Segment Disclosures

Our reportable segments are strategic business units that offer different products and services. Our segments are managed separately as each segment requires different marketing strategies and business knowledge. Management evaluates performance based on segment operating margin, which includes revenue from affiliates and external customers, operating expenses, cost of product sales and earnings of non-controlled entities.

We believe that investors benefit from having access to the same financial measures used by management. Operating margin, which is presented in the following tables, is an important measure used by management to evaluate the economic performance of our core operations. Operating margin is not a GAAP measure, but the components of operating margin are computed using amounts that are determined in accordance with GAAP. A reconciliation of operating margin to operating profit, which is its nearest comparable GAAP financial measure, is included in the tables below (presented in thousands). Operating profit includes depreciation and amortization expense and G&A expense that management does not consider when evaluating the core profitability of our separate operating segments.



	Three Months Ended September 30, 2017
	Refined Products		Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation and terminals revenue	$	289,030	$	116,305		$	42,501		$	(901	)	$	446,935
Product sales revenue	107,175		12,370			1,465			—			121,010
Affiliate management fee revenue	353		3,703			847			—			4,903
Total revenue	396,558		132,378			44,813			(901		)	572,848
Operating expenses	118,665		31,163			17,723			(2,183		)	165,368
Cost of product sales	103,391		16,630			1,798			—			121,819
(Earnings) losses of non-controlled entities	700		(31,244		)	(607		)	—			(31,151		)
Operating margin	173,802		115,829			25,899			1,282			316,812
Depreciation and amortization expense	27,469		12,584			8,574			1,282			49,909
G&A expense	23,808		9,266			4,128			—			37,202
Operating profit	$	122,525	$	93,979		$	13,197		$	—		$	229,701



	Three Months Ended September 30, 2018
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation and terminals revenue	$	300,034		$	145,118		$	44,546		$	(923	)	$	488,775
Product sales revenue	129,926			12,666			1,811			—			144,403
Affiliate management fee revenue	351			3,463			1,028			—			4,842
Total revenue	430,311			161,247			47,385			(923		)	638,020
Operating expenses	112,279			45,195			17,178			(2,537		)	172,115
Cost of product sales	106,756			11,590			2,164			—			120,510
Earnings of non-controlled entities	(3,393		)	(49,420		)	(982		)	—			(53,795		)
Operating margin	214,669			153,882			29,025			1,614			399,190
Depreciation and amortization expense	30,440			15,145			9,029			1,614			56,228
G&A expense	28,751			12,766			5,872			—			47,389
Operating profit	$	155,478		$	125,971		$	14,124		$	—		$	295,573



	Nine Months Ended September 30, 2017
	Refined Products		Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation and terminals revenue	$	808,818	$	329,813		$	136,702		$	(2,488	)	$	1,272,845
Product sales revenue	509,068		34,876			4,690			—			548,634
Affiliate management fee revenue	1,035		10,311			1,537			—			12,883
Total revenue	1,318,921		375,000			142,929			(2,488		)	1,834,362
Operating expenses	312,911		89,991			45,753			(6,401		)	442,254
Cost of product sales	396,292		37,814			6,564			—			440,670
(Earnings) losses of non-controlled entities	167		(76,388		)	(1,952		)	—			(78,173		)
Operating margin	609,551		323,583			92,564			3,913			1,029,611
Depreciation and amortization expense	81,440		35,947			24,803			3,913			146,103
G&A expense	75,429		30,376			15,071			—			120,876
Operating profit	$	452,682	$	257,260		$	52,690		$	—		$	762,632



	Nine Months Ended September 30, 2018
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation and terminals revenue	$	851,492		$	409,329		$	134,892		$	(2,753	)	$	1,392,960
Product sales revenue	513,634			32,387			6,771			—			552,792
Affiliate management fee revenue	1,000			11,328			2,810			—			15,138
Total revenue	1,366,126			453,044			144,473			(2,753		)	1,960,890
Operating expenses	319,670			109,963			52,835			(7,212		)	475,256
Cost of product sales	434,632			32,401			6,748			—			473,781
Earnings of non-controlled entities	(5,614		)	(122,879		)	(2,350		)	—			(130,843		)
Operating margin	617,438			433,559			87,240			4,459			1,142,696
Depreciation and amortization expense	89,855			40,648			26,764			4,459			161,726
G&A expense	90,825			38,127			18,283			—			147,235
Operating profit	$	436,758		$	354,784		$	42,193		$	—		$	833,735