Divestitures

Divestitures Recorded in Continuing Operations

For the three and nine months ended September 30, 2015, the Company recorded net gains on disposition of assets in continuing operations of $779 million and $782 million, respectively, as compared to $1 million and $11 million for the same respective periods in 2014. The net gains attributable to the disposition of assets included the following:

•

EFS Midstream. In November 2014, the Company announced that it was pursuing the divestment of its 50.1 percent equity interest in EFS Midstream LLC ("EFS Midstream"), which was accounted for under the equity method of accounting for investments in unconsolidated affiliates. In July 2015, the Company closed on the sale of its interest in EFS Midstream to an unaffiliated third party, with the Company receiving total consideration of $1.0 billion, of which $530 million was received at closing and the remaining approximately $500 million will be received in July 2016. The amount to be received in July 2016, less imputed interest, is included in notes receivable in the accompanying consolidated balance sheets and represents a noncash investing activity. Associated with the sale, the Company recorded a pretax gain of $778 million during the third quarter of 2015.

•

Vertical drilling rigs. In March 2014, the Company completed the sale of Sendero Drilling Company, LLC ("Sendero") to Sendero's minority interest owner for cash proceeds of $31 million, which resulted in a gain of $1 million. As part of the sales agreement, the Company committed to a lease agreement with Sendero for 12 vertical rigs through December 31, 2015, and eight vertical rigs in 2016. During the three and nine months ended September 30, 2015, the Company incurred $10 million and $30 million of idle drilling rig fees related to the leased Sendero rigs.


•	Permian Basin. During February 2014, the Company completed the sale of proved and unproved properties in Gaines and Dawson counties in the Spraberry field in West Texas for cash proceeds of $72 million, which resulted in a gain of $2 million.

Divestitures Recorded as Discontinued Operations

During 2014, the Company completed the sales of its (i) net assets in the Hugoton field in southwest Kansas for cash proceeds of $328 million, (ii) net assets in the Barnett Shale field in North Texas for cash proceeds of $150 million and (iii) capital stock in its Alaskan subsidiary ("Pioneer Alaska") for cash proceeds of $267 million. The Company has included its Hugoton, Barnett Shale and Pioneer Alaska results of operations in loss from discontinued operations, net of tax, in the accompanying consolidated statements of operations.

The following table represents the components of the Company's discontinued operations for the three and nine months ended September 30, 2015 and 2014:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(in millions)

Revenues and other income (a)	$	—		$	50		$	1		$	234
Costs and expenses (b)	(2		)	(108		)	(10		)	(408		)
Loss from discontinued operations before income taxes	(2		)	(58		)	(9		)	(174		)
Current tax provision	—			—			—			(1		)
Deferred tax benefit	—			21			3			62
Loss from discontinued operations, net of tax	$	(2	)	$	(37	)	$	(6	)	$	(113	)

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(a)	Primarily reflects oil and gas revenues and cash received associated with Alaskan Petroleum Production Tax credits on qualifying capital expenditures.

(b)

Costs and expenses during 2015 were primarily related to an arbitration award associated with plugging and abandonment obligations for two Gulf of Mexico wells from which Pioneer withdrew in 2009. Costs and expenses in 2014 were primarily comprised of oil and gas production costs and impairment charges. See Note D for information about impairment charges on the Barnett Shale assets and Pioneer Alaska.