Segment Information |
(13) Segment Information
Starting in the first quarter of 2021, we began evaluating the financial performance of our segments by including realized and unrealized gains and losses resulting from commodity swaps activity in the Permian, Louisiana, Oklahoma, and North Texas segments. Commodity swaps activity was previously reported in the Corporate segment. We have recast segment information for all presented periods prior to the first quarter of 2021 to conform to current period presentation. Identification of the majority of our operating segments is based principally upon geographic regions served:
•Permian Segment. The Permian segment includes our natural gas gathering, processing, and transmission activities and our crude oil operations in the Midland and Delaware Basins in West Texas and Eastern New Mexico;
•Louisiana Segment. The Louisiana segment includes our natural gas and NGL pipelines, natural gas processing plants, natural gas and NGL storage facilities, and fractionation facilities located in Louisiana and our crude oil operations in ORV;
•Oklahoma Segment. The Oklahoma segment includes our natural gas gathering, processing, and transmission activities, and our crude oil operations in the Cana-Woodford, Arkoma-Woodford, northern Oklahoma Woodford, STACK, and CNOW shale areas;
•North Texas Segment. The North Texas segment includes our natural gas gathering, processing, and transmission activities in North Texas; and
•Corporate Segment. The Corporate segment includes our unconsolidated affiliate investments in the Cedar Cove JV in Oklahoma, our ownership interest in GCF in South Texas, and our general corporate assets and expenses. We evaluate the performance of our operating segments based on segment profit and adjusted gross margin. Adjusted gross margin is a non-GAAP financial measure. Summarized financial information for our reportable segments is shown in the following tables (in millions): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Permian | | Louisiana | | Oklahoma | | North Texas | | Corporate | | Totals | Three Months Ended September 30, 2021 | | | | | | | | | | | | Natural gas sales | $ | 159.3 | | | $ | 183.2 | | | $ | 58.2 | | | $ | 32.2 | | | $ | — | | | $ | 432.9 | | NGL sales | 0.4 | | | 898.6 | | | 0.3 | | | (0.1) | | | — | | | 899.2 | | Crude oil and condensate sales | 194.4 | | | 62.5 | | | 21.2 | | | — | | | — | | | 278.1 | | | | | | | | | | | | | | Product sales | 354.1 | | | 1,144.3 | | | 79.7 | | | 32.1 | | | — | | | 1,610.2 | | | | | | | | | | | | | | NGL sales—related parties | 301.4 | | | 39.5 | | | 180.2 | | | 131.2 | | | (652.3) | | | — | | Crude oil and condensate sales—related parties | — | | | — | | | — | | | 1.5 | | | (1.5) | | | — | | Product sales—related parties | 301.4 | | | 39.5 | | | 180.2 | | | 132.7 | | | (653.8) | | | — | | Gathering and transportation | 12.8 | | | 16.3 | | | 44.6 | | | 39.0 | | | — | | | 112.7 | | Processing | 7.5 | | | 0.9 | | | 26.5 | | | 27.0 | | | — | | | 61.9 | | NGL services | — | | | 16.9 | | | — | | | — | | | — | | | 16.9 | | Crude services | 5.5 | | | 10.3 | | | 2.8 | | | 0.1 | | | — | | | 18.7 | | Other services | 0.2 | | | 0.4 | | | 0.1 | | | 0.1 | | | — | | | 0.8 | | Midstream services | 26.0 | | | 44.8 | | | 74.0 | | | 66.2 | | | — | | | 211.0 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Crude services—related parties | — | | | — | | | 0.1 | | | — | | | (0.1) | | | — | | Other services—related parties | — | | | 0.1 | | | — | | | — | | | (0.1) | | | — | | Midstream services—related parties | — | | | 0.1 | | | 0.1 | | | — | | | (0.2) | | | — | | Revenue from contracts with customers | 681.5 | | | 1,228.7 | | | 334.0 | | | 231.0 | | | (654.0) | | | 1,821.2 | | Cost of sales, exclusive of operating expenses and depreciation and amortization (1) | (576.6) | | | (1,110.8) | | | (218.0) | | | (149.4) | | | 654.0 | | | (1,400.8) | | Realized loss on derivatives | (8.7) | | | (14.9) | | | (6.8) | | | (2.0) | | | — | | | (32.4) | | Change in fair value of derivatives | 10.2 | | | (8.8) | | | (2.3) | | | (0.3) | | | — | | | (1.2) | | Adjusted gross margin | 106.4 | | | 94.2 | | | 106.9 | | | 79.3 | | | — | | | 386.8 | | Operating expenses | (37.3) | | | (30.5) | | | (19.8) | | | (19.3) | | | — | | | (106.9) | | Segment profit | 69.1 | | | 63.7 | | | 87.1 | | | 60.0 | | | — | | | 279.9 | | Depreciation and amortization | (35.4) | | | (34.6) | | | (52.3) | | | (28.5) | | | (2.2) | | | (153.0) | | | | | | | | | | | | | | Gain on disposition of assets | 0.1 | | | 0.2 | | | — | | | 0.1 | | | — | | | 0.4 | | General and administrative | — | | | — | | | — | | | — | | | (28.2) | | | (28.2) | | Interest expense, net of interest income | — | | | — | | | — | | | — | | | (60.1) | | | (60.1) | | | | | | | | | | | | | | Loss from unconsolidated affiliates | — | | | — | | | — | | | — | | | (2.3) | | | (2.3) | | | | | | | | | | | | | | Income (loss) before non-controlling interest and income taxes | $ | 33.8 | | | $ | 29.3 | | | $ | 34.8 | | | $ | 31.6 | | | $ | (92.8) | | | $ | 36.7 | | Capital expenditures | $ | 25.8 | | | $ | 0.4 | | | $ | 10.3 | | | $ | 3.3 | | | $ | 0.6 | | | $ | 40.4 | |
____________________________ (1)Includes related party cost of sales of $4.9 million for the three months ended September 30, 2021 and excludes all operating expenses as well as depreciation and amortization related to our operating segments of $150.8 million for the three months ended September 30, 2021. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Permian | | Louisiana | | Oklahoma | | North Texas | | Corporate | | Totals | Three Months Ended September 30, 2020 | | | | | | | | | | | | Natural gas sales | $ | 46.5 | | | $ | 76.4 | | | $ | 40.1 | | | $ | 16.0 | | | $ | — | | | $ | 179.0 | | NGL sales | 0.1 | | | 402.3 | | | 1.2 | | | — | | | — | | | 403.6 | | Crude oil and condensate sales | 82.6 | | | 21.7 | | | 9.2 | | | — | | | — | | | 113.5 | | | | | | | | | | | | | | Product sales | 129.2 | | | 500.4 | | | 50.5 | | | 16.0 | | | — | | | 696.1 | | | | | | | | | | | | | | NGL sales—related parties | 95.6 | | | 3.3 | | | 85.4 | | | 21.4 | | | (205.7) | | | — | | Crude oil and condensate sales—related parties | — | | | — | | | — | | | 0.7 | | | (0.7) | | | — | | Product sales—related parties | 95.6 | | | 3.3 | | | 85.4 | | | 22.1 | | | (206.4) | | | — | | Gathering and transportation | 17.9 | | | 10.7 | | | 56.7 | | | 43.4 | | | — | | | 128.7 | | Processing | 8.0 | | | 0.3 | | | 32.4 | | | 33.3 | | | — | | | 74.0 | | NGL services | — | | | 14.2 | | | — | | | — | | | — | | | 14.2 | | Crude services | 3.8 | | | 12.2 | | | 3.7 | | | — | | | — | | | 19.7 | | Other services | 0.2 | | | 0.4 | | | 0.1 | | | 0.2 | | | — | | | 0.9 | | Midstream services | 29.9 | | | 37.8 | | | 92.9 | | | 76.9 | | | — | | | 237.5 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Crude services—related parties | — | | | — | | | 0.1 | | | — | | | (0.1) | | | — | | | | | | | | | | | | | | Midstream services—related parties | — | | | — | | | 0.1 | | | — | | | (0.1) | | | — | | Revenue from contracts with customers | 254.7 | | | 541.5 | | | 228.9 | | | 115.0 | | | (206.5) | | | 933.6 | | Cost of sales, exclusive of operating expenses and depreciation and amortization (1) | (185.4) | | | (441.4) | | | (101.0) | | | (28.2) | | | 206.5 | | | (549.5) | | Realized loss on derivatives | (0.4) | | | (0.6) | | | (1.7) | | | (0.2) | | | — | | | (2.9) | | Change in fair value of derivatives | 0.9 | | | (2.7) | | | (0.3) | | | (0.1) | | | — | | | (2.2) | | Adjusted gross margin | 69.8 | | | 96.8 | | | 125.9 | | | 86.5 | | | — | | | 379.0 | | Operating expenses | (22.9) | | | (31.1) | | | (20.1) | | | (20.2) | | | — | | | (94.3) | | Segment profit | 46.9 | | | 65.7 | | | 105.8 | | | 66.3 | | | — | | | 284.7 | | Depreciation and amortization | (31.9) | | | (36.9) | | | (53.0) | | | (36.8) | | | (1.7) | | | (160.3) | | | | | | | | | | | | | | Gain on disposition of assets | — | | | — | | | — | | | 1.8 | | | — | | | 1.8 | | General and administrative | — | | | — | | | — | | | — | | | (25.7) | | | (25.7) | | Interest expense, net of interest income | — | | | — | | | — | | | — | | | (55.5) | | | (55.5) | | | | | | | | | | | | | | Loss from unconsolidated affiliates | — | | | — | | | — | | | — | | | (0.2) | | | (0.2) | | Other income | — | | | — | | | — | | | — | | | 0.4 | | | 0.4 | | Income (loss) before non-controlling interest and income taxes | $ | 15.0 | | | $ | 28.8 | | | $ | 52.8 | | | $ | 31.3 | | | $ | (82.7) | | | $ | 45.2 | | | | | | | | | | | | | | Capital expenditures | $ | 28.5 | | | $ | 8.5 | | | $ | 2.6 | | | $ | 3.0 | | | $ | 0.6 | | | $ | 43.2 | |
____________________________ (1)Includes related party cost of sales of $2.0 million for the three months ended September 30, 2020 and excludes all operating expenses as well as depreciation and amortization related to our operating segments of $158.6 million for the three months ended September 30, 2020. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Permian | | Louisiana | | Oklahoma | | North Texas | | Corporate | | Totals | Nine Months Ended September 30, 2021 | | | | | | | | | | | | Natural gas sales | $ | 381.7 | | | $ | 426.4 | | | $ | 139.7 | | | $ | 109.4 | | | $ | — | | | $ | 1,057.2 | | NGL sales | 0.9 | | | 2,231.2 | | | 1.3 | | | 1.0 | | | — | | | 2,234.4 | | Crude oil and condensate sales | 472.1 | | | 154.5 | | | 50.5 | | | — | | | — | | | 677.1 | | | | | | | | | | | | | | Product sales | 854.7 | | | 2,812.1 | | | 191.5 | | | 110.4 | | | — | | | 3,968.7 | | | | | | | | | | | | | | NGL sales—related parties | 661.8 | | | 93.3 | | | 430.4 | | | 306.4 | | | (1,491.9) | | | — | | Crude oil and condensate sales—related parties | — | | | — | | | 0.1 | | | 5.1 | | | (5.2) | | | — | | Product sales—related parties | 661.8 | | | 93.3 | | | 430.5 | | | 311.5 | | | (1,497.1) | | | — | | Gathering and transportation | 34.3 | | | 48.5 | | | 141.8 | | | 117.6 | | | — | | | 342.2 | | Processing | 21.7 | | | 1.9 | | | 70.5 | | | 81.1 | | | — | | | 175.2 | | NGL services | — | | | 56.0 | | | — | | | 0.2 | | | — | | | 56.2 | | Crude services | 13.0 | | | 29.8 | | | 9.5 | | | 0.5 | | | — | | | 52.8 | | Other services | 0.6 | | | 1.3 | | | 0.5 | | | 0.4 | | | — | | | 2.8 | | Midstream services | 69.6 | | | 137.5 | | | 222.3 | | | 199.8 | | | — | | | 629.2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Crude services—related parties | — | | | — | | | 0.2 | | | — | | | (0.2) | | | — | | Other services—related parties | — | | | 2.4 | | | — | | | — | | | (2.4) | | | — | | Midstream services—related parties | — | | | 2.4 | | | 0.2 | | | — | | | (2.6) | | | — | | Revenue from contracts with customers | 1,586.1 | | | 3,045.3 | | | 844.5 | | | 621.7 | | | (1,499.7) | | | 4,597.9 | | Cost of sales, exclusive of operating expenses and depreciation and amortization (1) | (1,304.5) | | | (2,690.1) | | | (533.9) | | | (361.8) | | | 1,499.7 | | | (3,390.6) | | Realized loss on derivatives | (69.8) | | | (32.0) | | | (15.7) | | | (4.8) | | | — | | | (122.3) | | Change in fair value of derivatives | (3.0) | | | (18.6) | | | (9.4) | | | (1.9) | | | — | | | (32.9) | | Adjusted gross margin | 208.8 | | | 304.6 | | | 285.5 | | | 253.2 | | | — | | | 1,052.1 | | Operating expenses | (52.9) | | | (91.4) | | | (57.3) | | | (58.4) | | | — | | | (260.0) | | Segment profit | 155.9 | | | 213.2 | | | 228.2 | | | 194.8 | | | — | | | 792.1 | | Depreciation and amortization | (103.5) | | | (106.8) | | | (153.6) | | | (86.0) | | | (6.0) | | | (455.9) | | | | | | | | | | | | | | Gain on disposition of assets | 0.2 | | | 0.3 | | | — | | | 0.2 | | | — | | | 0.7 | | General and administrative | — | | | — | | | — | | | — | | | (80.3) | | | (80.3) | | Interest expense, net of interest income | — | | | — | | | — | | | — | | | (180.1) | | | (180.1) | | | | | | | | | | | | | | Loss from unconsolidated affiliates | — | | | — | | | — | | | — | | | (9.9) | | | (9.9) | | Other income | — | | | — | | | — | | | — | | | 0.1 | | | 0.1 | | Income (loss) before non-controlling interest and income taxes | $ | 52.6 | | | $ | 106.7 | | | $ | 74.6 | | | $ | 109.0 | | | $ | (276.2) | | | $ | 66.7 | | Capital expenditures | $ | 78.6 | | | $ | 5.4 | | | $ | 17.1 | | | $ | 7.6 | | | $ | 1.1 | | | $ | 109.8 | |
____________________________ (1)Includes related party cost of sales of $11.7 million for the nine months ended September 30, 2021 and excludes all operating expenses as well as depreciation and amortization related to our operating segments of $449.9 million for the nine months ended September 30, 2021. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Permian | | Louisiana | | Oklahoma | | North Texas | | Corporate | | Totals | Nine Months Ended September 30, 2020 | | | | | | | | | | | | Natural gas sales | $ | 94.0 | | | $ | 226.6 | | | $ | 110.0 | | | $ | 50.7 | | | $ | — | | | $ | 481.3 | | NGL sales | 0.2 | | | 1,056.9 | | | 2.9 | | | 0.3 | | | — | | | 1060.3 | | Crude oil and condensate sales | 454.6 | | | 95.0 | | | 30.4 | | | — | | | — | | | 580.0 | | | | | | | | | | | | | | Product sales | 548.8 | | | 1,378.5 | | | 143.3 | | | 51.0 | | | — | | | 2,121.6 | | | | | | | | | | | | | | NGL sales—related parties | 201.0 | | | 13.3 | | | 209.0 | | | 52.5 | | | (475.8) | | | — | | Crude oil and condensate sales—related parties | 0.1 | | | — | | | (0.1) | | | 2.6 | | | (2.6) | | | — | | Product sales—related parties | 201.1 | | | 13.3 | | | 208.9 | | | 55.1 | | | (478.4) | | | — | | Gathering and transportation | 47.3 | | | 33.9 | | | 165.5 | | | 133.5 | | | — | | | 380.2 | | Processing | 19.8 | | | 1.6 | | | 97.8 | | | 101.7 | | | — | | | 220.9 | | NGL services | — | | | 52.4 | | | — | | | 0.1 | | | — | | | 52.5 | | Crude services | 13.0 | | | 33.8 | | | 12.6 | | | — | | | — | | | 59.4 | | Other services | 1.0 | | | 1.2 | | | 0.3 | | | 0.7 | | | — | | | 3.2 | | Midstream services | 81.1 | | | 122.9 | | | 276.2 | | | 236.0 | | | — | | | 716.2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Crude services—related parties | — | | | — | | | 0.3 | | | — | | | (0.3) | | | — | | | | | | | | | | | | | | Midstream services—related parties | — | | | — | | | 0.3 | | | — | | | (0.3) | | | — | | Revenue from contracts with customers | 831.0 | | | 1,514.7 | | | 628.7 | | | 342.1 | | | (478.7) | | | 2,837.8 | | Cost of sales, exclusive of operating expenses and depreciation and amortization (1) | (637.7) | | | (1,213.6) | | | (255.8) | | | (74.1) | | | 478.7 | | | (1,702.5) | | Realized gain (loss) on derivatives | (0.6) | | | 1.9 | | | (1.7) | | | 0.1 | | | — | | | (0.3) | | Change in fair value of derivatives | 2.3 | | | (7.8) | | | (2.4) | | | (0.1) | | | — | | | (8.0) | | Adjusted gross margin | 195.0 | | | 295.2 | | | 368.8 | | | 268.0 | | | — | | | 1,127.0 | | Operating expenses | (71.1) | | | (90.4) | | | (62.4) | | | (59.2) | | | — | | | (283.1) | | Segment profit | 123.9 | | | 204.8 | | | 306.4 | | | 208.8 | | | — | | | 843.9 | | Depreciation and amortization | (92.1) | | | (109.3) | | | (163.7) | | | (110.4) | | | (5.8) | | | (481.3) | | Impairments | (184.6) | | | (169.9) | | | — | | | — | | | — | | | (354.5) | | Gain (loss) on disposition of assets | (4.9) | | | 0.1 | | | 0.1 | | | 1.9 | | | — | | | (2.8) | | General and administrative | — | | | — | | | — | | | — | | | (79.6) | | | (79.6) | | Interest expense, net of interest income | — | | | — | | | — | | | — | | | (166.3) | | | (166.3) | | Gain on extinguishment of debt | — | | | — | | | — | | | — | | | 32.0 | | | 32.0 | | Income from unconsolidated affiliates | — | | | — | | | — | | | — | | | 0.8 | | | 0.8 | | Other income | — | | | — | | | — | | | — | | | 0.4 | | | 0.4 | | Income (loss) before non-controlling interest and income taxes | $ | (157.7) | | | $ | (74.3) | | | $ | 142.8 | | | $ | 100.3 | | | $ | (218.5) | | | $ | (207.4) | | | | | | | | | | | | | | Capital expenditures | $ | 161.4 | | | $ | 39.3 | | | $ | 14.1 | | | $ | 10.7 | | | $ | 1.7 | | | $ | 227.2 | |
____________________________ (1)Includes related party cost of sales of $6.2 million for the nine months ended September 30, 2020 and excludes all operating expenses as well as depreciation and amortization related to our operating segments of $475.5 million for the nine months ended September 30, 2020. The table below represents information about segment assets as of September 30, 2021 and December 31, 2020 (in millions): | | | | | | | | | | | | | | | Segment Identifiable Assets: | | September 30, 2021 | | December 31, 2020 | Permian | | $ | 2,391.2 | | | $ | 2,236.3 | | Louisiana | | 2,489.4 | | | 2,312.4 | | Oklahoma | | 2,661.5 | | | 2,847.6 | | North Texas | | 938.0 | | | 1,008.6 | | Corporate (1) | | 146.4 | | | 146.0 | | Total identifiable assets | | $ | 8,626.5 | | | $ | 8,550.9 | |
____________________________ (1)Accounts receivable and accrued revenue sold to the SPV for collateral under the AR Facility are included within the Permian, Louisiana, Oklahoma, and North Texas segments.
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