Segment Information

12 Months Ended

Dec. 31, 2016

Segment Information

Segment Information

(16) Segment Information

Identification of the majority of the Company’s operating segments is based principally upon geographic regions served. The Company’s reportable segments consist of the following: natural gas gathering, processing, transmission and fractionation operations located in north Texas, south Texas and the Permian Basin in west Texas (“Texas”), the pipelines and processing plants located in Louisiana and NGL assets located in south Louisiana (“Louisiana”), natural gas gathering and processing operations located throughout Oklahoma (“Oklahoma”) and crude rail, truck, pipeline and barge facilities in west Texas, south Texas, Louisiana and Ohio River Valley (“Crude and Condensate”). Operating activity for intersegment eliminations is shown in the Corporate segment. Our sales are derived from external domestic customers.

Corporate expenses include general partnership expenses associated with managing all reportable operating segments. Corporate assets consist primarily of cash, property and equipment, including software, for general corporate support, debt financing costs, and unconsolidated affiliate investments in HEP, GCF and the Cedar Cove JV. The Company evaluates the performance of its operating segments based on operating revenues and segment profits.

Summarized financial information for the Company’s reportable segments is shown in the following tables (in millions):

							Crude and
	Texas		Louisiana		Oklahoma		Condensate		Corporate		Totals
Year Ended December 31, 2016:
Product sales	$	237.2	$	1,632.5	$	48.5	$	1,090.7	$	—	$	3,008.9
Product sales - related parties		287.6		57.8		120.4		1.5		(333.0)		134.3
Midstream services		104.2		215.4		82.2		65.4		—		467.2
Midstream services - related parties		439.3		95.8		185.9		18.9		(86.8)		653.1
Cost of sales		(483.4)		(1,729.0)		(184.9)		(1,038.0)		419.8		(3,015.5)
Operating expenses		(168.5)		(96.6)		(52.1)		(81.3)		—		(398.5)
Loss on derivative activity		—		—		—		—		(11.1)		(11.1)
Segment profit (loss)	$	416.4	$	175.9	$	200.0	$	57.2	$	(11.1)	$	838.4
Depreciation and amortization	$	(196.9)	$	(114.8)	$	(140.6)	$	(42.4)	$	(9.2)	$	(503.9)
Impairments	$	(473.1)	$	—	$	—	$	(93.2)	$	(307.0)	$	(873.3)
Goodwill	$	232.0	$	—	$	190.3	$	—	$	1,119.9	$	1,542.2
Capital expenditures	$	217.9	$	79.1	$	295.7	$	74.3	$	9.1	$	676.1
Year Ended December 31, 2015:
Product sales	$	320.0	$	1,527.7	$	5.0	$	1,401.0	$	—	$	3,253.7
Product sales - related parties		123.3		48.5		13.0		0.8		(66.2)		119.4
Midstream services		100.2		244.1		28.3		78.4		—		451.0
Midstream services - related parties		456.7		20.0		140.7		18.0		(16.8)		618.6
Cost of sales		(412.2)		(1,567.6)		(17.9)		(1,330.6)		83.0		(3,245.3)
Operating expenses		(181.8)		(105.9)		(30.3)		(101.9)		—		(419.9)
Gain on derivative activity		—		—		—		—		9.4		9.4
Segment profit	$	406.2	$	166.8	$	138.8	$	65.7	$	9.4	$	786.9
Depreciation and amortization	$	(169.7)	$	(109.1)	$	(49.8)	$	(51.5)	$	(7.2)	$	(387.3)
Impairments	$	(496.3)	$	(787.3)	$	(0.6)	$	(279.2)	$	—	$	(1,563.4)
Goodwill	$	703.5	$	—	$	190.3	$	93.2	$	1,426.9	$	2,413.9
Capital expenditures	$	268.0	$	59.2	$	40.7	$	187.5	$	15.1	$	570.5
Year Ended December 31, 2014:
Product sales	$	216.5	$	1,612.7	$	13.1	$	317.0	$	—	$	2,159.3
Product sales - related parties		348.8		65.7		154.9		0.5		(64.3)		505.6
Midstream services		56.3		153.2		1.7		42.2		—		253.4
Midstream services - related parties		410.8		5.8		149.1		7.5		(5.8)		567.4
Cost of sales		(456.9)		(1,674.2)		(142.6)		(290.9)		70.1		(2,494.5)
Operating expenses		(146.8)		(64.9)		(28.7)		(43.2)		—		(283.6)
Gain on litigation settlement		—		6.1		—		—		—		6.1
Gain on derivative activity		—		—		—		—		22.1		22.1
Segment profit	$	428.7	$	104.4	$	147.5	$	33.1	$	22.1	$	735.8
Depreciation and amortization	$	(125.8)	$	(69.4)	$	(49.4)	$	(37.0)	$	(2.7)	$	(284.3)
Goodwill	$	1,168.2	$	786.8	$	190.3	$	112.5	$	1,426.9	$	3,684.7
Capital expenditures	$	271.0	$	273.1	$	17.1	$	183.6	$	13.9	$	758.7

The table below represents information about segment assets as of December 31, 2016 and 2015 (in millions):

	Year Ended December 31,
Segment Identifiable Assets:	2016		2015
Texas	$	3,142.6	$	3,709.5
Louisiana		2,349.3		2,309.3
Oklahoma		2,524.5		873.4
Crude and Condensate		836.8		898.0
Corporate		1,422.7		1,751.1
Total identifiable assets	$	10,275.9	$	9,541.3

The following table reconciles the segment profits reported above to the operating income (loss) as reported in the consolidated statements of operations (in millions):

	Year Ended December 31,
	2016		2015		2014
Segment profits	$	838.4	$	786.9	$	735.8
General and administrative expenses		(122.5)		(136.9)		(97.3)
Depreciation and amortization		(503.9)		(387.3)		(284.3)
Gain (loss) on disposition of assets		(13.2)		(1.2)		0.1
Impairments		(873.3)		(1,563.4)		—
Operating income (loss)	$	(674.5)	$	(1,301.9)	$	354.3