v3.8.0.1
Operating Segments (Notes)
 9 Months Ended
Sep. 30, 2017
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]  
Segment Disclosures
OPERATING SEGMENTS

We changed our operating segment presentation in the first quarter of 2017 to reflect our expanded gathering and processing assets and operations and how our chief operating decision maker (“CODM”) manages our business. With the completion of the North Dakota Gathering and Processing Assets acquisition on January 1, 2017, our gathering and processing assets and operations expanded significantly and enhanced our ability to offer integrated gathering and processing services to our customers. Given the business’s focus on providing integrated services along with the revised reporting structure implemented by management to assess performance and make resource allocation decisions, we have determined our operating segments, which are the same for reporting purposes, are the (i) Terminalling and Transportation segment and (ii) Gathering and Processing segment. No changes were deemed necessary to our Terminalling and Transportation segment. Comparable prior period information for the newly presented Gathering and Processing segment has been recast to reflect our current presentation.

In addition, as part of the CODM’s reevaluation of how it monitors and evaluates the business and allocates resources, management revised its methodology for the allocation of corporate general and administrative expenses which resulted in additional corporate costs being allocated to our Gathering and Processing segment for certain administrative activities associated with our gathering and processing business in the Rockies region. The change to our Terminalling and Transportation segment was not material. Comparable prior period segment information has been recast to reflect our revised allocation methodology.

Our Terminalling and Transportation segment consists of crude oil and refined products terminals and marine terminals, storage facilities for crude oil, refined products and petroleum coke handling, rail-car unloading facilities and pipelines, which transport products and crude oil. Our Gathering and Processing segment consists of crude oil, natural gas and produced water gathering systems and natural gas processing assets in the Bakken Shale/Williston Basin area of North Dakota and Montana and the Green River Basin, Uinta Basin and Vermillion Basin in the states of Utah, Colorado and Wyoming as well as gas processing complexes and fractionation facilities.

Our revenues are generated from commercial contracts we have entered into with Andeavor and with third-party contracts under which we are paid fees for gathering crude oil, natural gas and produced water, processing natural gas and distributing, transporting and storing crude oil, refined products, natural gas and natural gas liquids. The commercial agreements with Andeavor are described in Note 3 to our Annual Report on Form 10-K for the year ended December 31, 2016. We do not have any foreign operations.

Our operating segments are strategic business units that offer different services in various geographical locations. We evaluate the performance of each segment based on its respective operating income. Certain general and administrative expenses and interest and financing costs are excluded from segment operating income as they are not directly attributable to a specific operating segment. Identifiable assets are those used by the segment, whereas other assets are principally cash, deposits and other assets that are not associated with a specific operating segment.

SEGMENT INFORMATION (in millions)

 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2017
 
2016
 
2017
 
2016
Revenues
 
 
 
 
 
 
 
Terminalling and Transportation:
 
 
 
 
 
 
 
Terminalling
$
155

 
$
125

 
$
447

 
$
345

Pipeline transportation
34

 
32

 
97

 
93

Total Terminalling and Transportation
189

 
157

 
544

 
438

Gathering and Processing:
 
 
 
 
 
 
 
NGL sales
90

 
24

 
254

 
78

Gas gathering and processing
85

 
67

 
252

 
198

Crude oil and water gathering
43

 
33

 
116

 
100

Pass-thru and other
37

 
27

 
111

 
87

Total Gathering and Processing
255

 
151

 
733

 
463

Total Segment Revenues
$
444

 
$
308

 
$
1,277

 
$
901

 
 
 
 
 
 
 
 
Segment Operating Income
 
 
 
 
 
 
 
Terminalling and Transportation
$
110

 
$
80

 
$
329

 
$
211

Gathering and Processing
47

 
54

 
160

 
173

Total Segment Operating Income
157

 
134

 
489

 
384

Unallocated general and administrative expenses
(6
)
 
(7
)
 
(22
)
 
(20
)
Interest and financing costs, net
(59
)
 
(49
)
 
(178
)
 
(138
)
Equity in earnings of equity method investments
2

 
3

 
7

 
10

Other income, net
3

 
—

 
3

 
6

Net Earnings
$
97

 
$
81

 
$
299

 
$
242

 
 
 
 
 
 
 
 
Capital Expenditures
 
 
 
 
 
 
 
Terminalling and Transportation
$
26

 
$
38

 
$
77

 
$
99

Gathering and Processing
25

 
23

 
64

 
82

Total Capital Expenditures
$
51

 
$
61

 
$
141

 
$
181



TOTAL IDENTIFIABLE ASSETS BY OPERATING SEGMENT (in millions)
 
September 30,
2017
 
December 31,
2016
Identifiable Assets
 
 
 
Terminalling and Transportation
$
1,795

 
$
1,768

Gathering and Processing
4,048

 
3,392

Other (a)
21

 
700

Total Identifiable Assets
$
5,864

 
$
5,860


(a)
Other consists mainly of $688 million in cash and cash equivalents as of December 31, 2016, of which $673 million was used to fund the acquisition of the North Dakota Gathering and Processing Assets on January 1, 2017, increasing the Gathering and Processing segment’s identifiable assets as of September 30, 2017.