Segment Information

6 Months Ended

Jun. 30, 2013

Segment Information [Abstract]

Segment Information

(15) 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 2012 Annual Report on Form 10-K. 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 and interest 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 thousands)
Three months ended June 30, 2013:
Revenues from external customers	$	616,894	$	245,120	$	27		$	862,041
Intersegment revenues		1,664		641,655		60			643,379
Operating income (loss)		252,546		72,889		(118)			325,317
Other income, net		296		58		–			354
Gain on derivatives		93,449		–		–			93,449
Depreciation, depletion and amortization expense		174,267		12,495		105			186,867
Interest expense(2)		6,345		2,743		190			9,278
Provision (benefit) for income taxes(2)		138,636		25,711		(136)			164,211
Assets		6,006,318		1,383,930		244,943	(3)		7,635,191
Capital investments(4)		631,221		56,906		6,766			694,893
Three months ended June 30, 2012:
Revenues from external customers	$	437,035	$	169,004	$	37		$	606,076
Intersegment revenues		(1,448)		319,391		816			318,759
Operating income (loss)(1)		(718,277)		71,821		410			(646,046)
Other income (loss), net		(64)		(5)		2,646			2,577
Loss on derivatives		(6,348)		–		–			(6,348)
Depreciation, depletion and amortization expense		196,201		11,309		320			207,830
Impairment of natural gas and oil properties		800,652		–		–			800,652
Interest expense(2)		4,430		3,578		353			8,361
Provision (benefit) for income taxes(2)		(279,493)		25,414		1,033			(253,046)
Assets		6,120,697		1,114,364		404,149	(3)		7,639,210
Capital investments(4)		531,845		47,719		9,069			588,633

	Exploration
	and		Midstream
	Production		Services		Other			Total
	(in thousands)
Six months ended June 30, 2013:
Revenues from external customers	$	1,126,988	$	468,654	$	48		$	1,595,690
Intersegment revenues		3,173		1,139,028		113			1,142,314
Operating income (loss)		428,304		149,196		(223)			577,277
Other loss, net		(82)		(97)		–			(179)
Gain on derivatives		63,655		–		–			63,655
Depreciation, depletion and amortization expense		341,717		24,407		210			366,334
Interest expense(2)		12,521		5,388		390			18,299
Provision (benefit) for income taxes(2)		194,452		55,114		(258)			249,308
Assets		6,006,318		1,383,930		244,943	(3)		7,635,191
Capital investments(4)		1,106,554		95,373		11,022			1,212,949
Six months ended June 30, 2012:
Revenues from external customers	$	901,666	$	359,177	$	68		$	1,260,911
Intersegment revenues		(735)		675,672		1,635			676,572
Operating income (loss)(1)		(603,668)		141,110		838			(461,720)
Other income (loss), net		(247)		(23)		2,647			2,377
Loss on derivatives		(4,714)		–		–			(4,714)
Depreciation, depletion and amortization expense		378,940		21,879		638			401,457
Impairment of natural gas and oil properties		800,652		–		–			800,652
Interest expense(2)		7,752		7,245		702			15,699
Provision (benefit) for income taxes(2)		(234,655)		51,262		1,065			(182,328)
Assets		6,120,697		1,114,364		404,149	(3)		7,639,210
Capital investments(4)		1,064,984		73,883		22,878			1,161,745

(1) The operating loss for the E&P segment for the three and six months ended June 30, 2012 includes a $800.7 million non-cash ceiling test impairment of our natural gas and oil properties.

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

(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 includes increases of $7.5 million and $0.2 million for the three-month periods ended June 30, 2013 and 2012, respectively, and increases of $40.4 million and $15.5 million for the six-month periods ended June 30, 2013 and 2012, respectively, relating to the change in accrued expenditures between periods.

Included in intersegment revenues of the Midstream Services segment are $559.0 million and $245.5 million for the three months ended June  30, 2013 and 2012, respectively, and $978.5 million and $531.6 million for the six months ended June 30, 2013 and 2012, 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, 2013 and 2012, capital investments within the E&P segment include$5.6million and $2.3 million, respectively, related to the Company’s activities in Canada.  For the six months ended June 30, 2013 and 2012, capital investments within the E&P segment include $7.9 million and $4.7 million, respectively, relating to the Company’s activities in Canada. At June  30, 2013, E&P segment assets include $51.3 million and at June  30, 2012, assets include $33.2  million related to the Company’s activities in Canada.