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Operating Segments
 6 Months Ended
Jun. 30, 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 June 30, 2013

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

External Customers

 

$

165

 

$

197

 

$

9,933

 

$

10,295

 

Intersegment (1)

 

200

 

151

 

1

 

352

 

Total revenues of reportable segments

 

$

365

 

$

348

 

$

9,934

 

$

10,647

 

Equity earnings in unconsolidated entities

 

$

11

 

$

—

 

$

—

 

$

11

 

Segment profit (2) (3)

 

$

160

 

$

149

 

$

176

 

$

485

 

Maintenance capital

 

$

23

 

$

11

 

$

5

 

$

39

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2012

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

External Customers

 

$

158

 

$

186

 

$

9,442

 

$

9,786

 

Intersegment (1)

 

203

 

101

 

—

 

304

 

Total revenues of reportable segments

 

$

361

 

$

287

 

$

9,442

 

$

10,090

 

Equity earnings in unconsolidated entities

 

$

9

 

$

—

 

$

—

 

$

9

 

Segment profit (2) (3)

 

$

169

 

$

114

 

$

274

 

$

557

 

Maintenance capital

 

$

27

 

$

10

 

$

3

 

$

40

 

 

 

 

Transportation

 

Facilities

 

Supply
and Logistics

 

Total

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2013

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

External Customers

 

$

338

 

$

420

 

$

20,157

 

$

20,915

 

Intersegment (1)

 

394

 

283

 

1

 

678

 

Total revenues of reportable segments

 

$

732

 

$

703

 

$

20,158

 

$

21,593

 

Equity earnings in unconsolidated entities

 

$

23

 

$

—

 

$

—

 

$

23

 

Segment profit (2) (3)

 

$

323

 

$

300

 

$

610

 

$

1,233

 

Maintenance capital

 

$

55

 

$

18

 

$

9

 

$

82

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2012

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

External Customers

 

$

307

 

$

378

 

$

18,319

 

$

19,004

 

Intersegment (1)

 

371

 

145

 

—

 

516

 

Total revenues of reportable segments

 

$

678

 

$

523

 

$

18,319

 

$

19,520

 

Equity earnings in unconsolidated entities

 

$

16

 

$

—

 

$

—

 

$

16

 

Segment profit (2) (3)

 

$

332

 

$

204

 

$

402

 

$

938

 

Maintenance capital

 

$

52

 

$

17

 

$

7

 

$

76

 

 

(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 $4 million for the three months ended June 30, 2013 and 2012, respectively, and approximately $10 million and $6 million for the six months ended June 30, 2013 and 2012, respectively.

 

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

 

 

 

Three Months

 

Six Months

 

 

 

Ended June 30,

 

Ended June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

Segment profit

 

$

485

 

$

557

 

$

1,233

 

$

938

 

Depreciation and amortization

 

(91

)

(86

)

(173

)

(146

)

Interest expense

 

(75

)

(75

)

(152

)

(140

)

Other income/(expense), net

 

(1

)

—

 

(1

)

2

 

Income tax expense

 

(18

)

(10

)

(70

)

(30

)

Net income

 

300

 

386

 

837

 

624

 

Net income attributable to noncontrolling interests

 

(8

)

(8

)

(16

)

(15

)

Net income attributable to Plains

 

$

292

 

$

378

 

$

821

 

$

609