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SEGMENTS (Notes)

3 Months Ended

Mar. 31, 2021

Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]

SEGMENTS

SEGMENTS

Segment Descriptions - Our operations are divided into three reportable business segments as follows:

•    our Natural Gas Gathering and Processing segment gathers, treats and processes natural gas;

•    our Natural Gas Liquids segment gathers, treats, fractionates and transports NGLs and stores, markets and distributes NGL products; and

•    our Natural Gas Pipelines segment transports and stores natural gas via regulated intrastate and interstate natural gas transmission pipelines and natural gas storage facilities.

Other and eliminations consist of corporate costs, the operating and leasing activities of our headquarters building and related parking facility and eliminations necessary to reconcile our reportable segments to our Consolidated Financial Statements.

Accounting Policies - The accounting policies of the segments are described in Note A of the Notes to Consolidated Financial Statements in our Annual Report.

Operating Segment Information - The following tables set forth certain selected financial information for our operating segments for the periods indicated:

Three Months Ended March 31, 2021			Natural Gas Gathering and Processing						Natural Gas Liquids (a)						Natural Gas Pipelines (b)						Total Segments
			(Thousands of dollars)
NGL and condensate sales			$	491,807					$	2,414,830					$	—					$	2,906,637
Residue natural gas sales			312,247						—						115,455						427,702
Gathering, processing and exchange services revenue			31,687						113,231						—						144,918
Transportation and storage revenue			—						48,728						132,947						181,675
Other			4,000						33,276						412						37,688
Total revenues (c)			839,741						2,610,065						248,814						3,698,620
Cost of sales and fuel (exclusive of depreciation and operating costs)			(555,306)						(2,060,319)						(10,013)						(2,625,638)
Operating costs			(84,598)						(124,369)						(42,317)						(251,284)
Equity in net earnings from investments			1,728						3,604						27,988						33,320
Noncash compensation expense and other			3,151						6,647						1,703						11,501
Segment adjusted EBITDA			$	204,716					$	435,628					$	226,175					$	866,519
Depreciation and amortization			$	(67,032)					$	(74,542)					$	(14,476)					$	(156,050)
Investments in unconsolidated affiliates			$	24,584					$	420,614					$	362,523					$	807,721
Total assets			$	6,535,260					$	13,944,887					$	2,096,459					$	22,576,606
Capital expenditures			$	39,651					$	112,021					$	21,157					$	172,829

(a) - Our Natural Gas Liquids segment has regulated and nonregulated operations. Our Natural Gas Liquids segment’s regulated operations had revenues of $570.6 million, of which $516.1 million related to revenues within the segment, and cost of sales and fuel of $135.8 million.

(b) - Our Natural Gas Pipelines segment has regulated and nonregulated operations. Our Natural Gas Pipelines segment’s regulated operations had revenues of $181.4 million and cost of sales and fuel of $12.8 million.

(c) - Intersegment revenues are primarily commodity sales which are based on the contracted selling price that is generally index-based and settled monthly, and for the Natural Gas Gathering and Processing segment totaled $481.6 million. Intersegment revenues for the Natural Gas Liquids and Natural Gas Pipelines segments were not material.

Three Months Ended March 31, 2021						Total Segments						Other and Eliminations						Total
						(Thousands of dollars)
Reconciliations of total segments to consolidated
NGL and condensate sales						$	2,906,637					$	(500,064)					$	2,406,573
Residue natural gas sales						427,702						—						427,702
Gathering, processing and exchange services revenue						144,918						—						144,918
Transportation and storage revenue						181,675						(3,535)						178,140
Other						37,688						(342)						37,346
Total revenues (a)						$	3,698,620					$	(503,941)					$	3,194,679
Cost of sales and fuel (exclusive of depreciation and operating costs)						$	(2,625,638)					$	504,128					$	(2,121,510)
Operating costs						$	(251,284)					$	(313)					$	(251,597)
Depreciation and amortization						$	(156,050)					$	(1,070)					$	(157,120)
Equity in net earnings from investments						$	33,320					$	—					$	33,320
Investments in unconsolidated affiliates						$	807,721					$	—					$	807,721
Total assets						$	22,576,606					$	603,323					$	23,179,929
Capital expenditures						$	172,829					$	3,905					$	176,734

(a) - Noncustomer revenue for the three months ended March 31, 2021, totaled $(132.2) million related primarily to losses from derivatives on commodity contracts.

Three Months Ended March 31, 2020			Natural Gas Gathering and Processing						Natural Gas Liquids (a)						Natural Gas Pipelines (b)						Total Segments
			(Thousands of dollars)
NGL and condensate sales			$	219,917					$	1,596,711					$	—					$	1,816,628
Residue natural gas sales			189,051						—						2,035						191,086
Gathering, processing and exchange services revenue			37,937						120,536						—						158,473
Transportation and storage revenue			—						50,755						118,364						169,119
Other			3,075						2,590						384						6,049
Total revenues (c)			449,980						1,770,592						120,783						2,341,355
Cost of sales and fuel (exclusive of depreciation and operating costs)			(202,170)						(1,278,754)						(1,539)						(1,482,463)
Operating costs			(84,470)						(89,571)						(33,307)						(207,348)
Equity in net earnings from investments			806						15,268						28,553						44,627
Noncash compensation expense and other			(4,498)						(6,619)						(1,966)						(13,083)
Segment adjusted EBITDA			$	159,648					$	410,916					$	112,524					$	683,088
Depreciation and amortization			$	(58,756)					$	(57,841)					$	(14,769)					$	(131,366)
Impairment charges (d)			$	(564,353)					$	(77,401)					$	—					$	(641,754)
Investments in unconsolidated affiliates			$	4,276					$	435,024					$	371,179					$	810,479
Total assets			$	6,374,552					$	12,682,807					$	2,089,362					$	21,146,721
Capital expenditures			$	181,610					$	746,183					$	16,590					$	944,383

(a) - Our Natural Gas Liquids segment has regulated and nonregulated operations. Our Natural Gas Liquids segment’s regulated operations had revenues of $435.1 million, of which $378.2 million related to revenues within the segment, and cost of sales and fuel of $120.4 million.

(b) - Our Natural Gas Pipelines segment has regulated and nonregulated operations. Our Natural Gas Pipelines segment’s regulated operations had revenues of $73.9 million and cost of sales and fuel of $6.1 million.

(c) - Intersegment revenues are primarily commodity sales, which are based on the contracted selling price that is generally index-based and settled monthly, and for the Natural Gas Gathering and Processing segment totaled $213.3 million. Intersegment revenues for the Natural Gas Liquids and Natural Gas Pipelines segments were not material.

(d) - Includes noncash impairment charges of $380.5 million related primarily to long-lived assets, $153.4 million related to goodwill and $30.5 million related to an investment in an unconsolidated affiliate in our Natural Gas Gathering and Processing segment; and $70.2 million related to long-lived assets and $7.2 million related to an investment in an unconsolidated affiliate in our Natural Gas Liquids segment.

Three Months Ended March 31, 2020						Total Segments						Other and Eliminations						Total
						(Thousands of dollars)
Reconciliations of total segments to consolidated
NGL and condensate sales						$	1,816,628					$	(199,472)					$	1,617,156
Residue natural gas sales						191,086						(1,032)						190,054
Gathering, processing and exchange services revenue						158,473						—						158,473
Transportation and storage revenue						169,119						(3,809)						165,310
Other						6,049						(370)						5,679
Total revenues (a)						$	2,341,355					$	(204,683)					$	2,136,672
Cost of sales and fuel (exclusive of depreciation and operating costs)						$	(1,482,463)					$	205,535					$	(1,276,928)
Operating costs						$	(207,348)					$	308					$	(207,040)
Depreciation and amortization						$	(131,366)					$	(987)					$	(132,353)
Impairment charges						$	(641,754)					$	—					$	(641,754)
Equity in net earnings from investments						$	44,627					$	—					$	44,627
Investments in unconsolidated affiliates						$	810,479					$	—					$	810,479
Total assets						$	21,146,721					$	822,719					$	21,969,440
Capital expenditures						$	944,383					$	5,296					$	949,679

(a) - Noncustomer revenue for the three months ended March 31, 2020, totaled $80.2 million related primarily to gains from derivatives on commodity contracts.

									Three Months Ended
									March 31,
															2021						2020
															(Thousands of dollars)
Reconciliation of net income (loss) to total segment adjusted EBITDA
Net income (loss)															$	386,176					$	(141,857)
Add:
Interest expense, net of capitalized interest															185,523						140,616
Depreciation and amortization															157,120						132,353
Income tax expense (benefit)															122,132						(55,395)
Impairment charges															—						641,754
Noncash compensation expense															16,283						(1,302)
Other corporate costs and equity AFUDC (a)															(715)						(33,081)
Total segment adjusted EBITDA															$	866,519					$	683,088

(a) - The three months ended March 31, 2020, includes corporate gains of $15.8 million on extinguishment of debt related to open market repurchases.

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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://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

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