SEGMENT INFORMATION | 4. SEGMENT INFORMATION As of March 31, 2020, 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. Until March 22, 2019, we owned Tioga Midstream, a crude oil, produced water and associated natural gas gathering system operating in the Williston Basin. Until December 1, 2019, we owned certain assets in the Red Rock Gathering system operating in the Piceance Basin. Refer to Note 16 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 Ohio Gathering. Income or loss from equity method investees, as reflected on the unaudited condensed consolidated statements of operations, relates to Ohio Gathering and is recognized and disclosed on a one-month lag (see Note 7). For the three months ended March 31, 2020, other than the investment activity described in Note 7, Double E did not have any results of operations given that the Double E Project is currently under development. The Double E 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, certain natural gas and crude oil marketing services, construction management fees related to the Double E Project and transaction costs. Assets by reportable segment follow. March 31, 2020 December 31, 2019 (In thousands) Assets (1): Utica Shale $ 205,341 $ 206,368 Ohio Gathering 271,268 275,000 Williston Basin 452,684 452,152 DJ Basin 200,473 205,308 Permian Basin 184,043 185,708 Piceance Basin 622,403 631,140 Barnett Shale 345,248 350,638 Marcellus Shale 184,279 184,631 Total reportable segment assets 2,465,739 2,490,945 Corporate and Other 159,196 82,506 Total assets $ 2,624,935 $ 2,573,451 (1) At March 31, 2020, Corporate and Other included $92.3 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, 2019, Corporate and Other included $34.7 million relating to our investment in Double E. Revenues by reportable segment follow. Three months ended March 31, 2020 2019 (In thousands) Revenues (1): Utica Shale $ 6,962 $ 7,495 Williston Basin 31,263 34,199 DJ Basin 7,959 4,816 Permian Basin 7,010 4,619 Piceance Basin 29,257 35,280 Barnett Shale 15,574 15,285 Marcellus Shale 6,235 6,197 Total reportable segments revenue 104,260 107,891 Corporate and Other 643 26,838 Eliminations — (3,321 ) Total revenues $ 104,903 $ 131,408 (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 March 31, 2020 2019 Percentage of total revenues (1): Counterparty A - Piceance Basin 11 % * (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 gas gathering contracts as reported in Other revenues, by reportable segment follows. Three months ended March 31, 2020 2019 (In thousands) Depreciation and amortization (1): Utica Shale $ 1,927 $ 1,908 Williston Basin 6,495 5,436 DJ Basin 1,527 799 Permian Basin 1,345 1,072 Piceance Basin 11,298 11,791 Barnett Shale (2) 4,032 4,330 Marcellus Shale 2,300 2,283 Total reportable segment depreciation and amortization 28,924 27,619 Corporate and Other 939 497 Total depreciation and amortization $ 29,863 $ 28,116 (1) Excludes depreciation and amortization recognized by Ohio Gathering due to equity method accounting. (2) Includes the amortization expense associated with our favorable gas gathering contracts as reported in Other revenues . Cash paid for capital expenditures by reportable segment follow. Three months ended March 31, 2020 2019 (In thousands) Cash paid for capital expenditures (1): Utica Shale $ 909 $ 101 Williston Basin 4,943 8,023 DJ Basin 6,298 28,356 Permian Basin 3,281 7,057 Piceance Basin 346 1,226 Barnett Shale (2) 657 (118 ) Marcellus Shale 422 102 Total reportable segment capital expenditures 16,856 44,747 Corporate and Other 1,727 16,101 Total cash paid for capital expenditures $ 18,583 $ 60,848 (1) Excludes cash paid for capital expenditures by Ohio Gathering due to equity method accounting. (2) For the three months ended March 31, 2019, the amount includes sales tax reimbursements of $1.1 million. During the three months ended March 31, 2019, Corporate and Other included cash paid of $0.3 million for corporate purposes; the remainder represents capital expenditures relating to the Double E 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, (ix) other noncash expenses or losses, less other noncash income or gains and (x) restructuring expenses. 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), certain 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 March 31, 2020 2019 (In thousands) Reportable segment adjusted EBITDA Utica Shale $ 5,928 $ 6,193 Ohio Gathering 7,939 9,210 Williston Basin 16,192 18,734 DJ Basin 5,911 2,673 Permian Basin 1,581 (550 ) Piceance Basin 23,557 25,999 Barnett Shale 8,760 11,374 Marcellus Shale 5,320 5,142 Total of reportable segments' measures of profit $ 75,188 $ 78,775 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 March 31, 2020 2019 (In thousands) Reconciliation of income (loss) before income taxes and income (loss) from equity method investees to total of reportable segments' measures of profit: Income (loss) before income taxes and income (loss) from equity method investees $ 1,970 $ (36,266 ) Add: Corporate and Other expense 11,895 14,159 Interest expense 20,218 17,527 Deferred Purchase Price Obligation 2,297 4,427 Depreciation and amortization 29,863 28,116 Proportional adjusted EBITDA for equity method investees 7,939 9,210 Adjustments related to MVC shortfall payments (5,442 ) (4,199 ) Adjustments related to capital reimbursement activity (211 ) (715 ) Unit-based and noncash compensation 2,723 2,526 Loss (gain) on asset sales, net 115 (961 ) Long-lived asset impairment 3,821 44,951 Total of reportable segments' measures of profit $ 75,188 $ 78,775 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 March 31, 2020 Williston Basin Piceance Basin Barnett Shale Total (In thousands) Adjustments related to expected MVC shortfall payments: $ (5,665 ) $ 223 $ — $ (5,442 ) Three months ended March 31, 2019 Williston Basin Piceance Basin Barnett Shale Total (In thousands) Adjustments related to expected MVC shortfall payments: $ (5,549 ) $ (103 ) $ 1,453 $ (4,199 ) |