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Segment Information
 3 Months Ended
Mar. 31, 2019
Segment Reporting [Abstract]  
Segment Information

Note 21 — Segment Information

 

We operate in two primary segments: (i) Gathering and Processing, and (ii) Logistics and Marketing (also referred to as the Downstream Business). Our reportable segments include operating segments that have been aggregated based on the nature of the products and services provided.

 

Our Gathering and Processing segment 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 Gathering and Processing segment's assets are located in the Permian Basin of West Texas and Southeast New Mexico (including the Midland and Delaware Basins); the Eagle Ford Shale in South Texas; the Barnett Shale in North Texas; the Anadarko, Ardmore, and Arkoma Basins in Oklahoma (including the SCOOP and STACK) and South Central Kansas; the Williston Basin in North Dakota; and the onshore and near offshore regions of the Louisiana Gulf Coast and the Gulf of Mexico.

 

Our Logistics and Marketing segment includes the activities and assets necessary to convert mixed NGLs into NGL products and also includes other assets and value-added services such as storing, fractionating, terminaling, transporting and marketing of NGLs and NGL products, including services to LPG exporters; storing and terminaling of refined petroleum products and crude oil and certain natural gas supply and marketing activities in support of our other businesses. The Logistics and Marketing segment includes the Grand Prix pipeline, which is currently under construction with certain segments of the pipeline currently in operation. The associated assets are generally connected to and supplied in part by our Gathering and Processing segment and, except for the pipeline projects and smaller terminals, are located predominantly in Mont Belvieu and Galena Park, Texas, and in Lake Charles, Louisiana.

 

Other contains the results of commodity derivative activities related to Gathering and Processing hedges of equity volumes that are included in operating margin and mark-to-market gains/losses related to derivative contracts that were not designated as cash flow hedges. Elimination of inter-segment transactions are reflected in the corporate and eliminations column.

 

Reportable segment information is shown in the following tables:

 

 

 

Three Months Ended March 31, 2019

 

 

 

Gathering and Processing

 

 

Logistics and Marketing

 

 

Other

 

 

Corporate

and

Eliminations

 

 

Total

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales of commodities

 

$

247.6

 

 

$

1,726.8

 

 

$

2.1

 

 

$

—

 

 

$

1,976.5

 

Fees from midstream services

 

 

199.9

 

 

 

123.0

 

 

 

—

 

 

 

—

 

 

 

322.9

 

 

 

 

447.5

 

 

 

1,849.8

 

 

 

2.1

 

 

 

—

 

 

 

2,299.4

 

Intersegment revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales of commodities

 

 

822.8

 

 

 

38.4

 

 

 

—

 

 

 

(861.2

)

 

 

—

 

Fees from midstream services

 

 

1.9

 

 

 

5.5

 

 

 

—

 

 

 

(7.4

)

 

 

—

 

 

 

 

824.7

 

 

 

43.9

 

 

 

—

 

 

 

(868.6

)

 

 

—

 

Revenues

 

$

1,272.2

 

 

$

1,893.7

 

 

$

2.1

 

 

$

(868.6

)

 

$

2,299.4

 

Operating margin

 

$

229.0

 

 

$

152.1

 

 

$

2.1

 

 

$

—

 

 

$

383.2

 

Other financial information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets (1)

 

$

11,713.9

 

 

$

5,644.9

 

 

$

87.9

 

 

$

122.5

 

 

$

17,569.2

 

Goodwill

 

$

46.6

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

46.6

 

Capital expenditures

 

$

417.8

 

 

$

470.9

 

 

$

—

 

 

$

16.9

 

 

$

905.6

 

__________________________________________________________________________________________

 

(1)

Assets in the Corporate and Eliminations column primarily include tax-related assets, cash, prepaids and debt issuance costs for our revolving credit facilities.

 

 

 

 

Three Months Ended March 31, 2018

 

 

 

Gathering and Processing

 

 

Logistics and Marketing

 

 

Other

 

 

Corporate

and

Eliminations

 

 

Total

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales of commodities

 

$

265.2

 

 

$

1,926.3

 

 

$

(17.8

)

 

$

—

 

 

$

2,173.7

 

Fees from midstream services

 

 

161.3

 

 

 

120.6

 

 

 

—

 

 

 

—

 

 

 

281.9

 

 

 

 

426.5

 

 

 

2,046.9

 

 

 

(17.8

)

 

 

—

 

 

 

2,455.6

 

Intersegment revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales of commodities

 

 

866.5

 

 

 

55.7

 

 

 

—

 

 

 

(922.2

)

 

 

—

 

Fees from midstream services

 

 

1.9

 

 

 

6.9

 

 

 

—

 

 

 

(8.8

)

 

 

—

 

 

 

 

868.4

 

 

 

62.6

 

 

 

—

 

 

 

(931.0

)

 

 

—

 

Revenues

 

$

1,294.9

 

 

$

2,109.5

 

 

$

(17.8

)

 

$

(931.0

)

 

$

2,455.6

 

Operating margin

 

$

220.8

 

 

$

138.4

 

 

$

(17.8

)

 

$

—

 

 

$

341.4

 

Other financial information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets (1)

 

$

10,908.5

 

 

$

3,595.1

 

 

$

103.0

 

 

$

146.6

 

 

$

14,753.2

 

Goodwill

 

$

256.6

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

256.6

 

Capital expenditures

 

$

273.2

 

 

$

251.0

 

 

$

—

 

 

$

33.8

 

 

$

558.0

 

__________________________________________________________________________________________

(1)

Assets in the Corporate and Eliminations column primarily include tax-related assets, cash, prepaids and debt issuance costs for our revolving credit facilities.

 

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

 

 

Three Months Ended March 31,

 

 

2019

 

 

2018

 

Sales of commodities:

 

 

 

 

 

 

 

Revenue recognized from contracts with customers:

 

 

 

 

 

 

 

Natural gas

$

411.3

 

 

$

470.1

 

NGL

 

1,408.1

 

 

 

1,607.3

 

Condensate and crude oil

 

137.7

 

 

 

86.9

 

Petroleum products

 

7.6

 

 

 

48.2

 

 

 

1,964.7

 

 

 

2,212.5

 

Non-customer revenue:

 

 

 

 

 

 

 

Derivative activities - Hedge

 

21.3

 

 

 

(28.0

)

Derivative activities - Non-hedge (1)

 

(9.5

)

 

 

(10.8

)

 

 

11.8

 

 

 

(38.8

)

Total sales of commodities

 

1,976.5

 

 

 

2,173.7

 

 

 

 

 

 

 

 

 

Fees from midstream services:

 

 

 

 

 

 

 

Revenue recognized from contracts with customers:

 

 

 

 

 

 

 

NGL transportation and services

 

36.2

 

 

 

41.1

 

Storage, terminaling and export

 

79.6

 

 

 

78.2

 

Gathering and processing

 

194.5

 

 

 

152.1

 

Other

 

12.6

 

 

 

10.5

 

 

 

 

 

 

 

 

 

Total fees from midstream services

 

322.9

 

 

 

281.9

 

 

 

 

 

 

 

 

 

Total revenues

$

2,299.4

 

 

$

2,455.6

 

__________________________________________________________________________________________

(1)

Represents derivative activities that are not designated as hedging instruments under ASC 815.

 

The following table shows a reconciliation of reportable segment operating margin to income (loss) before income taxes for the periods presented: 

 

 

Three Months Ended March 31,

 

 

2019

 

 

2018

 

Reconciliation of reportable segment operating

margin to income (loss) before income taxes:

 

 

 

 

 

 

 

 

 

Gathering and Processing operating margin

$

 

229.0

 

 

$

 

220.8

 

Logistics and Marketing operating margin

 

 

152.1

 

 

 

 

138.4

 

Other operating margin

 

 

2.1

 

 

 

 

(17.8

)

Depreciation and amortization expense

 

 

(237.4

)

 

 

 

(198.1

)

General and administrative expense

 

 

(81.1

)

 

 

 

(56.7

)

Interest income (expense), net

 

 

(80.6

)

 

 

 

16.1

 

Change in contingent considerations

 

 

(9.7

)

 

 

 

(56.1

)

Other, net

 

 

(2.0

)

 

 

 

1.2

 

Income (loss) before income taxes

$

 

(27.6

)

 

$

 

47.8