Segment Disclosures

3 Months Ended

Mar. 31, 2020

During first quarter 2020, we revised our reporting segments. See Note 1 – Organization, Description of Business and Basis of Presentation for a discussion of this matter.

Our reportable segments are strategic business units that offer different products and services. Our segments are managed separately as each segment requires different marketing strategies and business knowledge. Management evaluates performance based on segment operating margin, which includes revenue from affiliates and third-party customers, operating expenses, cost of product sales, other operating (income) expense and earnings of non-controlled entities.

We believe that investors benefit from having access to the same financial measures used by management. Operating margin, which is presented in the following tables, is an important measure used by management to evaluate the economic performance of our core operations. Operating margin is not a GAAP measure, but the components of operating margin are computed using amounts that are determined in accordance with GAAP. A reconciliation of operating margin to operating profit, which is its nearest comparable GAAP financial measure, is included in the tables below (presented in thousands). Operating profit includes depreciation, amortization and impairment expense and general and administrative (“G&A”) expense that management does not consider when evaluating the core profitability of our separate operating segments.



	Three Months Ended March 31, 2019
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation and terminals revenue	$	309,571		$	152,159		$	(938	)	$	460,792
Product sales revenue	157,282			5,713			—			162,995
Affiliate management fee revenue	1,662			3,486			—			5,148
Total revenue	468,515			161,358			(938		)	628,935
Operating expenses	102,692			45,706			(2,373		)	146,025
Cost of product sales	162,430			6,664			—			169,094
Other operating (income) expense	(5,368		)	(1,573		)	—			(6,941		)
(Earnings) loss of non-controlled entities	1,047			(32,302		)	—			(31,255		)
Operating margin	207,714			142,863			1,435			352,012
Depreciation, amortization and impairment expense	44,427			16,009			1,435			61,871
G&A expense	32,813			13,182			—			45,995
Operating profit	$	130,474		$	113,672		$	—		$	244,146



	Three Months Ended March 31, 2020
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation and terminals revenue	$	314,319		$	145,658		$	(1,582	)	$	458,395
Product sales revenue	312,986			6,134			—			319,120
Affiliate management fee revenue	1,584			3,707			—			5,291
Total revenue	628,889			155,499			(1,582		)	782,806
Operating expenses	105,882			46,772			(3,146		)	149,508
Cost of product sales	233,342			15,894			—			249,236
Other operating (income) expense	(1,892		)	2,403			—			511
Earnings of non-controlled entities	(14,220		)	(29,440		)	—			(43,660		)
Operating margin	305,777			119,870			1,564			427,211
Depreciation, amortization and impairment expense	46,059			15,911			1,564			63,534
G&A expense	26,654			10,254			—			36,908
Operating profit	$	233,064		$	93,705		$	—		$	326,769