SEGMENTS

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

SEGMENTS

SEGMENTS

Our two operating segments represent the Company’s segments for which discrete financial information is available and is utilized on a regular basis by our chief operating decision maker (“CODM”) to make key operating decisions, assess performance and allocate resources. Our Chief Executive Officer is the CODM. These segments are strategic business units with differing products and services. No operating segments have been aggregated to form the reportable segments. Therefore, our two operating segments represent our reportable segments. The activities of each of our reportable segments from which the Company earns revenues and incurs expenses are described below:

•Midstream Logistics: The Midstream Logistics segment operates under three streams, 1) gas gathering and processing, 2) crude oil gathering, stabilization and storage services and 3) water gathering and disposal.

•Pipeline Transportation: The Pipeline Transportation segment consists of equity investment interests in four Permian Basin pipelines that access various points along the Texas Gulf Coast, and our Delaware Link Pipeline that is under development. The current operating pipelines transport crude oil, natural gas and NGLs to the Texas Gulf Coast.

Upon Closing, our CODM reviewed the Company and ALTM’s reporting segment activities. The Company then renamed its Gathering and Processing segment to Midstream Logistics and its Transmission segment to Pipeline Transportation. These name changes were made to better align segment activities with the name of the respective segment. There was no change in segment composition or structure for the three and six months ended June 30, 2022.

The following tables present the reconciliation of the segment profit measure as of and for the three and six months ended June 30, 2022 and 2021:

	Midstream Logistics		Pipeline Transportation		Corporate and Other(1)		Consolidated(2)
For the three months ended June 30, 2022	(In thousands)
Segment net income including noncontrolling interests	$	14,563	$	46,277	$	70,608	$	131,448
Add back:
Interest expense	20,641		942		3,764		25,347
Income tax expense	162		—		—		162
Depreciation and amortization	66,459		122		—		66,581
Contract assets amortization	448		—		—		448
Proportionate EMI EBITDA	—		71,340		—		71,340
Share-based compensation	—		—		12,174		12,174
Loss (gain) on disposal of assets	8,580		—		(34)		8,546
(Gain) loss on debt extinguishment	27,983		(8)		—		27,975
Integration costs	579		—		4,707		5,286
Acquisition transaction costs	—		—		674		674
Other one-time costs or amortization	1,239		—		1,020		2,259
Deduct:
Gain on redemption of mandatorily redeemable Preferred units	—		—		5,087		5,087
Unrealized gain on embedded derivatives	—		—		91,448		91,448
Equity income from unconsolidated affiliates	—		47,786		—		47,786
Segment adjusted EBITDA	$	140,654	$	70,887	$	(3,622)	$	207,919

	Midstream Logistics		Pipeline Transportation		Corporate and Other(1)		Consolidated(2)
For the three months ended June 30, 2021	(In thousands)
Segment net income (loss) including noncontrolling interests	$	(24,222)	$	11,310	$	(2,454)	$	(15,366)
Add back:
Interest expense	27,829		4,778		—		32,607
Depreciation and amortization	57,038		128		—		57,166
Contract assets amortization	448		—		—		448
Proportionate EMI EBITDA	—		21,717		—		21,717
Loss on disposal of assets	422		—		—		422
Gain on debt extinguishment	(60)		—		—		(60)
Other one-time costs or amortization	485		13		17		515
Producer settlement	6,827		—		—		6,827
Deduct:
Interest and other income	24		—		—		24
Equity income from unconsolidated affiliates	—		16,511		—		16,511
Segment adjusted EBITDA	$	68,743	$	21,435	$	(2,437)	$	87,741

	Midstream Logistics		Pipeline Transportation		Corporate and Other(1)		Consolidated(2)
For the six months ended June 30, 2022	(In thousands)
Segment net income including noncontrolling interests	$	23,749	$	75,412	$	53,676	$	152,837
Add back:
Interest expense	47,412		(672)		5,381		52,121
Income tax expense (benefit)	457		(39)		420		838
Depreciation and amortization	127,352		252		—		127,604
Contract assets amortization	896		—		—		896
Proportionate EMI EBITDA	—		112,081		—		112,081
Share-based compensation	—		—		18,304		18,304
Loss (gain) on disposal of assets	8,690		—		(34)		8,656
Loss on debt extinguishment	27,983		(8)		—		27,975
Integration costs	4,683		—		6,755		11,438
Acquisition transaction costs	4		—		6,346		6,350
Other one-time costs or amortization	2,157		—		1,297		3,454
Deduct:
Interest and other income	—		—		—		—
Gain on redemption of mandatorily redeemable Preferred units	—		—		9,580		9,580
Unrealized gain on embedded derivatives	—		—		88,562		88,562
Equity income from unconsolidated affiliates	—		75,703		—		75,703
Segment adjusted EBITDA	$	243,383	$	111,323	$	(5,997)	$	348,709

	Midstream Logistics		Pipeline Transportation		Corporate and Other(1)		Consolidated(2)
For the six months ended June 30, 2021	(In thousands)
Segment net income (loss) including noncontrolling interests	$	(16,027)	$	23,739	$	(4,942)	$	2,770
Add back:
Interest expense	55,285		2,632		—		57,917
Depreciation and amortization	112,880		257		—		113,137
Contract assets amortization	896		—		—		896
Proportionate EMI EBITDA	—		37,973		—		37,973
Loss on disposal of assets	454		—		—		454
Gain on debt extinguishment	(60)		—		—		(60)
Derivatives loss due to Winter Storm Uri	13,456		—		—		13,456
Other one-time costs or amortization	874		21		(52)		843
Producer settlement	6,827		—		—		6,827
Deduct:
Interest and other income	41		—		—		41
Equity income from unconsolidated affiliates	—		27,866		—		27,866
Segment adjusted EBITDA	$	174,544	$	36,756	$	(4,994)	$	206,306

(1) Corporate and Other represents those results that: (i) are not specifically attributable to a reportable segment; (ii) are not individually reportable or (iii) have not been allocated to a reportable segment for the purpose of evaluating their performance, including certain general and administrative expense items.

(2) Results do not include legacy ALTM prior to February 22, 2022. Refer to Note 1 —Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q, for further information on the Company’s basis of presentation. Adjusted EBITDA is a non-GAAP measure; please see Key Performance Metrics in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Form 10-Q, for a definition and reconciliation to the GAAP measure.

The following tables present the revenue for individual operating segment for the three and six months ended June 30, 2022 and 2021:

	Midstream Logistics		Pipeline Transportation		Consolidated
For the three months ended June 30, 2022	(In thousands)
Revenue	$	331,731	$	—	$	331,731
Other revenue	3,839		2		3,841
Total segment operating revenue	$	335,570	$	2	$	335,572

	Midstream Logistics		Pipeline Transportation		Consolidated
For the three months ended June 30, 2021	(In thousands)
Revenue	$	133,341	$	—	$	133,341
Other revenue	2,423		2		2,425
Total segment operating revenue	$	135,764	$	2	$	135,766

	Midstream Logistics		Pipeline Transportation		Consolidated
For the six months ended June 30, 2022	(In thousands)
Revenue	$	587,104	$	—	$	587,104
Other revenue	5,713		4		5,717
Total segment operating revenue	$	592,817	$	4	$	592,821

	Midstream Logistics		Pipeline Transportation		Consolidated
For the six months ended June 30, 2021	(In thousands)
Revenue	$	280,996	$	—	$	280,996
Other revenue	2,869		4		2,873
Total segment operating revenue	$	283,865	$	4	$	283,869

The following table presents total assets for each operating segment as of June 30, 2022 and December 31, 2021:

	June 30, 2022		December 31, 2021
	(In thousands)
Midstream Logistics	$	3,619,400	$	2,916,774
Pipeline Transportation	2,362,248		635,784
Segment total assets	5,981,648		3,552,558
Corporate and other	14,700		648
Total assets	$	5,996,348	$	3,553,206