Segments

9 Months Ended

Sep. 30, 2019

Our businesses are organized based on the nature and location of the services they provide. Certain summarized information related to our reportable segments is shown in the tables below. None of the operating segments have been aggregated. Although Corporate and Other does not represent an operating segment, it is included in the tables below to reconcile segment information to that of the consolidated Company.

In the fourth quarter of 2018, due to recent changes in our asset portfolio, the company elected to reorganize its business structure and reporting relationships to enhance execution and capture operating efficiencies. In conjunction with the reorganization, our reportable segments have changed. Prior period segment disclosures have been recast to reflect the new segments. U.S. Liquids includes the results of our U.S. crude oil operations, including the results of our historical HFOTCO segment. U.S. Gas contains the results of our historical SemGas segment. Canada includes the operations of our historical SemCAMS segment. Our prior SemMexico and SemLogistics segments are included within Corporate and Other, as these businesses were disposed of in 2018. Eliminations of transactions between segments are also included within Corporate and Other in the tables below.

The accounting policies of each segment are the same as the accounting policies of the consolidated Company. Transactions between segments are generally recorded based on prices negotiated between the segments.

Segment Profit is defined as revenue, less cost of products sold (exclusive of depreciation and amortization) and operating expenses, plus equity earnings and is adjusted to remove unrealized gains and losses on commodity derivatives and to reflect equity earnings on an EBITDA basis. Reflecting equity earnings on an EBITDA basis is achieved by adjusting equity earnings to exclude our percentage of interest, taxes, depreciation and amortization from equity earnings for operated equity method investees. For our investment in NGL Energy, we exclude equity earnings and include cash distributions received.

Our results by segment are presented in the tables below (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Revenues:
U.S. Liquids
External	$	457,672		$	520,287		$	1,506,173		$	1,509,365
U.S. Gas
External	34,346			71,770			120,366			183,176
Intersegment	3,082			4,705			11,354			11,568
Canada
External	70,392			41,939			178,043			156,715
Corporate and Other
External	—			—			—			42,143
Intersegment	(3,082		)	(4,705		)	(11,354		)	(11,568		)
Total Revenues	$	562,410		$	633,996		$	1,804,582		$	1,891,399



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019		2018
Earnings from equity method investments:
U.S. Liquids	$	9,075		$	14,546		$	35,700	$	41,489
Corporate and Other	(10		)	(18		)	11		4
Total earnings from equity method investments	$	9,065		$	14,528		$	35,711	$	41,493



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Depreciation and amortization:
U.S. Liquids	$	36,890	$	36,793	$	116,201	$	105,838
U.S. Gas	10,958		10,836		33,165		32,107
Canada	12,905		5,250		33,024		15,752
Corporate and Other	736		719		2,146		2,192
Total depreciation and amortization	$	61,489	$	53,598	$	184,536	$	155,889



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Income tax expense (benefit):
U.S. Liquids	$	149		$	209		$	445		$	599
Canada	2,532			2,836			(8,260		)	8,942
Corporate and Other	(6,700		)	(5,742		)	(6,895		)	7,232
Total income tax expense (benefit)	$	(4,019	)	$	(2,697	)	$	(14,710	)	$	16,773



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Segment profit:
U.S. Liquids	$	67,508		$	75,500		$	242,208		$	223,949
U.S. Gas	13,661			19,754			36,866			49,468
Canada	34,931			20,543			87,293			64,104
Corporate and Other	(1,527		)	(913		)	(1,983		)	9,878
Total segment profit	$	114,573		$	114,884		$	364,384		$	347,399



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Reconciliation of segment profit to net income (loss):
Total segment profit	$	114,573		$	114,884		$	364,384		$	347,399
Less:
Adjustment to reflect equity earnings on an EBITDA basis	4,633			4,926			14,061			14,695
Net unrealized loss (gain) related to commodity derivative instruments	(10,742		)	(4,860		)	(1,021		)	1,775
General and administrative expense	29,662			21,904			84,729			71,267
Depreciation and amortization	61,489			53,598			184,536			155,889
Loss (gain) on disposal or impairment, net	(373		)	(383		)	7,119			(2,125		)
Interest expense	39,663			35,318			115,225			113,683
Foreign currency transaction loss (gain)	801			(983		)	(476		)	4,625
Other income, net	(1,075		)	(400		)	(3,401		)	(1,883		)
Income tax expense (benefit)	(4,019		)	(2,697		)	(14,710		)	16,773
Net income (loss)	$	(5,466	)	$	8,461		$	(21,678	)	$	(27,300	)



	September 30, 2019		December 31, 2018
Total assets (excluding intersegment receivables):
U.S. Liquids	$	3,742,432	$	3,689,384
U.S. Gas	665,044		716,837
Canada	1,412,497		684,418
Corporate and Other	292,657		119,668
Total assets	$	6,112,630	$	5,210,307



	September 30, 2019		December 31, 2018
Equity investments:
U.S. Liquids	$	264,662	$	255,043
Corporate and Other	18,976		18,966
Total equity investments	$	283,638	$	274,009