Segment Information

3 Months Ended

Mar. 31, 2015

Segment Information [Abstract]

Segment Information

Note 18 — Segment Information

The Partnership reports its operations in two divisions: (i) Gathering and Processing, consisting of two reportable segments – (a) Field Gathering and Processing and (b) Coastal Gathering and Processing; and (ii) Logistics and Marketing consisting of two reportable segments – (a) Logistics Assets and (b) Marketing and Distribution. The financial results of its hedging activities on reported profits are reported in Other.

The Partnership’s Gathering and Processing division includes assets used in the gathering of natural gas produced from oil and gas wells and processing this raw natural gas into merchantable natural gas by extracting NGLs and removing impurities; and assets used for crude oil gathering and terminaling. The Field Gathering and Processing segment's assets are located in North Texas, the Permian Basin of West Texas and Southeast New Mexico, South Texas, Oklahoma, Kansas and in North Dakota. The Coastal Gathering and Processing segment's assets are located in the onshore and near offshore regions of the Louisiana Gulf Coast and the Gulf of Mexico.

The Partnership’s Logistics and Marketing division is also referred to as its Downstream Business. The Partnership’s Downstream Business includes all the activities necessary to convert mixed NGLs into NGL products and provides certain value added services such as storing, terminaling, distributing and marketing of NGLs, refined petroleum products and crude oil. It also includes certain natural gas supply and marketing activities in support of the Partnership’s other operations, including services to LPG exporters, as well as transporting natural gas and NGLs.

The Partnership’s Logistics Assets segment is involved in transporting, storing, and fractionating mixed NGLs; storing, terminaling, and transporting finished NGLs, including services for the LPG export market; and storing and terminaling refined petroleum products. These assets are generally connected to and supplied in part by the Partnership’s Gathering and Processing segments and are predominantly located in Mont Belvieu, and Galena Park, Texas and Lake Charles, Louisiana.

The Partnership’s Marketing and Distribution segment covers activities required to distribute and market raw and finished NGLs and all natural gas marketing activities. It includes (1) marketing the Partnership’s own NGL production and purchasing NGL products for resale in selected United States markets; (2) providing LPG balancing services to refinery customers; (3) transporting, storing and selling propane and providing related propane logistics services to multi-state retailers, independent retailers and other end-users; (4) providing propane, butane and services to LPG exporters; and (5) marketing natural gas available to the Partnership from its Gathering and Processing division and the purchase and resale and other value added activities related to third-party natural gas in selected United States markets.

Other contains the results of the Partnership’s commodity hedging activities included in operating margin. Eliminations of inter-segment transactions are reflected in the corporate and eliminations column.

We are reviewing our segment disclosures as a result of both the merger and integrations effort of the Atlas mergers.

Reportable segment information is shown in the following tables. We have segregated the following segment information between Partnership and non-Partnership activities.

 

	Three Months Ended March 31, 2015
	Partnership
	Field Gathering and Processing		Coastal Gathering and Processing		Logistics Assets		Marketing and Distribution		Other		Corporate and Eliminations			Total Partnership		TRC Non- Partnership			Consolidated
Revenues
Sales of commodities	$	168.0	$	52.7	$	27.4	$	1,132.3	$	21.7	$	0.1		$	1,402.2	$	-		$	1,402.2
Fees from midstream services		63.3		8.8		87.7		117.7		-		-			277.5		-			277.5
		231.3		61.5		115.1		1,250.0		21.7		0.1			1,679.7		-			1,679.7
Intersegment revenues
Sales of commodities		215.4		62.8		1.1		78.5		-		(357.8	)		-		-			-
Fees from midstream services		2.0		-		72.4		4.4		-		(78.8	)		-		-			-
		217.4		62.8		73.5		82.9		-		(436.6	)		-		-			-
Revenues	$	448.7	$	124.3	$	188.6	$	1,332.9	$	21.7	$	(436.5	)	$	1,679.7	$	-		$	1,679.7
Operating margin	$	79.3	$	7.8	$	125.4	$	65.9	$	21.7	$	-		$	-	$	(0.1	)	$	300.0
Other financial information:
Segment assets (1)	$	7,262.8	$	352.9	$	1,764.6	$	487.0	$	177.3	$	1,786.6		$	11,831.2	$	185.7		$	12,016.9
Special GP interest (2)
Goodwill		628.5		-		-		-		-		-			628.5		-			628.5
Intangible assets		979.9		-		-		-		-		-			979.9		-			979.9
Total assets	$	8,871.2	$	352.9	$	1764.6	$	487.0	$	177.3	$	1786.6		$	13,439.6		185.7		$	13,625.3
Capital expenditures	$	94.4	$	1.1	$	57.7	$	3.0	$	-	$	1.1		$	157.3	$	-		$	157.3
Business acquisitions	$	5,047.8	$	-	$	-	$	-	$	-	$	-		$	5,047.8	$	-		$	5,047.8

(1) Corporate assets at the Segment level primarily include investment in unconsolidated subsidiaries and debt issuance costs associated with our long-term debt.

(2) Represents the preliminary acquisition fair value attributable to goodwill and intangible assets associated with the Atlas mergers.

	Three Months Ended March 31, 2014
	Partnership
	Field Gathering and Processing		Coastal Gathering and Processing		Logistics Assets		Marketing and Distribution		Other			Corporate and Eliminations			TRC Non- Partnership		Consolidated
Revenues
Sales of commodities	$	45.8	$	100.5	$	21.0	$	1,924.0	$	(6.1	)	$	(0.1	)	$	-	$	2,085.1
Fees from midstream services		40.8		7.7		68.1		92.8		-			0.2			-		209.6
		86.6		108.2		89.1		2,016.8		(6.1	)		0.1			-		2,294.7
Intersegment revenues
Sales of commodities		400.4		177.0		0.6		130.4		-			(708.4	)		-		-
Fees from midstream services		1.1		-		66.2		7.9		-			(75.2	)		-		-
		401.5		177.0		66.8		138.3		-			(783.6	)		-		-
Revenues	$	488.1	$	285.2	$	155.9	$	2,155.1	$	(6.1	)	$	(783.5	)	$	-	$	2,294.7
Operating margin	$	94.1	$	26.1	$	96.6	$	64.6	$	(6.1	)	$	-		$	-	$	275.3
Other financial information:
Total assets	$	3,275.1	$	385.1	$	1,568.7	$	614.1	$	4.5		$	128.8		$	78.9	$	6,055.2
Capital expenditures	$	98.9	$	4.3	$	68.6	$	3.1	$	-		$	0.5		$	-	$	175.4

The following table shows our consolidated revenues by product and service for the periods presented:

	Three Months Ended March 31,
	2015		2014
Sales of commodities:
Natural gas	$	302.1	$	391.8
NGL		1,030.7		1,650.9
Condensate		21.3		28.4
Petroleum products		26.4		20.1
Derivative activities		21.7		(6.1	)
		1,402.2		2,085.1
Fees from midstream services:
Fractionating and treating		49.8		46.5
Storage, terminaling, transportation and export		136.2		101.2
Gathering and processing		68.4		42.6
Other		23.1		19.3
		277.5		209.6
Total revenues	$	1,679.7	$	2,294.7

The following table shows a reconciliation of operating margin to net income for the periods presented:

	Three Months Ended March 31,
	2015			2014
Reconciliation of operating margin to net income:
Operating margin	$	300.0		$	275.3
Depreciation and amortization expense		(119.6	)		(79.6	)
General and administrative expense		(42.6	)		(38.0	)
Interest expense, net		(55.0	)		(33.9	)
Other, net		(33.0	)		5.6
Income tax expense		(15.2	)		(22.5	)
Net income	$	34.6		$	106.9