Segment Information

12 Months Ended

Dec. 31, 2011

Segment Information [Abstract]

Segment Information

Segment Information

During 2011, the Partnership changed the name of the Transportation segment to Joint Ventures segment, which represents the Partnership’s equity method investments in its four unconsolidated affiliates: HPC, MEP, Lone Star and Ranch JV.

Gathering and Processing. The Partnership provides “wellhead-to-market” services to producers of natural gas, which include transporting raw natural gas from the wellhead through gathering systems, processing raw natural gas to separate NGLs from the raw natural gas and selling or delivering pipeline-quality natural gas and NGLs to various markets and pipeline systems.

Joint Ventures. The Partnership owns investments in four joint ventures:

• a 49.99% general partner interest in HPC, which owns RIGS, a 450-mile intrastate pipeline that delivers natural gas from northwest Louisiana to downstream pipelines and markets;

• a 50% membership interest in MEP, which owns an interstate natural gas pipeline with approximately 500  miles stretching from southeast Oklahoma through northeast Texas, northern Louisiana and central Mississippi to an interconnect with the Transcontinental Gas Pipe Line system in Butler, Alabama;

• a 30% membership interest in Lone Star, an entity owning a diverse set of midstream energy assets including pipelines, storage, fractionation and processing facilities located in the states of Texas, Mississippi and Louisiana; and

• a 33.33% membership interest in Ranch JV, which, upon completion of construction in 2012, will process natural gas delivered from the NGLs-rich Bone Spring and Avalon shale formations in west Texas.

Contract Compression. The Partnership owns and operates a fleet of compressors used to provide turn-key natural gas compression services for customer specific systems.

Contract Treating. The Partnership owns and operates a fleet of equipment used to provide treating services, such as carbon dioxide and hydrogen sulfide removal, natural gas cooling, dehydration and BTU management, to natural gas producers and midstream pipeline companies.

Corporate and Others. The Corporate and Others segment comprises a small regulated pipeline and the Partnership’s corporate offices.

The Partnership accounts for intersegment revenues as if the revenues were to third parties, exclusive of certain cost of capital charges.

Management evaluates the performance of each segment and makes capital allocation decisions through the separate consideration of segment margin and operation and maintenance expenses. Segment margin, for the Gathering and Processing and the Corporate and Others segments is defined as total revenues, including service fees, less cost of sales. In the Contract Compression segment and Contract Treating segment, segment margin is defined as revenues less direct costs.

Management believes segment margin is an important measure because it directly relates to volume, commodity price changes, revenue generating horsepower and revenue generating gallons per minute. Operation and maintenance expenses are a separate measure used by management to evaluate performance of field operations. Direct labor, insurance, property taxes, repair and maintenance, utilities and contract services comprise the most significant portion of operation and maintenance expenses. These expenses fluctuate depending on the activities performed during a specific period. The Partnership does not deduct operation and maintenance expenses from total revenues in calculating segment margin because management separately evaluates commodity volume and price changes in segment margin. The Partnership does not record segment margin for the Joint Ventures segment because it records its ownership percentages of the net income in HPC, MEP, Lone Star and Ranch JV as income from unconsolidated affiliates in accordance with the equity method of accounting.

Results for each period, together with amounts related to balance sheets for each segment are shown below:

	Successor						Predecessor
	Year Ended December 31, 2011			Period from Acquisition (May 26, 2010) to December 31, 2010				Period from January 1, 2010 to May 25, 2010			Year Ended December 31, 2009
External Revenue
Gathering and Processing	$	1,226,260		$	606,944			$	438,804		$	879,439
Joint Ventures	—			—				—			9,078
Contract Compression	150,496			86,099				58,971			148,846
Contract Treating	39,604			13,662				—			—
Corporate and Others	17,538			9,908				7,275			5,914
Eliminations	—			—				—			—
Total	$	1,433,898		$	716,613			$	505,050		$	1,043,277
Intersegment Revenue
Gathering and Processing	$	—		$	—			$	—		$	(8,755	)
Joint Ventures	—			—				—			4,933
Contract Compression	16,346			14,079				9,126			4,604
Contract Treating	397			—				—			—
Corporate and Others	296			185				91			296
Eliminations	(17,039		)	(14,264		)		(9,217		)	(1,078		)
Total	$	—		$	—			$	—		$	—
Cost of Sales
Gathering and Processing	$	992,797		$	496,933			$	352,807		$	656,764
Joint Ventures	—			—				—			2,297
Contract Compression	11,269			8,325				5,741			12,422
Contract Treating	10,545			2,208				—			—
Corporate and Others	(1,450		)	(2,954		)		(679		)	(65		)
Eliminations	(335		)	(185		)		(91		)	3,526
Total	$	1,012,826		$	504,327			$	357,778		$	674,944
Segment Margin
Gathering and Processing	$	233,463		$	110,011			$	85,997		$	213,920
Joint Ventures	—			—				—			11,714
Contract Compression	155,573			91,853				62,356			141,028
Contract Treating	29,456			11,454				—			—
Corporate and Others	19,284			13,047				8,045			6,275
Eliminations	(16,704		)	(14,079		)		(9,126		)	(4,604		)
Total	$	421,072		$	212,286			$	147,272		$	368,333

Operation and Maintenance
Gathering and Processing	$	97,566		$	53,421		$	33,430		$	74,962
Joint Ventures	—			—			—			2,112
Contract Compression	63,442			37,067			23,476			45,744
Contract Treating	2,974			1,227			—			—
Corporate and Others	365			172			59			238
Eliminations	(16,704		)	(14,079		)	(9,123		)	(5,976		)
Total	$	147,643		$	77,808		$	47,842		$	117,080
Depreciation and Amortization
Gathering and Processing	$	87,377		$	45,547		$	25,422		$	59,654
Joint Ventures	—			—			—			2,448
Contract Compression	65,201			25,771			15,560			36,548
Contract Treating	12,325			3,684			—			—
Corporate and Others	3,781			965			802			1,448
Eliminations	—			—			—			—
Total	$	168,684		$	75,967		$	41,784		$	100,098
Income from Unconsolidated Affiliates
Gathering and Processing	$	—		$	—		$	—		$	—
Joint Ventures	119,540			53,493			15,872			7,886
Contract Compression	—			—			—			—
Contract Treating	—			—			—			—
Corporate and Others	—			—			—			—
Eliminations	—			—			—			—
Total	$	119,540		$	53,493		$	15,872		$	7,886
Expenditures for Long-Lived Assets
Gathering and Processing	$	280,199		$	93,398		$	43,666		$	84,097
Joint Ventures	—			—			—			22,367
Contract Compression	112,338			44,316			18,418			83,707
Contract Treating	7,445			18,106			—			—
Corporate and Others	6,357			3,403			1,703			2,912
Eliminations	—			—			—			—
Total	$	406,339		$	159,223		$	63,787		$	193,083
							December 31, 2011			December 31, 2010
Assets
Gathering and Processing							$	1,959,697		$	1,724,682
Joint Ventures							1,924,705			1,351,256
Contract Compression							1,405,600			1,411,325
Contract Treating							215,172			220,584
Corporate and Others							62,682			62,357
Eliminations							—			—
Total							$	5,567,856		$	4,770,204
Investment in Unconsolidated Affiliates
Gathering and Processing							$	—		$	—
Joint Ventures							1,924,705			1,351,256
Contract Compression							—			—
Contract Treating							—			—
Corporate and Others							—			—
Eliminations							—			—
Total							$	1,924,705		$	1,351,256
Goodwill
Gathering and Processing							$	313,361		$	313,361
Joint Ventures							—			—

Contract Compression	476,428		476,428
Contract Treating	—		—
Corporate and Others	—		—
Eliminations	—		—
Total	$	789,789	$	789,789

The table below provides a reconciliation of total segment margin to net income (loss) from continuing operations before income taxes:

	Successor						Predecessor
	Year Ended December 31, 2011			Period from  Acquisition (May 26, 2010) to December 31, 2010			Period from  January 1, 2010 to (May 25, 2010)			Year Ended December 31, 2009
Net income (loss) from continuing operations before income taxes	$	74,084		$	(4,176	)	$	(4,215	)	$	141,663
Add (deduct):
Operation and maintenance	147,643			77,808			47,842			117,080
General and administrative	67,408			43,739			37,212			57,863
(Gain) loss on assets sales, net	(2,372		)	213			303			(133,282		)
Depreciation and amortization	168,684			75,967			41,784			100,098
Income from unconsolidated affiliates	(119,540		)	(53,493		)	(15,872		)	(7,886		)
Interest expense, net	102,474			48,251			34,541			77,665
Loss on debt refinancing, net	—			15,748			1,780			—
Other income and deductions, net	(17,309		)	8,229			3,897			15,132
Total segment margin	$	421,072		$	212,286		$	147,272		$	368,333