SEGMENTS |
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 transports and stores natural gas via regulated intrastate and interstate 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, 2020, 2019 and 2018, we had no single customer from which we received 10% 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, 2020 | | Natural Gas Gathering and Processing | | Natural Gas Liquids (a) | | Natural Gas Pipelines (b) | | Total Segments | | | (Thousands of dollars) | NGL and condensate sales | | $ | 889,388 | | | $ | 6,409,332 | | | $ | — | | | $ | 7,298,720 | | Residue natural gas sales | | 771,486 | | | — | | | 8,693 | | | 780,179 | | Gathering, processing and exchange services revenue | | 141,943 | | | 488,574 | | | — | | | 630,517 | | Transportation and storage revenue | | — | | | 182,915 | | | 470,097 | | | 653,012 | | Other | | 17,304 | | | 9,192 | | | 1,192 | | | 27,688 | | Total revenues (c) | | 1,820,121 | | | 7,090,013 | | | 479,982 | | | 9,390,116 | | Cost of sales and fuel (exclusive of depreciation and operating costs) | | (843,976) | | | (5,108,558) | | | (6,809) | | | (5,959,343) | | Operating costs | | (326,938) | | | (412,900) | | | (141,713) | | | (881,551) | | Equity in net earnings (loss) from investments | | (1,123) | | | 39,938 | | | 104,426 | | | 143,241 | | Noncash compensation expense and other | | 1,952 | | | 8,748 | | | 1,540 | | | 12,240 | | Segment adjusted EBITDA | | $ | 650,036 | | | $ | 1,617,241 | | | $ | 437,426 | | | $ | 2,704,703 | | | | | | | | | | | Depreciation and amortization | | $ | (247,010) | | | $ | (271,900) | | | $ | (55,739) | | | $ | (574,649) | | Impairment charges | | $ | (566,145) | | | $ | (78,785) | | | $ | — | | | $ | (644,930) | | Investments in unconsolidated affiliates | | $ | 22,757 | | | $ | 423,494 | | | $ | 358,781 | | | $ | 805,032 | | Total assets | | $ | 6,499,908 | | | $ | 13,636,109 | | | $ | 2,100,213 | | | $ | 22,236,230 | | Capital expenditures | | $ | 446,142 | | | $ | 1,655,759 | | | $ | 71,918 | | | $ | 2,173,819 | |
(a) - Our Natural Gas Liquids segment has regulated and nonregulated operations. Our Natural Gas Liquids segment’s regulated operations had revenues of $2.0 billion, of which $1.8 billion related to sales within the segment, and cost of sales and fuel of $520.6 million. (b) - Our Natural Gas Pipelines segment has regulated and nonregulated operations. Our Natural Gas Pipelines segment’s regulated operations had revenues of $298.5 million and cost of sales and fuel of $30.4 million. (c) - Intersegment revenues are primarily commodity sales which are based on the contracted selling price, which is generally index-based and settled monthly, and for the Natural Gas Gathering and Processing segment totaled $865.6 million. Intersegment revenues for the Natural Gas Liquids and Natural Gas Pipelines segments were not material. | | | | | | | | | | | | | | | | | | | | | Year Ended December 31, 2020 | | Total Segments | | Other and Eliminations | | Total | | | (Thousands of dollars) | Reconciliations of total segments to consolidated | | | | | | | NGL and condensate sales | | $ | 7,298,720 | | | $ | (820,851) | | | $ | 6,477,869 | | Residue natural gas sales | | 780,179 | | | (10,860) | | | 769,319 | | Gathering, processing and exchange services revenue | | 630,517 | | | — | | | 630,517 | | Transportation and storage revenue | | 653,012 | | | (14,599) | | | 638,413 | | Other | | 27,688 | | | (1,564) | | | 26,124 | | Total revenues (a) | | $ | 9,390,116 | | | $ | (847,874) | | | $ | 8,542,242 | | | | | | | | | Cost of sales and fuel (exclusive of depreciation and operating costs) | | $ | (5,959,343) | | | $ | 849,197 | | | $ | (5,110,146) | | Operating costs | | $ | (881,551) | | | $ | (4,653) | | | $ | (886,204) | | Depreciation and amortization | | $ | (574,649) | | | $ | (4,013) | | | $ | (578,662) | | Impairment charges | | $ | (644,930) | | | $ | — | | | $ | (644,930) | | Equity in net earnings from investments | | $ | 143,241 | | | $ | — | | | $ | 143,241 | | Investments in unconsolidated affiliates | | $ | 805,032 | | | $ | — | | | $ | 805,032 | | Total assets | | $ | 22,236,230 | | | $ | 842,524 | | | $ | 23,078,754 | | Capital expenditures | | $ | 2,173,819 | | | $ | 21,562 | | | $ | 2,195,381 | |
(a) - Noncustomer revenue for the year ended December 31, 2020, totaled $65.8 million related primarily to gains from derivatives on commodity contracts.
| | | | | | | | | | | | | | | | | | | | | | | | | | | Year Ended December 31, 2019 | | Natural Gas Gathering and Processing | | Natural Gas Liquids (a) | | Natural Gas Pipelines (b) | | Total Segments | | | (Thousands of dollars) | NGL and condensate sales | | $ | 1,224,378 | | | $ | 7,910,833 | | | $ | — | | | $ | 9,135,211 | | Residue natural gas sales | | 966,149 | | | — | | | 1,244 | | | 967,393 | | Gathering, processing and exchange services revenue | | 164,299 | | | 414,238 | | | — | | | 578,537 | | Transportation and storage revenue | | — | | | 197,483 | | | 466,266 | | | 663,749 | | Other | | 13,813 | | | 9,962 | | | 4,477 | | | 28,252 | | Total revenues (c) | | 2,368,639 | | | 8,532,516 | | | 471,987 | | | 11,373,142 | | Cost of sales and fuel (exclusive of depreciation and operating costs) | | (1,302,310) | | | (6,690,918) | | | (4,628) | | | (7,997,856) | | Operating costs | | (368,352) | | | (456,892) | | | (157,230) | | | (982,474) | | Equity in net earnings (loss) from investments | | (6,292) | | | 65,123 | | | 95,710 | | | 154,541 | | Noncash compensation expense and other | | 10,965 | | | 15,936 | | | 2,977 | | | 29,878 | | Segment adjusted EBITDA | | $ | 702,650 | | | $ | 1,465,765 | | | $ | 408,816 | | | $ | 2,577,231 | | | | | | | | | | | Depreciation and amortization | | $ | (219,519) | | | $ | (196,132) | | | $ | (57,250) | | | $ | (472,901) | | Investments in unconsolidated affiliates | | $ | 34,426 | | | $ | 439,393 | | | $ | 388,025 | | | $ | 861,844 | | Total assets | | $ | 6,795,744 | | | $ | 12,551,476 | | | $ | 2,094,072 | | | $ | 21,441,292 | | Capital expenditures | | $ | 926,489 | | | $ | 2,796,604 | | | $ | 99,221 | | | $ | 3,822,314 | |
(a) - Our Natural Gas Liquids segment has regulated and nonregulated operations. Our Natural Gas Liquids segment’s regulated operations had revenues of $1.4 billion, of which $1.2 billion related to revenues within the segment, and cost of sales and fuel of $496.8 million. (b) - Our Natural Gas Pipelines segment has regulated and nonregulated operations. Our Natural Gas Pipelines segment’s regulated operations had revenues of $285.3 million and cost of sales and fuel of $20.0 million. (c) - Intersegment revenues are primarily commodity sales which are based on the contracted selling price, which is generally index-based and settled monthly, and for the Natural Gas Gathering and Processing segment totaled $1.2 billion. Intersegment revenues for the Natural Gas Liquids and Natural Gas Pipelines segments were not material. | | | | | | | | | | | | | | | | | | | | | Year Ended December 31, 2019 | | Total Segments | | Other and Eliminations | | Total | | | (Thousands of dollars) | Reconciliations of total segments to consolidated | | | | | | | NGL and condensate sales | | $ | 9,135,211 | | | $ | (1,190,424) | | | $ | 7,944,787 | | Residue natural gas sales | | 967,393 | | | (1,418) | | | 965,975 | | Gathering, processing and exchange services revenue | | 578,537 | | | — | | | 578,537 | | Transportation and storage revenue | | 663,749 | | | (15,646) | | | 648,103 | | Other | | 28,252 | | | (1,287) | | | 26,965 | | Total revenues (a) | | $ | 11,373,142 | | | $ | (1,208,775) | | | $ | 10,164,367 | | | | | | | | | Cost of sales and fuel (exclusive of depreciation and operating costs) | | $ | (7,997,856) | | | $ | 1,209,816 | | | $ | (6,788,040) | | Operating costs | | $ | (982,474) | | | $ | (390) | | | $ | (982,864) | | Depreciation and amortization | | $ | (472,901) | | | $ | (3,634) | | | $ | (476,535) | | Equity in net earnings from investments | | $ | 154,541 | | | $ | — | | | $ | 154,541 | | Investments in unconsolidated affiliates | | $ | 861,844 | | | $ | — | | | $ | 861,844 | | Total assets | | $ | 21,441,292 | | | $ | 370,829 | | | $ | 21,812,121 | | Capital expenditures | | $ | 3,822,314 | | | $ | 26,035 | | | $ | 3,848,349 | |
(a) - Noncustomer revenue for the year ended December 31, 2019, totaled $139.6 million related primarily to gains from derivatives on commodity contracts.
| | | | | | | | | | | | | | | | | | | | | | | | | | | 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 | | | 414,969 | | | 613,987 | | Other | | 11,230 | | | 10,816 | | | 6,994 | | | 29,040 | | 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) | | Investments in unconsolidated affiliates | | $ | 42,630 | | | $ | 451,040 | | | $ | 475,480 | | | $ | 969,150 | | 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 revenues 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 are primarily commodity sales which are based on the contracted selling price, which is generally index-based and settled monthly, and for the Natural Gas Gathering and Processing segment totaled $1.8 billion. Intersegment revenues for the Natural Gas Liquids and Natural Gas Pipelines segments were not material. | | | | | | | | | | | | | | | | | | | | | 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 | | 613,987 | | | (10,550) | | | 603,437 | | Other | | 29,040 | | | 51 | | | 29,091 | | 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 | | Investments in unconsolidated affiliates | | $ | 969,150 | | | $ | — | | | $ | 969,150 | | 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 from derivatives on commodity contracts.
| | | | | | | | | | | | | | | | | | | | | | | Years Ended December 31, | | | 2020 | | 2019 | | 2018 | Reconciliation of net income to total segment adjusted EBITDA | | (Thousands of dollars) | Net income | | $ | 612,809 | | | $ | 1,278,577 | | | $ | 1,155,032 | | Add: | | | | | | | Interest expense, net of capitalized interest | | 712,886 | | | 491,773 | | | 469,620 | | Depreciation and amortization | | 578,662 | | | 476,535 | | | 428,557 | | Income tax expense | | 189,507 | | | 372,414 | | | 362,903 | | Impairment charges | | 644,930 | | | — | | | — | | Noncash compensation expense | | 8,540 | | | 26,699 | | | 37,954 | | Other corporate costs and equity AFUDC (a) | | (42,631) | | | (68,767) | | | (15,603) | | Total segment adjusted EBITDA | | $ | 2,704,703 | | | $ | 2,577,231 | | | $ | 2,438,463 | |
(a) - The year ended December 31, 2020, includes corporate net gains of $22.3 million on extinguishment of debt related to open market repurchases. The year ended December 31, 2019, includes higher equity AFUDC related to our capital-growth projects compared with 2020 and 2018.
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