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Business Segments and Related Information
 9 Months Ended
Sep. 30, 2023
Business Segments [Abstract]  
Business Segments
Note 10.  Business Segments and Related Information

Our operations are reported under four business segments: (i) NGL Pipelines & Services, (ii) Crude Oil Pipelines & Services, (iii) Natural Gas Pipelines & Services and (iv) Petrochemical & Refined Products Services.  Our business segments are generally organized and managed according to the types of services rendered (or technologies employed) and products produced and/or sold.  

Financial information regarding these segments is evaluated regularly by our co-chief operating decision makers in deciding how to allocate resources and in assessing our operating and financial performance.  The co-principal executive officers of our general partner have been identified as our co-chief operating decision makers.  While these two officers evaluate results in a number of different ways, the business segment structure is the primary basis for which the allocation of resources and financial results are assessed.

The following information summarizes the assets and operations of each business segment:

•
Our NGL Pipelines & Services business segment includes our natural gas processing and related NGL marketing activities, NGL pipelines, NGL fractionation facilities, NGL and related product storage facilities, and NGL marine terminals.

•
Our Crude Oil Pipelines & Services business segment includes our crude oil pipelines, crude oil storage and marine terminals, and related crude oil marketing activities.  

•
Our Natural Gas Pipelines & Services business segment includes our natural gas pipeline systems that provide for the gathering, treating and transportation of natural gas.  This segment also includes our natural gas marketing activities.

•
Our Petrochemical & Refined Products Services business segment includes our (i) propylene production facilities, which include propylene fractionation units and PDH facilities, and related pipelines and marketing activities, (ii) butane isomerization complex and related deisobutanizer operations, (iii) octane enhancement, iBDH and HPIB production facilities, (iv) refined products pipelines, terminals and related marketing activities, (v) ethylene export terminal and related operations; and (vi) marine transportation business.

Segment Gross Operating Margin

We evaluate segment performance based on our financial measure of gross operating margin.  Gross operating margin is an important performance measure of the core profitability of our operations and forms the basis of our internal financial reporting.  We believe that investors benefit from having access to the same financial measures that our management uses in evaluating segment results.  Gross operating margin is exclusive of other income and expense transactions, income taxes, the cumulative effect of changes in accounting principles and extraordinary charges.  Gross operating margin is presented on a 100% basis before any allocation of earnings to noncontrolling interests. Our calculation of gross operating margin may or may not be comparable to similarly titled measures used by other companies.

The following table presents our measurement of total segment gross operating margin for the periods presented.  The GAAP financial measure most directly comparable to total segment gross operating margin is operating income.

 
  
For the Three Months
Ended September 30,
    
For the Nine Months
Ended September 30,
  
 
  
2023
    
2022
    
2023
    
2022
  
Operating income
  
$
1,695
    
$
1,712
    
$
5,008
    
$
5,142
  
Adjustments to reconcile operating income to total segment gross operating margin
   (addition or subtraction indicated by sign):
                                
Depreciation, amortization and accretion expense in operating costs and expenses (1)
    
566
      
524
      
1,644
      
1,569
  
Asset impairment charges in operating costs and expenses
    
11
      
29
      
27
      
48
  
Net losses (gains) attributable to asset sales and related matters in operating costs
   and expenses
    
–
      
1
      
(4
)
    
3
  
General and administrative costs
    
59
      
55
      
172
      
179
  
Non-refundable payments received from shippers attributable to make-up rights (2)
    
12
      
39
      
36
      
112
  
Subsequent recognition of revenues attributable to make-up rights (3)
    
(23
)
    
(18
)
    
(68
)
    
(63
)
Total segment gross operating margin
  
$
2,320
    
$
2,342
    
$
6,815
    
$
6,990
  

(1)
Excludes amortization of major maintenance costs for reaction-based plants, which are a component of gross operating margin.
(2)
Since make-up rights entail a future performance obligation by the pipeline to the shipper, these receipts are recorded as deferred revenue for GAAP purposes; however, these receipts are included in gross operating margin in the period of receipt since they are nonrefundable to the shipper.
(3)
As deferred revenues attributable to make-up rights are subsequently recognized as revenue under GAAP, gross operating margin must be adjusted to remove such amounts to prevent duplication since the associated non-refundable payments were previously included in gross operating margin.

Gross operating margin by segment is calculated by subtracting segment operating costs and expenses from segment revenues, with both segment totals reflecting the adjustments noted in the preceding table, as applicable, and before the elimination of intercompany transactions.  The following table presents gross operating margin by segment for the periods indicated:

   
For the Three Months
Ended September 30,
    
For the Nine Months
Ended September 30,
  
 
  
2023
    
2022
    
2023
    
2022
  
Gross operating margin by segment:
                        
NGL Pipelines & Services
  
$
1,196
    
$
1,296
    
$
3,518
    
$
3,848
  
Crude Oil Pipelines & Services
    
432
      
415
      
1,251
      
1,237
  
Natural Gas Pipelines & Services
    
239
      
278
      
791
      
727
  
Petrochemical & Refined Products Services
    
453
      
353
      
1,255
      
1,178
  
Total segment gross operating margin
  
$
2,320
    
$
2,342
    
$
6,815
    
$
6,990
  

Summarized Segment Financial Information

Information by business segment, together with reconciliations to amounts presented on, or included in, our Unaudited Condensed Statements of Consolidated Operations, is presented in the following table:

 
  
Reportable Business Segments
              
 
  
NGL
Pipelines
& Services
    
Crude Oil
Pipelines
& Services
    
Natural Gas
Pipelines
& Services
    
Petrochemical
& Refined
Products
Services
    
Adjustments
and
Eliminations
    
Consolidated
Total
  
Revenues from third parties:
                                    
Three months ended September 30, 2023
  
$
3,754
    
$
5,354
    
$
880
    
$
1,992
    
$
–
    
$
11,980
  
Three months ended September 30, 2022
    
6,232
      
4,720
      
1,875
      
2,621
      
–
      
15,448
  
Nine months ended September 30, 2023
    
12,367
      
13,825
      
2,863
      
5,994
      
–
      
35,049
  
Nine months ended September 30, 2022
    
18,358
      
14,163
      
4,672
      
7,288
      
–
      
44,481
  
Revenues from related parties:
                                                
Three months ended September 30, 2023
    
3
      
11
      
4
      
–
      
–
      
18
  
Three months ended September 30, 2022
    
5
      
4
      
11
      
–
      
–
      
20
  
Nine months ended September 30, 2023
    
8
      
25
      
11
      
–
      
–
      
44
  
Nine months ended September 30, 2022
    
13
      
18
      
24
      
–
      
–
      
55
  
Intersegment and intrasegment revenues:
                                                
Three months ended September 30, 2023
    
12,367
      
16,343
      
133
      
4,307
      
(33,150
)
    
–
  
Three months ended September 30, 2022
    
14,666
      
13,456
      
262
      
5,934
      
(34,318
)
    
–
  
Nine months ended September 30, 2023
    
34,347
      
41,139
      
386
      
13,108
      
(88,980
)
    
–
  
Nine months ended September 30, 2022
    
52,079
      
35,327
      
683
      
14,446
      
(102,535
)
    
–
  
Total revenues:
                                                
Three months ended September 30, 2023
    
16,124
      
21,708
      
1,017
      
6,299
      
(33,150
)
    
11,998
  
Three months ended September 30, 2022
    
20,903
      
18,180
      
2,148
      
8,555
      
(34,318
)
    
15,468
  
Nine months ended September 30, 2023
    
46,722
      
54,989
      
3,260
      
19,102
      
(88,980
)
    
35,093
  
Nine months ended September 30, 2022
    
70,450
      
49,508
      
5,379
      
21,734
      
(102,535
)
    
44,536
  
Equity in income of unconsolidated affiliates:
                                                
Three months ended September 30, 2023
    
32
      
89
      
1
      
–
      
–
      
122
  
Three months ended September 30, 2022
    
39
      
70
      
2
      
–
      
–
      
111
  
Nine months ended September 30, 2023
    
101
      
241
      
4
      
1
      
–
      
347
  
Nine months ended September 30, 2022
    
109
      
221
      
4
      
1
      
–
      
335
  

Segment revenues include intersegment and intrasegment transactions, which are generally based on transactions made at market-based rates.  Our consolidated revenues reflect the elimination of intercompany transactions.  Substantially all of our consolidated revenues are earned in the U.S. and derived from a wide customer base.

Information by business segment, together with reconciliations to our Unaudited Condensed Consolidated Balance Sheet totals, is presented in the following table:

 
  
Reportable Business Segments
              
 
  
NGL
Pipelines
& Services
    
Crude Oil
Pipelines
& Services
    
Natural Gas
Pipelines
& Services
    
Petrochemical
& Refined
Products
Services
    
Adjustments
and
Eliminations
    
Consolidated
Total
  
Property, plant and equipment, net:
(see Note 4)
                                    
At September 30, 2023
  
$
17,468
    
$
6,671
    
$
9,821
    
$
9,374
    
$
2,006
    
$
45,340
  
At December 31, 2022
    
17,283
      
6,760
      
9,721
      
7,770
      
2,867
      
44,401
  
Investments in unconsolidated affiliates:
(see Note 5)
                                                
At September 30, 2023
    
618
      
1,684
      
32
      
3
      
–
      
2,337
  
At December 31, 2022
    
640
      
1,677
      
32
      
3
      
–
      
2,352
  
Intangible assets, net: (see Note 6)
                                                
At September 30, 2023
    
839
      
1,700
      
1,170
      
112
      
–
      
3,821
  
At December 31, 2022
    
865
      
1,776
      
1,206
      
118
      
–
      
3,965
  
Goodwill: (see Note 6)
                                                
At September 30, 2023
    
2,811
      
1,841
      
–
      
956
      
–
      
5,608
  
At December 31, 2022
    
2,811
      
1,841
      
–
      
956
      
–
      
5,608
  
Segment assets:
                                                
At September 30, 2023
    
21,736
      
11,896
      
11,023
      
10,445
      
2,006
      
57,106
  
At December 31, 2022
    
21,599
      
12,054
      
10,959
      
8,847
      
2,867
      
56,326
  

Supplemental Revenue and Expense Information

The following table presents additional information regarding our consolidated revenues and costs and expenses for the periods indicated:

 
  
For the Three Months
Ended September 30,
    
For the Nine Months
Ended September 30,
  
 
  
2023
    
2022
    
2023
    
2022
  
Consolidated revenues:
                        
NGL Pipelines & Services
  
$
3,757
    
$
6,237
    
$
12,375
    
$
18,371
  
Crude Oil Pipelines & Services
    
5,365
      
4,724
      
13,850
      
14,181
  
Natural Gas Pipelines & Services
    
884
      
1,886
      
2,874
      
4,696
  
Petrochemical & Refined Products Services
    
1,992
      
2,621
      
5,994
      
7,288
  
Total consolidated revenues
  
$
11,998
    
$
15,468
    
$
35,093
    
$
44,536
  
 
                                
Consolidated costs and expenses
                                
Operating costs and expenses:
                                
Cost of sales
  
$
8,786
    
$
12,319
    
$
25,796
    
$
35,325
  
Other operating costs and expenses (1)
    
986
      
926
      
2,749
      
2,567
  
Depreciation, amortization and accretion
    
583
      
537
      
1,692
      
1,607
  
Asset impairment charges
    
11
      
29
      
27
      
48
  
Net losses (gains) attributable to asset sales and related matters
    
–
      
1
      
(4
)
    
3
  
General and administrative costs
    
59
      
55
      
172
      
179
  
Total consolidated costs and expenses
  
$
10,425
    
$
13,867
    
$
30,432
    
$
39,729
  

(1)
Represents the cost of operating our plants, pipelines and other fixed assets excluding: depreciation, amortization and accretion charges; asset impairment charges; and net losses (gains) attributable to asset sales and related matters.

Fluctuations in our product sales revenues and cost of sales amounts are explained in large part by changes in energy commodity prices.  In general, higher energy commodity prices result in an increase in our revenues attributable to product sales; however, these higher commodity prices would also be expected to increase the associated cost of sales as purchase costs are higher.  The same type of relationship would be true in the case of lower energy commodity sales prices and purchase costs.