Reportable Segments | (21) Reportable Segments Since the first quarter of 2017, as a result of the acquisition of JPE described in Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies , we realigned the composition of our reportable segments. We restated the items of segment information as reported for the three and nine months ended September 30, 2016 to reflect this new segment adjustment. On September 1, 2017, we sold the Propane Business, as described in Note 4 - Discontinued Operations . Prior to the sale, during July 2017, we moved the trucking business from the Propane Marketing Services segment to the Liquid Pipelines and Services segment. The prior periods were adjusted to reflect that change. With the disposition of the Propane Business, we eliminated the Propane Marketing Services segment. We have classified the results of our Propane Marketing Services segment, including the gain on sale, as discontinued operations in our condensed consolidated statements of operations for all periods presented. Our operations are located in the United States and are organized into five reportable segments: 1) Gas Gathering and Processing Services, 2) Liquid Pipelines and Services, 3) Natural Gas Transportation Services, 4) Offshore Pipelines and Services and 5) Terminalling 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. 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 and Terminalling Services. 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. A reconciliation from Total segment gross margin to Net income (loss) attributable to the Partnership for the periods presented is below (in thousands): Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Reconciliation of Segment Gross Margin to Net income (loss) attributable to the Partnership: Gas Gathering and Processing Services segment gross margin $ 12,761 $ 12,627 $ 36,663 $ 37,586 Liquid Pipelines and Services segment gross margin 7,808 7,600 21,209 23,829 Natural Gas Transportation Services segment gross margin 5,356 3,709 17,106 13,115 Offshore Pipelines and Services segment gross margin 29,312 24,126 80,738 57,947 Terminalling Services segment gross margin (1) 8,509 10,731 30,429 31,760 Total segment gross margin (non-GAAP) 63,746 58,793 186,145 164,237 Less: Direct operating expenses (1) 17,274 14,695 47,316 45,999 Plus: Gain (loss) on commodity derivatives, net (597 ) 324 (33 ) (1,929 ) Less: Corporate expenses 27,083 22,103 84,570 60,945 Depreciation, amortization and accretion expense 26,781 22,668 78,834 65,937 (Gain) loss on sale of assets, net (4,061 ) 36 (4,064 ) 297 Interest expense 17,759 5,830 51,037 24,723 Other (income) expense (34,085 ) 1 (32,248 ) (245 ) Other (income) expense, net (139 ) (1,129 ) 322 (1,773 ) Income tax expense 731 401 2,611 1,839 (Income) loss from discontinued operations, net of tax (44,696 ) 2,310 (42,185 ) (7,532 ) Net income attributable to noncontrolling interests 621 1,241 3,386 2,192 Net income (loss) $ 55,881 $ (9,039 ) $ (3,467 ) $ (30,074 ) _____________________________________ (1) Direct operating expenses include Gas Gathering and Processing Services segment direct operating expenses of $8.7 million and $7.9 million , Liquid Pipelines and Services segment direct operating expenses of $2.4 million and $2.6 million , Natural Gas Transportation Services segment direct operating expenses of $2.2 million and $1.3 million and Offshore Pipelines and Services segment direct operating expenses of $3.9 million and $2.9 million for the three months ended September 30, 2017 and 2016 , respectively. Direct operating expenses related to our Terminalling Services segment of $3.4 million and $2.9 million for the three months ended September 30, 2017 and 2016 , respectively, are included within the calculation of Terminalling Services segment gross margin. Other direct operating expenses include Gas Gathering and Processing Services segment direct operating expenses of $24.8 million and $25.3 million , Liquid Pipelines and Services segment direct operating expenses of $7.1 million and $8.2 million , Natural Gas Transportation Services segment direct operating expenses of $5.4 million and $4.5 million , and Offshore Pipelines and Services segment direct operating expenses of $10.0 million and $8.0 million for the nine months ended September 30, 2017 and 2016 , respectively. Direct operating expenses related to our Terminalling Services segment of $9.5 million and $7.9 million for the nine months ended September 30, 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 and nine months ended September 30, 2017 and 2016 (in thousands): Three months ended September 30, 2017 Gas Gathering and Processing Services Liquid Pipelines and Services Natural Gas Transportation Services Offshore Pipelines and Services Terminalling Services Total Revenue $ 37,287 $ 87,022 $ 11,131 $ 14,360 $ 13,087 $ 162,887 Gain (loss) on commodity derivatives, net (65 ) (532 ) — — — (597 ) Total revenue 37,222 86,490 11,131 14,360 13,087 162,290 Earnings in unconsolidated affiliates — 1,317 — 15,510 — 16,827 Operating expenses: Cost of Sales 24,492 80,510 5,692 558 1,146 112,398 Direct operating expenses 8,655 2,438 2,240 3,940 3,432 20,705 Corporate expenses 27,083 Depreciation, amortization and accretion expense 26,781 Gain on sale of assets, net (4,061 ) Total operating expenses 182,906 Interest expense 17,759 Other income (34,085 ) Income from continuing operations before income taxes 12,537 Income tax expense 731 Income from continuing operations 11,806 Income from discontinued operations, including gain on disposition (Note 4) 44,696 Net income 56,502 Less: Net income attributable to non-controlling interests 621 Net income attributable to the Partnership $ 55,881 Segment gross margin $ 12,761 $ 7,808 $ 5,356 $ 29,312 $ 8,509 Three months ended September 30, 2016 Gas Gathering and Processing Services Liquid Pipelines and Services Natural Gas Transportation Services Offshore Pipelines and Services Terminalling Services Total Revenue $ 31,650 $ 87,898 $ 10,709 $ 14,879 $ 14,443 $ 159,579 Gain (loss) on commodity derivatives, net 149 177 — (2 ) — — 324 Total revenue 31,799 88,075 10,709 14,877 14,443 159,903 Earnings in unconsolidated affiliates (1 ) 650 — 9,819 — 10,468 Operating expenses: Cost of Sales 18,477 80,372 6,994 570 836 107,249 Direct operating expenses 7,856 2,617 1,324 2,898 2,876 17,571 Corporate expenses 22,103 Depreciation, amortization and accretion expense 22,668 Loss on sale of assets, net 36 Total operating expenses 169,627 Interest expense 5,830 Other expense 1 Loss from continuing operations before income taxes (5,087 ) Income tax expense 401 Loss from continuing operations (5,488 ) Loss from discontinued operations (2,310 ) Net loss (7,798 ) Less: Net income attributable to non-controlling interests 1,241 Net loss attributable to the Partnership $ (9,039 ) Segment gross margin $ 12,627 $ 7,600 $ 3,709 $ 24,126 $ 10,731 Nine months ended September 30, 2017 Gas Gathering and Processing Services Liquid Pipelines and Services Natural Gas Transportation Services Offshore Pipelines and Services Terminalling Services Total Revenue $ 111,001 $ 253,590 $ 34,966 $ 41,330 $ 47,544 $ 488,431 Gain (loss) on commodity derivatives, net (170 ) 137 — — — (33 ) Total revenue 110,831 253,727 34,966 41,330 47,544 488,398 Earnings in unconsolidated affiliates — 3,886 — 45,895 — 49,781 Operating expenses: Cost of Sales 74,261 236,896 17,630 6,487 7,612 342,886 Direct operating expenses 24,766 7,137 5,403 10,010 9,503 56,819 Corporate expenses 84,570 Depreciation, amortization and accretion expense 78,834 Gain on sale of assets, net (4,064 ) Total operating expenses 559,045 Interest expense 51,037 Other income (32,248 ) Loss from continuing operations before income taxes (39,655 ) Income tax expense 2,611 Loss from continuing operations (42,266 ) Income from discontinued operations, including gain on disposition (Note 4) 42,185 Net loss (81 ) Less: Net income attributable to non-controlling interests 3,386 Net loss attributable to the Partnership $ (3,467 ) Segment gross margin $ 36,663 $ 21,209 $ 17,106 $ 80,738 $ 30,429 Nine months ended September 30, 2016 Gas Gathering and Processing Services Liquid Pipelines and Services Natural Gas Transportation Services Offshore Pipelines and Services Terminalling Services Total Revenue $ 85,655 $ 221,866 $ 28,383 $ 32,526 $ 46,652 $ 415,082 Gain (loss) on commodity derivatives, net (716 ) (772 ) — (5 ) (436 ) (1,929 ) Total revenue 84,939 221,094 28,383 32,521 46,216 413,153 Earnings in unconsolidated affiliates — 1,658 — 27,855 — 29,513 Operating expenses: Cost of Sales 47,344 199,111 15,245 2,429 6,583 270,712 Direct operating expenses 25,344 8,186 4,515 7,954 7,873 53,872 Corporate expenses 60,945 Depreciation, amortization and accretion expense 65,937 Loss on sale of assets, net 297 Total operating expenses 451,763 Interest expense 24,723 Other income (245 ) Loss from continuing operations before income taxes (33,575 ) Income tax expense 1,839 Loss from continuing operations (35,414 ) Income from discontinued operations 7,532 Net loss (27,882 ) Less: Net income attributable to non-controlling interests 2,192 Net loss attributable to the Partnership $ (30,074 ) Segment gross margin $ 37,586 $ 23,829 $ 13,115 $ 57,947 $ 31,760 A reconciliation of total assets by segment to the amounts included in the condensed consolidated balance sheets follows: September 30, December 31, 2017 2016 Segment assets: Gas Gathering and Processing Services $ 416,498 $ 530,889 Liquid Pipelines and Services 443,771 425,389 Offshore Pipelines and Services 544,895 400,193 Natural Gas Transportation Services 172,813 221,604 Terminalling Services 256,922 299,534 Other (1) 188,308 334,953 Discontinued Operations — 136,759 Total Assets $ 2,023,207 $ 2,349,321 _____________________________________ (1) Other assets not allocable to segments consist of corporate leasehold improvements and other miscellaneous assets. |