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Operating Segments
 3 Months Ended
Mar. 31, 2013
Operating Segments  
Operating Segments

Note 13—Operating Segments

 

We manage our operations through three operating segments: (i) Transportation, (ii) Facilities and (iii) Supply and Logistics. Our Chief Operating Decision Maker (our Chief Executive Officer) evaluates segment performance based on measures including segment profit and maintenance capital investment. We define segment profit as revenues and equity earnings in unconsolidated entities less (i) purchases and related costs, (ii) field operating costs and (iii) segment general and administrative expenses. Each of the items above excludes depreciation and amortization. The following table reflects certain financial data for each segment for the periods indicated (in millions):

 

 

 

Transportation

 

Facilities

 

Supply and Logistics

 

Total

 

Three Months Ended March 31, 2013

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

External Customers

 

$

173

 

$

223

 

$

10,224

 

$

10,620

 

Intersegment (1)

 

195

 

131

 

1

 

327

 

Total revenues of reportable segments

 

$

368

 

$

354

 

$

10,225

 

$

10,947

 

Equity earnings in unconsolidated entities

 

$

11

 

$

—

 

$

—

 

$

11

 

Segment profit (2) (3)

 

$

164

 

$

150

 

$

434

 

$

748

 

Maintenance capital

 

$

32

 

$

7

 

$

5

 

$

44

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2012

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

External Customers

 

$

150

 

$

191

 

$

8,877

 

$

9,218

 

Intersegment (1)

 

167

 

45

 

—

 

212

 

Total revenues of reportable segments

 

$

317

 

$

236

 

$

8,877

 

$

9,430

 

Equity earnings in unconsolidated entities

 

$

7

 

$

—

 

$

—

 

$

7

 

Segment profit (2) (3)

 

$

162

 

$

90

 

$

128

 

$

380

 

Maintenance capital

 

$

24

 

$

7

 

$

4

 

$

35

 

 

 

(1)                          Segment revenues and purchases and related costs include intersegment amounts. Intersegment sales are conducted at posted tariff rates, rates similar to those charged to third parties or rates that we believe approximate market. For further discussion, see “Analysis of Operating Segments” under Item 7 of our 2012 Annual Report on Form 10-K.

 

(2)                          Supply and Logistics segment profit includes interest expense (related to hedged inventory) of approximately $5 million and $2 million for the three months ended March 31, 2013 and 2012, respectively.

 

(3)                          The following table reconciles segment profit to net income attributable to Plains (in millions):

 

 

 

For the Three Months

 

 

 

Ended March 31,

 

 

 

2013

 

2012

 

Segment profit

 

$

748

 

$

380

 

Depreciation and amortization

 

(82

)

(60

)

Interest expense

 

(77

)

(65

)

Other income, net

 

—

 

2

 

Income tax expense

 

(53

)

(20

)

Net income

 

536

 

237

 

Net income attributable to noncontrolling interests

 

(8

)

(7

)

Net income attributable to Plains

 

$

528

 

$

230