SEGMENT INFORMATION | 4. SEGMENT INFORMATION As of June 30, 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, Bison Midstream and Meadowlark 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. U ntil 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 1 6 to the unaudited condensed consolidated financial statements for details on the sale of Tioga Midstream and on the sale of certain assets in the Red Rock Gathering system . 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 and six months ended June 30, 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. June 30, 2020 December 31, 2019 (In thousands) Assets (1): Utica Shale $ 210,592 $ 206,368 Ohio Gathering 269,504 275,000 Williston Basin 453,327 452,152 DJ Basin 203,866 205,308 Permian Basin 169,710 185,708 Piceance Basin 605,786 631,140 Barnett Shale 357,824 350,638 Marcellus Shale 183,896 184,631 Total reportable segment assets 2,454,505 2,490,945 Corporate and Other 131,997 83,153 Total assets $ 2,586,502 $ 2,574,098 (1) At June 30, 2020, Corporate and Other included $113.6 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 June 30, Six months ended June 30, 2020 2019 2020 2019 (In thousands) Revenues (1): Utica Shale $ 11,538 $ 7,591 $ 18,500 $ 15,086 Williston Basin 18,314 22,123 49,577 56,322 DJ Basin 6,292 5,156 14,251 9,972 Permian Basin 7,059 3,041 14,069 7,660 Piceance Basin 27,719 33,604 56,976 68,884 Barnett Shale 14,513 19,347 30,087 34,632 Marcellus Shale 5,928 5,897 12,163 12,094 Total reportable segments revenue 91,363 96,759 195,623 204,650 Corporate and Other 644 3,824 1,287 30,662 Eliminations — (897 ) — (4,218 ) Total revenues $ 92,007 $ 99,686 $ 196,910 $ 231,094 (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, 2020 2019 2020 2019 Percentage of total revenues (1): Counterparty A - Piceance Basin 11 % 12 % 11 % 11 % Counterparty B - Williston Basin * 11 % * 10 % Counterparty C - Barnett Shale * 14 % * 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 gas gathering contracts as reported in Other revenues, by reportable segment follows. Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 (In thousands) Depreciation and amortization (1): Utica Shale $ 1,920 $ 1,923 $ 3,847 $ 3,831 Williston Basin 6,487 4,734 12,982 10,170 DJ Basin 1,502 464 3,029 1,263 Permian Basin 1,387 1,163 2,732 2,235 Piceance Basin 11,306 11,810 22,604 23,601 Barnett Shale (2) 4,023 4,167 8,055 8,497 Marcellus Shale 2,300 2,286 4,600 4,569 Total reportable segment depreciation and amortization 28,925 26,547 57,849 54,166 Corporate and Other 941 653 1,917 1,187 Total depreciation and amortization $ 29,866 $ 27,200 $ 59,766 $ 55,353 (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. Six months ended June 30, 2020 2019 (In thousands) Cash paid for capital expenditures (1): Utica Shale $ 1,482 $ 1,065 Williston Basin 7,423 14,230 DJ Basin 8,428 50,373 Permian Basin 4,921 28,163 Piceance Basin 404 1,497 Barnett Shale (2) 869 (37 ) Marcellus Shale 430 108 Total reportable segment capital expenditures 23,957 95,399 Corporate and Other 3,469 15,693 Total cash paid for capital expenditures $ 27,426 $ 111,092 (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 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) impairments, (viii) other noncash expenses or losses, less other noncash income or gains and (ix) 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 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, 2020 2019 2020 2019 (In thousands) Reportable segment adjusted EBITDA Utica Shale $ 10,693 $ 6,640 $ 16,621 $ 12,833 Ohio Gathering 7,514 9,939 15,453 19,149 Williston Basin 12,727 16,650 28,919 35,384 DJ Basin 4,339 2,816 10,250 5,489 Permian Basin 1,828 (656 ) 3,409 (1,206 ) Piceance Basin 21,734 24,584 45,291 50,583 Barnett Shale 8,510 11,208 17,270 22,582 Marcellus Shale 4,888 4,635 10,208 9,777 Total of reportable segments' measures of profit $ 72,233 $ 75,816 $ 147,421 $ 154,591 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, 2020 2019 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 $ 53,292 $ 4,256 $ 53,730 $ (35,326 ) Add: Corporate and Other expense 9,533 8,255 21,610 24,905 Interest expense 21,990 22,343 45,818 45,085 Gain on early extinguishment of debt (54,235 ) — (54,235 ) — Depreciation and amortization 29,866 27,200 59,766 55,353 Proportional adjusted EBITDA for equity method investees 7,514 9,939 15,453 19,149 Adjustments related to MVC shortfall payments 2,291 3,533 (3,151 ) (666 ) Adjustments related to capital reimbursement activity (237 ) (1,046 ) (448 ) (1,761 ) Unit-based and noncash compensation 1,846 1,553 4,569 4,079 Gain on asset sales, net (281 ) (287 ) (166 ) (1,248 ) Long-lived asset impairment 654 70 4,475 45,021 Total of reportable segments' measures of profit $ 72,233 $ 75,816 $ 147,421 $ 154,591 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, 2020 Williston Basin Piceance Basin Barnett Shale Total (In thousands) Adjustments related to expected MVC shortfall payments: $ 2,124 $ 167 $ — $ 2,291 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 Six months ended June 30, 2020 Williston Basin Piceance Basin Barnett Shale Total (In thousands) Adjustments related to expected MVC shortfall payments: $ (3,541 ) $ 390 $ — $ (3,151 ) 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 ) |