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 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 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 160,558 83,153 Total assets $ 2,626,297 $ 2,574,098 (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 976 534 Total depreciation and amortization $ 29,900 $ 28,153 (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) 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 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 $ 438 $ (39,582 ) Add: Corporate and Other expense 12,077 16,650 Interest expense 23,828 22,742 Depreciation and amortization 29,900 28,153 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 ) | 4. SEGMENT INFORMATION As of December 31, 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. 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 17 to the 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 statements of operations, relates to Ohio Gathering and is recognized and disclosed on a one-month For the year ended December 31, 2019, other than the investment activity described in Note 8, 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 and transaction costs. Assets by reportable segment follow. December 31, 2019 2018 2017 (In thousands) Assets (1): Utica Shale $ 206,368 $ 207,357 $ 212,311 Ohio Gathering 275,000 649,250 690,485 Williston Basin 452,152 526,819 512,860 DJ Basin 205,308 166,580 79,438 Permian Basin 185,708 145,702 57,590 Piceance Basin 631,140 699,638 719,284 Barnett Shale 350,638 376,564 383,306 Marcellus Shale 184,631 208,790 217,362 Total reportable segment assets 2,490,945 2,980,700 2,872,636 Corporate and Other 83,153 56,838 35,332 Eliminations — (4,319 ) (249 ) Total assets $ 2,574,098 $ 3,033,219 $ 2,907,719 (1) At December 31, 2019, Corporate and Other included $34.7 million relating to our investment in Double E (included in the Investment in equity method investees caption of the consolidated balance sheet). At December 31, 2018, Corporate and Other included $9.6 million of capital expenditures relating to the Double E Project. Revenues by reportable segment follow. Year ended December 31, 2019 2018 2017 (In thousands) Revenues (1): Utica Shale $ 33,991 $ 35,233 $ 38,907 Williston Basin 105,651 123,650 161,503 DJ Basin 26,050 15,294 11,860 Permian Basin 20,303 958 — Piceance Basin 133,638 155,519 154,893 Barnett Shale 71,802 68,265 71,667 Marcellus Shale 24,471 29,573 30,394 Total reportable segments revenue 415,906 428,492 469,224 Corporate and Other 30,552 88,286 26,446 Eliminations (2,930 ) (10,125 ) (6,929 ) Total revenues $ 443,528 $ 506,653 $ 488,741 (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, 2019 2018 2017 Percentage of total revenues (1): Counterparty A - Piceance Basin 11 % * * Counterparty B - Williston Basin 10 % * 13 % Counterparty C - Piceance Shale * 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. Year ended December 31, 2019 2018 2017 (In thousands) Depreciation and amortization (1): Utica Shale $ 7,659 $ 7,672 $ 7,009 Williston Basin 19,829 22,642 33,772 DJ Basin 3,732 3,133 2,636 Permian Basin 4,868 243 — Piceance Basin 47,018 46,919 46,289 Barnett Shale (2) 16,575 15,325 15,001 Marcellus Shale 9,141 9,090 9,047 Total reportable segment depreciation and amortization 108,822 105,024 113,754 Corporate and Other 2,752 1,906 1,364 Total depreciation and amortization $ 111,574 $ 106,930 $ 115,118 (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. Year ended December 31, 2019 2018 2017 (In thousands) Cash paid for capital expenditures (1): Utica Shale $ 3,902 $ 5,719 $ 22,921 Williston Basin 30,861 25,202 17,309 DJ Basin 80,487 64,920 7,150 Permian Basin 44,955 83,823 56,020 Piceance Basin 1,946 7,887 16,564 Barnett Shale (2) 184 1,370 569 Marcellus Shale 693 1,030 641 Total reportable segment capital expenditures 163,028 189,951 121,174 Corporate and Other 19,263 10,635 3,041 Total cash paid for capital expenditures $ 182,291 $ 200,586 $ 124,215 (1) Excludes cash paid for capital expenditures by Ohio Gathering due to equity method accounting. (2) For the year ended December 31, 2019, the amount includes sales tax reimbursements of $1.1 million. For the years ended December 31, 2019 and 2018, Corporate and Other includes cash paid of $1.6 million and $3.3 million, respectively, 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. Year ended December 31, 2019 2018 2017 (In thousands) Reportable segment adjusted EBITDA Utica Shale $ 29,292 $ 30,285 $ 34,011 Ohio Gathering 39,126 39,969 41,246 Williston Basin 69,437 76,701 66,413 DJ Basin 18,668 7,558 6,624 Permian Basin (879 ) (1,200 ) — Piceance Basin 98,765 111,042 111,113 Barnett Shale 43,043 43,268 46,232 Marcellus Shale 20,051 24,267 23,888 Total of reportable segments’ measures of profit $ 317,503 $ 331,890 $ 329,527 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, 2019 2018 2017 (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 $ (54,644 ) $ 45,575 $ (134,187 ) Add: Corporate and Other expense 44,808 45,131 40,803 Interest expense 91,966 82,830 88,701 Early extinguishment of debt — — 22,039 Depreciation and amortization 111,574 106,930 115,118 Proportional adjusted EBITDA for equity method investees 39,126 39,969 41,246 Adjustments related to MVC shortfall payments 3,476 (3,632 ) (41,373 ) Adjustments related to capital reimbursement activity (2,156 ) (427 ) — Unit-based and noncash compensation 8,171 8,328 7,951 (Gain) loss on asset sales, net (1,536 ) — 527 Long-lived asset impairment 60,507 7,186 188,702 Goodwill impairment 16,211 — — Total of reportable segments’ measures of profit $ 317,503 $ 331,890 $ 329,527 For the years ended December 31, 2019 and 2018, 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. For the year ended December 31, 2017, 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 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, 2019 Williston Basin Piceance Basin Barnett Shale Total (In thousands) Adjustments related to expected MVC shortfall payments: $ — $ (103 ) $ 3,579 $ 3,476 Year ended December 31, 2018 Williston Basin Piceance Basin Barnett Shale Total (In thousands) Adjustments related to expected 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 ) |