Segment Information

12 Months Ended

Dec. 31, 2012

Segment Information

Segment Information

NOTE 19 – SEGMENT INFORMATION

The Partnership has two reportable segments: Gathering and Processing; and Transportation and Treating. These reportable segments reflect the way the Partnership manages its operations.

The Gathering and Processing segment consists of (1) the Arkoma, WestOK, WestTX and Velma operations, which are comprised of natural gas gathering and processing assets servicing drilling activity in the Anadarko, Arkoma and Permian Basins; (2) the natural gas gathering assets located in the Barnett Shale play in Texas and the Appalachian Basin in Tennessee; and (3) through the year ended December 31, 2011, the revenues and gain on sale related to the Partnership's former 49% interest in Laurel Mountain (see Note 4).Gathering and Processing revenues are primarily derived from the sale of residue gas and NGLs and the gathering, processing and treating of natural gas.

The Transportation and Treating segment consists of the contract gas treating operations located in various shale plays including the Avalon, Eagle Ford, Granite Wash, Haynesville, Fayetteville and Woodford; and the Partnership's 20% interest in the equity income generated by WTLPG, which owns a common-carrier pipeline system that transports NGLs from New Mexico and Texas to Mont Belvieu, Texas for fractionation. Contract gas treating revenues are primarily derived from monthly lease fees for use of treating facilities. Pipeline revenues are primarily derived from transportation fees.

In connection with the Cardinal Acquisition (see Note 3), the Partnership reviewed the acquired assets to determine the proper alignment of these assets with the existing reportable segments.The gas gathering and processing facilities acquired, along with their related assets, are included in the Gathering and Processing segment.The fixed fee contract gas treating business acquired in the Cardinal Acquisition generates revenue based upon monthly lease fees. The Partnership included these assets in the Pipeline Transportation segment and renamed it "Transportation, Treating and Other".

The following summarizes the Partnership's reportable segment data for the periods indicated (in thousands):

	Gathering and Processing		Transportation and Treating		Corporate  and Other		Consolidated
Year Ended December 31, 2012:
Revenue:
Revenues – third party(1)	$	1,217,820	$	182	$	27,583		$	1,245,585
Revenues – affiliates		435		–		–			435
Total revenues		1,218,255		182		27,583			1,246,020
Costs and Expenses:
Operating costs and expenses		989,864		180		–			990,044
General and administrative(1) `		–		–		47,206			47,206
Other costs(2)		(303)		–		15,372			15,069
Depreciation and amortization		90,029		–		–			90,029
Interest expense(1)		–		–		41,760			41,760
Total costs and expenses		1,079,590		180		104,338			1,184,108
Equity income		–		6,323		–			6,323
Net income (loss) from continuing operations before tax		138,665		6,325		(76,755)			68,235
Income tax		176		–		–			176
Net income (loss)	$	138,489	$	6,325	$	(76,755)		$	68,059

	Gathering and Processing			Transportation and Treating		Corporate  and Other			Consolidated
Year Ended December 31, 2011:
Revenue:
Revenues – third party(1)		$	1,329,686	$	–	$	(27,287)	$		1,302,399
Revenues – affiliates			335		–		–			335
Total revenues			1,330,021		–		(27,287)			1,302,734
Costs and Expenses:
Operating costs and expenses			1,102,330		214		–			1,102,544
General and administrative(1) `			–		–		36,357			36,357
Other costs			330		710		–			1,040
Depreciation and amortization			77,435		–		–			77,435
Interest expense(1)			–		–		31,603			31,603
Total costs and expenses			1,180,095		924		67,960			1,248,979
Equity income			462		4,563		–			5,025
Gain on asset sale and other			256,272		–		–			256,272
Loss on early extinguishment of debt			–		–		(19,574)			(19,574)
Net income (loss) from continuing operations			406,660		3,639		(114,821)			295,478
Loss from discontinued operations			–		–		(81)			(81)
Net income (loss)		$	406,660	$	3,639	$	(114,902)	$		295,397

Year Ended December 31, 2010:
Revenue:
Revenues – third party(1)	$	956,483	$	–	$	(21,514)	$	934,969
Revenues – affiliates		619		–		–		619
Total revenues		957,102		–		(21,514)		935,588
Costs and expenses:
Operating costs and expenses		769,946		–		–		769,946
General and administrative(1)		–		–		34,021		34,021
Depreciation and amortization		74,897		–		–		74,897
Interest expense(1)		–		–		87,273		87,273
Total costs and expenses		844,843		–		121,294		966,137
Equity income		4,920		–		–		4,920
Loss on asset sale and other		(10,729)		–		–		(10,729)
Loss on early extinguishment of debt		–		–		(4,359)		(4,359)
Net income (loss) from continuing operations		106,450		–		(147,167)		(40,717)
Income from discontinued operations		–		–		321,155		321,155
Net income (loss)	$	106,450	$	–	$	173,988	$	280,438

	Years Ended December 31,
Capital Expenditures:	2012		2011		2010
Gathering and Processing	$	373,533	$	245,426	$	46,636
Transportation and Treating		–		–		–
	$	373,533	$	245,426	$	46,636

	December 31,		December 31,
Balance Sheet	2012		2011
Equity method investment in joint venture:
Transportation and Treating		86,002		86,879
Goodwill:
Gathering and Processing		292,448		–
Transportation and Treating		26,837		–
	$	319,285	$	–
Total assets:
Gathering and Processing	$	2,831,639	$	1,806,550
Transportation and Treating		141,356		87,053
Corporate and other		92,643		37,209
	$	3,065,638	$	1,930,812
(1)The Partnership notes derivative contracts are carried at the corporate level; and interest and general and administrative expenses have not been allocated to its reportable segments, as it would be unfeasible to reasonably do so for the periods presented.
(2)The Partnership notes that for the year ended December 31, 2012, acquisition costs related to the Cardinal Acquisition have not been allocated to its reportable segments, as it would be unfeasible to reasonably do so.

The following table summarizes the Partnership's total natural gas and liquids sales by product or service for the periods indicated (in thousands):

	Years Ended December 31,
	2012		2011			2010
Natural gas and liquids sales:
Natural gas	$	396,867	$	400,991	$		299,461
NGLs		657,271		795,122			548,308
Condensate		85,234		72,037			41,933
Other		(2,111)		45			346
Total	$	1,137,261	$	1,268,195	$		890,048