SEGMENT INFORMATION | 4. SEGMENT INFORMATION We evaluate our business operations each reporting period to determine whether any of our operating segments in which we internally report financial information are considered significant and would require us to separately disclose certain segment financial information in our external reporting. As a result of our evaluation, during the fourth quarter of 2018, we determined that the DJ Basin natural gas gathering and processing system, previously reported within the Piceance/DJ Basins reportable segment, is expected to be a significant operating segment in future reporting periods. This determination was based on, among other things, the development of a new 60 MMcf/d processing plant that is expected to be operational in 2019, which will increase volume throughput beginning in 2019. In addition, we determined the Permian Basin natural gas gathering and processing system, which was commissioned in the fourth quarter of 2018, is expected to be a significant operating segment in future reporting periods. As such, we modified our current segments in the fourth quarter of 2018 such that the DJ Basin reportable segment includes the Niobrara G&P system and the Permian Basin reportable segment includes the Summit Permian natural gas gathering and processing system. For the year ended December 31, 2018, we have disclosed the required segment information for Niobrara G&P and Summit Permian and the periods prior have been recast to reflect this change. As of December 31, 2018, our reportable segments are: • the Utica Shale, which is served by Summit Utica; • Ohio Gathering, which includes our ownership interest in OGC and OCC; • the Williston Basin, which is served by Polar and Divide, Tioga Midstream and Bison Midstream; • the DJ Basin, which is served by Niobrara G&P; • the Permian Basin, which is served by Summit Permian; • the Piceance Basin, which is served by Grand River; • the Barnett Shale, which is served by DFW Midstream; and • the Marcellus Shale, which is served by Mountaineer Midstream. Each of our reportable segments provides midstream services in a specific geographic area. Our reportable segments reflect the way in which we internally report the financial information used to make decisions and allocate resources in connection with our operations. The Ohio Gathering reportable segment includes our investment in OGC and OCC. Income or loss from equity method investees, as reflected on the statements of operations, solely relates to Ohio Gathering and is recognized and disclosed on a one-month lag (see Note 8). Corporate and Other represents those results that are: (i) not specifically attributable to a reportable segment; (ii) not individually reportable; or (iii) that have not been allocated to our reportable segments for the purpose of evaluating their performance, including certain general and administrative expense items, natural gas and crude oil marketing services and transaction costs. Assets by reportable segment follow. December 31, 2018 2017 2016 (In thousands) Assets: Utica Shale $ 207,357 $ 212,311 $ 199,392 Ohio Gathering 649,250 690,485 707,415 Williston Basin 526,819 512,860 724,084 DJ Basin 166,580 79,438 72,494 Permian Basin 145,702 57,590 — Piceance Basin 699,638 719,284 770,946 Barnett Shale 376,564 383,306 404,314 Marcellus Shale 208,790 217,362 224,709 Total reportable segment assets 2,980,700 2,872,636 3,103,354 Corporate and Other 44,181 22,406 12,294 Eliminations (4,319 ) (249 ) (469 ) Total assets $ 3,020,562 $ 2,894,793 $ 3,115,179 Revenues by reportable segment follow. Year ended December 31, 2018 2017 2016 (In thousands) Revenues (1): Utica Shale $ 35,233 $ 38,907 $ 24,263 Williston Basin 123,650 161,503 122,174 DJ Basin 15,294 11,860 8,439 Permian Basin 958 — — Piceance Basin 155,519 154,893 141,464 Barnett Shale 68,265 71,667 79,956 Marcellus Shale 29,573 30,394 26,111 Total reportable segments revenue 428,492 469,224 402,407 Corporate and Other 88,286 26,446 412 Eliminations (10,125 ) (6,929 ) (457 ) Total revenues $ 506,653 $ 488,741 $ 402,362 (1) Excludes revenues earned by Ohio Gathering due to equity method accounting. Counterparties accounting for more than 10% of total revenues were as follows: Year ended December 31, 2018 2017 2016 Percentage of total revenues (1)(2): Counterparty A - Piceance Basin * * 14 % Counterparty B - Williston Basin * 13 % * Counterparty C - Piceance Basin 10 % * * (1) Includes recognition of revenue that was previously deferred in connection with minimum volume commitments (see Note 9). (2) Excludes revenues earned by Ohio Gathering due to equity method accounting. * Less than 10% Depreciation and amortization, including the amortization expense associated with our favorable and unfavorable gas gathering contracts as reported in other revenues, by reportable segment follows. Year ended December 31, 2018 2017 2016 (In thousands) Depreciation and amortization (1): Utica Shale $ 7,672 $ 7,009 $ 4,331 Williston Basin 22,642 33,772 33,676 DJ Basin 3,133 2,636 2,524 Permian Basin 243 — — Piceance Basin 46,919 46,289 46,616 Barnett Shale (2) 15,325 15,001 16,093 Marcellus Shale 9,090 9,047 8,841 Total reportable segment depreciation and amortization 105,024 113,754 112,081 Corporate and Other 1,743 1,118 580 Total depreciation and amortization $ 106,767 $ 114,872 $ 112,661 (1) Excludes depreciation and amortization recognized by Ohio Gathering due to equity method accounting. (2) Includes the amortization expense associated with our favorable and unfavorable gas gathering contracts as reported in other revenues. Cash paid for capital expenditures by reportable segment follow. Year ended December 31, 2018 2017 2016 (In thousands) Cash paid for capital expenditures (1): Utica Shale $ 5,719 $ 22,921 $ 78,708 Williston Basin 25,202 17,309 31,541 DJ Basin 64,920 7,150 5,807 Permian Basin 83,823 56,020 — Piceance Basin 7,887 16,564 19,912 Barnett Shale 1,370 569 3,910 Marcellus Shale 1,030 641 1,173 Total reportable segment capital expenditures 189,951 121,174 141,051 Corporate and Other 10,635 3,041 1,668 Total cash paid for capital expenditures $ 200,586 $ 124,215 $ 142,719 (1) Excludes cash paid for capital expenditures by Ohio Gathering due to equity method accounting. During the year ended December 31, 2018, Corporate and Other included cash paid of $3.3 million for corporate purposes; the remainder represents capital expenditures for the Double E Pipeline Project relating to the Summit Permian Transmission expansion. We assess the performance of our reportable segments based on segment adjusted EBITDA. For the purpose of evaluating segment performance, we exclude the effect of Corporate and Other revenues and expenses, such as certain general and administrative expenses (including compensation-related expenses and professional services fees), natural gas and crude oil marketing services, transaction costs, interest expense, change in the Deferred Purchase Price Obligation fair value, early extinguishment of debt expense and income tax expense or benefit from segment adjusted EBITDA. Segment adjusted EBITDA by reportable segment follows. Year ended December 31, 2018 2017 2016 (In thousands) Reportable segment adjusted EBITDA Utica Shale $ 30,285 $ 34,011 $ 21,035 Ohio Gathering 39,969 41,246 45,602 Williston Basin 76,701 66,413 79,475 DJ Basin 7,558 6,624 3,681 Permian Basin (1,200 ) — — Piceance Basin 111,042 111,113 105,560 Barnett Shale 43,268 46,232 54,634 Marcellus Shale 24,267 23,888 19,203 Total of reportable segments' measures of profit or loss $ 331,890 $ 329,527 $ 329,190 A reconciliation of income or loss before income taxes and income or loss from equity method investees to total of reportable segments' measures of profit or loss follows. Year ended December 31, 2018 2017 2016 (In thousands) Reconciliation of income (loss) before income taxes and loss from equity method investees to total of reportable segments' measures of profit: Income (loss) before income taxes and loss from equity method investees $ 53,272 $ 88,614 $ (7,768 ) Add: Corporate and Other 38,917 39,140 37,589 Interest expense 60,535 68,131 63,810 Early extinguishment of debt — 22,039 — Deferred Purchase Price Obligation 20,975 (200,322 ) 55,854 Depreciation and amortization 106,767 114,872 112,661 Proportional adjusted EBITDA for equity method investees 39,969 41,246 45,602 Adjustments related to MVC shortfall payments (3,632 ) (41,373 ) 11,600 Adjustments related to capital reimbursement activity (427 ) — — Unit-based and noncash compensation 8,328 7,951 7,985 Loss on asset sales, net — 527 93 Long-lived asset impairment 7,186 188,702 1,764 Total of reportable segments' measures of profit $ 331,890 $ 329,527 $ 329,190 For the year ended December 31, 2018, in accordance with Topic 606, adjustments related to MVC shortfall payments are recognized in gathering services and related fees (see Note 3). In accordance with Topic 606, contributions in aid of construction are recognized over the remaining term of the respective contract. We include adjustments related to capital reimbursement activity in our calculation of segment adjusted EBITDA to account for revenue recognized from contributions in aid of construction. For the years ended December 31, 2017 and 2016, we included adjustments related to MVC shortfall payments in our calculation of segment adjusted EBITDA to account for (i) the net increases or decreases in deferred revenue for MVC shortfall payments and (ii) our inclusion of expected annual or multi-year MVC shortfall payments. With respect to the impact of a net change in deferred revenue for MVC shortfall payments, we treated increases in deferred revenue balances as a favorable adjustment to segment adjusted EBITDA, while decreases in deferred revenue balances were treated as an unfavorable adjustment to segment adjusted EBITDA. We also included a proportional amount of any historical and expected MVC shortfall payments in each quarter prior to the quarter in which we actually recognize the shortfall payment. Adjustments related to MVC shortfall payments by reportable segment follow. Year ended December 31, 2018 Williston Basin Piceance Basin Barnett Shale Total (In thousands) Adjustments related to MVC shortfall payments: Net change in deferred revenue for MVC shortfall payments $ — $ — $ — $ — Expected MVC shortfall adjustments — 10 (3,642 ) (3,632 ) Total adjustments related to MVC shortfall payments $ — $ 10 $ (3,642 ) $ (3,632 ) Year ended December 31, 2017 Williston Basin Piceance Basin Barnett Shale Total (In thousands) Adjustments related to MVC shortfall payments: Net change in deferred revenue for MVC shortfall payments $ (37,693 ) $ (3,065 ) $ — $ (40,758 ) Expected MVC shortfall adjustments — (3 ) (612 ) (615 ) Total adjustments related to MVC shortfall payments $ (37,693 ) $ (3,068 ) $ (612 ) $ (41,373 ) Year Ended December 31, 2016 Williston Basin Piceance Basin Barnett Shale Total (In thousands) Adjustments related to MVC shortfall payments: Net change in deferred revenue for MVC shortfall payments $ 8,691 $ 3,288 $ (677 ) $ 11,302 Expected MVC shortfall adjustments — (317 ) 615 298 Total adjustments related to MVC shortfall payments $ 8,691 $ 2,971 $ (62 ) $ 11,600 |