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

4. SEGMENT INFORMATION

As of March 31, 2019, our reportable segments are:

 

the Utica Shale, which is served by Summit Utica;

 

Ohio Gathering, which includes our ownership interest in OGC and OCC;

 

the Williston Basin, which is served by Polar and Divide, Bison Midstream and Tioga Midstream (through March 22, 2019; refer to Note 17 for details on the sale of Tioga Midstream);

 

the DJ Basin, which is served by Niobrara G&P;

 

the Permian Basin, which is served by Summit Permian;

 

the Piceance Basin, which is served by Grand River;

 

the Barnett Shale, which is served by DFW Midstream; and

 

the Marcellus Shale, which is served by Mountaineer Midstream.

Each of our reportable segments provides midstream services in a specific geographic area. Our reportable segments reflect the way in which we internally report the financial information used to make decisions and allocate resources in connection with our operations.

The Ohio Gathering reportable segment includes our investment in OGC and OCC. Income or loss from equity method investees, as reflected on the statements of operations, solely relates to Ohio Gathering and is recognized and disclosed on a one-month lag (see Note 8).

Corporate and Other represents those results that are: (i) not specifically attributable to a reportable segment; (ii) not individually reportable; or (iii) that have not been allocated to our reportable segments for the purpose of evaluating their performance, including certain general and administrative expense items, natural gas and crude oil marketing services and transaction costs.

Assets by reportable segment follow.

 

 

 

March 31,2019

 

 

December 31, 2018

 

 

 

(In thousands)

 

Assets (1):

 

 

 

 

 

 

 

 

Utica Shale

 

$

206,621

 

 

$

207,357

 

Ohio Gathering

 

 

640,226

 

 

 

649,250

 

Williston Basin

 

 

438,772

 

 

 

526,819

 

DJ Basin

 

 

150,663

 

 

 

166,580

 

Permian Basin

 

 

163,897

 

 

 

145,702

 

Piceance Basin

 

 

685,713

 

 

 

699,638

 

Barnett Shale

 

 

363,834

 

 

 

376,564

 

Marcellus Shale

 

 

206,447

 

 

 

208,790

 

Total reportable segment assets

 

 

2,856,173

 

 

 

2,980,700

 

Corporate and Other

 

 

47,238

 

 

 

44,181

 

Eliminations

 

 

(2,821

)

 

 

(4,319

)

Total assets

 

$

2,900,590

 

 

$

3,020,562

 

 

(1) At March 31, 2019 and December 31, 2018, Corporate and Other included $17.0 million and $9.6 million of capital expenditures relating to the Double E Pipeline Project.

 

Revenues by reportable segment follow.

 

 

 

Three months ended March 31,

 

 

 

2019

 

 

2018

 

 

 

(In thousands)

 

Revenues (1):

 

 

 

 

 

 

 

 

Utica Shale

 

$

7,495

 

 

$

10,041

 

Williston Basin

 

 

34,199

 

 

 

28,424

 

DJ Basin

 

 

4,816

 

 

 

3,016

 

Permian Basin

 

 

4,619

 

 

 

 

Piceance Basin

 

 

35,280

 

 

 

38,571

 

Barnett Shale

 

 

15,285

 

 

 

16,170

 

Marcellus Shale

 

 

6,197

 

 

 

7,825

 

Total reportable segments revenue

 

 

107,891

 

 

 

104,047

 

Corporate and Other

 

 

26,838

 

 

 

14,176

 

Eliminations

 

 

(3,321

)

 

 

(903

)

Total revenues

 

$

131,408

 

 

$

117,320

 

 

(1) Excludes revenues earned by Ohio Gathering due to equity method accounting.

 

Counterparties accounting for more than 10% of total revenues were as follows:

 

 

 

Three months ended March 31,

 

 

 

2019

 

2018

 

Percentage of total revenues (1):

 

 

 

 

 

 

Counterparty A - Piceance Basin

 

*

 

 

11

%

 

(1) Excludes revenues earned by Ohio Gathering due to equity method accounting.

* Less than 10%

 

Depreciation and amortization, including the amortization expense associated with our favorable and unfavorable gas gathering contracts as reported in other revenues, by reportable segment follows.

 

 

 

Three months ended March 31,

 

 

 

2019

 

 

2018

 

 

 

(In thousands)

 

Depreciation and amortization (1):

 

 

 

 

 

 

 

 

Utica Shale

 

$

1,908

 

 

$

1,853

 

Williston Basin

 

 

5,436

 

 

 

5,609

 

DJ Basin

 

 

799

 

 

 

781

 

Permian Basin

 

 

1,072

 

 

 

 

Piceance Basin

 

 

11,791

 

 

 

11,774

 

Barnett Shale (2)

 

 

4,330

 

 

 

3,757

 

Marcellus Shale

 

 

2,283

 

 

 

2,272

 

Total reportable segment depreciation and amortization

 

 

27,619

 

 

 

26,046

 

Corporate and Other

 

 

497

 

 

 

480

 

Total depreciation and amortization

 

$

28,116

 

 

$

26,526

 

 

(1) Excludes depreciation and amortization recognized by Ohio Gathering due to equity method accounting.

(2) Includes the amortization expense associated with our favorable and unfavorable gas gathering contracts as reported in other revenues.

Cash paid for capital expenditures by reportable segment follow.

 

 

 

Three months ended March 31,

 

 

 

2019

 

 

2018

 

 

 

(In thousands)

 

Cash paid for capital expenditures (1):

 

 

 

 

 

 

 

 

Utica Shale

 

$

101

 

 

$

1,020

 

Williston Basin

 

 

8,023

 

 

 

5,888

 

DJ Basin

 

 

28,356

 

 

 

14,260

 

Permian Basin

 

 

7,057

 

 

 

16,145

 

Piceance Basin

 

 

1,226

 

 

 

2,644

 

Barnett Shale (2)

 

 

(118

)

 

 

37

 

Marcellus Shale

 

 

102

 

 

 

487

 

Total reportable segment capital expenditures

 

 

44,747

 

 

 

40,481

 

Corporate and Other

 

 

16,101

 

 

 

297

 

Total cash paid for capital expenditures

 

$

60,848

 

 

$

40,778

 

 

(1) Excludes cash paid for capital expenditures by Ohio Gathering due to equity method accounting.

(2) For the three months ended March 31, 2019, the amount includes vendor reimbursements of $1.1 million.

During the three months ended March 31, 2019, Corporate and Other included cash paid of $0.3 million for corporate purposes; the remainder represents capital expenditures relating to the Double E Pipeline Project.

We assess the performance of our reportable segments based on segment adjusted EBITDA. We define segment adjusted EBITDA as total revenues less total costs and expenses; plus (i) other income excluding interest income, (ii) our proportional adjusted EBITDA for equity method investees, (iii) depreciation and amortization, (iv) adjustments related to MVC shortfall payments, (v) adjustments related to capital reimbursement activity, (vi) unit-based and noncash compensation, (vii) change in the Deferred Purchase Price Obligation fair value, (viii) impairments and (ix) other noncash expenses or losses, less other noncash income or gains. We define proportional adjusted EBITDA for our equity method investees as the product of (i) total revenues less total expenses, excluding impairments and other noncash income or expense items and (ii) amortization for deferred contract costs; multiplied by our ownership interest in Ohio Gathering during the respective period.

For the purpose of evaluating segment performance, we exclude the effect of Corporate and Other revenues and expenses, such as certain general and administrative expenses (including compensation-related expenses and professional services fees), natural gas and crude oil marketing services, transaction costs, interest expense, change in the Deferred Purchase Price Obligation fair value and income tax expense or benefit from segment adjusted EBITDA.

Segment adjusted EBITDA by reportable segment follows.

 

 

 

Three months ended March 31,

 

 

 

2019

 

 

2018

 

 

 

(In thousands)

 

Reportable segment adjusted EBITDA

 

 

 

 

 

 

 

 

Utica Shale

 

$

6,193

 

 

$

8,715

 

Ohio Gathering

 

 

9,210

 

 

 

10,477

 

Williston Basin

 

 

18,734

 

 

 

15,970

 

DJ Basin

 

 

2,673

 

 

 

1,321

 

Permian Basin

 

 

(550

)

 

 

 

Piceance Basin

 

 

25,999

 

 

 

27,914

 

Barnett Shale

 

 

11,374

 

 

 

9,859

 

Marcellus Shale

 

 

5,142

 

 

 

6,676

 

Total of reportable segments' measures of profit or loss

 

$

78,775

 

 

$

80,932

 

 

A reconciliation of income or loss before income taxes and income or loss from equity method investees to total of reportable segments' measures of profit or loss follows.

 

 

 

Three months ended March 31,

 

 

 

2019

 

 

2018

 

 

 

(In thousands)

 

Reconciliation of loss before income taxes and

    loss from equity method investees to total

    of reportable segments' measures of profit:

 

 

 

 

 

 

 

 

Loss before income taxes and loss

    from equity method investees

 

$

(36,266

)

 

$

(5,402

)

Add:

 

 

 

 

 

 

 

 

Corporate and Other expense

 

 

14,159

 

 

 

10,623

 

Interest expense

 

 

17,527

 

 

 

15,122

 

Deferred Purchase Price Obligation

 

 

4,427

 

 

 

21,658

 

Depreciation and amortization

 

 

28,116

 

 

 

26,526

 

Proportional adjusted EBITDA for equity method

   investees

 

 

9,210

 

 

 

10,477

 

Adjustments related to MVC shortfall payments

 

 

(4,199

)

 

 

-

 

Adjustments related to capital reimbursement activity

 

 

(715

)

 

 

40

 

Unit-based and noncash compensation

 

 

2,526

 

 

 

1,962

 

Gain on asset sales, net

 

 

(961

)

 

 

(74

)

Long-lived asset impairment

 

 

44,951

 

 

 

-

 

Total of reportable segments' measures of profit

 

$

78,775

 

 

$

80,932

 

 

Adjustments related to MVC shortfall payments are recognized in gathering services and related fees (see Note 3). Contributions in aid of construction are recognized over the remaining term of the respective contract. We include adjustments related to capital reimbursement activity in our calculation of segment adjusted EBITDA to account for revenue recognized from contributions in aid of construction.  

Adjustments related to MVC shortfall payments by reportable segment follow.

 

 

 

Three months ended March 31, 2019

 

 

 

Williston Basin

 

 

Piceance

Basin

 

 

Barnett

Shale

 

 

Total

 

 

 

(In thousands)

 

Adjustments related to expected MVC shortfall payments:

 

$

(5,549

)

 

$

(103

)

 

$

1,453

 

 

$

(4,199

)

 

There were no adjustments related to MVC shortfall payments for the three months ended March 31, 2018.