Operating Segments

6 Months Ended

Jun. 30, 2012

Operating Segments

Operating Segments

Note 13—Operating Segments

We manage our operations through three operating segments: (i) Transportation, (ii) Facilities and (iii) Supply and Logistics.  The following table reflects certain financial data for each segment for the periods indicated (in millions):

	Transportation		Facilities		Supply and Logistics		Total
Three Months Ended June 30, 2012
Revenues:
External Customers	$	158	$	186	$	9,442	$	9,786
Intersegment (1)	203		101		—		304
Total revenues of reportable segments	$	361	$	287	$	9,442	$	10,090
Equity earnings in unconsolidated entities	$	9	$	—	$	—	$	9
Segment profit (2) (3)	$	169	$	114	$	274	$	557
Maintenance capital	$	27	$	10	$	3	$	40
Three Months Ended June 30, 2011
Revenues:
External Customers	$	147	$	126	$	8,586	$	8,859
Intersegment (1)	143		38		—		181
Total revenues of reportable segments	$	290	$	164	$	8,586	$	9,040
Equity earnings in unconsolidated entities	$	4	$	—	$	—	$	4
Segment profit (2) (3)	$	128	$	86	$	151	$	365
Maintenance capital	$	17	$	7	$	3	$	27
Six Months Ended June 30, 2012
Revenues:
External Customers	$	307	$	378	$	18,319	$	19,004
Intersegment (1)	371		145		—		516
Total revenues of reportable segments	$	678	$	523	$	18,319	$	19,520
Equity earnings in unconsolidated entities	$	16	$	—	$	—	$	16
Segment profit (2) (3)	$	332	$	204	$	402	$	938
Maintenance capital	$	52	$	17	$	7	$	76
Six Months Ended June 30, 2011
Revenues:
External Customers	$	288	$	244	$	16,021	$	16,553
Intersegment (1)	276		81		1		358
Total revenues of reportable segments	$	564	$	325	$	16,022	$	16,911
Equity earnings in unconsolidated entities	$	5	$	—	$	—	$	5
Segment profit (2) (3)	$	265	$	164	$	285	$	714
Maintenance capital	$	35	$	10	$	7	$	52

(1)Segment revenues and purchases and related costs include intersegment amounts.  Intersegment sales are conducted at posted tariff rates, rates similar to those charged to third parties or rates that we believe approximate market.  For further discussion, see “Analysis of Operating Segments” under Item 7 of our 2011 Annual Report on Form 10-K.

(2)Supply and Logistics segment profit includes interest expense (related to hedged inventory purchases) of approximately $4 million and $7 million for the three months ended June 30, 2012 and 2011, respectively, and approximately $6 million and $12 million for the six months ended June 30, 2012 and 2011, respectively.

(3)The following table reconciles segment profit to net income attributable to Plains (in millions):

	For the Three Months						For the Six Months
	Ended June 30,						Ended June 30,
	2012			2011			2012			2011
Segment profit	$	557		$	365		$	938		$	714
Depreciation and amortization	(86		)	(63		)	(146		)	(126		)
Interest expense	(75		)	(62		)	(140		)	(128		)
Other income/(expense), net	—			2			2			(20		)
Income tax expense	(10		)	(9		)	(30		)	(22		)
Net income	386			233			624			418
Less: Net income attributable to noncontrolling interests	(8		)	(8		)	(15		)	(10		)
Net income attributable to Plains	$	378		$	225		$	609		$	408