Segment Information

6 Months Ended

Jun. 30, 2011


Note 13 —	Segment Information

We manage our business and analyze and report our results of operations on a segment basis. Our operations are divided into the following three segments for both internal and external reporting and analysis:


	•	Texas, which provides midstream natural gas services in south and north Texas, including gathering and intrastate transportation of natural gas, and related services such as compression, dehydration, treating, processing and marketing. Our Texas segment also provides NGL fractionation and transportation. This segment includes our equity investments in Webb Duval, Eagle Ford Gathering and Liberty Pipeline Group, and a processing plant located in southwest Louisiana.

	•	Oklahoma, which provides midstream natural gas services in central and east Oklahoma, including gathering of natural gas and related services such as compression, dehydration, treating, processing and nitrogen rejection. This segment includes our equity investment in Southern Dome.

	•	Rocky Mountains, which provides natural gas gathering and treating and compressor rental services in the Powder River Basin of Wyoming. This segment includes our equity investments in Bighorn and Fort Union.

The amounts indicated below as “Corporate and other” relate to our risk management activities, intersegment eliminations and other activities we perform or assets we hold that have not been allocated to any of our reporting segments.

We evaluate segment performance based on segment gross margin before depreciation, amortization and impairment. Operating and maintenance expenses and general and administrative expenses incurred at Corporate and other are allocated to Texas, Oklahoma and Rocky Mountains based on expenses directly attributable to each segment or an allocation based on activity, as appropriate. We use the same accounting methods and allocations in the preparation of our segment information as used in our consolidated reporting.

Summarized financial information concerning our reportable segments is shown in the following tables:


							Rocky						Corporate
	Texas			Oklahoma			Mountains			Total Segments			and Other			Consolidated
							(In thousands)

*Three Months Ended June 30, 2011:*
Total segment gross margin	$	46,134		$	28,665		$	771		$	75,570		$	(10,274	)	$	65,296
Operations and maintenance expenses		8,908			6,794			61			15,763			—			15,763
Depreciation and amortization		6,861			9,358			766			16,985			378			17,363
General and administrative expenses		2,955			2,389			296			5,640			6,261			11,901
Taxes other than income		685			712			—			1,397			—			1,397
Equity in earnings from unconsolidated affiliates		(23	)		(669	)		(614	)		(1,306	)		—			(1,306	)

Operating income (loss)	$	26,748		$	10,081		$	262		$	37,091		$	(16,913	)	$	20,178

Natural gas sales	$	76,684		$	48,651		$	128		$	125,463		$	(1,535	)	$	123,928
Natural gas liquids sales		108,919			78,898			—			187,817			(7,059	)		180,758
Transportation, compression and processing fees		20,906			2,778			4,214			27,898			—			27,898
Condensate and other		4,629			10,124			398			15,151			(1,679	)		13,472

Sales to external customers	$	211,138		$	140,451		$	4,740		$	356,329		$	(10,273	)	$	346,056

Interest and other financing costs	$	—		$	—		$	—		$	—		$	11,454		$	11,454
*Three Months Ended June 30, 2010:*
Total segment gross margin	$	31,751		$	21,821		$	1,148		$	54,720		$	2,115		$	56,835
Operations and maintenance expenses		7,497			5,670			63			13,230			—			13,230
Depreciation and amortization		6,452			7,942			765			15,159			424			15,583
General and administrative expenses		2,763			1,690			589			5,042			5,858			10,900
Taxes other than income		600			578			3			1,181			—			1,181
Equity in loss (earnings) from unconsolidated affiliates		27			(686	)		24,291			23,632			—			23,632

Operating income (loss)	$	14,412		$	6,627		$	(24,563	)	$	(3,524	)	$	(4,167	)	$	(7,691	)

Natural gas sales	$	38,622		$	47,222		$	331		$	86,175		$	(1,356	)	$	84,819
Natural gas liquids sales		60,016			54,324			—			114,340			462			114,802
Transportation, compression and		10,688			1,388			4,440			16,516			—			16,516
processing fees
Condensate and other		2,414			8,073			417			10,904			3,010			13,914

Sales to external customers	$	111,740		$	111,007		$	5,188		$	227,935		$	2,116		$	230,051

Interest and other financing costs	$	—		$	—		$	—		$	—		$	13,351		$	13,351


						Rocky						Corporate
	Texas		Oklahoma			Mountains			Total Segments			and Other			Consolidated
	In thousands

*Six Months Ended June 30, 2011:*
Total segment gross margin	$	91,145	$	51,747		$	1,813		$	144,705		$	(19,063	)	$	125,642
Operations and maintenance expenses		17,733		13,013			116			30,862			—			30,862
Depreciation and amortization		13,530		18,401			1,531			33,462			770			34,232
General and administrative expenses		5,721		4,567			664			10,952			13,547			24,499
Taxes other than income		1,227		1,282			1			2,510			17			2,527
Equity in loss (earnings) from unconsolidated affiliates		196		(1,371	)		(1,833	)		(3,008	)		—			(3,008	)

Operating income (loss)	$	52,738	$	15,855		$	1,334		$	69,927		$	(33,397	)	$	36,530

Natural gas sales	$	136,785	$	93,736		$	253		$	230,774		$	(3,051	)	$	227,723
Natural gas liquids sales		197,599		145,020			—			342,619			(12,860	)		329,759
Transportation, compression and		38,582		5,200			8,587			52,369			—			52,369
Condensate and other		9,492		18,975			815			29,282			(3,152	)		26,130

Sales to external customers	$	382,458	$	262,931		$	9,655		$	655,044		$	(19,063	)	$	635,981

Interest and other financing costs	$	—	$	—		$	—		$	—		$	23,370		$	23,370
Segment assets	$	734,468	$	670,897		$	629,193		$	2,034,558		$	44,349		$	2,078,907
*Six Months Ended June 30, 2010:*
Total segment gross margin	$	58,916	$	46,096		$	2,251		$	107,263		$	697		$	107,960
Operations and maintenance expenses		14,066		11,103			164			25,333			—			25,333
Depreciation and amortization		12,037		16,356			1,531			29,924			860			30,784
General and administrative expenses		5,174		3,977			1,125			10,276			11,166			21,442
Taxes other than income		1,263		1,077			3			2,343			—			2,343
Equity in loss (earnings) from unconsolidated affiliates		91		(1,640	)		23,386			21,837			—			21,837

Operating income (loss)	$	26,285	$	15,223		$	(23,958	)	$	17,550		$	(11,329	)	$	6,221

Natural gas sales	$	100,433	$	106,703		$	935		$	208,071		$	(3,036	)	$	205,035
Natural gas liquids sales		120,302		115,348			—			235,650			(1,530	)		234,120
Transportation, compression and		18,025		2,631			8,974			29,630			—			29,630
Condensate and other		4,808		17,028			833			22,669			5,263			27,932

Sales to external customers	$	243,568	$	241,710		$	10,742		$	496,020		$	697		$	496,717

Interest and other financing costs	$	—	$	—		$	—		$	—		$	28,296		$	28,296