(15)Segment Information

See Note 2(k) for a description of the Company’s determination of its reportable segments. Revenues from gathering and processing and water handling and treatment operations are primarily derived from intersegment transactions for services provided to the Company’s exploration and production operations. Marketing revenues are primarily derived from activities to purchase and sell third-party natural gas and NGLs and to market excess firm transportation capacity to third parties.

Operating segments are evaluated based on their contribution to consolidated results, which is primarily determined by the respective operating income of each segment. General and administrative expenses are allocated to the gathering and processing and water handling and treatment segments based on the nature of the expenses and on a combination of the segments’ proportionate share of the Company’s consolidated property and equipment, capital expenditures, and labor costs, as applicable. 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 and evaluated on a consolidated basis. Intersegment sales are transacted at prices which approximate market. Accounting policies for each segment are the same as the Company’s accounting policies described in Note 2 to the condensed consolidated financial statements.

The operating results and assets of the Company’s reportable segments were as follows for the three months ended March 31, 2017 and 2018 (in thousands):


	Exploration and production		Gathering and processing	Water handling and treatment	Marketing	Elimination of intersegment transactions	Consolidated total
Three months ended March 31, 2017:
Sales and revenues:
Third-party	$	1,127,051	2,539	65	65,924	—	1,195,579
Intersegment		4,440	89,120	83,045	—	(176,605)	—
Total	$	1,131,491	91,659	83,110	65,924	(176,605)	1,195,579

Operating expenses:
Lease operating	$	15,742	—	38,622	—	(38,813)	15,551
Gathering, compression, processing, and transportation		347,768	8,114	—	—	(89,053)	266,829
Depletion, depreciation, and amortization		174,969	19,924	7,836	—	—	202,729
General and administrative		51,056	10,138	4,319	—	(815)	64,698
Other		53,618	—	4,344	89,993	(3,526)	144,429
Total		643,153	38,176	55,121	89,993	(132,207)	694,236
Operating income (loss)	$	488,338	53,483	27,989	(24,069)	(44,398)	501,343
Equity in earnings of unconsolidated affiliates	$	—	2,231	—	—	—	2,231
Segment assets	$	12,989,013	1,941,668	645,943	27,730	(715,700)	14,888,654
Capital expenditures for segment assets	$	457,739	66,559	36,954	—	(45,018)	516,234


	Exploration and production		Gathering and processing	Water handling and treatment	Marketing	Elimination of intersegment transactions	Consolidated total
Three months ended March 31, 2018:
Sales and revenues:
Third-party	$	784,543	4,145	790	238,623	—	1,028,101
Intersegment		5,875	104,032	120,624	—	(230,531)	—
Total	$	790,418	108,177	121,414	238,623	(230,531)	1,028,101

Operating expenses:
Lease operating	$	31,262	—	54,872	—	(59,412)	26,722
Gathering, compression, processing, and transportation		384,345	11,368	—	—	(103,775)	291,938
Depletion, depreciation, and amortization		195,588	23,638	9,018	—	—	228,244
General and administrative		46,420	10,362	4,093	—	(845)	60,030
Other		77,884	14	4,910	195,739	(3,874)	274,673
Total		735,499	45,382	72,893	195,739	(167,906)	881,607
Operating income (loss)	$	54,919	62,795	48,521	42,884	(62,625)	146,494
Equity in earnings of unconsolidated affiliates	$	—	7,862	—	—	—	7,862
Segment assets	$	13,200,108	2,217,115	933,909	41,548	(969,831)	15,422,849
Capital expenditures for segment assets	$	472,767	93,670	40,285	—	(60,759)	545,963