Segment Disclosures

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Segment Disclosures [Text Block]

Note 10 – Segment Disclosures

Our reportable segments are Transmission & Gulf of Mexico, Northeast G&P, West, and Gas & NGL Marketing Services. All remaining business activities are included in Other. (See Note 1 – General, Description of Business, and Basis of Presentation.)

Performance Measurement

We evaluate segment operating performance based upon Modified EBITDA. This measure represents the basis of our internal financial reporting and is the primary performance measure used by our chief operating decision maker in measuring performance and allocating resources among our reportable segments. Intersegment Service revenues primarily represent transportation services provided to our marketing business and gathering services provided to our oil and gas properties. Intersegment Product sales primarily represent the sale of natural gas and NGLs from our natural gas processing plants and our oil and gas properties to our marketing business.

We define Modified EBITDA as follows:

•Net income (loss) before:

◦Provision (benefit) for income taxes;

◦Interest incurred, net of interest capitalized;

◦Equity earnings (losses);

◦Other investing income (loss) – net;

◦Depreciation and amortization expenses;

◦Accretion expense associated with asset retirement obligations for nonregulated operations.

•This measure is further adjusted to include our proportionate share (based on ownership interest) of Modified EBITDA from our equity-method investments calculated consistently with the definition described above.

The following table reflects the reconciliation of Modified EBITDA to Net income (loss) as reported in our Consolidated Statement of Income.

	Three Months Ended  March 31,
	2023		2022
	(Millions)
Modified EBITDA by segment:
Transmission & Gulf of Mexico	$	715	$	697
Northeast G&P	470		418
West	304		260
Gas & NGL Marketing Services (1)	567		13
Other	74		5
	2,130		1,393
Accretion expense associated with asset retirement obligations for nonregulated operations	(15)		(11)
Depreciation and amortization expenses	(506)		(498)
Equity earnings (losses)	147		136
Other investing income (loss) – net	8		1
Proportional Modified EBITDA of equity-method investments	(229)		(225)
Interest expense	(294)		(286)
(Provision) benefit for income taxes	(284)		(118)
Net income (loss)	$	957	$	392

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(1)    Modified EBITDA for the three months ended March 31, 2023 and 2022, includes charges of $18 million and $0 million, respectively, associated with lower of cost or net realizable value adjustments to our inventory. These charges are reflected in Product sales and Product costs in our Consolidated Statement of Income. Net unrealized commodity-related derivatives gains (losses) of $(5) million and $2 million for the three months ended March 31, 2023 and 2022, respectively, are reflected in Net processing commodity expenses.

The following table reflects the reconciliation of Segment revenues to Total revenues as reported in our Consolidated Statement of Income.

	Transmission &Gulf of Mexico		Northeast G&P		West		Gas & NGL Marketing Services (1)		Other		Eliminations		Total
	(Millions)
Three Months Ended March 31, 2023
Segment revenues:
Service revenues
External	$	915	$	443	$	332	$	1	$	3	$	—	$	1,694
Internal	25		11		24		—		—		(60)		—
Total service revenues	940		454		356		1		3		(60)		1,694
Total service revenues – commodity consideration	12		6		18		—		—		—		36
Product sales
External	24		8		19		776		18		—		845
Internal	31		41		71		(101)		84		(126)		—
Total product sales	55		49		90		675		102		(126)		845
Net gain (loss) on commodity derivatives
Realized	—		—		39		117		18		—		174
Unrealized	—		—		—		338		(6)		—		332
Total net gain (loss) on commodity derivatives (2)	—		—		39		455		12		—		506
Total revenues	$	1,007	$	509	$	503	$	1,131	$	117	$	(186)	$	3,081
Three Months Ended March 31, 2022
Segment revenues:
Service revenues
External	$	845	$	370	$	316	$	1	$	5	$	—	$	1,537
Internal	29		10		15		—		4		(58)		—
Total service revenues	874		380		331		1		9		(58)		1,537
Total service revenues – commodity consideration	21		7		49		—		—		—		77
Product sales
External	51		5		11		1,015		22		—		1,104
Internal	49		31		176		(47)		82		(291)		—
Total product sales	100		36		187		968		104		(291)		1,104
Net gain (loss) on commodity derivatives
Realized	—		—		(5)		(56)		(8)		—		(69)
Unrealized	—		—		—		(59)		(66)		—		(125)
Total net gain (loss) on commodity derivatives (2)	—		—		(5)		(115)		(74)		—		(194)
Total revenues	$	995	$	423	$	562	$	854	$	39	$	(349)	$	2,524

_____________

(1)    As we are acting as agent for natural gas marketing customers or engage in energy trading activities, the resulting revenues are presented net of the related costs of those activities.

(2)    We record transactions that qualify as derivatives at fair value with changes in fair value recognized in earnings in the period of change and characterized as unrealized gains or losses. Gains and losses on derivatives held for energy trading purposes are presented on a net basis in revenue.