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Business Segments | 12 Months Ended
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Dec. 31, 2023
Business Segments [Abstract] |
Business Segments | Note 10. Business Segments and Related Information Segment Overview 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.
Our plants, pipelines and other fixed assets are located in the U.S. 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 years indicated. The GAAP financial measure most directly comparable to total segment gross operating margin is operating income.
|  | For the Year Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Operating income |  | $ | 6,929 |  |  | $ | 6,907 |  |  | $ | 6,103 |
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) |  |  | 2,215 |  |  |  | 2,107 |  |  |  | 2,011 |
Asset impairment charges in operating costs and expenses |  |  | 30 |  |  |  | 53 |  |  |  | 233 |
Net losses (gains) attributable to asset sales and related matters in operating costs and expenses |  |  | (10 | ) |  |  | 1 |  |  |  | 5 |
General and administrative costs |  |  | 231 |  |  |  | 241 |  |  |  | 209 |
Non-refundable payments received from shippers attributable to make-up rights (2) |  |  | 52 |  |  |  | 144 |  |  |  | 85 |
Subsequent recognition of revenues attributable to make-up rights (3) |  |  | (71 | ) |  |  | (97 | ) |  |  | (138 | )
Total segment gross operating margin |  | $ | 9,376 |  |  | $ | 9,356 |  |  | $ | 8,508 |
(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.
The results of operations from our liquids pipelines are primarily dependent upon the volumes transported and the associated fees we charge for such transportation services. Typically, pipeline transportation revenue is recognized when volumes are re-delivered to customers. However, under certain pipeline transportation agreements, customers are required to ship a minimum volume over an agreed-upon period. These arrangements may entail the shipper paying a transportation fee based on a minimum volume commitment, with a provision that allows the shipper to make-up any volume shortfalls over the agreed-upon period (referred to as shipper “make-up rights”). Revenue pursuant to such agreements is initially deferred and subsequently recognized under GAAP at the earlier of when the deficiency volume is shipped, when the likelihood of the shipper’s ability to meet the minimum volume commitment becomes remote, or when the pipeline is otherwise released from its performance obligation. However, management includes deferred transportation revenues relating to the “make-up rights” of committed shippers when reviewing the financial results of certain pipelines (Texas Express Pipeline, Front Range Pipeline, ATEX, Aegis Ethane Pipeline, and Seaway Pipeline). From an internal (and segment) reporting standpoint, management considers the transportation fees paid by committed shippers on these pipelines, including any non-refundable revenues that may be deferred under GAAP related to make-up rights, to be important in assessing the financial performance of these pipeline assets. Although the adjustments for make-up rights are included in segment gross operating margin, our consolidated revenues do not reflect any deferred revenues until the conditions for recognizing such revenues are met in accordance with GAAP. 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 years indicated:
|  | For the Year Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Gross operating margin by segment: |  |  |  |  |  |  |  |  |
NGL Pipelines & Services |  | $ | 4,898 |  |  | $ | 5,142 |  |  | $ | 4,316 |
Crude Oil Pipelines & Services |  |  | 1,707 |  |  |  | 1,655 |  |  |  | 1,680 |
Natural Gas Pipelines & Services |  |  | 1,077 |  |  |  | 1,042 |  |  |  | 1,155 |
Petrochemical & Refined Products Services |  |  | 1,694 |  |  |  | 1,517 |  |  |  | 1,357 |
Total segment gross operating margin |  | $ | 9,376 |  |  | $ | 9,356 |  |  | $ | 8,508 |
Summarized Segment Financial Information Information by business segment, together with reconciliations to amounts presented on, or included in, our 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: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Year ended December 31, 2023 |  | $ | 17,635 |  |  | $ | 19,300 |  |  | $ | 3,761 |  |  | $ | 8,958 |  |  | $ | – |  |  | $ | 49,654 |
Year ended December 31, 2022 |  |  | 24,244 |  |  |  | 18,548 |  |  |  | 6,229 |  |  |  | 9,106 |  |  |  | – |  |  |  | 58,127 |
Year ended December 31, 2021 |  |  | 16,293 |  |  |  | 10,849 |  |  |  | 4,382 |  |  |  | 9,203 |  |  |  | – |  |  |  | 40,727 |
Revenues from related parties: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Year ended December 31, 2023 |  |  | 10 |  |  |  | 36 |  |  |  | 15 |  |  |  | – |  |  |  | – |  |  |  | 61 |
Year ended December 31, 2022 |  |  | 15 |  |  |  | 13 |  |  |  | 31 |  |  |  | – |  |  |  | – |  |  |  | 59 |
Year ended December 31, 2021 |  |  | 9 |  |  |  | 53 |  |  |  | 18 |  |  |  | – |  |  |  | – |  |  |  | 80 |
Intersegment and intrasegment revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Year ended December 31, 2023 |  |  | 45,490 |  |  |  | 57,122 |  |  |  | 527 |  |  |  | 18,882 |  |  |  | (122,021 | ) |  |  | – |
Year ended December 31, 2022 |  |  | 65,760 |  |  |  | 46,625 |  |  |  | 888 |  |  |  | 18,304 |  |  |  | (131,577 | ) |  |  | – |
Year ended December 31, 2021 |  |  | 55,796 |  |  |  | 29,985 |  |  |  | 650 |  |  |  | 22,110 |  |  |  | (108,541 | ) |  |  | – |
Total revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Year ended December 31, 2023 |  |  | 63,135 |  |  |  | 76,458 |  |  |  | 4,303 |  |  |  | 27,840 |  |  |  | (122,021 | ) |  |  | 49,715 |
Year ended December 31, 2022 |  |  | 90,019 |  |  |  | 65,186 |  |  |  | 7,148 |  |  |  | 27,410 |  |  |  | (131,577 | ) |  |  | 58,186 |
Year ended December 31, 2021 |  |  | 72,098 |  |  |  | 40,887 |  |  |  | 5,050 |  |  |  | 31,313 |  |  |  | (108,541 | ) |  |  | 40,807 |
Equity in income of unconsolidated affiliates: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Year ended December 31, 2023 |  |  | 133 |  |  |  | 320 |  |  |  | 6 |  |  |  | 3 |  |  |  | – |  |  |  | 462 |
Year ended December 31, 2022 |  |  | 149 |  |  |  | 308 |  |  |  | 5 |  |  |  | 2 |  |  |  | – |  |  |  | 464 |
Year ended December 31, 2021 |  |  | 120 |  |  |  | 456 |  |  |  | 6 |  |  |  | 1 |  |  |  | – |  |  |  | 583 |
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. We include equity in income of unconsolidated affiliates in our measurement of segment gross operating margin and operating income. Equity investments with industry partners are a significant component of our business strategy. They are a means by which we conduct our operations to align our interests with those of customers and/or suppliers. This method of operation enables us to achieve favorable economies of scale relative to the level of investment and business risk assumed. Many of these businesses perform supporting or complementary roles to our other midstream business operations. Our integrated midstream energy asset network (including the midstream energy assets owned by our unconsolidated affiliates) provides services to producers and consumers of natural gas, NGLs, crude oil, refined products and certain petrochemicals. In general, hydrocarbons may enter our asset system in a number of ways, such as through a natural gas gathering pipeline, natural gas processing facility, a crude oil pipeline or terminal, an NGL fractionator, an NGL storage facility or an NGL gathering or transportation pipeline. The assets of many of our equity investees are included within our integrated midstream network. For example, we use the Front Range Pipeline and Texas Express Pipeline to transport mixed NGLs to our Chambers County NGL fractionation and storage complex and the Seaway Pipeline to transport crude oil to our terminals in the Houston, Texas area. Given the integral nature of these equity method investees to our operations, we believe the presentation of equity earnings from such investees as a component of gross operating margin and operating income is meaningful and appropriate. Information by business segment, together with reconciliations to our 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 December 31, 2023 |  | $ | 17,541 |  |  | $ | 6,627 |  |  | $ | 10,019 |  |  | $ | 9,372 |  |  | $ | 2,245 |  |  | $ | 45,804 |
At December 31, 2022 |  |  | 17,283 |  |  |  | 6,760 |  |  |  | 9,721 |  |  |  | 7,770 |  |  |  | 2,867 |  |  |  | 44,401 |
At December 31, 2021 |  |  | 17,202 |  |  |  | 6,974 |  |  |  | 8,560 |  |  |  | 7,736 |  |  |  | 1,616 |  |  |  | 42,088 |
Investments in unconsolidated affiliates: (see Note 5) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
At December 31, 2023 |  |  | 612 |  |  |  | 1,681 |  |  |  | 33 |  |  |  | 4 |  |  |  | – |  |  |  | 2,330 |
At December 31, 2022 |  |  | 640 |  |  |  | 1,677 |  |  |  | 32 |  |  |  | 3 |  |  |  | – |  |  |  | 2,352 |
At December 31, 2021 |  |  | 656 |  |  |  | 1,738 |  |  |  | 31 |  |  |  | 3 |  |  |  | – |  |  |  | 2,428 |
Intangible assets, net: (see Note 6) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
At December 31, 2023 |  |  | 828 |  |  |  | 1,673 |  |  |  | 1,158 |  |  |  | 111 |  |  |  | – |  |  |  | 3,770 |
At December 31, 2022 |  |  | 865 |  |  |  | 1,776 |  |  |  | 1,206 |  |  |  | 118 |  |  |  | – |  |  |  | 3,965 |
At December 31, 2021 |  |  | 317 |  |  |  | 1,860 |  |  |  | 849 |  |  |  | 125 |  |  |  | – |  |  |  | 3,151 |
Goodwill: (see Note 6) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
At December 31, 2023 |  |  | 2,811 |  |  |  | 1,841 |  |  |  | – |  |  |  | 956 |  |  |  | – |  |  |  | 5,608 |
At December 31, 2022 |  |  | 2,811 |  |  |  | 1,841 |  |  |  | – |  |  |  | 956 |  |  |  | – |  |  |  | 5,608 |
At December 31, 2021 |  |  | 2,652 |  |  |  | 1,841 |  |  |  | – |  |  |  | 956 |  |  |  | – |  |  |  | 5,449 |
Segment assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
At December 31, 2023 |  |  | 21,792 |  |  |  | 11,822 |  |  |  | 11,210 |  |  |  | 10,443 |  |  |  | 2,245 |  |  |  | 57,512 |
At December 31, 2022 |  |  | 21,599 |  |  |  | 12,054 |  |  |  | 10,959 |  |  |  | 8,847 |  |  |  | 2,867 |  |  |  | 56,326 |
At December 31, 2021 |  |  | 20,827 |  |  |  | 12,413 |  |  |  | 9,440 |  |  |  | 8,820 |  |  |  | 1,616 |  |  |  | 53,116 |
Segment assets consist of property, plant and equipment, investments in unconsolidated affiliates, intangible assets and goodwill. The carrying values of such amounts are assigned to each segment based on each asset’s or investment’s principal operations and contribution to the gross operating margin of that particular segment. Since construction-in-progress (a component of property, plant and equipment) does not contribute to segment gross operating margin, such amounts are excluded from segment asset totals until the underlying assets are placed in service. Intangible assets and goodwill are assigned to each segment based on the classification of the assets to which they relate. The remainder of our consolidated total assets, which consist primarily of working capital assets, are excluded from segment assets since these amounts are not attributable to one specific segment (e.g., cash). Supplemental Revenue and Expense Information The following table presents additional information regarding our consolidated revenues and costs and expenses for the years indicated:
|  | For the Year Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Consolidated revenues: |  |  |  |  |  |  |  |  |
NGL Pipelines & Services |  | $ | 17,645 |  |  | $ | 24,259 |  |  | $ | 16,302 |
Crude Oil Pipelines & Services |  |  | 19,336 |  |  |  | 18,561 |  |  |  | 10,902 |
Natural Gas Pipelines & Services |  |  | 3,776 |  |  |  | 6,260 |  |  |  | 4,400 |
Petrochemical & Refined Products Services |  |  | 8,958 |  |  |  | 9,106 |  |  |  | 9,203 |
Total consolidated revenues |  | $ | 49,715 |  |  | $ | 58,186 |  |  | $ | 40,807 |
Consolidated costs and expenses: |  |  |  |  |  |  |  |  |  |  |  |
Operating costs and expenses: |  |  |  |  |  |  |  |  |  |  |  |
Cost of sales |  | $ | 37,023 |  |  | $ | 45,836 |  |  | $ | 29,887 |
Other operating costs and expenses (1) |  |  | 3,695 |  |  |  | 3,454 |  |  |  | 2,915 |
Depreciation, amortization and accretion |  |  | 2,279 |  |  |  | 2,158 |  |  |  | 2,038 |
Impairment of assets other than goodwill |  |  | 30 |  |  |  | 53 |  |  |  | 233 |
Net losses (gains) attributable to asset sales and related matters |  |  | (10 | ) |  |  | 1 |  |  |  | 5 |
General and administrative costs |  |  | 231 |  |  |  | 241 |  |  |  | 209 |
Total consolidated costs and expenses |  | $ | 43,248 |  |  | $ | 51,743 |  |  | $ | 35,287 |
(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. Major Customer Information Substantially all of our consolidated revenues are earned in the U.S. and derived from a wide customer base. For the years ended December 31, 2023 and 2022, Vitol Holding B.V. and its affiliates (collectively, “Vitol”) accounted for $7.87 billion, or 15.8%, and $5.92 billion, or 10.2%, respectively, of our consolidated revenues. Vitol is a global energy and commodity trading company. Revenues earned from Vitol during 2023 and 2022 are included within each of our four business segments. No single customer accounted for 10% or more of our consolidated revenues during the year ended December 31, 2021.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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