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Operating Segments
 9 Months Ended
Sep. 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 September 30, 2013

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

External Customers

 

$

179

 

$

138

 

$

10,386

 

$

10,703

 

Intersegment (1)

 

199

 

142

 

—

 

341

 

Total revenues of reportable segments

 

$

378

 

$

280

 

$

10,386

 

$

11,044

 

Equity earnings in unconsolidated entities

 

$

19

 

$

—

 

$

—

 

$

19

 

Segment profit (2) (3)

 

$

198

 

$

146

 

$

64

 

$

408

 

Maintenance capital

 

$

29

 

$

6

 

$

7

 

$

42

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2012

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

External Customers

 

$

150

 

$

156

 

$

9,048

 

$

9,354

 

Intersegment (1)

 

214

 

106

 

1

 

321

 

Total revenues of reportable segments

 

$

364

 

$

262

 

$

9,049

 

$

9,675

 

Equity earnings in unconsolidated entities

 

$

9

 

$

—

 

$

—

 

$

9

 

Segment profit (2) (3)

 

$

184

 

$

140

 

$

142

 

$

466

 

Maintenance capital

 

$

26

 

$

17

 

$

4

 

$

47

 

 

 

 

Transportation

 

Facilities

 

Supply
and Logistics

 

Total

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2013

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

External Customers

 

$

517

 

$

558

 

$

30,542

 

$

31,617

 

Intersegment (1)

 

594

 

425

 

2

 

1,021

 

Total revenues of reportable segments

 

$

1,111

 

$

983

 

$

30,544

 

$

32,638

 

Equity earnings in unconsolidated entities

 

$

42

 

$

—

 

$

—

 

$

42

 

Segment profit (2) (3)

 

$

522

 

$

445

 

$

673

 

$

1,640

 

Maintenance capital

 

$

84

 

$

23

 

$

17

 

$

124

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2012

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

External Customers

 

$

458

 

$

533

 

$

27,367

 

$

28,358

 

Intersegment (1)

 

585

 

252

 

1

 

838

 

Total revenues of reportable segments

 

$

1,043

 

$

785

 

$

27,368

 

$

29,196

 

Equity earnings in unconsolidated entities

 

$

25

 

$

—

 

$

—

 

$

25

 

Segment profit (2) (3)

 

$

516

 

$

344

 

$

544

 

$

1,404

 

Maintenance capital

 

$

78

 

$

34

 

$

11

 

$

123

 

 

(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 $8 million and $3 million for the three months ended September 30, 2013 and 2012, respectively, and approximately $21 million and $9 million for the nine months ended September 30, 2013 and 2012, respectively.

 

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

 

 

 

Three Months

 

Nine Months

 

 

 

Ended September 30,

 

Ended September 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

Segment profit

 

$

408

 

$

466

 

$

1,640

 

$

1,404

 

Depreciation and amortization

 

(93

)

(210

)

(265

)

(356

)

Interest expense

 

(72

)

(74

)

(224

)

(214

)

Other income, net

 

3

 

4

 

2

 

6

 

Income tax expense

 

(9

)

(13

)

(79

)

(43

)

Net income

 

237

 

173

 

1,074

 

797

 

Net income attributable to noncontrolling interests

 

(6

)

(8

)

(22

)

(23

)

Net income attributable to Plains

 

$

231

 

$

165

 

$

1,052

 

$

774