Segment Information

9 Months Ended

Sep. 30, 2015

Segment Information [Abstract]

Segment Information

(13) SEGMENT INFORMATION

The Company’s reportable business segments have been identified based on the differences in products or services provided. Revenues for the E&P segment are derived from the production and sale of natural gas and liquids. The Midstream Services segment generates revenue through the marketing of both Company and third-party produced natural gas and liquids volumes and through gathering fees associated with the transportation of natural gas to market.

Summarized financial information for the Company’s reportable segments is shown in the following table. The accounting policies of the segments are the same as those described in Note 1 of the Notes to Consolidated Financial Statements included in Item 8 of the 2014 Annual Report. Management evaluates the performance of its segments based on operating income, defined as operating revenues less operating costs. Income before income taxes, for the purpose of reconciling the operating income amount shown below to consolidated income before income taxes, is the sum of operating income, interest expense, gain (loss) on derivatives, and other income (loss). The “Other” column includes items not related to the Company’s reportable segments including real estate and corporate items.

	Exploration
	and		Midstream
	Production		Services		Other			Total
	(in millions)
Three months ended September 30, 2015:
Revenues from external customers	$	491	$	258	$	–		$	749
Intersegment revenues		(3)		489		–			486
Operating income (loss)		(2,910)		68		–			(2,842)
Gain on derivatives		15		–		–			15
Depreciation, depletion and amortization		255		20		–			275
Impairment of natural gas and oil properties		2,839		–		–			2,839
Provision (benefit) for income taxes (1)		(1,112)		24		–			(1,088)
Assets		9,159		1,329		237	(2)		10,725
Capital investments (3)		461		7		–			468
Three months ended September 30, 2014:
Revenues from external customers	$	652	$	276	$	–		$	928
Intersegment revenues		3		707		–			710
Operating income		189		97		–			286
Gain (loss) on derivatives		79		–		(1)			78
Depreciation, depletion and amortization		223		15		–			238
Interest expense(1)		10		2		1			13
Provision (benefit) for income taxes(1)		107		34		(1)			140
Assets		7,461		1,494		222	(2)		9,177
Capital investments(3)		531		34		9			574

	Exploration
	and		Midstream
	Production		Services		Other			Total
	(in millions)
Nine months ended September 30, 2015:
Revenues from external customers	$	1,647	$	798	$	1		$	2,446
Intersegment revenues		(14)		1,653		–			1,639
Operating income (loss)		(4,471)		511		(1)			(3,961)
Other income, net		2		–		–			2
Gain (loss) on derivatives		32		–		(2)			30
Depreciation, depletion and amortization		824		52		–			876
Impairment of natural gas and oil properties		4,374		–		–			4,374
Interest expense (1)		45		7		–			52
Provision (benefit) for income taxes (1)		(1,724)		193		(1)			(1,532)
Assets		9,159		1,329		237	(2)		10,725
Capital investments (3)		1,880		164		10			2,054
Nine months ended September 30, 2014:
Revenues from external customers	$	2,169	$	907	$	–		$	3,076
Intersegment revenues		13		2,437		–			2,450
Operating income (loss)		817		272		(1)			1,088
Other income, net		1		–		–			1
Loss on derivatives		(27)		(1)		(1)			(29)
Depreciation, depletion and amortization		650		43		–			693
Interest expense(1)		29		9		1			39
Provision (benefit) for income taxes(1)		309		101		(1)			409
Assets		7,461		1,494		222	(2)		9,177
Capital investments(3)		1,706		109		22			1,837

⁽¹⁾ Interest expense and the provision for income taxes by segment are allocated as they are incurred at the corporate level.

⁽²⁾ Other assets represent corporate assets not allocated to segments and assets for non-reportable segments.

⁽³⁾ Capital investments includes a $6 million increase and a $53 million increase for the three months ended September 30, 2015 and 2014, respectively, and a $5 million decrease and a $114 million increase for the nine months ended September 30, 2015 and 2014, respectively, relating to the change in accrued expenditures between periods.  E&P capital for the nine month period ended September 30, 2015 includes approximately $516 million related to the WPX Property and Statoil Property Acquisitions. Midstream capital for the nine months ended September 30, 2015 includes approximately $119 million associated with the intangible asset related to the firm transportation acquired through the WPX Property Acquisition.

Included in intersegment revenues of the Midstream Services segment are $414 million and $612 million for the three months ended September 30, 2015 and 2014, respectively, and $1.4  billion and $2.2 billion for the nine months ended September 30, 2015 and 2014, respectively, for marketing of the Company’s E&P sales. Corporate assets include cash and cash equivalents, furniture and fixtures, prepaid debt and other costs. Corporate general and administrative costs, depreciation expense and taxes other than income are allocated to the segments. The Company’s E&P segment assets included $69 million and $78 million at September 30, 2015 and 2014, respectively, related to the Company’s activities in Canada.