Discontinued Operations

12 Months Ended

Dec. 31, 2015

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

On December 2, 2014, the Company closed the sale of substantially all of its midstream business, including its ownership interest in QEP Midstream Partners, LP (QEP Midstream) to Tesoro Logistics LP for total cash proceeds of approximately $2.5 billion, including $230.0 million to refinance debt at QEP Midstream, and QEP recorded a pre-tax gain of approximately $1.8 billion for the year endedDecember 31, 2014 (Midstream Sale).

The operating results of QEP Field Services Company (QEP Field Services), excluding Haynesville Gathering (the Discontinued Operations of QEP Field Services), was classified as discontinued operations on the Consolidated Statements of Operations and Notes accompanying the Consolidated Financial Statements for the years ended December 31, 2014 and 2013. QEP will have continuing cash outflows to the entities sold as a part of the Midstream Sale for gathering, processing and water handling costs in Pinedale, the Uinta Basin and a portion of its Williston Basin operations. The contracts related to these cash flows vary in length from month-to-month to over a year and will be reviewed periodically in the normal course of business. Historically, these transactions were eliminated in consolidation, as they represented transactions between two related entities but are now reflected as part of the continuing operations for QEP. For the years ended December 31, 2015, 2014 and 2013, cash outflows for these transactions included in continuing operations were $131.8 million, $145.3 million and $124.6 million, respectively.

In 2013, in connection with QEP's plan to separate its midstream business, the Board of Directors approved an employee retention plan to provide substantially all QEP Field Services' employees as of December 1, 2013, with a one-time lump-sum cash payment on the earlier of December 31, 2014, or whenever the separation of QEP Field Services occurred, conditioned on continued employment with QEP Field Services or a successor through the payment date unless the employee is terminated prior to such date. QEP recognized $10.4 million of costs under this retention plan during the year ended December 31, 2014, which is included within "Discontinued operations, net of income tax" on the Consolidated Statements of Operations.

Consolidated Statement of Operations

The Discontinued Operations of QEP Field Services are summarized below:

	Year Ended December 31,
	2014			2013
	(in millions)
REVENUES
NGL sales	$	109.3		$	101.9
Other revenues	140.9			166.6
Purchased gas and oil sales(1)	(47.1		)	(17.8		)
Total Revenues	203.1			250.7
OPERATING EXPENSES
Purchased gas and oil expense(1)	(48.5		)	(17.6		)
Lease operating expense(1)	(5.5		)	(3.5		)
Gas, oil and NGL transport & other handling costs(1)	(55.4		)	(80.6		)
Gathering, processing, and other	85.9			82.2
General and administrative	42.1			30.7
Production and property taxes	7.3			5.2
Depreciation, depletion and amortization	45.9			52.2
Total Operating Expenses	71.8			68.6
Net gain (loss) from asset sales	1,793.4			(0.5		)
OPERATING INCOME	1,924.7			181.6
Interest and other income (expense)	0.3			(10.0		)
Income from unconsolidated affiliates	4.9			5.6
Loss on early extinguishment of debt	(2.4		)	—
Interest expense (income)	(3.8		)	1.8
INCOME FROM DISCONTINUED OPERATIONS BEFORE INCOME TAXES (2)	1,923.7			179.0
Income tax provision	(708.2		)	(59.7		)
NET INCOME FROM DISCONTINUED OPERATIONS	1,215.5			119.3
Net income attributable to noncontrolling interest	(21.6		)	(12.0		)
NET INCOME FROM DISCONTINUED OPERATIONS, NET OF INCOME TAX	$	1,193.9		$	107.3

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⁽¹⁾  Includes discontinued intercompany eliminations.

⁽²⁾  Includes income from discontinued operations before income taxes attributable to QEP from QEP Midstream (of which QEP owned 57.8%) of $28.9 million and $33.5 million for the years ended December 31, 2014 and 2013, respectively.

Consolidated Statement of Cash Flows

The impact of the Discontinued Operations of QEP Field Services on the Consolidated Statements of Cash Flows for "Depreciation, depletion and amortization" contained in "Cash flows from operating activities" was $45.9 million and $52.2 million for the years ended December 31, 2014 and 2013, respectively. The impact on cash used for "Property, plant and equipment, including dry hole exploratory well expense" contained in "Cash flows from investing activities" was $55.2 million and $88.9 million for the years ended December 31, 2014 and 2013, respectively.