Operations by Line of Business

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Operations by Line of Business

QEP’s two lines of business include oil and gas exploration and production (QEP Energy) and oil and gas marketing, operation of a gas gathering system and an underground gas storage facility and corporate (QEP Marketing and Other). The lines of business are managed separately and, therefore, the financial information is presented separately due to the distinct differences in the nature of operations of each line of business, among other factors.

Our financial results for prior periods have been revised, in accordance with GAAP, to reflect the impact of the Midstream Sale. See Note 3 – Discontinued Operations for detailed information on the Midstream Sale.

The following table is a summary of operating results for the year ended December 31, 2015, by line of business:

	QEP Energy			QEP Marketing  and Other			Eliminations			QEP Consolidated
	(in millions)
REVENUES
From unaffiliated customers	$	1,477.2		$	654.5		$	(113.1	)	$	2,018.6
From affiliated customers	—			946.8			(946.8		)	—
Total Revenues	1,477.2			1,601.3			(1,059.9		)	2,018.6
OPERATING EXPENSES
Purchased gas and oil expense	87.3			1,588.1			(1,048.6		)	626.8
Lease operating expense	238.8			—			—			238.8
Gas, oil and NGL transportation and other handling costs	300.2			—			(8.9		)	291.3
Gathering and other expense	—			5.8			—			5.8
General and administrative	176.8			6.7			(2.4		)	181.1
Production and property taxes	115.1			2.5			—			117.6
Depreciation, depletion and amortization	870.8			10.3			—			881.1
Impairment and exploration expenses	58.3			—			—			58.3
Total Operating Expenses	1,847.3			1,613.4			(1,059.9		)	2,400.8
Net gain (loss) from asset sales	9.7			(5.1		)	—			4.6
OPERATING INCOME (LOSS)	(360.4		)	(17.2		)	—			(377.6		)
Realized and unrealized gains (losses) on derivative contracts	274.2			3.0			—			277.2
Interest and other income	1.9			205.7			(204.6		)	3.0
Interest expense	(204.5		)	(145.7		)	204.6			(145.6		)
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	(288.8		)	45.8			—			(243.0		)
Income tax (provision) benefit	105.9			(12.3		)	—			93.6
NET INCOME (LOSS)	$	(182.9	)	$	33.5		$	—		$	(149.4	)
Identifiable total assets	$	7,799.5		$	626.0		$	—		$	8,425.5
Cash capital expenditures	$	1,233.3		$	6.1		$	—		$	1,239.4
Accrued capital expenditures	$	1,105.7		$	4.5		$	—		$	1,110.2

The following table is a summary of operating results for the year ended December 31, 2014, by line of business:

	QEP Energy			QEP Marketing and Other			Eliminations			Discontinued Operations		QEP Consolidated
	(in millions)
REVENUES
From unaffiliated customers(1)	$	2,524.6		$	889.7		$	(121.1	)	$	—	$	3,293.2
From affiliated customers	—			1,492.6			(1,492.6		)	—		—
Total Revenues	2,524.6			2,382.3			(1,613.7		)	—		3,293.2
OPERATING EXPENSES
Purchased gas and oil expense(1)	150.0			2,356.6			(1,596.5		)	—		910.1
Lease operating expense	240.1			—			—			—		240.1
Gas, oil and NGL transportation and other handling costs	291.5			—			(13.9		)	—		277.6
Gathering and other expense	—			6.8			(0.1		)	—		6.7
General and administrative	201.3			6.3			(3.2		)	—		204.4
Production and property taxes	204.0			1.2			—			—		205.2
Depreciation, depletion and amortization	984.4			10.3			—			—		994.7
Impairment and exploration expenses	1,153.1			—			—			—		1,153.1
Total Operating Expenses	3,224.4			2,381.2			(1,613.7		)	—		3,991.9
Net gain (loss) from asset sales	(148.6		)	—			—			—		(148.6		)
OPERATING INCOME (LOSS)	(848.4		)	1.1			—			—		(847.3		)
Realized and unrealized gains (losses) on derivative contracts	367.2			(3.9		)	—			—		363.3
Interest and other income	11.8			209.7			(208.7		)	—		12.8
Income from unconsolidated affiliates	0.3			—			—			—		0.3
Loss from early extinguishment of debt	—			(2.0		)	—			—		(2.0		)
Interest expense	(210.3		)	(167.5		)	208.7			—		(169.1		)
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	(679.4		)	37.4			—			—		(642.0		)
Income tax (provision) benefit	246.9			(14.4		)	—					232.5
NET INCOME (LOSS) FROM CONTINUING OPERATIONS	(432.5		)	23.0			—			—		(409.5		)
Net income from discontinued operations, net of income tax	—			—			—			1,193.9		1,193.9
NET INCOME (LOSS)	$	(432.5	)	$	23.0		$	—		$	1,193.9	$	784.4
Identifiable total assets	$	8,001.1		$	1,285.7		$	—		$	—	$	9,286.8
Cash capital expenditures	$	2,660.3		$	10.9		$	—		$	55.2	$	2,726.4
Accrued capital expenditures	$	2,670.5		$	13.6		$	—		$	50.7	$	2,734.8

____________________________

⁽¹⁾  In the fourth quarter of 2015, the Company determined that certain purchased oil transactions that had been included in "Revenues" and "Purchased gas and oil expense" on a gross basis should have been reported net, as the transactions were with the same counterparty and were entered into in contemplation of one another. The revisions had no effect on the Company’s operating income or net income. The following table details the impact to Eliminations of the revisions to the Consolidated Statement of Operations. See Note 1 – Summary of Significant Accounting Policies for additional information.

	Eliminations as Reported			Eliminations as Revised			Change
	(in millions)
From unaffiliated customers	$	—		$	(121.1	)	$	(121.1	)
Purchased gas and oil expense	(1,475.4		)	(1,596.5		)	(121.1		)

The following table is a summary of operating results for the year ended December 31, 2013, by line of business:

	QEP Energy			QEP Marketing and Other			Eliminations			Discontinued Operations		QEP Consolidated
	(in millions)
REVENUES
From unaffiliated customers	$	2,092.8		$	592.3		$	—		$	—	$	2,685.1
From affiliated customers	—			1,008.9			(1,008.9		)	—		—
Total Revenues	2,092.8			1,601.2			(1,008.9		)	—		2,685.1
OPERATING EXPENSES
Purchased gas and oil expense	197.1			1,570.5			(984.1		)	—		783.5
Lease operating expense	181.3			—			—			—		181.3
Gas, oil and NGL transportation and other handling costs	242.2			—			(20.2		)	—		222.0
Gathering and other expense	—			8.4			—			—		8.4
General and administrative	160.6			4.4			(4.6		)	—		160.4
Production and property taxes	159.8			1.5			—			—		161.3
Depreciation, depletion and amortization	954.2			9.6			—			—		963.8
Impairment and exploration expenses	104.9			—			—			—		104.9
Total Operating Expenses	2,000.1			1,594.4			(1,008.9		)	—		2,585.6
Net gain from asset sales	104.1			(0.6		)	—			—		103.5
OPERATING INCOME (LOSS)	196.8			6.2			—			—		203.0
Realized and unrealized gains (losses) on derivative contracts	59.1			(0.2		)	—			—		58.9
Interest and other income	3.6			206.9			(195.3		)	—		15.2
Income from unconsolidated affiliates	0.2			—			—			—		0.2
Interest expense	(192.6		)	(167.8		)	195.3			—		(165.1		)
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	67.1			45.1			—			—		112.2
Income tax (provision) benefit	(41.5		)	(18.6		)	—			—		(60.1		)
NET INCOME (LOSS) FROM CONTINUING OPERATIONS	25.6			26.5			—			—		52.1
Net income from discontinued operations, net of income tax	—			—			—			107.3		107.3
NET INCOME (LOSS)	$	25.6		$	26.5		$	—		$	107.3	$	159.4
Identifiable assets	$	7,937.0		$	182.2		$	—		$	1,289.7	$	9,408.9
Cash capital expenditures	$	1,488.6		$	25.1		$	—		$	88.9	$	1,602.6
Accrued capital expenditures	$	1,467.2		$	24.6		$	—		$	85.6	$	1,577.4