Permian Basin Acquisition

On February 25, 2014, QEP Energy acquired oil and gas properties in the Permian Basin of Texas for an aggregate purchase price of $941.8 million (the Permian Basin Acquisition). The acquired properties consisted of approximately 26,500 net acres of producing and undeveloped oil and gas properties and approximately 270 vertical producing wells in the Permian Basin, which created a new core area of operation for QEP Energy.

The Permian Basin Acquisition met the definition of a business combination under ASC 805, Business Combinations, as it included significant proved properties. QEP allocated the cost of the Permian Basin Acquisition to assets acquired and liabilities assumed based on fair values as of the acquisition date. Revenues of $149.9 million and a net loss of $2.8 million were generated from the acquired properties during the year ended December 31, 2015. Revenues of $159.5 million and a net loss of $438.3 million were generated from the acquired properties from February 25, 2014, to December 31, 2014, and are included in QEP's Consolidated Statements of Operations. The significant net loss in 2014 was primarily due to an impairment of proved properties of $467.7 million recognized in 2014 due to the decrease in the future oil prices.

The following table presents a summary of the Company's purchase accounting entries (in millions):



Consideration:
Total consideration	$	941.8

Amounts recognized for fair value of assets acquired and liabilities assumed:
Proved properties	$	472.1
Unproved properties	480.6
Asset retirement obligations	(9.7		)
Liabilities assumed	(1.2		)
Total fair value	$	941.8

The following unaudited, pro forma results of operations are provided for the years ended December 31, 2014 and 2013. Pro forma results are not provided for the year ended December 31, 2015, because the Permian Basin Acquisition occurred during the first quarter of 2014, and therefore the Permian Basin results are included in QEP's results for this period. These supplemental pro forma results of operations are provided for illustrative purposes only and may not be indicative of the actual results that would have been achieved by the acquired properties for the period presented, or that may be achieved by such properties in the future. Future results may vary significantly from the results reflected in this pro forma financial information because of future events and transactions, as well as other factors. The pro forma information is based on QEP's consolidated results of operations for the years ended December 31, 2014 and 2013, the acquired properties' historical results of operations, and estimates of the effect of the transaction on the combined results. The pro forma results of operations have been prepared by adjusting the historical results of QEP to include the historical results of the acquired properties based on information provided by the seller and the impact of the purchase price allocation. The pro forma results of operations do not include any cost savings or other synergies that may result from the Permian Basin Acquisition or any estimated costs that have been or will be incurred by the Company to integrate the acquired properties.



	Year ended December 31,
	2014				2013
	Actual		Pro Forma		Actual		Pro Forma
	(in millions, except per share amounts)
Revenues	$	3,293.2	$	3,319.3	$	2,685.1	$	2,858.8
Net income	784.4		791.4		159.4		195.3
Earnings per common share
Basic	$	4.36	$	4.40	$	0.89	$	1.09
Diluted	4.36		4.40		0.89		1.09

Other Acquisitions

During the year ended December 31, 2015, QEP acquired various oil and gas properties primarily in the Williston and Permian basins for a total purchase price of $98.3 million, which included an acquisition of additional interests in QEP's operated wells and undeveloped acreage. As a part of the purchase price allocation, the Company recorded $14.3 million of goodwill.

Divestitures

During 2015, QEP sold its interest in certain non-core properties for aggregate proceeds of $31.7 million and a recorded a pre-tax gain on sale of $21.0 million.

During 2014, QEP sold its interest in certain non-core properties in the Midcontinent and Williston Basin for aggregate proceeds of $783.8 million. For the year ended December 31, 2014, QEP recorded a pre-tax loss on sale of $147.0 million. QEP recorded a pre-tax loss on sale of $9.3 million for the year ended December 31, 2015, due to post-closing purchase price adjustments from the sale of such properties.

During 2013, QEP Energy sold its interests in several non-core properties for aggregate proceeds of $205.8 million and recorded a pre-tax gain on sale of $105.7 million.

These gains and losses are reported on the Consolidated Statements of Operations within "Net gain (loss) from asset sales".