SEGMENTS (Tables)

6 Months Ended

Jun. 30, 2021

Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]

Segments

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

Three Months Ended June 30, 2021	Natural Gas Gathering and Processing		Natural Gas Liquids (a)		Natural Gas Pipelines (b)		Total Segments
	(Thousands of dollars)
NGL and condensate sales	$	566,383	$	2,829,604	$	—	$	3,395,987
Residue natural gas sales	257,802		—		4		257,806
Gathering, processing and exchange services revenue	34,139		129,624		—		163,763
Transportation and storage revenue	—		37,864		112,337		150,201
Other	5,128		2,386		103		7,617
Total revenues (c)	863,452		2,999,478		112,444		3,975,374
Cost of sales and fuel (exclusive of depreciation and operating costs)	(550,486)		(2,399,919)		(544)		(2,950,949)
Operating costs	(86,429)		(128,834)		(38,506)		(253,769)
Equity in net earnings from investments	442		5,090		20,188		25,720
Noncash compensation expense and other	2,287		4,476		1,114		7,877
Segment adjusted EBITDA	$	229,266	$	480,291	$	94,696	$	804,253
Depreciation and amortization	$	(67,268)	$	(74,151)	$	(14,489)	$	(155,908)
Capital expenditures	$	56,872	$	59,967	$	27,796	$	144,635

(a) - Our Natural Gas Liquids segment has regulated and nonregulated operations. Our Natural Gas Liquids segment’s regulated operations had revenues of $603.1 million, of which $557.2 million related to revenues within the segment, and cost of sales and fuel of $153.3 million.

(b) - Our Natural Gas Pipelines segment has regulated and nonregulated operations. Our Natural Gas Pipelines segment’s regulated operations had revenues of $69.4 million and cost of sales and fuel of $3.8 million.

(c) - Intersegment revenues are primarily commodity sales which are based on the contracted selling price that is generally index-based and settled monthly, and for the Natural Gas Gathering and Processing segment totaled $555.6 million. Intersegment revenues for the Natural Gas Liquids and Natural Gas Pipelines segments were not material.

Three Months Ended June 30, 2021	Total Segments		Other and Eliminations		Total
	(Thousands of dollars)
Reconciliations of total segments to consolidated
NGL and condensate sales	$	3,395,987	$	(582,140)	$	2,813,847
Residue natural gas sales	257,806		—		257,806
Gathering, processing and exchange services revenue	163,763		—		163,763
Transportation and storage revenue	150,201		(3,506)		146,695
Other	7,617		(764)		6,853
Total revenues (a)	$	3,975,374	$	(586,410)	$	3,388,964
Cost of sales and fuel (exclusive of depreciation and operating costs)	$	(2,950,949)	$	583,970	$	(2,366,979)
Operating costs	$	(253,769)	$	(490)	$	(254,259)
Depreciation and amortization	$	(155,908)	$	(1,013)	$	(156,921)
Equity in net earnings from investments	$	25,720	$	—	$	25,720
Capital expenditures	$	144,635	$	2,753	$	147,388

(a) - Noncustomer revenue for the three months ended June 30, 2021, totaled $(76.0) million related primarily to losses from derivatives on commodity contracts.

Three Months Ended June 30, 2020	Natural Gas Gathering and Processing		Natural Gas Liquids (a)		Natural Gas Pipelines (b)		Total Segments
	(Thousands of dollars)
NGL and condensate sales	$	109,581	$	1,174,580	$	—	$	1,284,161
Residue natural gas sales	150,892		—		—		150,892
Gathering, processing and exchange services revenue	35,949		118,174		—		154,123
Transportation and storage revenue	—		40,881		121,777		162,658
Other	3,387		2,079		281		5,747
Total revenues (c)	299,809		1,335,714		122,058		1,757,581
Cost of sales and fuel (exclusive of depreciation and operating costs)	(132,221)		(905,154)		(168)		(1,037,543)
Operating costs	(78,668)		(106,977)		(33,092)		(218,737)
Equity in net earnings (loss) from investments	(2,149)		7,797		19,680		25,328
Noncash compensation expense and other	1,978		6,262		1,355		9,595
Segment adjusted EBITDA	$	88,749	$	337,642	$	109,833	$	536,224
Depreciation and amortization	$	(55,419)	$	(69,065)	$	(14,925)	$	(139,409)
Capital expenditures	$	118,171	$	459,807	$	10,910	$	588,888

(a) - Our Natural Gas Liquids segment has regulated and nonregulated operations. Our Natural Gas Liquids segment’s regulated operations had revenues of $477.2 million, of which $432.6 million related to revenues within the segment, and cost of sales and fuel of $117.1 million.

(b) - Our Natural Gas Pipelines segment has regulated and nonregulated operations. Our Natural Gas Pipelines segment’s regulated operations had revenues of $79.9 million and cost of sales and fuel of $6.7 million.

(c) - Intersegment revenues are primarily commodity sales which are based on the contracted selling price that is generally index-based and settled monthly, and for the Natural Gas Gathering and Processing segment totaled $108.2 million. Intersegment revenues for the Natural Gas Liquids and Natural Gas Pipelines segments were not material.

Three Months Ended June 30, 2020	Total Segments		Other and Eliminations		Total
	(Thousands of dollars)
Reconciliations of total segments to consolidated
NGL and condensate sales	$	1,284,161	$	(88,967)	$	1,195,194
Residue natural gas sales	150,892		(3,931)		146,961
Gathering, processing and exchange services revenue	154,123		—		154,123
Transportation and storage revenue	162,658		(3,627)		159,031
Other	5,747		(327)		5,420
Total revenues (a)	$	1,757,581	$	(96,852)	$	1,660,729
Cost of sales and fuel (exclusive of depreciation and operating costs)	$	(1,037,543)	$	97,085	$	(940,458)
Operating costs	$	(218,737)	$	(5,727)	$	(224,464)
Depreciation and amortization	$	(139,409)	$	(1,007)	$	(140,416)
Equity in net earnings from investments	$	25,328	$	—	$	25,328
Capital expenditures	$	588,888	$	5,394	$	594,282

(a) - Noncustomer revenue for the three months ended June 30, 2020, totaled $18.8 million related primarily to gains from derivatives on commodity contracts.

Six Months Ended June 30, 2021	Natural Gas Gathering and Processing		Natural Gas Liquids (a)		Natural Gas Pipelines (b)		Total Segments
	(Thousands of dollars)
NGL and condensate sales	$	1,058,190	$	5,244,434	$	—	$	6,302,624
Residue natural gas sales	570,049		—		115,459		685,508
Gathering, processing and exchange services revenue	65,826		242,855		—		308,681
Transportation and storage revenue	—		86,592		245,284		331,876
Other	9,128		35,662		515		45,305
Total revenues (c)	1,703,193		5,609,543		361,258		7,673,994
Cost of sales and fuel (exclusive of depreciation and operating costs)	(1,105,792)		(4,460,238)		(10,557)		(5,576,587)
Operating costs	(171,027)		(253,203)		(80,823)		(505,053)
Equity in net earnings from investments	2,170		8,694		48,176		59,040
Noncash compensation expense and other	5,438		11,123		2,817		19,378
Segment adjusted EBITDA	$	433,982	$	915,919	$	320,871	$	1,670,772
Depreciation and amortization	$	(134,300)	$	(148,693)	$	(28,965)	$	(311,958)
Investments in unconsolidated affiliates	$	23,529	$	420,949	$	355,873	$	800,351
Total assets	$	6,564,118	$	14,309,709	$	2,110,459	$	22,984,286
Capital expenditures	$	96,523	$	171,988	$	48,953	$	317,464

(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 $289.1 million.

(b) - Our Natural Gas Pipelines segment has regulated and nonregulated operations. Our Natural Gas Pipelines segment’s regulated operations had revenues of $250.8 million and cost of sales and fuel of $16.6 million.

(c) - Intersegment revenues are primarily commodity sales which are based on the contracted selling price that is generally index-based and settled monthly, and for the Natural Gas Gathering and Processing segment totaled $1.0 billion. Intersegment revenues for the Natural Gas Liquids and Natural Gas Pipelines segments were not material.

Six Months Ended June 30, 2021	Total Segments		Other and Eliminations		Total
	(Thousands of dollars)
Reconciliations of total segments to consolidated
NGL and condensate sales	$	6,302,624	$	(1,082,204)	$	5,220,420
Residue natural gas sales	685,508		—		685,508
Gathering, processing and exchange services revenue	308,681		—		308,681
Transportation and storage revenue	331,876		(7,041)		324,835
Other	45,305		(1,106)		44,199
Total revenues (a)	$	7,673,994	$	(1,090,351)	$	6,583,643
Cost of sales and fuel (exclusive of depreciation and operating costs)	$	(5,576,587)	$	1,088,098	$	(4,488,489)
Operating costs	$	(505,053)	$	(803)	$	(505,856)
Depreciation and amortization	$	(311,958)	$	(2,083)	$	(314,041)
Equity in net earnings from investments	$	59,040	$	—	$	59,040
Investments in unconsolidated affiliates	$	800,351	$	—	$	800,351
Total assets	$	22,984,286	$	452,962	$	23,437,248
Capital expenditures	$	317,464	$	6,658	$	324,122

(a) - Noncustomer revenue for the six months ended June 30, 2021, totaled $(208.2) million related primarily to losses from derivatives on commodity contracts.

Six Months Ended June 30, 2020	Natural Gas Gathering and Processing		Natural Gas Liquids (a)		Natural Gas Pipelines (b)		Total Segments
	(Thousands of dollars)
NGL and condensate sales	$	329,498	$	2,771,291	$	—	$	3,100,789
Residue natural gas sales	339,943		—		2,035		341,978
Gathering, processing and exchange services revenue	73,886		238,710		—		312,596
Transportation and storage revenue	—		91,636		240,141		331,777
Other	6,462		4,669		665		11,796
Total revenues (c)	749,789		3,106,306		242,841		4,098,936
Cost of sales and fuel (exclusive of depreciation and operating costs)	(334,391)		(2,183,908)		(1,707)		(2,520,006)
Operating costs	(163,138)		(196,548)		(66,399)		(426,085)
Equity in net earnings (loss) from investments	(1,343)		23,065		48,233		69,955
Noncash compensation expense and other	(2,520)		(357)		(611)		(3,488)
Segment adjusted EBITDA	$	248,397	$	748,558	$	222,357	$	1,219,312
Depreciation and amortization	$	(114,175)	$	(126,906)	$	(29,694)	$	(270,775)
Impairment charges (d)	$	(564,353)	$	(77,401)	$	—	$	(641,754)
Investments in unconsolidated affiliates	$	2,250	$	427,032	$	360,753	$	790,035
Total assets	$	6,426,121	$	13,183,168	$	2,064,197	$	21,673,486
Capital expenditures	$	299,781	$	1,205,990	$	27,500	$	1,533,271

(a) - Our Natural Gas Liquids segment has regulated and nonregulated operations. Our Natural Gas Liquids segment’s regulated operations had revenues of $912.3 million, of which $810.8 million related to revenues within the segment, and cost of sales and fuel of $237.5 million.

(b) - Our Natural Gas Pipelines segment has regulated and nonregulated operations. Our Natural Gas Pipelines segment’s regulated operations had revenues of $153.8 million and cost of sales and fuel of $12.8 million.

(c) - Intersegment revenues are primarily commodity sales, which are based on the contracted selling price that is generally index-based and settled monthly, and for the Natural Gas Gathering and Processing segment totaled $321.5 million. Intersegment revenues for the Natural Gas Liquids and Natural Gas Pipelines segments were not material.

(d) - Includes noncash impairment charges of $380.5 million related primarily to long-lived assets, $153.4 million related to goodwill and $30.5 million related to an investment in an unconsolidated affiliate in our Natural Gas Gathering and Processing segment; and $70.2 million related to long-lived assets and $7.2 million related to an investment in an unconsolidated affiliate in our Natural Gas Liquids segment.

Six Months Ended June 30, 2020	Total Segments		Other and Eliminations		Total
	(Thousands of dollars)
Reconciliations of total segments to consolidated
NGL and condensate sales	$	3,100,789	$	(288,439)	$	2,812,350
Residue natural gas sales	341,978		(4,963)		337,015
Gathering, processing and exchange services revenue	312,596		—		312,596
Transportation and storage revenue	331,777		(7,436)		324,341
Other	11,796		(697)		11,099
Total revenues (a)	$	4,098,936	$	(301,535)	$	3,797,401
Cost of sales and fuel (exclusive of depreciation and operating costs)	$	(2,520,006)	$	302,620	$	(2,217,386)
Operating costs	$	(426,085)	$	(5,419)	$	(431,504)
Depreciation and amortization	$	(270,775)	$	(1,994)	$	(272,769)
Impairment charges	$	(641,754)	$	—	$	(641,754)
Equity in net earnings from investments	$	69,955	$	—	$	69,955
Investments in unconsolidated affiliates	$	790,035	$	—	$	790,035
Total assets	$	21,673,486	$	1,318,981	$	22,992,467
Capital expenditures	$	1,533,271	$	10,690	$	1,543,961

(a) - Noncustomer revenue for the six months ended June 30, 2020, totaled $99.0 million related primarily to gains from derivatives on commodity contracts.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
	(Thousands of dollars)
Reconciliation of net income (loss) to total segment adjusted EBITDA
Net income (loss)	$	342,139	$	134,321	$	728,315	$	(7,536)
Add:
Interest expense, net of capitalized interest	184,957		218,968		370,480		359,584
Depreciation and amortization	156,921		140,416		314,041		272,769
Income tax expense (benefit)	110,069		43,140		232,201		(12,255)
Impairment charges	—		—		—		641,754
Noncash compensation expense (benefit)	7,825		957		24,108		(345)
Other corporate costs and equity AFUDC (a)	2,342		(1,578)		1,627		(34,659)
Total segment adjusted EBITDA	$	804,253	$	536,224	$	1,670,772	$	1,219,312

(a) - The three and six months ended June 30, 2020, include corporate gains of $4.3 million and $20.0 million, respectively, on extinguishment of debt related to open market repurchases.