| Segment Disclosures |
Segment Disclosures
Our reportable segments are strategic business units that offer different products and services. Our segments are managed separately because each segment requires different marketing strategies and business knowledge. Management evaluates performance based on segment operating margin, which includes revenue from affiliates and external customers, operating expenses, cost of product sales and earnings of non-controlled entities. Transactions between our business segments are conducted and recorded on the same basis as transactions with third-party entities. We believe that investors benefit from having access to the same financial measures used by management. Operating margin, which is presented in the following tables, is an important measure used by management to evaluate the economic performance of our core operations. Operating margin is not a generally accepted accounting principles ("GAAP") measure, but the components of operating margin are computed using amounts that are determined in accordance with GAAP. A reconciliation of operating margin to operating profit, which is its nearest comparable GAAP financial measure, is included in the tables below. Operating profit includes depreciation and amortization expense and general and administrative ("G&A") expenses that management does not consider when evaluating the core profitability of our separate operating segments.
| | | | | | | | | | | | | | | | | | | | | | Three Months Ended September 30, 2013 | | (in thousands) | | Refined Products | | Crude Oil | | Marine Storage | | Intersegment Eliminations | | Total | Transportation and terminals revenue | $ | 205,859 |
| | $ | 49,519 |
| | $ | 39,948 |
| | $ | — |
| | $ | 295,326 |
| Product sales revenue | 143,549 |
| | — |
| | 1,303 |
| | — |
| | 144,852 |
| Affiliate management fee revenue | — |
| | 3,369 |
| | 288 |
| | — |
| | 3,657 |
| Total revenue | 349,408 |
| | 52,888 |
| | 41,539 |
| | — |
| | 443,835 |
| Operating expenses | 82,174 |
| | 4,034 |
| | 17,813 |
| | (759 | ) | | 103,262 |
| Cost of product sales | 120,429 |
| | — |
| | (130 | ) | | — |
| | 120,299 |
| Earnings of non-controlled entities | — |
| | (1,770 | ) | | (605 | ) | | — |
| | (2,375 | ) | Operating margin | 146,805 |
| | 50,624 |
| | 24,461 |
| | 759 |
| | 222,649 |
| Depreciation and amortization expense | 21,851 |
| | 5,538 |
| | 7,122 |
| | 759 |
| | 35,270 |
| G&A expenses | 22,741 |
| | 5,100 |
| | 4,914 |
| | — |
| | 32,755 |
| Operating profit | $ | 102,213 |
| | $ | 39,986 |
| | $ | 12,425 |
| | $ | — |
| | $ | 154,624 |
|
| | | | | | | | | | | | | | | | | | | | | | Three Months Ended September 30, 2014 | | (in thousands) | | Refined Products | | Crude Oil | | Marine Storage | | Intersegment Eliminations | | Total | Transportation and terminals revenue | $ | 237,972 |
| | $ | 78,839 |
| | $ | 43,706 |
| | $ | — |
| | $ | 360,517 |
| Product sales revenue | 155,134 |
| | — |
| | 731 |
| | — |
| | 155,865 |
| Affiliate management fee revenue | — |
| | 4,902 |
| | 317 |
| | — |
| | 5,219 |
| Total revenue | 393,106 |
| | 83,741 |
| | 44,754 |
| | — |
| | 521,601 |
| Operating expenses | 101,206 |
| | 14,375 |
| | 17,691 |
| | (885 | ) | | 132,387 |
| Cost of product sales | 91,407 |
| | — |
| | 184 |
| | — |
| | 91,591 |
| Earnings of non-controlled entities | — |
| | (959 | ) | | (686 | ) | | — |
| | (1,645 | ) | Operating margin | 200,493 |
| | 70,325 |
| | 27,565 |
| | 885 |
| | 299,268 |
| Depreciation and amortization expense | 23,050 |
| | 6,918 |
| | 7,201 |
| | 885 |
| | 38,054 |
| G&A expenses | 22,600 |
| | 7,635 |
| | 5,142 |
| | — |
| | 35,377 |
| Operating profit | $ | 154,843 |
| | $ | 55,772 |
| | $ | 15,222 |
| | $ | — |
| | $ | 225,837 |
|
| | | | | | | | | | | | | | | | | | | | | | Nine Months Ended September 30, 2013 | | (in thousands) | | Refined Products | | Crude Oil | | Marine Storage | | Intersegment Eliminations | | Total | Transportation and terminals revenue | $ | 573,615 |
| | $ | 113,905 |
| | $ | 117,539 |
| | $ | — |
| | $ | 805,059 |
| Product sales revenue | 499,285 |
| | — |
| | 5,200 |
| | — |
| | 504,485 |
| Affiliate management fee revenue | — |
| | 9,767 |
| | 857 |
| | — |
| | 10,624 |
| Total revenue | 1,072,900 |
| | 123,672 |
| | 123,596 |
| | — |
| | 1,320,168 |
| Operating expenses | 194,911 |
| | 13,168 |
| | 40,060 |
| | (2,281 | ) | | 245,858 |
| Cost of product sales | 393,187 |
| | — |
| | 2,838 |
| | — |
| | 396,025 |
| Earnings of non-controlled entities | — |
| | (3,255 | ) | | (1,907 | ) | | — |
| | (5,162 | ) | Operating margin | 484,802 |
| | 113,759 |
| | 82,605 |
| | 2,281 |
| | 683,447 |
| Depreciation and amortization expense | 64,428 |
| | 18,111 |
| | 20,968 |
| | 2,281 |
| | 105,788 |
| G&A expenses | 67,235 |
| | 14,142 |
| | 14,696 |
| | — |
| | 96,073 |
| Operating profit | $ | 353,139 |
| | $ | 81,506 |
| | $ | 46,941 |
| | $ | — |
| | $ | 481,586 |
|
| | | | | | | | | | | | | | | | | | | | | | Nine Months Ended September 30, 2014 | | (in thousands) | | Refined Products | | Crude Oil | | Marine Storage | | Intersegment Eliminations | | Total | Transportation and terminals revenue | $ | 680,697 |
| | $ | 226,298 |
| | $ | 124,727 |
| | $ | — |
| | $ | 1,031,722 |
| Product sales revenue | 585,178 |
| | — |
| | 4,407 |
| | — |
| | 589,585 |
| Affiliate management fee revenue | — |
| | 14,399 |
| | 947 |
| | — |
| | 15,346 |
| Total revenue | 1,265,875 |
| | 240,697 |
| | 130,081 |
| | — |
| | 1,636,653 |
| Operating expenses | 249,665 |
| | 35,300 |
| | 48,321 |
| | (2,528 | ) | | 330,758 |
| Cost of product sales | 397,980 |
| | — |
| | 754 |
| | — |
| | 398,734 |
| Earnings of non-controlled entities | — |
| | (1,667 | ) | | (2,399 | ) | | — |
| | (4,066 | ) | Operating margin | 618,230 |
| | 207,064 |
| | 83,405 |
| | 2,528 |
| | 911,227 |
| Depreciation and amortization expense | 78,305 |
| | 20,106 |
| | 21,523 |
| | 2,528 |
| | 122,462 |
| G&A expenses | 70,993 |
| | 21,326 |
| | 17,302 |
| | — |
| | 109,621 |
| Operating profit | $ | 468,932 |
| | $ | 165,632 |
| | $ | 44,580 |
| | $ | — |
| | $ | 679,144 |
| | | | | | | | | | | | As of September 30, 2014 | Segment assets | $ | 2,849,397 |
| | $ | 1,732,464 |
| | $ | 638,948 |
| | $ | — |
| | $ | 5,220,809 |
| Corporate assets | | | | | | | | | 90,587 |
| Total assets | | | | | | | | | $ | 5,311,396 |
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