Segment Information

6 Months Ended

Jun. 30, 2011

(11) Segment Information

Identification of operating segments is based principally upon regions served. The Partnership's reportable segments consist of the natural gas gathering, processing and transmission operations located in north Texas (NTX), the pipelines and processing plants located in Louisiana (LIG) and the south Louisiana processing and NGL assets (PNGL). Operating activity for assets sold in the comparative periods that was not considered discontinued operations as well as intersegment eliminations is shown in the corporate segment.

The Partnership evaluates the performance of its operating segments based on operating revenues and segment profits. Corporate expenses include general partnership expenses associated with managing all reportable operating segments and the Company's general and administrative expenses, including the Partnership's general and administrative expenses. Corporate assets consist of property and equipment, including software, for general corporate support, working capital, debt financing costs, and the investment in HEP.

Summarized financial information concerning the Partnership's reportable segments as consolidated into the Company's condensed financial statements is shown in the following table.

			LIG		NTX		PNGL		Corporate		Totals
			(In thousands)
Three Months Ended June 30, 2011:
	Sales to external customers		$	219,272	$	87,813	$	189,062	$	-	$	496,147
	Sales to affiliates			23,935		21,295		-		(45,230)		-
	Purchased gas and NGLs			(211,417)		(64,360)		(169,042)		45,230		(399,589)
	Operating expenses			(8,902)		(12,108)		(6,903)		-		(27,913)
	Segment profit		$	22,888	$	32,640	$	13,117	$	-	$	68,645
	Gain (loss) on derivatives		$	(1,269)	$	(377)	$	110	$	-	$	(1,536)
	Depreciation, amortization
		and impairments	$	(4,045)	$	(18,744)	$	(7,828)	$	(1,037)	$	(31,654)
	Capital expenditures		$	1,129	$	16,807	$	5,555	$	715	$	24,206
	Identifiable assets		$	327,174	$	1,112,750	$	492,920	$	78,345	$	2,011,189
Three Months Ended June 30, 2010:
	Sales to external customers		$	244,146	$	86,464	$	111,438	$	-	$	442,048
	Sales to affiliates			19,420		19,800		1,308		(40,528)		-
	Purchased gas and NGLs			(233,729)		(65,459)		(99,378)		40,528		(358,038)
	Operating expenses			(7,805)		(11,214)		(6,405)		-		(25,424)
	Segment profit		$	22,032	$	29,591	$	6,963	$	-	$	58,586
	Gain (loss) on derivatives		$	906	$	(2,693)	$	193	$	-	$	(1,594)
	Depreciation, amortization and
		impairments	$	(3,051)	$	(15,048)	$	(7,933)	$	(1,121)	$	(27,153)
	Capital expenditures		$	4,972	$	2,692	$	851	$	266	$	8,781
	Identifiable assets		$	336,407	$	1,122,796	$	475,724	$	51,553	$	1,986,480
Six Months Ended June 30, 2011:
	Sales to external customers		$	423,705	$	168,779	$	353,978	$	-	$	946,462
	Sales to affiliates			46,742		42,880		-		(89,622)		-
	Purchased gas and NGLs			(406,920)		(127,519)		(315,251)		89,622		(760,068)
	Operating expenses			(16,969)		(23,460)		(12,528)		-		(52,957)
	Segment profit		$	46,558	$	60,680	$	26,199	$	-	$	133,437
	Gain (loss) on derivatives		$	(3,954)	$	(1,094)	$	91	$	-	$	(4,957)
	Depreciation, amortization
		and impairments	$	(7,205)	$	(36,464)	$	(15,541)	$	(2,116)	$	(61,326)
	Capital expenditures		$	2,679	$	35,011	$	9,636	$	1,202	$	48,528
	Identifiable assets		$	327,174	$	1,112,750	$	492,919	$	78,346	$	2,011,189
Six Months Ended June 30, 2010:
	Sales to external customers		$	489,504	$	196,598	$	224,604	$	-	$	910,706
	Sales to affiliates			41,134		45,591		2,839		(89,564)		-
	Purchased gas and NGLs			(473,026)		(163,755)		(198,284)		89,564		(745,501)
	Operating expenses			(16,264)		(23,267)		(12,358)		-		(51,889)
	Segment profit		$	41,348	$	55,167	$	16,801	$	-	$	113,316
	Gain (loss) on derivatives		$	(904)	$	(4,507)	$	121	$	-	$	(5,290)
	Depreciation, amortization
		and impairments	$	(6,072)	$	(31,104)	$	(15,828)	$	(2,257)	$	(55,261)
	Capital expenditures		$	5,902	$	5,380	$	920	$	681	$	12,883
	Identifiable assets		$	336,407	$	1,122,796	$	475,724	$	51,553	$	1,986,480

	The following table reconciles the segment profits reported above to the operating income as reported in the condensed
consolidated statements of operations (in thousands):

		Three Months Ended				Six Months Ended
		June 30,				June 30,

		2011		2010		2011		2010
Segment profits		$	68,645	$	58,586	$	133,437	$	113,316
General and administrative expenses			(13,272)		(12,455)		(25,754)		(25,936)
Loss on derivatives			(1,536)		(1,594)		(4,957)		(5,290)
Gain (loss) on sale of property			60		(564)		80		13,779
Depreciation, amortization and impairments			(31,654)		(27,153)		(61,326)		(55,261)
Operating income		$	22,243	$	16,820	$	41,480	$	40,608