XML 31 R17.htm IDEA: XBRL DOCUMENT v3.24.3
Business Segments and Related Information
 9 Months Ended
Sep. 30, 2024
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.

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 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,
  
 
  
2024
    
2023
    
2024
    
2023
  
Operating income
  
$
1,780
    
$
1,695
    
$
5,367
    
$
5,008
  
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)
    
586
      
566
      
1,749
      
1,644
  
Asset impairment charges in operating costs and expenses
    
27
      
11
      
51
      
27
  
Net losses (gains) attributable to asset sales and related matters in operating costs
   and expenses
    
–
      
–
      
5
      
(4
)
General and administrative costs
    
61
      
59
      
184
      
172
  
Non-refundable payments received from shippers attributable to make-up rights (2)
    
13
      
12
      
56
      
36
  
Subsequent recognition of revenues attributable to make-up rights (3)
    
(19
)
    
(23
)
    
(30
)
    
(68
)
Total segment gross operating margin
  
$
2,448
    
$
2,320
    
$
7,382
    
$
6,815
  

(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,
  
 
  
2024
    
2023
    
2024
    
2023
  
Gross operating margin by segment:
                        
NGL Pipelines & Services
  
$
1,335
    
$
1,196
    
$
4,000
    
$
3,518
  
Crude Oil Pipelines & Services
    
401
      
432
      
1,229
      
1,251
  
Natural Gas Pipelines & Services
    
349
      
239
      
954
      
791
  
Petrochemical & Refined Products Services
    
363
      
453
      
1,199
      
1,255
  
Total segment gross operating margin
  
$
2,448
    
$
2,320
    
$
7,382
    
$
6,815
  

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, 2024
  
$
4,828
    
$
5,241
    
$
646
    
$
3,044
    
$
–
    
$
13,759
  
Three months ended September 30, 2023
    
3,754
      
5,354
      
880
      
1,992
      
–
      
11,980
  
Nine months ended September 30, 2024
    
14,227
      
16,530
      
2,106
      
9,113
      
–
      
41,976
  
Nine months ended September 30, 2023
    
12,367
      
13,825
      
2,863
      
5,994
      
–
      
35,049
  
Revenues from related parties:
                                                
Three months ended September 30, 2024
    
3
      
10
      
3
      
–
      
–
      
16
  
Three months ended September 30, 2023
    
3
      
11
      
4
      
–
      
–
      
18
  
Nine months ended September 30, 2024
    
9
      
24
      
9
      
–
      
–
      
42
  
Nine months ended September 30, 2023
    
8
      
25
      
11
      
–
      
–
      
44
  
Intersegment and intrasegment revenues:
                                                
Three months ended September 30, 2024
    
11,044
      
13,678
      
166
      
6,944
      
(31,832
)
    
–
  
Three months ended September 30, 2023
    
12,367
      
16,343
      
133
      
4,307
      
(33,150
)
    
–
  
Nine months ended September 30, 2024
    
34,157
      
42,547
      
481
      
18,982
      
(96,167
)
    
–
  
Nine months ended September 30, 2023
    
34,347
      
41,139
      
386
      
13,108
      
(88,980
)
    
–
  
Total revenues:
                                                
Three months ended September 30, 2024
    
15,875
      
18,929
      
815
      
9,988
      
(31,832
)
    
13,775
  
Three months ended September 30, 2023
    
16,124
      
21,708
      
1,017
      
6,299
      
(33,150
)
    
11,998
  
Nine months ended September 30, 2024
    
48,393
      
59,101
      
2,596
      
28,095
      
(96,167
)
    
42,018
  
Nine months ended September 30, 2023
    
46,722
      
54,989
      
3,260
      
19,102
      
(88,980
)
    
35,093
  
Equity in income of unconsolidated affiliates:
                                                
Three months ended September 30, 2024
    
27
      
70
      
2
      
–
      
–
      
99
  
Three months ended September 30, 2023
    
32
      
89
      
1
      
–
      
–
      
122
  
Nine months ended September 30, 2024
    
84
      
212
      
5
      
1
      
–
      
302
  
Nine months ended September 30, 2023
    
101
      
241
      
4
      
1
      
–
      
347
  

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, 2024
  
$
17,784
    
$
6,374
    
$
10,256
    
$
10,146
    
$
3,539
    
$
48,099
  
At December 31, 2023
    
17,541
      
6,627
      
10,019
      
9,372
      
2,245
      
45,804
  
Investments in unconsolidated affiliates:
(see Note 5)
                                                
At September 30, 2024
    
597
      
1,634
      
34
      
3
      
–
      
2,268
  
At December 31, 2023
    
612
      
1,681
      
33
      
4
      
–
      
2,330
  
Intangible assets, net: (see Note 6)
                                                
At September 30, 2024
    
797
      
1,595
      
1,121
      
106
      
–
      
3,619
  
At December 31, 2023
    
828
      
1,673
      
1,158
      
111
      
–
      
3,770
  
Goodwill: (see Note 6)
                                                
At September 30, 2024
    
2,811
      
1,841
      
–
      
956
      
–
      
5,608
  
At December 31, 2023
    
2,811
      
1,841
      
–
      
956
      
–
      
5,608
  
Segment assets:
                                                
At September 30, 2024
    
21,989
      
11,444
      
11,411
      
11,211
      
3,539
      
59,594
  
At December 31, 2023
    
21,792
      
11,822
      
11,210
      
10,443
      
2,245
      
57,512
  

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,
  
 
  
2024
    
2023
    
2024
    
2023
  
Consolidated revenues:
                        
NGL Pipelines & Services
  
$
4,831
    
$
3,757
    
$
14,236
    
$
12,375
  
Crude Oil Pipelines & Services
    
5,251
      
5,365
      
16,554
      
13,850
  
Natural Gas Pipelines & Services
    
649
      
884
      
2,115
      
2,874
  
Petrochemical & Refined Products Services
    
3,044
      
1,992
      
9,113
      
5,994
  
Total consolidated revenues
  
$
13,775
    
$
11,998
    
$
42,018
    
$
35,093
  
 
                                
Consolidated costs and expenses
                                
Operating costs and expenses:
                                
Cost of sales
  
$
10,387
    
$
8,786
    
$
31,976
    
$
25,796
  
Other operating costs and expenses (1)
    
1,018
      
986
      
2,946
      
2,749
  
Depreciation, amortization and accretion
    
601
      
583
      
1,791
      
1,692
  
Asset impairment charges
    
27
      
11
      
51
      
27
  
Net losses (gains) attributable to asset sales and related matters
    
–
      
–
      
5
      
(4
)
General and administrative costs
    
61
      
59
      
184
      
172
  
Total consolidated costs and expenses
  
$
12,094
    
$
10,425
    
$
36,953
    
$
30,432
  

(1)
Represents the cost of operating our plants, pipelines and other fixed assets excluding: depreciation, amortization and accretion; 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.