Segment Information

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Segment Information

(13) Segment Information

Starting in the first quarter of 2021, we began evaluating the financial performance of our segments by including realized and unrealized gains and losses resulting from commodity swaps activity in the Permian, Louisiana, Oklahoma, and North Texas segments. Commodity swaps activity was previously reported in the Corporate segment. We have recast segment information for all presented periods prior to the first quarter of 2021 to conform to current period presentation. Identification of the majority of our operating segments is based principally upon geographic regions served:

•Permian Segment. The Permian segment includes our natural gas gathering, processing, and transmission activities and our crude oil operations in the Midland and Delaware Basins in West Texas and Eastern New Mexico;

•Louisiana Segment. The Louisiana segment includes our natural gas and NGL pipelines, natural gas processing plants, natural gas and NGL storage facilities, and fractionation facilities located in Louisiana and our crude oil operations in ORV;

•Oklahoma Segment. The Oklahoma segment includes our natural gas gathering, processing, and transmission activities, and our crude oil operations in the Cana-Woodford, Arkoma-Woodford, northern Oklahoma Woodford, STACK, and CNOW shale areas;

•North Texas Segment. The North Texas segment includes our natural gas gathering, processing, and transmission activities in North Texas; and

•Corporate Segment. The Corporate segment includes our unconsolidated affiliate investments in the Cedar Cove JV in Oklahoma, our ownership interest in GCF in South Texas, and our general corporate assets and expenses.

We evaluate the performance of our operating segments based on segment profit and adjusted gross margin. Adjusted gross margin is a non-GAAP financial measure. Summarized financial information for our reportable segments is shown in the following tables (in millions):

	Permian		Louisiana		Oklahoma		North Texas		Corporate		Totals
Three Months Ended June 30, 2021
Natural gas sales	$	97.4	$	122.0	$	45.6	$	26.2	$	—	$	291.2
NGL sales	0.5		706.6		0.4		(0.1)		—		707.4
Crude oil and condensate sales	170.4		50.9		15.7		—		—		237.0
Product sales	268.3		879.5		61.7		26.1		—		1,235.6
NGL sales—related parties	195.5		30.2		137.1		94.3		(457.1)		—
Crude oil and condensate sales—related parties	—		—		0.1		2.1		(2.2)		—
Product sales—related parties	195.5		30.2		137.2		96.4		(459.3)		—
Gathering and transportation	11.8		16.4		45.9		38.2		—		112.3
Processing	6.0		0.5		28.1		27.0		—		61.6
NGL services	—		17.1		—		0.1		—		17.2
Crude services	4.0		9.6		3.4		0.2		—		17.2
Other services	0.2		0.4		0.2		0.2		—		1.0
Midstream services	22.0		44.0		77.6		65.7		—		209.3
Revenue from contracts with customers	485.8		953.7		276.5		188.2		(459.3)		1,444.9
Cost of sales, exclusive of operating expenses and depreciation and amortization (1)	(402.3)		(838.9)		(164.9)		(108.3)		459.3		(1,055.1)
Realized loss on derivatives	(4.2)		(6.4)		(2.9)		(0.9)		—		(14.4)
Change in fair value of derivatives	(7.9)		(9.4)		(5.3)		(1.2)		—		(23.8)
Adjusted gross margin	71.4		99.0		103.4		77.8		—		351.6
Operating expenses	(27.4)		(31.7)		(17.8)		(19.9)		—		(96.8)
Segment profit	44.0		67.3		85.6		57.9		—		254.8
Depreciation and amortization	(34.6)		(36.1)		(50.6)		(28.8)		(1.8)		(151.9)
Gain on disposition of assets	—		0.2		—		0.1		—		0.3
General and administrative	—		—		—		—		(26.1)		(26.1)
Interest expense, net of interest income	—		—		—		—		(60.0)		(60.0)
Loss from unconsolidated affiliates	—		—		—		—		(1.3)		(1.3)
Other income	—		—		—		—		0.2		0.2
Income (loss) before non-controlling interest and income taxes	$	9.4	$	31.4	$	35.0	$	29.2	$	(89.0)	$	16.0
Capital expenditures	$	39.5	$	2.2	$	4.9	$	1.9	$	0.1	$	48.6

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(1)Includes related party cost of sales of $3.6 million for the three months ended June 30, 2021 and excludes all operating expenses as well as depreciation and amortization related to our operating segments of $150.1 million for the three months ended June 30, 2021.

	Permian		Louisiana		Oklahoma		North Texas		Corporate		Totals
Three Months Ended June 30, 2020
Natural gas sales	$	32.4	$	68.6	$	28.8	$	14.6	$	—	$	144.4
NGL sales	(0.1)		280.9		0.5		—		—		281.3
Crude oil and condensate sales	87.0		14.9		5.0		—		—		106.9
Product sales	119.3		364.4		34.3		14.6		—		532.6
NGL sales—related parties	59.5		3.2		56.0		13.9		(132.5)		0.1
Crude oil and condensate sales—related parties	—		—		0.1		0.4		(0.6)		(0.1)
Product sales—related parties	59.5		3.2		56.1		14.3		(133.1)		—
Gathering and transportation	13.1		11.5		52.5		44.2		—		121.3
Processing	7.5		0.6		32.1		33.0		—		73.2
NGL services	—		18.6		—		0.1		—		18.7
Crude services	5.0		11.0		4.6		—		—		20.6
Other services	0.2		0.4		0.1		0.2		—		0.9
Midstream services	25.8		42.1		89.3		77.5		—		234.7
Crude services—related parties	—		—		0.1		—		(0.1)		—
Midstream services—related parties	—		—		0.1		—		(0.1)		—
Revenue from contracts with customers	204.6		409.7		179.8		106.4		(133.2)		767.3
Cost of sales, exclusive of operating expenses and depreciation and amortization (1)	(138.4)		(312.5)		(61.1)		(18.9)		133.2		(397.7)
Realized gain (loss) on derivatives	(1.1)		(1.8)		(0.8)		0.1		—		(3.6)
Change in fair value of derivatives	(8.0)		(4.1)		(5.9)		(0.8)		—		(18.8)
Adjusted gross margin	57.1		91.3		112.0		86.8		—		347.2
Operating expenses	(22.7)		(27.5)		(19.4)		(18.5)		—		(88.1)
Segment profit	34.4		63.8		92.6		68.3		—		259.1
Depreciation and amortization	(31.0)		(34.6)		(54.1)		(36.4)		(2.1)		(158.2)
Impairments	—		(1.5)		—		—		—		(1.5)
Gain (loss) on disposition of assets	(5.3)		0.1		(0.1)		0.1		—		(5.2)
General and administrative	—		—		—		—		(23.5)		(23.5)
Interest expense, net of interest income	—		—		—		—		(55.2)		(55.2)
Gain on extinguishment of debt	—		—		—		—		26.7		26.7
Loss from unconsolidated affiliates	—		—		—		—		(0.7)		(0.7)
Income (loss) before non-controlling interest and income taxes	$	(1.9)	$	27.8	$	38.4	$	32.0	$	(54.8)	$	41.5
Capital expenditures	$	46.9	$	15.6	$	3.0	$	3.0	$	0.7	$	69.2

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(1)Includes related party cost of sales of $1.3 million for the three months ended June 30, 2020 and excludes all operating expenses as well as depreciation and amortization related to our operating segments of $156.1 million for the three months ended June 30, 2020.

	Permian		Louisiana		Oklahoma		North Texas		Corporate		Totals
Six Months Ended June 30, 2021
Natural gas sales	$	222.4	$	243.2	$	81.5	$	77.2	$	—	$	624.3
NGL sales	0.5		1,332.6		1.0		1.1		—		1,335.2
Crude oil and condensate sales	277.7		92.0		29.3		—		—		399.0
Product sales	500.6		1,667.8		111.8		78.3		—		2,358.5
NGL sales—related parties	360.4		53.8		250.2		175.2		(839.6)		—
Crude oil and condensate sales—related parties	—		—		0.1		3.6		(3.7)		—
Product sales—related parties	360.4		53.8		250.3		178.8		(843.3)		—
Gathering and transportation	21.5		32.2		97.2		78.6		—		229.5
Processing	14.2		1.0		44.0		54.1		—		113.3
NGL services	—		39.1		—		0.2		—		39.3
Crude services	7.5		19.5		6.7		0.4		—		34.1
Other services	0.4		0.9		0.4		0.3		—		2.0
Midstream services	43.6		92.7		148.3		133.6		—		418.2
Crude services—related parties	—		—		0.1		—		(0.1)		—
Other services—related parties	—		2.3		—		—		(2.3)		—
Midstream services—related parties	—		2.3		0.1		—		(2.4)		—
Revenue from contracts with customers	904.6		1,816.6		510.5		390.7		(845.7)		2,776.7
Cost of sales, exclusive of operating expenses and depreciation and amortization (1)	(727.9)		(1,579.3)		(315.9)		(212.4)		845.7		(1,989.8)
Realized loss on derivatives	(61.1)		(17.1)		(8.9)		(2.8)		—		(89.9)
Change in fair value of derivatives	(13.2)		(9.8)		(7.1)		(1.6)		—		(31.7)
Adjusted gross margin	102.4		210.4		178.6		173.9		—		665.3
Operating expenses	(15.6)		(60.9)		(37.5)		(39.1)		—		(153.1)
Segment profit	86.8		149.5		141.1		134.8		—		512.2
Depreciation and amortization	(68.1)		(72.2)		(101.3)		(57.5)		(3.8)		(302.9)
Gain on disposition of assets	0.1		0.1		—		0.1		—		0.3
General and administrative	—		—		—		—		(52.1)		(52.1)
Interest expense, net of interest income	—		—		—		—		(120.0)		(120.0)
Loss from unconsolidated affiliates	—		—		—		—		(7.6)		(7.6)
Other income	—		—		—		—		0.1		0.1
Income (loss) before non-controlling interest and income taxes	$	18.8	$	77.4	$	39.8	$	77.4	$	(183.4)	$	30.0
Capital expenditures	$	52.8	$	5.0	$	6.8	$	4.3	$	0.5	$	69.4

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(1)Includes related party cost of sales of $6.8 million for the six months ended June 30, 2021 and excludes all operating expenses as well as depreciation and amortization related to our operating segments of $299.1 million for the six months ended June 30, 2021.

	Permian		Louisiana		Oklahoma		North Texas		Corporate		Totals
Six Months Ended June 30, 2020
Natural gas sales	$	47.5	$	150.2	$	69.9	$	34.7	$	—	$	302.3
NGL sales	0.1		654.6		1.7		0.3		—		656.7
Crude oil and condensate sales	372.0		73.3		21.2		—		—		466.5
Product sales	419.6		878.1		92.8		35.0		—		1,425.5
NGL sales—related parties	105.4		10.0		123.6		31.1		(270.1)		—
Crude oil and condensate sales—related parties	0.1		—		(0.1)		1.9		(1.9)		—
Product sales—related parties	105.5		10.0		123.5		33.0		(272.0)		—
Gathering and transportation	29.4		23.2		108.8		90.1		—		251.5
Processing	11.8		1.3		65.4		68.4		—		146.9
NGL services	—		38.2		—		0.1		—		38.3
Crude services	9.2		21.6		8.9		—		—		39.7
Other services	0.8		0.8		0.2		0.5		—		2.3
Midstream services	51.2		85.1		183.3		159.1		—		478.7
Crude services—related parties	—		—		0.2		—		(0.2)		—
Midstream services—related parties	—		—		0.2		—		(0.2)		—
Revenue from contracts with customers	576.3		973.2		399.8		227.1		(272.2)		1,904.2
Cost of sales, exclusive of operating expenses and depreciation and amortization (1)	(452.3)		(772.2)		(154.8)		(45.9)		272.2		(1,153.0)
Realized gain (loss) on derivatives	(0.2)		2.5		—		0.3		—		2.6
Change in fair value of derivatives	1.4		(5.1)		(2.1)		—		—		(5.8)
Adjusted gross margin	125.2		198.4		242.9		181.5		—		748.0
Operating expenses	(48.2)		(59.3)		(42.3)		(39.0)		—		(188.8)
Segment profit	77.0		139.1		200.6		142.5		—		559.2
Depreciation and amortization	(60.2)		(72.4)		(110.7)		(73.6)		(4.1)		(321.0)
Impairments	(184.6)		(169.9)		—		—		—		(354.5)
Gain (loss) on disposition of assets	(4.9)		0.1		0.1		0.1		—		(4.6)
General and administrative	—		—		—		—		(53.9)		(53.9)
Interest expense, net of interest income	—		—		—		—		(110.8)		(110.8)
Gain on extinguishment of debt	—		—		—		—		32.0		32.0
Loss from unconsolidated affiliates	—		—		—		—		1.0		1.0
Income (loss) before non-controlling interest and income taxes	$	(172.7)	$	(103.1)	$	90.0	$	69.0	$	(135.8)	$	(252.6)
Capital expenditures	$	132.9	$	30.8	$	11.5	$	7.7	$	1.1	$	184.0

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(1)Includes related party cost of sales of $4.2 million for the six months ended June 30, 2020 and excludes all operating expenses as well as depreciation and amortization related to our operating segments of $316.9 million for the six months ended June 30, 2020.

The table below represents information about segment assets as of June 30, 2021 and December 31, 2020 (in millions):

Segment Identifiable Assets:	June 30, 2021		December 31, 2020
Permian	$	2,387.5	$	2,236.3
Louisiana	2,349.2		2,312.4
Oklahoma	2,698.8		2,847.6
North Texas	960.9		1,008.6
Corporate (1)	170.1		146.0
Total identifiable assets	$	8,566.5	$	8,550.9

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(1)Accounts receivable and accrued revenue sold to the SPV for collateral under the AR Facility are included within the Permian, Louisiana, Oklahoma, and North Texas segments.