SEGMENT INFORMATION | 4. SEGMENT INFORMATION As of June 30, 2019, 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 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. Additionally, until March 22, 2019, we owned Tioga Midstream, a crude oil, produced water and associated natural gas gathering system operating in the Williston Basin, which includes the Bakken and Three Forks shale formations in northwestern North Dakota. Refer to Note 17 to the unaudited condensed consolidated financial statements for details on the sale of Tioga 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, relates to Ohio Gathering and is recognized and disclosed on a one-month lag (see Note 8). For the three and six months ended June 30, 2019, other than the investment activity described in Note 8 below, Double E did not have any results of operations given that the Project is currently under development. The Project is expected to be operational in the third quarter of 2021. Corporate and Other represents those results that are: (i) not specifically attributable to a reportable segment; (ii) not individually reportable (such as Double E); 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. June 30,2019 December 31, 2018 (In thousands) Assets (1): Utica Shale $ 206,911 $ 207,357 Ohio Gathering 630,513 649,250 Williston Basin 439,026 526,819 DJ Basin 167,329 166,580 Permian Basin 174,964 145,702 Piceance Basin 672,664 699,638 Barnett Shale 358,997 376,564 Marcellus Shale 204,252 208,790 Total reportable segment assets 2,854,656 2,980,700 Corporate and Other 43,046 44,181 Eliminations — (4,319 ) Total assets $ 2,897,702 $ 3,020,562 (1) At June 30, 2019, Corporate and Other included $23.3 million relating to our investment in Double E (included in the Investment in equity method investees caption of the unaudited condensed consolidated balance sheet). At December 31, 2018, Corporate and Other included $9.6 million of capital expenditures relating to our investment in Double E. Revenues by reportable segment follow. Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 (In thousands) Revenues (1): Utica Shale $ 7,591 $ 10,422 $ 15,086 $ 20,463 Williston Basin 22,123 33,416 56,322 61,840 DJ Basin 5,156 3,557 9,972 6,573 Permian Basin 3,041 — 7,660 — Piceance Basin 33,604 39,435 68,884 78,006 Barnett Shale 19,347 16,155 34,632 32,325 Marcellus Shale 5,897 8,050 12,094 15,875 Total reportable segments revenue 96,759 111,035 204,650 215,082 Corporate and Other 3,824 19,422 30,662 33,598 Eliminations (897 ) (2,274 ) (4,218 ) (3,177 ) Total revenues $ 99,686 $ 128,183 $ 231,094 $ 245,503 (1) Excludes revenues earned by Ohio Gathering due to equity method accounting. Counterparties accounting for more than 10% of total revenues were as follows: Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 Percentage of total revenues (1): Counterparty A - Piceance Basin 12 % 10 % 11 % 11 % Counterparty B - Williston Basin 11 % * 10 % * Counterparty C - Barnett Shale 14 % 11 % 12 % * (1) 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 (for 2018) gas gathering contracts as reported in other revenues, by reportable segment follows. Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 (In thousands) Depreciation and amortization (1): Utica Shale $ 1,923 $ 2,033 $ 3,831 $ 3,886 Williston Basin 4,734 5,622 10,170 11,231 DJ Basin 464 784 1,263 1,565 Permian Basin 1,163 — 2,235 — Piceance Basin 11,810 11,666 23,601 23,440 Barnett Shale (2) 4,167 3,759 8,497 7,516 Marcellus Shale 2,286 2,274 4,569 4,546 Total reportable segment depreciation and amortization 26,547 26,138 54,166 52,184 Corporate and Other 616 496 1,113 976 Total depreciation and amortization $ 27,163 $ 26,634 $ 55,279 $ 53,160 (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 (for 2018) gas gathering contracts as reported in other revenues . Cash paid for capital expenditures by reportable segment follow. Six months ended June 30, 2019 2018 (In thousands) Cash paid for capital expenditures (1): Utica Shale $ 1,065 $ 1,846 Williston Basin 14,230 10,966 DJ Basin 50,373 21,415 Permian Basin 28,163 50,773 Piceance Basin 1,497 3,412 Barnett Shale (2) (37 ) 349 Marcellus Shale 108 545 Total reportable segment capital expenditures 95,399 89,306 Corporate and Other 15,693 1,088 Total cash paid for capital expenditures $ 111,092 $ 90,394 (1) Excludes cash paid for capital expenditures by Ohio Gathering due to equity method accounting. (2) For the six months ended June 30, 2019, the amount includes sales tax reimbursements of $1.1 million. During the six months ended June 30, 2019, Corporate and Other included cash paid of $0.3 million for corporate purposes; the remainder represents capital expenditures relating to the Project. We assess the performance of our reportable segments based on segment adjusted EBITDA. We define segment adjusted EBITDA as total revenues less total costs and expenses; plus (i) other income excluding interest income, (ii) our proportional adjusted EBITDA for equity method investees, (iii) depreciation and amortization, (iv) adjustments related to MVC shortfall payments, (v) adjustments related to capital reimbursement activity, (vi) unit-based and noncash compensation, (vii) change in the Deferred Purchase Price Obligation fair value, (viii) impairments and (ix) other noncash expenses or losses, less other noncash income or gains. We define proportional adjusted EBITDA for our equity method investees as the product of (i) total revenues less total expenses, excluding impairments and other noncash income or expense items and (ii) amortization for deferred contract costs; multiplied by our ownership interest in Ohio Gathering during the respective period. 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 and income tax expense or benefit from segment adjusted EBITDA. Segment adjusted EBITDA by reportable segment follows. Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 (In thousands) Reportable segment adjusted EBITDA Utica Shale $ 6,640 $ 9,223 $ 12,833 $ 17,938 Ohio Gathering 9,939 8,935 19,149 19,412 Williston Basin 16,650 19,030 35,384 35,000 DJ Basin 2,816 959 5,489 2,280 Permian Basin (656 ) — (1,206 ) — Piceance Basin 24,584 26,714 50,583 54,628 Barnett Shale 11,208 11,093 22,582 20,952 Marcellus Shale 4,635 6,543 9,777 13,219 Total of reportable segments' measures of profit or loss $ 75,816 $ 82,497 $ 154,591 $ 163,429 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. Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 (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 $ 6,030 $ (45,699 ) $ (30,236 ) $ (51,101 ) Add: Corporate and Other expense 7,208 9,002 21,367 19,625 Interest expense 17,941 14,837 35,468 29,959 Deferred Purchase Price Obligation 3,712 69,305 8,139 90,963 Depreciation and amortization 27,163 26,634 55,279 53,160 Proportional adjusted EBITDA for equity method investees 9,939 8,935 19,149 19,412 Adjustments related to MVC shortfall payments 3,533 (3,542 ) (666 ) (3,542 ) Adjustments related to capital reimbursement activity (1,046 ) 115 (1,761 ) 155 Unit-based and noncash compensation 1,553 2,261 4,079 4,223 (Gain) loss on asset sales, net (287 ) 62 (1,248 ) (12 ) Long-lived asset impairment 70 587 45,021 587 Total of reportable segments' measures of profit $ 75,816 $ 82,497 $ 154,591 $ 163,429 Adjustments related to MVC shortfall payments recognize the earnings from MVC shortfall payments ratably over the term of the associated MVC (see Note 3). 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. Adjustments related to MVC shortfall payments by reportable segment follow. Three months ended June 30, 2019 Williston Basin Piceance Basin Barnett Shale Total (In thousands) Adjustments related to expected MVC shortfall payments: $ 2,081 $ — $ 1,452 $ 3,533 Three months ended June 30, 2018 Williston Basin Piceance Basin Barnett Shale Total (In thousands) Adjustments related to expected MVC shortfall payments: $ (3,386 ) $ (93 ) $ (63 ) $ (3,542 ) Six months ended June 30, 2019 Williston Basin Piceance Basin Barnett Shale Total (In thousands) Adjustments related to expected MVC shortfall payments: $ (3,468 ) $ (103 ) $ 2,905 $ (666 ) Six months ended June 30, 2018 Williston Basin Piceance Basin Barnett Shale Total (In thousands) Adjustments related to expected MVC shortfall payments: $ (3,386 ) $ (93 ) $ (63 ) $ (3,542 ) |