SEGMENT INFORMATION | 4. SEGMENT INFORMATION As of September 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 nine months ended September 30, 2019, other than the investment activity described in Note 8, 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. September 30,2019 December 31, 2018 (In thousands) Assets (1): Utica Shale $ 207,850 $ 207,357 Ohio Gathering 620,496 649,250 Williston Basin 445,838 526,819 DJ Basin 187,542 166,580 Permian Basin 184,386 145,702 Piceance Basin 665,489 699,638 Barnett Shale 354,173 376,564 Marcellus Shale 186,899 208,790 Total reportable segment assets 2,852,673 2,980,700 Corporate and Other 48,783 44,181 Eliminations — (4,319 ) Total assets $ 2,901,456 $ 3,020,562 (1) At September 30, 2019, Corporate and Other included $28.3 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 the Project. Revenues by reportable segment follow. Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 (In thousands) Revenues (1): Utica Shale $ 8,865 $ 7,974 $ 23,951 $ 28,437 Williston Basin 21,118 29,010 77,440 90,850 DJ Basin 7,867 3,782 17,839 10,355 Permian Basin 4,885 — 12,545 — Piceance Basin 33,111 38,683 101,995 116,689 Barnett Shale 17,820 21,020 52,452 53,345 Marcellus Shale 5,987 7,150 18,081 23,025 Total reportable segments revenue 99,653 107,619 304,303 322,701 Corporate and Other 534 23,636 31,196 57,234 Eliminations — (3,776 ) (4,218 ) (6,953 ) Total revenues $ 100,187 $ 127,479 $ 331,281 $ 372,982 (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 September 30, Nine months ended September 30, 2019 2018 2019 2018 Percentage of total revenues (1): Counterparty A - Piceance Basin 12 % 11 % 11 % 11 % Counterparty B - Williston Basin 10 % * 10 % * Counterparty C - Barnett Shale * 12 % * 10 % (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 September 30, Nine months ended September 30, 2019 2018 2019 2018 (In thousands) Depreciation and amortization (1): Utica Shale $ 1,913 $ 1,887 $ 5,744 $ 5,773 Williston Basin 4,788 5,672 14,958 16,903 DJ Basin 775 783 2,038 2,349 Permian Basin 1,312 — 3,547 — Piceance Basin 11,798 11,729 35,399 35,168 Barnett Shale (2) 4,045 3,760 12,542 11,276 Marcellus Shale 2,286 2,273 6,855 6,819 Total reportable segment depreciation and amortization 26,917 26,104 81,083 78,288 Corporate and Other 723 488 1,836 1,464 Total depreciation and amortization $ 27,640 $ 26,592 $ 82,919 $ 79,752 (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. Nine months ended September 30, 2019 2018 (In thousands) Cash paid for capital expenditures (1): Utica Shale $ 2,473 $ 3,922 Williston Basin 20,288 18,463 DJ Basin 66,775 38,864 Permian Basin 43,422 67,640 Piceance Basin 1,919 5,302 Barnett Shale (2) 317 914 Marcellus Shale 347 557 Total reportable segment capital expenditures 135,541 135,662 Corporate and Other 16,122 1,371 Total cash paid for capital expenditures $ 151,663 $ 137,033 (1) Excludes cash paid for capital expenditures by Ohio Gathering due to equity method accounting. (2) For the nine months ended September 30, 2019, the amount includes sales tax reimbursements of $1.1 million. During the nine months ended September 30, 2019, Corporate and Other included cash paid of $0.7 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 amortization for deferred contract costs; and (ii) 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 September 30, Nine months ended September 30, 2019 2018 2019 2018 (In thousands) Reportable segment adjusted EBITDA Utica Shale $ 7,864 $ 6,521 $ 20,697 $ 24,459 Ohio Gathering 10,435 10,171 29,584 29,583 Williston Basin 13,840 19,849 49,224 54,849 DJ Basin 6,554 2,248 12,043 4,528 Permian Basin 210 — (996 ) — Piceance Basin 24,044 27,583 74,627 82,211 Barnett Shale 10,901 10,818 33,483 31,770 Marcellus Shale 4,958 5,550 14,735 18,769 Total of reportable segments' measures of profit $ 78,806 $ 82,740 $ 233,397 $ 246,169 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 September 30, Nine months ended September 30, 2019 2018 2019 2018 (In thousands) Reconciliation of (loss) income before income taxes and loss from equity method investees to total of reportable segments' measures of profit: (Loss) income before income taxes and loss from equity method investees $ (9,947 ) $ 58,589 $ (40,183 ) $ 7,488 Add: Corporate and Other expense 7,039 9,324 28,406 28,949 Interest expense 19,335 14,862 54,803 44,821 Deferred Purchase Price Obligation 3,760 (37,204 ) 11,899 53,759 Depreciation and amortization 27,640 26,592 82,919 79,752 Proportional adjusted EBITDA for equity method investees 10,435 10,171 29,584 29,583 Adjustments related to MVC shortfall payments 3,534 (2,999 ) 2,868 (6,541 ) Adjustments related to capital reimbursement activity (145 ) (106 ) (1,906 ) 49 Unit-based and noncash compensation 1,291 1,965 5,370 6,188 (Gain) loss on asset sales, net (347 ) 6 (1,595 ) (6 ) Long-lived asset impairment — 1,540 45,021 2,127 Goodwill impairment 16,211 — 16,211 — Total of reportable segments' measures of profit $ 78,806 $ 82,740 $ 233,397 $ 246,169 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 September 30, 2019 Williston Basin Piceance Basin Barnett Shale Total (In thousands) Adjustments related to expected MVC shortfall payments: $ 2,081 $ — $ 1,453 $ 3,534 Three months ended September 30, 2018 Williston Basin Piceance Basin Barnett Shale Total (In thousands) Adjustments related to expected MVC shortfall payments: $ 2,032 $ — $ (5,031 ) $ (2,999 ) Nine months ended September 30, 2019 Williston Basin Piceance Basin Barnett Shale Total (In thousands) Adjustments related to expected MVC shortfall payments: $ (1,387 ) $ (103 ) $ 4,358 $ 2,868 Nine months ended September 30, 2018 Williston Basin Piceance Basin Barnett Shale Total (In thousands) Adjustments related to expected MVC shortfall payments: $ (1,354 ) $ (93 ) $ (5,094 ) $ (6,541 ) |