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Business Segments (Tables)
9 Months Ended
Sep. 30, 2012
Segment Information

The following tables set forth our segment information:

Three Months Ended September 30, 2012

 

     Natural Gas
Services (e)
    NGL
Logistics
    Wholesale
Propane
Logistics
    Other     Eliminations
(f)
    Total  
     (Millions)  

Total operating revenue

   $ 278.5      $ 15.8      $ 36.7      $ —        $ (0.1   $ 330.9   

Total purchases

     (232.9     —          (35.2     —          0.1        (268.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross margin (a)

   $ 45.6      $ 15.8      $ 1.5      $ —        $ —        $ 62.9   

Operating and maintenance expense

     (26.9     (5.1     (3.7     —          —          (35.7

Depreciation and amortization expense

     (12.5     (1.6     (0.6     (0.1     —          (14.8

General and administrative expense

     —          —          —          (11.1     —          (11.1

Other income

     —          0.1        —          —          —          0.1   

Earnings from unconsolidated affiliates

     3.9        5.0        —          —          —          8.9   

Interest expense, net

     —          —          —          (8.1     —          (8.1

Income tax expense (b)

     —          —          —          (0.3     —          (0.3
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     10.1        14.2        (2.8     (19.6     —          1.9   

Net income attributable to noncontrolling interests

     (0.6     —          —          —          —          (0.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to partners

   $ 9.5      $ 14.2      $ (2.8   $ (19.6   $ —        $ 1.3   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-cash derivative mark-to-market (c)

   $ (20.8   $ —        $ (2.1   $ 0.4      $ —        $ (22.5
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Three Months Ended September 30, 2011

 

     Natural Gas
Services (e)
    NGL
Logistics
    Wholesale
Propane
Logistics
    Other     Eliminations      Total  
     (Millions)  

Total operating revenue

   $ 478.8      $ 14.7      $ 100.1      $ —        $ —         $ 593.6   

Total purchases

     (354.9     —          (94.1     —          —           (449.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Gross margin (a)

   $ 123.9      $ 14.7      $ 6.0      $ —        $ —         $ 144.6   

Operating and maintenance expense

     (28.0     (5.5     (3.2     —          —           (36.7

Depreciation and amortization expense

     (22.8     (2.4     (0.7     —          —           (25.9

General and administrative expense

     —          —          —          (12.0     —           (12.0

Other income

     —          0.2        —          —          —           0.2   

Earnings from unconsolidated affiliates

     6.9        —          —          —          —           6.9   

Interest expense, net

     —          —          —          (8.6     —           (8.6

Income tax expense (b)

     —          —          —          (0.4     —           (0.4
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Net income (loss)

     80.0        7.0        2.1        (21.0     —           68.1   

Net loss attributable to noncontrolling interests

     0.4        —          —          —          —           0.4   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Net income (loss) attributable to partners

   $ 80.4      $ 7.0      $ 2.1      $ (21.0   $ —         $ 68.5   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Non-cash derivative mark-to-market (c)

   $ 61.0      $ —        $ 0.1      $ (0.7   $ —         $ 60.4   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

 

Nine Months Ended September 30, 2012

 

     Natural Gas
Services (e)
    NGL
Logistics
    Wholesale
Propane
Logistics
    Other     Eliminations
(f)
    Total  
     (Millions)  

Total operating revenue

   $ 910.4      $ 46.2      $ 313.8      $ —        $ (0.2   $ 1,270.2   

Total purchases

     (683.6     —          (290.0     —          0.2        (973.4
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross margin (a)

   $ 226.8      $ 46.2      $ 23.8      $ —        $ —        $ 296.8   

Operating and maintenance expense

     (67.8     (12.8     (11.1     —          —          (91.7

Depreciation and amortization expense

     (43.0     (4.6     (1.9     (0.1     —          (49.6

General and administrative expense

     —          —          —          (34.0     —          (34.0

Other income

     —          0.4        —          —          —          0.4   

Earnings from unconsolidated affiliates

     11.6        5.0        —          —          —          16.6   

Interest expense, net

     —          —          —          (31.8     —          (31.8

Income tax expense (b)

     —          —          —          (1.0     —          (1.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     127.6        34.2        10.8        (66.9     —          105.7   

Net income attributable to noncontrolling interests

     (2.0     —          —          —          —          (2.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to partners

   $ 125.6      $ 34.2      $ 10.8      $ (66.9   $ —        $ 103.7   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-cash derivative mark-to-market (c)

   $ 5.4      $ —        $ 13.9      $ (0.4   $ —        $ 18.9   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Capital expenditures

   $ 141.5      $ 8.5      $ 2.5      $ —        $ —        $ 152.5   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Acquisition expenditures

   $ 375.4      $ 29.8      $ —        $ —        $ —        $ 405.2   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Investments in unconsolidated affiliates

   $ 52.7      $ 33.6      $ —        $ —        $ —        $ 86.3   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Nine Months Ended September 30, 2011

 

     Natural Gas
Services (e)
    NGL
Logistics
    Wholesale
Propane
Logistics
    Other     Eliminations
(f)
    Total  
     (Millions)  

Total operating revenue

   $ 1,310.9      $ 42.3      $ 452.1      $ —        $ (2.2   $ 1,803.1   

Total purchases

     (1,043.7     (4.7     (418.1     —          2.2        (1,464.3
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross margin (a)

   $ 267.2      $ 37.6      $ 34.0      $ —        $ —        $ 338.8   

Operating and maintenance expense

     (69.0     (11.3     (11.0     —          —          (91.3

Depreciation and amortization expense

     (66.7     (6.1     (2.1     —          —          (74.9

General and administrative expense

     —          —          —          (35.2     —          (35.2

Other income

     —          0.4        —          —          —          0.4   

Earnings from unconsolidated affiliates

     17.1        —          —          —          —          17.1   

Interest expense, net

     —          —          —          (25.0     —          (25.0

Income tax expense (b)

     —          —          —          (0.9     —          (0.9
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     148.6        20.6        20.9        (61.1     —          129.0   

Net income attributable to noncontrolling interests

     (12.8     —          —          —          —          (12.8
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to partners

   $ 135.8      $ 20.6      $ 20.9      $ (61.1   $ —        $ 116.2   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-cash derivative mark-to-market (c)

   $ 49.7      $ —        $ (0.7   $ (1.7   $ —        $ 47.3   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Capital expenditures

   $ 88.8      $ 6.9      $ 2.8      $ —        $ —        $ 98.5   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Acquisition expenditures

   $ 145.3      $ 29.6      $ —        $ —        $ —        $ 174.9   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Investments in unconsolidated affiliates

   $ 6.8      $ —        $ —        $ —        $ —        $ 6.8   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

     September 30,
2012
     December 31,
2011
 
     (Millions)  

Segment long-term assets:

     

Natural Gas Services (e)

   $ 1,768.1       $ 1,555.4   

NGL Logistics

     331.0         250.1   

Wholesale Propane Logistics

     104.5         104.2   

Other (d)

     43.2         14.0   
  

 

 

    

 

 

 

Total long-term assets

     2,246.8         1,923.7   

Current assets

     270.6         353.7   
  

 

 

    

 

 

 

Total assets

   $ 2,517.4       $ 2,277.4   
  

 

 

    

 

 

 

 

(a) Gross margin consists of total operating revenues, including commodity derivative activity, less purchases of natural gas, propane, NGLs and condensate. Gross margin is viewed as a non-GAAP measure under the rules of the SEC, but is included as a supplemental disclosure because it is a primary performance measure used by management as it represents the results of product sales versus product purchases. As an indicator of our operating performance, gross margin should not be considered an alternative to, or more meaningful than, net income or cash flow as determined in accordance with GAAP. Our gross margin may not be comparable to a similarly titled measure of another company because other entities may not calculate gross margin in the same manner.
(b) For the three and nine months ended September 30, 2011, income tax expense relates primarily to the Texas margin tax and the Michigan business tax. The Michigan business tax was repealed in 2012; accordingly, income tax expense for the three and nine months ended September 30, 2012 relates primarily to the Texas margin tax.
(c) Non-cash derivative mark-to-market is included in segment gross margin, along with cash settlements for our derivative contracts.
(d) Other long-term assets not allocable to segments consist of unrealized gains on derivative instruments, corporate leasehold improvements and other long-term assets.
(e) The segment information for the three and nine months ended September 30, 2012 and 2011, and as of December 31, 2011, include the results of Southeast Texas, a transfer of net assets between entities under common control that was accounted for as if the transfer occurred at the beginning of the period, and prior years are retrospectively adjusted to furnish comparative information similar to the pooling method.
(f) Represents intersegment revenues consisting of sales of NGLs by Marysville in our NGL Logistics business to our Wholesale Propane business.