Segment Information

12 Months Ended

Dec. 31, 2014

Segment Information

Segment Information

(13) Segment Information

See note 2(r) for a description of the Company’s determination of its reportable segments for 2014.  Marketing of excess firm transportation capacity began in the second quarter of 2014, and was subsequently determined to be a new reportable segment.  Prior to 2013, the Company’s gathering and compression and fresh water distribution operations were immaterial and were considered ancillary to the Company’s exploration and production activities.

Operating segments are evaluated based on their contribution to consolidated results, which is determined by their operating income.  General and administrative expenses are allocated to the gathering and compression and fresh water distribution segments based on estimates of labor and overhead expenditures on those activities.  General and administrative expenses related to the marketing segment are not allocated because they are immaterial.  Other income, income taxes, and interest expense are primarily managed on a consolidated basis.  Intersegment sales are at market value.  Segment accounting policies are the same as those described in note 2 to the consolidated financial statements.

The operating results and assets of the Company’s reportable segments were as follows for the years ended December 31, 2013 and 2014:

	Exploration and		Gathering and	Fresh water	Elimination of intersegment	Consolidated
	production		compression	distribution	transactions	total
2013:
Sales and revenues:
Third-party	$	1,313,134	—	—	—	1,313,134
Intersegment		—	22,363	35,871	(58,234)	—
	$	1,313,134	22,363	35,871	(58,234)	1,313,134
Operating expenses:
Lease operating	$	9,439	—	3,843	(3,843)	9,439
Gathering, compression, processing, and transportation		238,712	2,079	—	(22,363)	218,428
Depletion, depreciation, and amortization		219,757	11,346	2,773	—	233,876
General and administrative expense		391,373	23,124	10,941	—	425,438
Other operating expenses		82,787	—	1,959	—	84,746
Total		942,068	36,549	19,516	(26,206)	971,927
Operating income (loss)	$	371,066	(14,186)	16,355	(32,028)	341,207
Segment assets	$	5,859,933	561,855	230,247	(38,454)	6,613,581
Capital expenditures for segment assets	$	2,110,358	389,453	203,790	(32,028)	2,671,573

	Exploration and		Gathering and	Fresh water		Elimination of intersegment	Consolidated
	production		compression	distribution	Marketing	transactions	total
2014:
Sales and revenues:
Third-party	$	2,644,953	6,810	15,265	53,604	—	2,720,632
Intersegment		195	88,936	156,660	—	(245,791)	—
	$	2,645,148	95,746	171,925	53,604	(245,791)	2,720,632
Operating expenses:
Lease operating	$	28,041	—	34,737	—	(33,437)	29,341
Gathering, compression, processing, and transportation		536,879	13,497	—	—	(88,963)	461,413
Depletion, depreciation, and amortization		424,684	36,972	16,240	—	—	477,896
General and administrative expense		186,335	22,035	8,331	—	(168)	216,533
Other operating expenses		128,419	1,973	1,888	103,435	—	235,715
Total		1,304,358	74,477	61,196	103,435	(122,568)	1,420,898
Operating income (loss)	$	1,340,790	21,269	110,729	(49,831)	(123,223)	1,299,734
Segment assets	$	9,920,331	1,411,470	422,885	10,456	(191,647)	11,573,495
Capital expenditures for segment assets	$	3,455,079	558,037	196,675	—	(123,223)	4,086,568