Business Segment Information

3 Months Ended

Mar. 31, 2012

Business Segment Information [Abstract]

Business Segment Information

10. Business Segment Information

Our operations consist of three operating segments: (1) Pipeline Transportation – interstate, intrastate and offshore crude oil, and to a lesser extent, CO₂ pipeline transportation; (2) Refinery Services – processing high sulfur (or "sour") gas streams as part of refining operations to remove the sulfur and sale of the related by-product, and (3) Supply and Logistics – purchasing, transporting, storing, blending and marketing of crude oil and petroleum products (primarily fuel oil, asphalt, and other heavy refined products). 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 maintenance capital investment.

Segment information for the periods presented below was as follows:

	Pipeline Transportation		Refinery Services			Supply & Logistics			Total
Three Months Ended March 31, 2012
Segment margin (a)	$	25,347	$	17,249		$	17,656		$	60,252
Capital expenditures (b)	$	246,428	$	910		$	40,831		$	288,169
Revenues:
External customers	$	14,976	$	50,373		$	867,594		$	932,943
Intersegment (c)		4,433		(2,328	)		(2,105	)		—
Total revenues of reportable segments	$	19,409	$	48,045		$	865,489		$	932,943
Three Months Ended March 31, 2011
Segment margin (a)	$	17,682	$	17,948		$	13,525		$	49,155
Capital expenditures (b)	$	448	$	280		$	308		$	1,036
Revenues:
External customers	$	12,593	$	49,583		$	627,622		$	689,798
Intersegment (c)		1,862		(2,037	)		175			—
Total revenues of reportable segments	$	14,455	$	47,546		$	627,797		$	689,798

Total assets by reportable segment were as follows:

	March 31, 2012		December 31, 2011
Pipeline Transportation	$	836,924	$	594,728
Refinery Services		420,039		426,993
Supply & Logistics		762,686		659,576
Other assets		50,626		49,547
Total consolidated assets	$	2,070,275	$	1,730,844

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

	Three Months Ended March 31,
	2012			2011
Segment Margin	$	60,252		$	49,155
Corporate general and administrative expenses		(8,621	)		(7,384	)
Depreciation and amortization		(15,035	)		(13,903	)
Net gain on disposal of surplus assets		256			11
Interest expense		(10,596	)		(8,699	)
Distributable cash from equity investees in excess of equity in earnings		(6,733	)		(3,303	)
Non-cash items not included in segment margin		1,324			(7,434	)
Cash payments from direct financing leases in excess of earnings		(1,221	)		(1,113	)
Income before income taxes	$	19,626		$	7,330

(b) Capital expenditures include fixed asset additions and acquisitions of businesses and equity investees. For the three months ended March 31, 2012, capital spending in our Pipeline Transportation segment included $205.6 million for the acquisition of interests in several Gulf of Mexico pipelines and $33.5 million for our share of construction costs in connection with our joint venture in the planned SEKCO pipeline. Capital spending in our Supply & Logistics segment included $30.6 million for the purchase of barge assets during the three months ended March 31, 2012.

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