Reportable Segments | Reportable Segments During the first quarter of 2017, as a result of the acquisition of JPE described in Note 1, we realigned the composition of our reportable segments. Accordingly, we have restated the items of segment information for the three months ended March 31, 2016 to reflect this new segment adjustment. Our operations are located in the United States and are organized into six reportable segments: 1) Gas Gathering and Processing Services, 2) Liquid Pipelines and Services, 3) Natural Gas Transportation Services, 4) Offshore Pipeline and Services, 5) Terminalling Services, and 6) Propane Marketing Services. • Gas Gathering and Processing Services . Our Gas Gathering and Processing Services segment provides “wellhead-to-market” services to producers of natural gas and natural gas liquids, which include transporting raw natural gas from various receipt points through gathering systems, treating the raw natural gas, processing raw natural gas to separate the NGLs from the natural gas, fractionating NGLs, and selling or delivering pipeline-quality natural gas and NGLs to various markets and pipeline systems. • Liquid Pipelines and Services . Our Liquid Pipelines and Services segment provides transportation, purchase and sales of crude oil from various receipt points including lease automatic customer transfer (“LACT”) facilities and deliveries to various markets. • Natural Gas Transportation Services . Our Natural Gas Transportation Services segment transports and delivers natural gas from producing wells, receipt points, or pipeline interconnects for shippers and other customers, which include local distribution companies (“LDCs”), utilities and industrial, commercial and power generation customers. • Offshore Pipelines and Services . Our Offshore Pipelines and Services segment gathers and transports natural gas and crude oil from various receipt points to other pipeline interconnects, onshore facilities and other delivery points. • Terminalling Services . Our Terminalling Services segment provides above-ground leasable storage operations at our marine terminals that support various commercial customers, including commodity brokers, refiners and chemical manufacturers to store a range of products and also includes crude oil storage in Cushing, Oklahoma and refined products terminals in Texas and Arkansas. • Propane Marketing Services . Our Propane Marketing Services segment gathers, transports and sells natural gas liquids (NGLs). This is accomplished through cylinder tank exchange, sales through retail, commercial and wholesale distribution and through a fleet of trucks operating in the Eagle Ford and Permian basin areas. These segments are monitored separately by our chief operating decision maker (“CODM”) for performance and are consistent with our internal financial reporting. The CODM periodically reviews segment gross margin information for each segment to make business decisions. These segments have been identified based on the differing products and services, regulatory environment and the expertise required for these operations. We define total segment gross margin as the sum of the segment gross margins for our Gas Gathering and Processing Services, Liquid Pipelines and Services, Natural Gas Transportation Services, Offshore Pipelines and Services, Terminalling Services and Propane Marketing Services segments. We define segment gross margin in our Gas Gathering and Processing Services segment as total revenue plus unconsolidated affiliate earnings less unrealized gains or plus unrealized losses on commodity derivatives, construction and operating management agreement income and the cost of natural gas, crude oil and NGLs and condensate purchased. We define segment gross margin in our Liquid Pipelines and Services segment as total revenue plus unconsolidated affiliate earnings less unrealized gains or plus unrealized losses on commodity derivatives and the cost of crude oil purchased in connection with fixed-margin arrangements. Substantially all of our gross margin in this segment is fee-based or fixed-margin, with little to no direct commodity price risk. We define segment gross margin in our Natural Gas Transportation Services segment as total revenue plus unconsolidated affiliate earnings less the cost of natural gas purchased in connection with fixed-margin arrangements. Substantially all of our gross margin in this segment is fee-based or fixed-margin, with little to no direct commodity price risk. We define segment gross margin in our Offshore Pipelines and Services segment as total revenue plus unconsolidated affiliate earnings less the cost of natural gas purchased in connection with fixed-margin arrangements. Substantially all of our gross margin in this segment is fee-based or fixed-margin, with little to no direct commodity price risk. We define segment gross margin in our Terminalling Services segment as total revenue less direct operating expense which includes direct labor, general materials and supplies and direct overhead. We define segment gross margin in our Propane Marketing Services segment as total revenue less purchases of natural gas, NGLs and condensate excluding non-cash charges such as non-cash unrealized gains or plus unrealized losses on commodity derivatives. A reconciliation from Segment Gross Margin to Net Income attributable to the Partnership for the periods ended March 31, 2017 and March 31, 2016 is below (in thousands): Three months ended March 31, 2017 2016 Reconciliation of Segment Gross Margin to Net income (loss) attributable to the Partnership: Gas Gathering and Processing Services segment gross margin $ 11,251 $ 11,619 Liquid Pipelines and Services segment gross margin 6,470 5,850 Natural Gas Transportation Services segment gross margin 6,119 5,563 Offshore Pipelines and Services segment gross margin 25,802 13,265 Terminalling Services segment gross margin (1) 11,160 9,443 Propane Marketing Services segment gross margin 19,302 28,305 Total Segment Gross Margin 80,104 74,045 Less: Other direct operating expenses (1) 27,015 27,966 Total Operating Margin 53,089 46,079 Plus: Loss on commodity derivatives, net (257 ) (238 ) Less: Corporate expenses 32,844 21,101 Depreciation, amortization and accretion expense 29,351 25,041 (Gain) loss on sale of assets, net (228 ) 1,122 Interest expense 17,966 8,302 Other income (14 ) (31 ) Other, net 671 (365 ) Income tax expense 1,123 735 Loss from discontinued operations, net of tax — 539 Net income (loss) attributable to noncontrolling interest 1,303 (3 ) Net income (loss) attributable to the Partnership $ (30,184 ) $ (10,600 ) _______________________ (1) Other direct operating expenses include Gas Gathering and Processing segment direct operating expenses of $8.1 million and $8.5 million , respectively, Liquid Pipelines and Services segment direct operating expenses of $2.1 million and $2.5 million , respectively, Natural Gas Transportation Services segment direct operating expenses of $1.2 million and $1.2 million , respectively, Offshore Pipelines and Services segment direct operating expenses of $2.6 million and $2.3 million , respectively, Propane Marketing Services segment direct operating expenses of $13.1 million and $13.5 million , respectively, for the three months ended March 31, 2017 and 2016 . Direct operating expenses related to our Terminalling Services segment of $3.1 million and $2.6 million for the three months ended March 31, 2017 and 2016 , respectively, are included within the calculation of Terminalling Services segment gross margin. The following tables set forth our segment information for the three months ended March 31, 2017 and 2016 (in thousands): Three months ended March 31, 2017 Gas Gathering and Processing Services Liquid Pipelines and Services Natural Gas Transportation Services Offshore Pipelines and Services Terminalling Services Propane Marketing Services Total Revenue $ 34,407 $ 82,039 $ 12,438 $ 14,831 $ 18,626 $ 37,548 $ 199,889 Gain (loss) on commodity derivatives, net (7 ) 372 — — — (622 ) (257 ) Total revenue 34,400 82,411 12,438 14,831 18,626 36,926 199,632 Earnings in unconsolidated affiliates — 1,088 — 14,314 — — 15,402 Operating expenses: Cost of Sales 23,187 77,077 6,260 3,343 4,393 18,525 132,785 Direct operating expenses 8,065 2,074 1,235 2,579 3,073 13,062 30,088 Corporate expenses 32,844 Depreciation, amortization and accretion expense 29,351 Gain on sale of assets, net (228 ) Total operating expenses 224,840 Interest expense 17,966 Other (income) expense (14 ) Loss from continuing operations before taxes (27,758 ) Income tax expense 1,123 Net loss (28,881 ) Less: Net income attributable to non-controlling interests 1,303 Net loss attributable to the Partnership $ (30,184 ) Segment gross margin $ 11,251 $ 6,470 $ 6,119 $ 25,802 $ 11,160 $ 19,302 Three months ended March 31, 2016 Gas Gathering and Processing Services Liquid Pipelines and Services Natural Gas Transportation Services Offshore Pipelines and Services Terminalling Services Propane Marketing Services Total Revenue $ 23,295 $ 44,515 $ 9,795 $ 7,003 $ 14,393 $ 44,613 $ 143,614 Gain (loss) on commodity derivatives, net (103 ) (233 ) — — (175 ) — 273 (238 ) Total revenue 23,192 44,282 9,795 7,003 14,218 44,886 143,376 Earnings in unconsolidated affiliates — — — 7,343 — — 7,343 Operating expenses: Cost of Sales 11,707 38,654 4,224 1,081 2,205 16,067 73,938 Direct operating expenses 8,548 2,467 1,227 2,253 2,609 13,471 30,575 Corporate expenses 21,101 Depreciation, amortization and accretion expense 25,041 Loss on sale of assets, net 1,122 Total operating expenses 151,777 Interest expense 8,302 Other (income) expense (31 ) Loss from continuing operations before taxes (9,329 ) Income tax expense 735 Income (loss from continuing operation (10,064 ) Loss from discontinued operations, net of tax 539 Net loss (10,603 ) Less: Net loss attributable to non-controlling interests (3 ) Net loss attributable to the Partnership $ (10,600 ) Segment gross margin $ 11,619 $ 5,850 $ 5,563 $ 13,265 $ 9,443 $ 28,305 A reconciliation of total assets by segment to the amounts included in the condensed consolidated balance sheets follows: March 31, December 31, 2017 2016 Segment assets: Gas Gathering and Processing Services $ 390,334 $ 532,009 Liquid Pipelines and Services 447,121 422,636 Offshore Pipelines and Services 365,507 385,893 Natural Gas Transportation Services 176,740 221,604 Terminalling Services 277,632 299,534 Propane Marketing Services 134,604 140,864 Other (1) 254,305 346,781 Total assets $ 2,046,243 $ 2,349,321 (1) Other assets not allocable to segments consist of corporate leasehold improvements and other assets. |