SEGMENTS

Segment Descriptions - Our operations are divided into three reportable business segments, as follows:


•	our Natural Gas Gathering and Processing segment gathers, treats and processes natural gas;


•	our Natural Gas Liquids segment gathers, treats, fractionates and transports NGLs and stores, markets and distributes NGL products; and


•	our Natural Gas Pipelines segment operates regulated interstate and intrastate natural gas transmission pipelines and natural gas storage facilities.

Other and eliminations consist of corporate costs, the operating and leasing activities of our headquarters building and related parking facility and eliminations necessary to reconcile our reportable segments to our Consolidated Financial Statements.

Accounting Policies - The accounting policies of the segments are described in Note A.

For each of the years ended December 31, 2018, 2017 and 2016, we had no single customer from which we received 10 percent or more of our consolidated revenues.

Operating Segment Information - The following tables set forth certain selected financial information for our operating segments for the periods indicated:



Year Ended December 31, 2018	Natural Gas Gathering and Processing			Natural Gas Liquids (a)			Natural Gas Pipelines (b)			Total Segments
	(Thousands of dollars)
NGL and condensate sales	$	1,775,991		$	10,319,847		$	—		$	12,095,838
Residue natural gas sales	1,084,162			—			9,772			1,093,934
Gathering, processing and exchange services revenue	163,194			404,897			—			568,091
Transportation and storage revenue	—			199,018			394,014			593,032
Other	11,230			10,816			27,949			49,995
Total revenues (c)	3,034,577			10,934,578			431,735			14,400,890
Cost of sales and fuel (exclusive of depreciation and operating costs)	(2,041,448		)	(9,176,813		)	(15,984		)	(11,234,245		)
Operating costs	(368,939		)	(394,115		)	(144,259		)	(907,313		)
Equity in net earnings from investments	410			67,126			90,847			158,383
Noncash compensation expense and other	7,007			9,829			3,912			20,748
Segment adjusted EBITDA	$	631,607		$	1,440,605		$	366,251		$	2,438,463

Depreciation and amortization	$	(196,090	)	$	(174,007	)	$	(55,118	)	$	(425,215	)
Total assets	$	6,078,473		$	9,663,640		$	2,131,669		$	17,873,782
Capital expenditures	$	694,611		$	1,306,341		$	119,185		$	2,120,137

(a) - Our Natural Gas Liquids segment has regulated and nonregulated operations. Our Natural Gas Liquids segment’s regulated operations had revenues of $1.2 billion, of which $1.1 billion related to sales within the segment, and cost of sales and fuel of $506.0 million.

(b) - Our Natural Gas Pipelines segment has regulated and nonregulated operations. Our Natural Gas Pipelines segment’s regulated operations had revenues of $266.6 million and cost of sales and fuel of $26.0 million.

(c) - Intersegment revenues for the Natural Gas Gathering and Processing, Natural Gas Liquids and Natural Gas Pipelines segments totaled $1,768.8 million, $28.7 million and $12.6 million, respectively.



Year Ended December 31, 2018	Total Segments			Other and Eliminations			Total
	(Thousands of dollars)
Reconciliations of total segments to consolidated
NGL and condensate sales	$	12,095,838		$	(1,794,342	)	$	10,301,496
Residue natural gas sales	1,093,934			(2,832		)	1,091,102
Gathering, processing and exchange services revenue	568,091			(21		)	568,070
Transportation and storage revenue	593,032			(9,606		)	583,426
Other	49,995			(893		)	49,102
Total revenues (a)	$	14,400,890		$	(1,807,694	)	$	12,593,196

Cost of sales and fuel (exclusive of depreciation and operating costs)	$	(11,234,245	)	$	1,811,537		$	(9,422,708	)
Operating costs	$	(907,313	)	$	245		$	(907,068	)
Depreciation and amortization	$	(425,215	)	$	(3,342	)	$	(428,557	)
Equity in net earnings from investments	$	158,383		$	—		$	158,383
Total assets	$	17,873,782		$	357,889		$	18,231,671
Capital expenditures	$	2,120,137		$	21,338		$	2,141,475

(a) - Noncustomer revenue for the year ended December 31, 2018, totaled $(16.2) million related primarily to losses reclassified from accumulated other comprehensive income from derivatives on commodity contracts.



Year Ended December 31, 2017	Natural Gas Gathering and Processing			Natural Gas Liquids (a)			Natural Gas Pipelines (b)			Total Segments
	(Thousands of dollars)
Sales to unaffiliated customers	$	1,750,655		$	10,009,576		$	411,490		$	12,171,721
Intersegment revenues	1,275,919			616,628			8,442			1,900,989
Total revenues	3,026,574			10,626,204			419,932			14,072,710
Cost of sales and fuel (exclusive of depreciation and operating costs)	(2,216,355		)	(9,176,494		)	(43,424		)	(11,436,273		)
Operating costs	(307,376		)	(358,278		)	(125,308		)	(790,962		)
Equity in net earnings from investments	12,098			59,876			87,304			159,278
Other	3,531			3,631			1,314			8,476
Segment adjusted EBITDA	$	518,472		$	1,154,939		$	339,818		$	2,013,229

Depreciation and amortization	$	(184,923	)	$	(167,277	)	$	(51,025	)	$	(403,225	)
Impairment of long-lived assets and equity investments	$	(20,240	)	$	—		$	—		$	(20,240	)
Total assets	$	5,495,163		$	8,782,700		$	2,055,020		$	16,332,883
Capital expenditures	$	284,205		$	114,267		$	95,564		$	494,036

(a) - Our Natural Gas Liquids segment has regulated and nonregulated operations. Our Natural Gas Liquids segment’s regulated operations had revenues of $1.2 billion, of which $1.0 billion related to sales within the segment, and cost of sales and fuel of $497.4 million.

(b) - Our Natural Gas Pipelines segment has regulated and nonregulated operations. Our Natural Gas Pipelines segment’s regulated operations had revenues of $264.9 million and cost of sales and fuel of $44.0 million.



Year Ended December 31, 2017	Total Segments			Other and Eliminations			Total
	(Thousands of dollars)
Reconciliations of total segments to consolidated
Sales to unaffiliated customers	$	12,171,721		$	2,186		$	12,173,907
Intersegment revenues	1,900,989			(1,900,989		)	—
Total revenues	$	14,072,710		$	(1,898,803	)	$	12,173,907

Cost of sales and fuel (exclusive of depreciation and operating costs)	$	(11,436,273	)	$	1,898,228		$	(9,538,045	)
Operating costs	$	(790,962	)	$	(31,748	)	$	(822,710	)
Depreciation and amortization	$	(403,225	)	$	(3,110	)	$	(406,335	)
Impairment of long-lived assets and equity investments	$	(20,240	)	$	—		$	(20,240	)
Equity in net earnings from investments	$	159,278		$	—		$	159,278
Total assets	$	16,332,883		$	513,054		$	16,845,937
Capital expenditures	$	494,036		$	18,357		$	512,393



Year Ended December 31, 2016	Natural Gas Gathering and Processing			Natural Gas Liquids (a)			Natural Gas Pipelines (b)			Total Segments
	(Thousands of dollars)
Sales to unaffiliated customers	$	1,375,738		$	7,168,983		$	373,738		$	8,918,459
Intersegment revenues	675,839			506,671			5,623			1,188,133
Total revenues	2,051,577			7,675,654			379,361			10,106,592
Cost of sales and fuel (exclusive of depreciation and operating costs)	(1,331,542		)	(6,321,377		)	(30,561		)	(7,683,480		)
Operating costs	(283,395		)	(326,056		)	(114,658		)	(724,109		)
Equity in net earnings from investments	10,742			54,513			74,435			139,690
Other	(604		)	(3,115		)	4,560			841
Segment adjusted EBITDA	$	446,778		$	1,079,619		$	313,137		$	1,839,534

Depreciation and amortization	$	(178,548	)	$	(163,303	)	$	(46,718	)	$	(388,569	)
Total assets	$	5,320,666		$	8,347,961		$	1,946,318		$	15,614,945
Capital expenditures	$	410,485		$	105,861		$	96,274		$	612,620

(a) - Our Natural Gas Liquids segment has regulated and nonregulated operations. Our Natural Gas Liquids segment’s regulated operations had revenues of $1.2 billion, of which $992.8 million related to sales within the segment, and cost of sales and fuel of $458.7 million.

(b) - Our Natural Gas Pipelines segment has regulated and nonregulated operations. Our Natural Gas Pipelines segment’s regulated operations had revenues of $238.7 million and cost of sales and fuel of $30.0 million.



Year Ended December 31, 2016	Total Segments			Other and Eliminations			Total
	(Thousands of dollars)
Reconciliations of total segments to consolidated
Sales to unaffiliated customers	$	8,918,459		$	2,475		$	8,920,934
Intersegment revenues	1,188,133			(1,188,133		)	—
Total revenues	$	10,106,592		$	(1,185,658	)	$	8,920,934

Cost of sales and fuel (exclusive of depreciation and operating costs)	$	(7,683,480	)	$	1,187,356		$	(6,496,124	)
Operating costs	$	(724,109	)	$	(22,973	)	$	(747,082	)
Depreciation and amortization	$	(388,569	)	$	(3,016	)	$	(391,585	)
Equity in net earnings from investments	$	139,690		$	—		$	139,690
Total assets	$	15,614,945		$	523,806		$	16,138,751
Capital expenditures	$	612,620		$	12,014		$	624,634



	Years Ended December 31,
	2018			2017		2016
Reconciliation of net income to total segment adjusted EBITDA	(Thousands of dollars)
Net income	$	1,155,032		$	593,519	$	743,499
Add:
Interest expense, net of capitalized interest	469,620			485,658		469,651
Depreciation and amortization	428,557			406,335		391,585
Income taxes	362,903			447,282		212,406
Impairment charges	—			20,240		—
Noncash compensation expense	37,954			13,421		31,981
Other corporate costs and noncash items (a)	(15,603		)	46,774		(9,588		)
Total segment adjusted EBITDA	$	2,438,463		$	2,013,229	$	1,839,534

(a) - The year ended December 31, 2017, includes our April 2017 $20.0 million contribution of Series E Preferred Stock to the Foundation and costs related to the Merger Transaction of $30.0 million.