Business Segments (Notes)

6 Months Ended

Jun. 30, 2023

Our operations are organized into two reportable segments: (i) Logistics and Marketing and (ii) Gathering and Processing. These segments are monitored separately by management for performance against our internal forecast and are consistent with internal financial reporting. These segments have been identified based on the differing products and services, regulatory environment and the expertise required for these operations. Our Gathering and Processing reportable segment includes operating segments that have been aggregated based on the nature of the products and services provided. Adjusted gross margin is a performance measure utilized by management to monitor the operations of each segment. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies included in Note 2 of the Notes to the Consolidated Financial Statements in "Financial Statements and Supplementary Data" included as Item 8 in our Annual Report on Form 10-K for the year ended December 31, 2022.

Our Logistics and Marketing segment includes transporting, trading, marketing, storing natural gas and NGLs, and fractionating NGLs. Our Gathering and Processing segment consists of gathering, compressing, treating, processing natural gas, producing and fractionating NGLs, and recovering condensate. The remainder of our business operations is presented as “Other,” and consists of unallocated corporate costs. Elimination of inter-segment transactions are reflected in the Eliminations column.

The following tables set forth our segment information:

Three Months Ended June 30, 2023


	Logistics and Marketing		Gathering and Processing		Other		Eliminations		Total
	(millions)
Total operating revenue	$	1,561	$	1,252	$	—	$	(972)	$	1,841
Adjusted gross margin (a)	$	58	$	371	$	—	$	—	$	429
Operating and maintenance expense	(8)		(216)		(5)		—		(229)
General and administrative expense	(1)		(4)		(63)		—		(68)
Depreciation and amortization expense	(4)		(84)		(3)		—		(91)




Loss on sale of assets, net	—		(3)		—		—		(3)
Restructuring costs	—		—		(16)		—		(16)
Earnings from unconsolidated affiliates	147		1		—		—		148
Interest expense	—		—		(75)		—		(75)

Net income (loss)	$	192	$	65	$	(162)	$	—	$	95
Net income attributable to noncontrolling interests	—		(1)		—		—		(1)
Net income (loss) attributable to partners	$	192	$	64	$	(162)	$	—	$	94
Non-cash derivative mark-to-market	$	17	$	(10)	$	—	$	—	$	7

Capital expenditures	$	1	$	81	$	—	$	—	$	82

Six Months Ended June 30, 2023:


	Logistics and Marketing		Gathering and Processing		Other		Eliminations		Total
	(millions)
Total operating revenue	$	3,953	$	3,018	$	—	$	(2,404)	$	4,567
Adjusted gross margin (a)	$	112	$	815	$	—	$	—	$	927
Operating and maintenance expense	(17)		(398)		(11)		—		(426)
General and administrative expense	(3)		(8)		(137)		—		(148)
Depreciation and amortization expense	(6)		(168)		(7)		—		(181)




Loss on sale of assets, net	—		(3)		—		—		(3)
Restructuring costs	—		—		(26)		—		(26)
Earnings from unconsolidated affiliates	301		7		—		—		308
Interest expense	—		—		(143)		—		(143)
Income tax expense	—		—		(1)		—		(1)
Net income (loss)	$	387	$	245	$	(325)	$	—	$	307
Net income attributable to noncontrolling interests	—		(2)		—		—		(2)
Net income (loss) attributable to partners	$	387	$	243	$	(325)	$	—	$	305
Non-cash derivative mark-to-market	$	12	$	35	$	—	$	—	$	47
Non-cash lower of cost or net realizable value adjustments	$	22	$	—	$	—	$	—	$	22
Capital expenditures	$	1	$	160	$	2	$	—	$	163

Three Months Ended June 30, 2022


	Logistics and Marketing		Gathering and Processing		Other		Eliminations		Total
	(millions)
Total operating revenue	$	3,789	$	2,967	$	—	$	(2,487)	$	4,269
Adjusted gross margin (a)	$	40	$	585	$	—	$	—	$	625
Operating and maintenance expense	(9)		(175)		(5)		—		(189)
General and administrative expense	(2)		(5)		(58)		—		(65)
Depreciation and amortization expense	(3)		(82)		(5)		—		(90)
Asset impairments	—		(1)		—		—		(1)
Other income (expense), net	10		(2)		—		—		8




Earnings from unconsolidated affiliates	165		3		—		—		168
Interest expense	—		—		(70)		—		(70)
Income tax expense	—		—		(2)		—		(2)
Net income (loss)	$	201	$	323	$	(140)	$	—	$	384
Net income attributable to noncontrolling interests	—		(1)		—		—		(1)
Net income (loss) attributable to partners	$	201	$	322	$	(140)	$	—	$	383
Non-cash derivative mark-to-market	$	26	$	75	$	—	$	—	$	101

Capital expenditures	$	4	$	31	$	2	$	—	$	37
Investments in unconsolidated affiliates, net	$	—	$	—	$	—	$	—	$	—

Six Months Ended June 30, 2022:


	Logistics and Marketing		Gathering and Processing		Other		Eliminations		Total
	(millions)
Total operating revenue	$	6,952	$	5,073	$	—	$	(4,381)	$	7,644
Adjusted gross margin (a)	$	56	$	869	$	—	$	—	$	925
Operating and maintenance expense	(17)		(315)		(9)		—		(341)
General and administrative expense	(3)		(9)		(108)		—		(120)
Depreciation and amortization expense	(6)		(163)		(11)		—		(180)
Asset impairments	—		(1)		—		—		(1)
Other income (expense), net	10		(2)		—		—		8

Gain on sale of assets, net	—		7		—		—		7

Earnings from unconsolidated affiliates	302		9		—		—		311
Interest expense	—		—		(141)		—		(141)
Income tax expense	—		—		(3)		—		(3)
Net income (loss)	$	342	$	395	$	(272)	$	—	$	465
Net income attributable to noncontrolling interests	—		(2)		—		—		(2)
Net income (loss) attributable to partners	$	342	$	393	$	(272)	$	—	$	463

Non-cash derivative mark-to-market	$	(19)	$	(56)	$	—	$	—	$	(75)

Capital expenditures	$	6	$	51	$	3	$	—	$	60
Investments in unconsolidated affiliates, net	$	—	$	1	$	—	$	—	$	1


	June 30,		December 31,
	2023		2022
	(millions)
Segment long-term assets:
Gathering and Processing	$	7,573	$	7,594
Logistics and Marketing	3,754		3,814
Other (b)	163		224
Total long-term assets	11,490		11,632
Current assets	1,002		1,702
Total assets	$	12,492	$	13,334

(a) Adjusted gross margin consists of total operating revenues, including commodity derivative activity, less purchases and related costs. Adjusted gross margin is viewed as a non-GAAP financial measure under the rules of the SEC, but is included as a supplemental disclosure because it is a primary performance measure used by management as it represents the results of product sales versus product purchases. As an indicator of our operating performance, adjusted gross margin should not be considered an alternative to, or more meaningful than, net income, net cash provided by operating activities or gross margin as determined in accordance with GAAP. Our adjusted gross margin may not be comparable to similarly titled measures of other companies because other entities may not calculate adjusted gross margin in the same manner.

(b) Other long-term assets not allocable to segments consist of corporate leasehold improvements and other long-term assets.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

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