Segment Disclosures

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Segment Disclosures

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 third-party customers, operating expenses, cost of product sales, other operating (income) expense 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, amortization and impairment expense and general and administrative (“G&A”) expense that management does not consider when evaluating the core profitability of our separate operating segments.

	Three Months Ended September 30, 2019
	Refined Products		Crude Oil		Intersegment Eliminations		Total
Transportation and terminals revenue	$	352,611	$	155,377	$	(1,556)	$	506,432
Product sales revenue	136,464		8,343		—		144,807
Affiliate management fee revenue	1,764		3,593		—		5,357
Total revenue	490,839		167,313		(1,556)		656,596
Operating expenses	127,328		44,961		(2,902)		169,387
Cost of product sales	100,416		8,341		—		108,757
Other operating (income) expense	(3,249)		3,628		—		379
Earnings of non-controlled entities	(4,142)		(46,047)		—		(50,189)
Operating margin	270,486		156,430		1,346		428,262
Depreciation, amortization and impairment expense	39,660		15,621		1,346		56,627
G&A expense	36,806		14,350		—		51,156
Operating profit	$	194,020	$	126,459	$	—	$	320,479

	Three Months Ended September 30, 2020
	Refined Products		Crude Oil		Intersegment Eliminations		Total
Transportation and terminals revenue	$	320,809	$	154,652	$	(1,930)	$	473,531
Product sales revenue	114,252		5,193		—		119,445
Affiliate management fee revenue	1,579		3,709		—		5,288
Total revenue	436,640		163,554		(1,930)		598,264
Operating expenses	118,579		46,956		(3,553)		161,982
Cost of product sales	86,356		9,763		—		96,119
Other operating (income) expense	(193)		3,056		—		2,863
Earnings of non-controlled entities	(7,134)		(32,001)		—		(39,135)
Operating margin	239,032		135,780		1,623		376,435
Depreciation, amortization and impairment expense	41,620		28,579		1,623		71,822
G&A expense	27,487		10,529		—		38,016
Operating profit	$	169,925	$	96,672	$	—	$	266,597

	Nine Months Ended September 30, 2019
	Refined Products		Crude Oil		Intersegment Eliminations		Total
Transportation and terminals revenue	$	1,009,812	$	467,652	$	(3,835)	$	1,473,629
Product sales revenue	478,441		19,350		—		497,791
Affiliate management fee revenue	5,085		10,725		—		15,810
Total revenue	1,493,338		497,727		(3,835)		1,987,230
Operating expenses	362,870		129,431		(7,960)		484,341
Cost of product sales	411,012		19,715		—		430,727
Other operating (income) expense	(9,648)		8,110		—		(1,538)
Earnings of non-controlled entities	(145)		(122,084)		—		(122,229)
Operating margin	729,249		462,555		4,125		1,195,929
Depreciation, amortization and impairment expense	128,724		48,179		4,125		181,028
G&A expense	107,179		42,355		—		149,534
Operating profit	$	493,346	$	372,021	$	—	$	865,367

	Nine Months Ended September 30, 2020
	Refined Products		Crude Oil		Intersegment Eliminations		Total
Transportation and terminals revenue	$	914,887	$	433,947	$	(5,093)	$	1,343,741
Product sales revenue	461,701		20,141		—		481,842
Affiliate management fee revenue	4,676		11,219		—		15,895
Total revenue	1,381,264		465,307		(5,093)		1,841,478
Operating expenses	327,866		139,645		(9,914)		457,597
Cost of product sales	365,314		30,550		—		395,864
Other operating (income) expense	(2,223)		1,684		—		(539)
Earnings of non-controlled entities	(25,946)		(90,538)		—		(116,484)
Operating margin	716,253		383,966		4,821		1,105,040
Depreciation, amortization and impairment expense	128,708		60,367		4,821		193,896
G&A expense	84,802		32,290		—		117,092
Operating profit	$	502,743	$	291,309	$	—	$	794,052