SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2020

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 Marketing segment generates revenue through the marketing of both Company and third-party produced natural gas and liquids volumes.

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 2019 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, gain on early extinguishment of debt and other income. The “Other” column includes items not related to the Company’s reportable segments, including real estate and corporate items. Corporate general and administrative costs, depreciation expense and taxes, other than income taxes, are allocated to the segments.


	E&P			Marketing		Other			Total

	(in millions)
Three months ended June 30, 2020
Revenues from external customers	$	223		$	187	$	—		$	410
Intersegment revenues	(12)			202		—			190
Depreciation, depletion and amortization expense	81			3		—			84
Impairments	655			—		—			655
Operating loss	(748)		⁽¹⁾	(8)		—			(756)
Interest expense ⁽²⁾	22			—		—			22
Loss on derivatives	(109)			—		—			(109)
Gain on extinguishment of debt	—			—		7			7
Other income (loss), net	(1)			—		1			—
Provision for income taxes⁽²⁾	—			—		—			—
Assets	4,185		⁽³⁾	208		162		⁽⁴⁾	4,555
Capital investments ⁽⁵⁾	245			—		—			245

Three months ended June 30, 2019
Revenues from external customers	$	380		$	287	$	—		$	667
Intersegment revenues	(9)			339		—			330
Depreciation, depletion and amortization expense	112			3		—			115
Impairments	6			—		—			6
Operating income (loss)	30		⁽¹⁾	(8)		—			22
Interest expense ⁽²⁾	15			—		—			15
Gain on derivatives	152			—		—			152

Other loss, net	(5)			—		(1)			(6)
Provision for income taxes⁽²⁾	15			—		—			15
Assets	5,945		⁽³⁾	277		323		⁽⁴⁾	6,545
Capital investments ⁽⁵⁾	367			—		1			368


	E&P			Marketing		Other			Total

Six months ended June 30, 2020	(in millions)
Revenues from external customers	$	576		$	426	$	—		$	1,002
Intersegment revenues	(21)			511		—			490
Depreciation, depletion and amortization expense	192			5		—			197
Impairments	2,134			—		—			2,134
Operating income (loss)	(2,234)		⁽¹⁾	(12)		—			(2,246)
Interest expense⁽²⁾	41			—		—			41
Gain on derivatives	230			—		—			230
Gain on early extinguishment of debt	—			—		35			35
Other income, net	—			—		1			1
Provision for income taxes ⁽²⁾	406			—		—			406
Assets	4,185		⁽³⁾	208		162		⁽⁴⁾	4,555
Capital investments⁽⁵⁾	482			—		—			482

Six months ended June 30, 2019
Revenues from external customers	$	931		$	726	$	—		$	1,657
Intersegment revenues	(18)			841		—			823
Depreciation, depletion and amortization expense	222			5		—			227
Impairments	6			—		—			6
Operating income (loss)	240		⁽¹⁾	(5)		—			235
Interest expense⁽²⁾	29			—		—			29
Gain on derivatives	120			—		—			120

Other loss, net	(4)			—		(1)			(5)
Benefit from income taxes⁽²⁾	(411)			—		—			(411)
Assets	5,945		⁽³⁾	277		323		⁽⁴⁾	6,545
Capital investments⁽⁵⁾	692			—		1			693

(1)Operating income for the E&P segment includes $2 million and $2 million of restructuring charges for the three months ended June 30, 2020 and 2019, respectively, and $12 million and $5 million of restructuring charges for the six months ended June 30, 2020 and 2019, respectively.

(2)Interest expense and provision (benefit) for income taxes by segment is an allocation of corporate amounts as they are incurred at the corporate level.

(3)E&P assets includes office, technology, water infrastructure, drilling rigs and other ancillary equipment not directly related to natural gas and oil properties. E&P assets also includes deferred tax assets which are an allocation of corporate amounts as they are incurred at the corporate level.

(4)Other assets represent corporate assets not allocated to segments and assets for non-reportable segments. At June 30, 2020 and 2019, other assets included approximately $10 million and $155 million, respectively, in cash and cash equivalents, $31 million and $68 million, respectively, in income taxes receivable, $21 million and $50 million, respectively, in property, plant and equipment, $10 million and $10 million, respectively, in unamortized debt expense, $5 million and $6 million, respectively, in a non-qualified retirement plan and $77 million and $29 million in right-of-use lease assets, respectively. Additionally, the June 30, 2020 other asset balance includes $7 million in prepayments and the June 30, 2020 and 2019 other asset balances includes $1 million and $5 million in other assets, respectively.

(5)Capital investments include an increase of $39 million for the three months ended June 30, 2019 and increases of $8 million and $105 million for the six months ended June 30, 2020 and 2019, respectively, relating to the change in accrued expenditures between years. There was no change in the capital accrual for the three months ended June 30, 2020.