,854      $ 2,282,788   
  

 

 

     

 

 

    

 

 

    

 

 

  

Nine Months Ended September 30, 2010

          

Segment margin (a)

   $ 33,756       $ 45,668      $ 28,463      $ 107,887   
  

 

 

     

 

 

    

 

 

    

 

 

  

Maintenance capital expenditures

    $ 295       $ 1,169      $ 795      $ 2,259   
  

 

 

     

 

 

    

 

 

    

 

 

  

Revenues:

          

External customers

    $ 33,969       $ 111,964      $ 1,353,148      $ 1,499,081   

Intersegment (b)

     7,201         (5,804 )      (1,397 )      —     
  

 

 

     

 

 

    

 

 

    

 

 

  

Total revenues of reportable segments

    $ 41,170       $ 106,160      $ 1,351,751      $ 1,499,081   
  

 

 

     

 

 

    

 

 

    

 

 

  

 

  a) A reconciliation of Segment Margin to income before income taxes for the periods presented is as follows:

 

     Three Months Ended
September 30,		     Nine Months Ended
September 30,		  
     2011     2010     2011     2010  

Segment margin

    $ 52,931      $ 39,373      $ 149,759      $ 107,887   

Corporate general and administrative expenses

      (8,194 )      (9,769 )      (23,267 )      (21,174 ) 

Depreciation and amortization

      (14,593 )      (13,477 )      (42,749 )      (40,489 ) 

Net loss on disposal of surplus assets

      (113 )      (7 )      (351 )      (25 ) 

Interest expense

      (8,960 )      (6,542 )      (26,670 )      (13,506 ) 

Distributable cash from equity investees in excess of equity in earnings

      (3,701 )      (123 )      (11,925 )      (880 ) 

Non-cash items not included in segment margin

      3,061        (4,301 )      2,729        (2,966 ) 

Cash payments from direct financing leases in excess of earnings

      (1,171 )      (1,136 )      (3,424 )      (2,911 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Income before income taxes

    $ 19,260      $ 4,018      $ 44,102      $ 25,936   
  

 

 

    

 

 

    

 

 

    

 

 

  

 

  b) Intersegment sales were conducted on an arm's length basis.