Segment Information

6 Months Ended

Jun. 30, 2011

Segment Information

Segment Information

(14) 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 crude oil. The Midstream Services segment generates revenue through the marketing of both Company and third-party produced natural gas 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 2010 Annual Report on Form 10-K. Management evaluates the performance of its segments based on operating income, defined as operating revenues less operating costs and expenses. 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 and other income (loss), net. 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 thousands)
Three months ended June 30, 2011:
Revenues from external customers	$   526,969		$   238,197	$              0		$   765,166
Intersegment revenues	2,899		522,412	793		526,104
Operating income	222,539		59,644	359		282,542
Other income, net(1)	6		52	11		69
Depreciation, depletion and amortization expense	161,929		9,365	326		171,620
Interest expense(1)	799		5,371	0		6,170
Provision for income taxes(1)	87,492		21,349	146		108,987
Assets	5,366,199	(2)	1,095,685	280,217	(3)	6,742,101
Capital investments(4)	476,040		59,862	20,072		555,974
Three months ended June 30, 2010:
Revenues from external customers	$   419,149		$   170,794	$              0		$   589,943
Intersegment revenues	2,706		388,064	246		391,016
Operating income	162,473		43,767	77		206,317
Other income (loss), net(1)	(107)		11	12		(84)
Depreciation, depletion and amortization expense	136,905		6,986	115		144,006
Interest expense(1)	704		5,476	0		6,180
Provision for income taxes(1)	63,072		14,938	34		78,044
Assets	4,272,197	(2)	839,959	478,195	(3)	5,590,351
Capital investments(4)	441,226		89,753	12,546		543,525
	Exploration
	and		Midstream
	Production		Services	Other		Total
	(in thousands)
Six months ended June 30, 2011:
Revenues from external customers	$   997,625		$   443,876	$              0		$ 1,441,501
Intersegment revenues	8,413		996,001	1,569		1,005,983
Operating income	400,822		113,561	810		515,193
Other income, net(1)	349		81	13		443
Depreciation, depletion and amortization expense	316,739		17,756	572		335,067
Interest expense(1)	3,703		9,903	0		13,606
Provision for income taxes(1)	156,874		40,769	324		197,967
Assets	5,366,199	(2)	1,095,685	280,217	(3)	6,742,101
Capital investments(4)	944,252		105,840	36,411		1,086,503
Six months ended June 30, 2010:
Revenues from external customers	$   904,220		$   353,840	$              0		$ 1,258,060
Intersegment revenues	9,704		836,661	492		846,857
Operating income	412,904		81,391	112		494,407
Other income (loss), net(1)	(152)		79	12		(61)
Depreciation, depletion and amortization expense	269,612		13,147	264		283,023
Interest expense(1)	3,004		9,684	0		12,688
Provision for income taxes(1)	159,837		27,997	47		187,881
Assets	4,272,197	(2)	839,959	478,195	(3)	5,590,351
Capital investments(4)	852,659		139,019	25,472		1,017,150

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

(2) Includes capital investments for office, technology, drilling rigs and other ancillary equipment not directly related to gas and oil property acquisition, exploration and development activities.

(3) Other assets represent corporate assets not allocated to segments and assets, including restricted cash and investments in cash equivalents, for non-reportable segments.

(4) Capital investments include an increase of $56.4 million and a reduction of $2.3 million for the three-month periods ended June 30, 2011 and 2010, respectively, and increases of $57.9 million and $25.0 million for the six-month periods ended June 30, 2011 and 2010, respectively, relating to the change in accrued expenditures between periods.

Included in intersegment revenues of the Midstream Services segment are $456.7 million and $335.1 million for the three months ended June 30, 2011 and 2010, respectively, and $867.9 million and $741.0 million for the six months ended June 30, 2011 and 2010, respectively, for marketing of the Company's E&P sales. Corporate assets include cash and cash equivalents, restricted cash, 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. For the three months ended June 30, 2011 and 2010, capital investments within the E&P segment include $5.4 million and $7.3 million, respectively, related to the Company's activities in Canada. For the six months ended June 30, 2011 and 2010, capital investments within the E&P segment include $7.8 million and $7.3 million, respectively, related to the Company's activities in Canada. At June 30, 2011, assets include $18.4 million and at June 30, 2010, assets include $7.3 million related to the Company's activities in Canada.