Segment Information |
(14) Segment Information
We manage and report our activities primarily according to the geography and nature of activity. We have five reportable segments:
•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 Cana-Woodford, Arkoma-Woodford, northern Oklahoma Woodford, STACK, and adjacent areas;
•North Texas Segment. The North Texas segment includes our natural gas gathering, processing, fractionation, and transmission activities in North Texas; and
•Corporate Segment. The Corporate segment includes our unconsolidated affiliate investments in the Cedar Cove JV in Oklahoma, GCF in South Texas, and the Matterhorn JV in West Texas, as well as our 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. See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for additional information. 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, 2023 | | | | | | | | | | | | Natural gas sales | $ | 132.9 | | | $ | 101.8 | | | $ | 42.3 | | | $ | 22.7 | | | $ | — | | | $ | 299.7 | | NGL sales | (4.8) | | | 746.6 | | | (2.0) | | | 0.7 | | | — | | | 740.5 | | Crude oil and condensate sales | 345.2 | | | 78.0 | | | 24.7 | | | — | | | — | | | 447.9 | | | | | | | | | | | | | | Product sales | 473.3 | | | 926.4 | | | 65.0 | | | 23.4 | | | — | | | 1,488.1 | | | | | | | | | | | | | | NGL sales—related parties | 247.4 | | | 5.3 | | | 126.0 | | | 78.7 | | | (457.4) | | | — | | Crude oil and condensate sales—related parties | — | | | — | | | — | | | 2.3 | | | (2.3) | | | — | | Product sales—related parties | 247.4 | | | 5.3 | | | 126.0 | | | 81.0 | | | (459.7) | | | — | | Gathering and transportation | 30.5 | | | 19.5 | | | 60.5 | | | 49.8 | | | — | | | 160.3 | | Processing | 15.3 | | | 0.5 | | | 36.2 | | | 29.9 | | | — | | | 81.9 | | NGL services | — | | | 20.5 | | | — | | | 0.1 | | | — | | | 20.6 | | Crude services | 5.6 | | | 5.7 | | | 3.7 | | | 0.1 | | | — | | | 15.1 | | Other services | 1.7 | | | 0.2 | | | 0.1 | | | 0.2 | | | — | | | 2.2 | | Midstream services | 53.1 | | | 46.4 | | | 100.5 | | | 80.1 | | | — | | | 280.1 | | | | | | | | | | | | | | | | | | | | | | | | | | NGL services—related parties | — | | | — | | | — | | | 1.2 | | | (1.2) | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | Midstream services—related parties | — | | | — | | | — | | | 1.2 | | | (1.2) | | | — | | Revenue from contracts with customers | 773.8 | | | 978.1 | | | 291.5 | | | 185.7 | | | (460.9) | | | 1,768.2 | | Realized gain (loss) on derivatives | (4.4) | | | — | | | 0.9 | | | 4.4 | | | — | | | 0.9 | | Change in fair value of derivatives | (7.4) | | | (6.0) | | | (4.1) | | | (5.4) | | | — | | | (22.9) | | Total revenues | 762.0 | | | 972.1 | | | 288.3 | | | 184.7 | | | (460.9) | | | 1,746.2 | | Cost of sales, exclusive of operating expenses and depreciation and amortization | (604.3) | | | (850.0) | | | (157.1) | | | (94.2) | | | 460.9 | | | (1,244.7) | | Adjusted gross margin | 157.7 | | | 122.1 | | | 131.2 | | | 90.5 | | | — | | | 501.5 | | Operating expenses | (55.0) | | | (35.0) | | | (26.6) | | | (26.7) | | | — | | | (143.3) | | Segment profit | 102.7 | | | 87.1 | | | 104.6 | | | 63.8 | | | — | | | 358.2 | | Depreciation and amortization | (42.1) | | | (36.3) | | | (54.6) | | | (29.3) | | | (1.5) | | | (163.8) | | Gross margin | 60.6 | | | 50.8 | | | 50.0 | | | 34.5 | | | (1.5) | | | 194.4 | | Impairments | — | | | (20.7) | | | — | | | — | | | — | | | (20.7) | | Gain on disposition of assets | — | | | — | | | 0.5 | | | 0.1 | | | — | | | 0.6 | | General and administrative | — | | | — | | | — | | | — | | | (30.4) | | | (30.4) | | Interest expense, net of interest income | — | | | — | | | — | | | — | | | (67.9) | | | (67.9) | | | | | | | | | | | | | | Income from unconsolidated affiliate investments | — | | | — | | | — | | | — | | | 1.0 | | | 1.0 | | Other expense | — | | | — | | | — | | | — | | | (0.6) | | | (0.6) | | Income (loss) before non-controlling interest and income taxes | $ | 60.6 | | | $ | 30.1 | | | $ | 50.5 | | | $ | 34.6 | | | $ | (99.4) | | | $ | 76.4 | | Capital expenditures | $ | 82.9 | | | $ | 23.1 | | | $ | 11.5 | | | $ | 17.0 | | | $ | 2.0 | | | $ | 136.5 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Permian | | Louisiana | | Oklahoma | | North Texas | | Corporate | | Totals | Three Months Ended September 30, 2022 | | | | | | | | | | | | Natural gas sales | $ | 361.6 | | | $ | 383.8 | | | $ | 114.5 | | | $ | 42.8 | | | $ | — | | | $ | 902.7 | | NGL sales | 0.2 | | | 1,067.4 | | | 1.7 | | | 1.4 | | | — | | | 1,070.7 | | Crude oil and condensate sales | 280.7 | | | 97.0 | | | 33.3 | | | — | | | — | | | 411.0 | | | | | | | | | | | | | | Product sales | 642.5 | | | 1,548.2 | | | 149.5 | | | 44.2 | | | — | | | 2,384.4 | | | | | | | | | | | | | | NGL sales—related parties | 380.3 | | | 46.3 | | | 203.2 | | | 139.7 | | | (769.5) | | | — | | Crude oil and condensate sales—related parties | — | | | — | | | — | | | 2.6 | | | (2.6) | | | — | | Product sales—related parties | 380.3 | | | 46.3 | | | 203.2 | | | 142.3 | | | (772.1) | | | — | | Gathering and transportation | 20.9 | | | 22.1 | | | 45.9 | | | 49.9 | | | — | | | 138.8 | | Processing | 11.1 | | | 0.4 | | | 31.4 | | | 39.5 | | | — | | | 82.4 | | NGL services | — | | | 19.5 | | | — | | | 0.1 | | | — | | | 19.6 | | Crude services | 5.7 | | | 8.1 | | | 3.0 | | | 0.1 | | | — | | | 16.9 | | Other services | 0.2 | | | 0.4 | | | 0.2 | | | 0.1 | | | — | | | 0.9 | | Midstream services | 37.9 | | | 50.5 | | | 80.5 | | | 89.7 | | | — | | | 258.6 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Other services—related parties | — | | | 0.1 | | | — | | | — | | | (0.1) | | | — | | Midstream services—related parties | — | | | 0.1 | | | — | | | — | | | (0.1) | | | — | | Revenue from contracts with customers | 1,060.7 | | | 1,645.1 | | | 433.2 | | | 276.2 | | | (772.2) | | | 2,643.0 | | Realized gain (loss) on derivatives | 1.3 | | | 3.3 | | | 0.6 | | | (2.9) | | | — | | | 2.3 | | Change in fair value of derivatives | 2.4 | | | 4.0 | | | 9.5 | | | 2.3 | | | — | | | 18.2 | | Total revenues | 1,064.4 | | | 1,652.4 | | | 443.3 | | | 275.6 | | | (772.2) | | | 2,663.5 | | Cost of sales, exclusive of operating expenses and depreciation and amortization | (903.3) | | | (1,517.8) | | | (315.3) | | | (166.9) | | | 772.2 | | | (2,131.1) | | Adjusted gross margin | 161.1 | | | 134.6 | | | 128.0 | | | 108.7 | | | — | | | 532.4 | | Operating expenses | (49.7) | | | (37.6) | | | (23.5) | | | (26.0) | | | — | | | (136.8) | | Segment profit | 111.4 | | | 97.0 | | | 104.5 | | | 82.7 | | | — | | | 395.6 | | Depreciation and amortization | (36.8) | | | (39.7) | | | (51.5) | | | (33.4) | | | (1.2) | | | (162.6) | | Gross margin | 74.6 | | | 57.3 | | | 53.0 | | | 49.3 | | | (1.2) | | | 233.0 | | | | | | | | | | | | | | Gain on disposition of assets | — | | | 0.1 | | | 0.1 | | | 0.6 | | | — | | | 0.8 | | General and administrative | — | | | — | | | — | | | — | | | (34.5) | | | (34.5) | | Interest expense, net of interest income | — | | | — | | | — | | | — | | | (60.4) | | | (60.4) | | Loss on extinguishment of debt | — | | | — | | | — | | | — | | | (5.7) | | | (5.7) | | Loss from unconsolidated affiliate investments | — | | | — | | | — | | | — | | | (1.7) | | | (1.7) | | Other income | — | | | — | | | — | | | — | | | 0.3 | | | 0.3 | | Income (loss) before non-controlling interest and income taxes | $ | 74.6 | | | $ | 57.4 | | | $ | 53.1 | | | $ | 49.9 | | | $ | (103.2) | | | $ | 131.8 | | | | | | | | | | | | | | Capital expenditures | $ | 61.7 | | | $ | 6.5 | | | $ | 18.2 | | | $ | 6.5 | | | $ | 1.6 | | | $ | 94.5 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Permian | | Louisiana | | Oklahoma | | North Texas | | Corporate | | Totals | Nine Months Ended September 30, 2023 | | | | | | | | | | | | Natural gas sales | $ | 338.6 | | | $ | 326.1 | | | $ | 142.0 | | | $ | 53.9 | | | $ | — | | | $ | 860.6 | | NGL sales | (4.4) | | | 2,253.1 | | | 7.0 | | | (2.2) | | | — | | | 2,253.5 | | Crude oil and condensate sales | 826.3 | | | 187.2 | | | 76.1 | | | — | | | — | | | 1,089.6 | | | | | | | | | | | | | | Product sales | 1,160.5 | | | 2,766.4 | | | 225.1 | | | 51.7 | | | — | | | 4,203.7 | | | | | | | | | | | | | | NGL sales—related parties | 689.0 | | | 15.0 | | | 346.3 | | | 224.4 | | | (1,274.7) | | | — | | Crude oil and condensate sales—related parties | — | | | — | | | — | | | 7.8 | | | (7.8) | | | — | | Product sales—related parties | 689.0 | | | 15.0 | | | 346.3 | | | 232.2 | | | (1,282.5) | | | — | | Gathering and transportation | 83.1 | | | 58.2 | | | 175.8 | | | 153.8 | | | — | | | 470.9 | | Processing | 43.8 | | | 0.9 | | | 107.9 | | | 92.5 | | | — | | | 245.1 | | NGL services | — | | | 65.7 | | | — | | | 0.2 | | | — | | | 65.9 | | Crude services | 18.6 | | | 17.8 | | | 13.1 | | | 0.5 | | | — | | | 50.0 | | Other services | 5.0 | | | 0.9 | | | 0.4 | | | 0.7 | | | — | | | 7.0 | | Midstream services | 150.5 | | | 143.5 | | | 297.2 | | | 247.7 | | | — | | | 838.9 | | | | | | | | | | | | | | | | | | | | | | | | | | NGL services—related parties | — | | | — | | | — | | | 2.6 | | | (2.6) | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | Midstream services—related parties | — | | | — | | | — | | | 2.6 | | | (2.6) | | | — | | Revenue from contracts with customers | 2,000.0 | | | 2,924.9 | | | 868.6 | | | 534.2 | | | (1,285.1) | | | 5,042.6 | | Realized gain (loss) on derivatives | (3.0) | | | (0.6) | | | 4.8 | | | 19.0 | | | — | | | 20.2 | | Change in fair value of derivatives | (9.0) | | | 3.2 | | | (3.5) | | | (9.7) | | | — | | | (19.0) | | Total revenues | 1,988.0 | | | 2,927.5 | | | 869.9 | | | 543.5 | | | (1,285.1) | | | 5,043.8 | | Cost of sales, exclusive of operating expenses and depreciation and amortization | (1,541.3) | | | (2,538.9) | | | (481.6) | | | (258.9) | | | 1,285.1 | | | (3,535.6) | | Adjusted gross margin | 446.7 | | | 388.6 | | | 388.3 | | | 284.6 | | | — | | | 1,508.2 | | Operating expenses | (156.2) | | | (100.6) | | | (78.3) | | | (77.4) | | | — | | | (412.5) | | Segment profit | 290.5 | | | 288.0 | | | 310.0 | | | 207.2 | | | — | | | 1,095.7 | | Depreciation and amortization | (123.6) | | | (111.5) | | | (163.1) | | | (87.1) | | | (4.2) | | | (489.5) | | Gross margin | 166.9 | | | 176.5 | | | 146.9 | | | 120.1 | | | (4.2) | | | 606.2 | | Impairments | — | | | (20.7) | | | — | | | — | | | — | | | (20.7) | | Gain on disposition of assets | 0.1 | | | 0.2 | | | 0.8 | | | 0.7 | | | — | | | 1.8 | | General and administrative | — | | | — | | | — | | | — | | | (87.8) | | | (87.8) | | Interest expense, net of interest income | — | | | — | | | — | | | — | | | (205.2) | | | (205.2) | | | | | | | | | | | | | | Loss from unconsolidated affiliate investments | — | | | — | | | — | | | — | | | (3.7) | | | (3.7) | | Other expense | — | | | — | | | — | | | — | | | (0.2) | | | (0.2) | | Income (loss) before non-controlling interest and income taxes | $ | 167.0 | | | $ | 156.0 | | | $ | 147.7 | | | $ | 120.8 | | | $ | (301.1) | | | $ | 290.4 | | Capital expenditures | $ | 191.2 | | | $ | 53.1 | | | $ | 59.3 | | | $ | 46.9 | | | $ | 4.8 | | | $ | 355.3 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Permian | | Louisiana | | Oklahoma | | North Texas | | Corporate | | Totals | Nine Months Ended September 30, 2022 | | | | | | | | | | | | Natural gas sales | $ | 880.2 | | | $ | 868.2 | | | $ | 277.9 | | | $ | 106.1 | | | $ | — | | | $ | 2,132.4 | | NGL sales | 0.2 | | | 3,382.6 | | | 8.4 | | | 1.4 | | | — | | | 3,392.6 | | Crude oil and condensate sales | 884.3 | | | 280.9 | | | 108.6 | | | — | | | — | | | 1,273.8 | | | | | | | | | | | | | | Product sales | 1,764.7 | | | 4,531.7 | | | 394.9 | | | 107.5 | | | — | | | 6,798.8 | | | | | | | | | | | | | | NGL sales—related parties | 1,207.6 | | | 126.3 | | | 653.9 | | | 452.4 | | | (2,440.2) | | | — | | Crude oil and condensate sales—related parties | — | | | — | | | 0.3 | | | 9.6 | | | (9.9) | | | — | | Product sales—related parties | 1,207.6 | | | 126.3 | | | 654.2 | | | 462.0 | | | (2,450.1) | | | — | | Gathering and transportation | 54.4 | | | 54.1 | | | 133.3 | | | 129.3 | | | — | | | 371.1 | | Processing | 28.8 | | | 1.2 | | | 85.4 | | | 95.0 | | | — | | | 210.4 | | NGL services | — | | | 61.8 | | | — | | | 0.2 | | | — | | | 62.0 | | Crude services | 16.0 | | | 26.7 | | | 9.9 | | | 0.5 | | | — | | | 53.1 | | Other services | 0.6 | | | 1.2 | | | 0.4 | | | 0.4 | | | — | | | 2.6 | | Midstream services | 99.8 | | | 145.0 | | | 229.0 | | | 225.4 | | | — | | | 699.2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Crude services—related parties | — | | | — | | | 0.1 | | | — | | | (0.1) | | | — | | Other services—related parties | — | | | 0.2 | | | — | | | — | | | (0.2) | | | — | | Midstream services—related parties | — | | | 0.2 | | | 0.1 | | | — | | | (0.3) | | | — | | Revenue from contracts with customers | 3,072.1 | | | 4,803.2 | | | 1,278.2 | | | 794.9 | | | (2,450.4) | | | 7,498.0 | | Realized loss on derivatives | (11.3) | | | (5.8) | | | (18.9) | | | (8.6) | | | — | | | (44.6) | | Change in fair value of derivatives | 9.0 | | | 10.2 | | | 10.6 | | | 8.6 | | | — | | | 38.4 | | Total revenues | 3,069.8 | | | 4,807.6 | | | 1,269.9 | | | 794.9 | | | (2,450.4) | | | 7,491.8 | | Cost of sales, exclusive of operating expenses and depreciation and amortization | (2,628.0) | | | (4,425.7) | | | (913.4) | | | (514.0) | | | 2,450.4 | | | (6,030.7) | | Adjusted gross margin | 441.8 | | | 381.9 | | | 356.5 | | | 280.9 | | | — | | | 1,461.1 | | Operating expenses | (145.3) | | | (105.4) | | | (67.6) | | | (68.3) | | | — | | | (386.6) | | Segment profit | 296.5 | | | 276.5 | | | 288.9 | | | 212.6 | | | — | | | 1,074.5 | | Depreciation and amortization | (110.6) | | | (114.6) | | | (154.7) | | | (90.5) | | | (4.1) | | | (474.5) | | Gross margin | 185.9 | | | 161.9 | | | 134.2 | | | 122.1 | | | (4.1) | | | 600.0 | | | | | | | | | | | | | | Gain (loss) on disposition of assets | — | | | 0.3 | | | 0.5 | | | (4.7) | | | — | | | (3.9) | | General and administrative | — | | | — | | | — | | | — | | | (91.9) | | | (91.9) | | Interest expense, net of interest income | — | | | — | | | — | | | — | | | (171.0) | | | (171.0) | | Loss on extinguishment of debt | — | | | — | | | — | | | — | | | (6.2) | | | (6.2) | | Loss from unconsolidated affiliate investments | — | | | — | | | — | | | — | | | (4.0) | | | (4.0) | | Other income | — | | | — | | | — | | | — | | | 0.6 | | | 0.6 | | Income (loss) before non-controlling interest and income taxes | $ | 185.9 | | | $ | 162.2 | | | $ | 134.7 | | | $ | 117.4 | | | $ | (276.6) | | | $ | 323.6 | | | | | | | | | | | | | | Capital expenditures | $ | 130.6 | | | $ | 18.5 | | | $ | 45.1 | | | $ | 17.7 | | | $ | 5.1 | | | $ | 217.0 | | The table below represents information about segment assets as of September 30, 2023 and December 31, 2022 (in millions): | | | | | | | | | | | | | | | Segment Identifiable Assets: | | September 30, 2023 | | December 31, 2022 | Permian | | $ | 2,771.5 | | | $ | 2,661.4 | | Louisiana | | 2,164.0 | | | 2,310.7 | | Oklahoma | | 2,330.3 | | | 2,420.4 | | North Texas | | 1,025.5 | | | 1,094.6 | | Corporate (1) | | 199.2 | | | 163.9 | | Total identifiable assets | | $ | 8,490.5 | | | $ | 8,651.0 | | ____________________________(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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