Segment Information

9 Months Ended

Sep. 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 September 30, 2013:
Revenues from external customers	$	621,833	$	246,501	$	32		$	868,366
Intersegment revenues		644		601,104		64			601,812
Operating income (loss)		222,692		86,658		(121)			309,229
Other income (loss), net		143		70		(532)			(319)
Gain on derivatives		10,885		1,232		7			12,124
Depreciation, depletion and amortization expense		191,860		12,970		104			204,934
Interest expense(2)		8,580		2,294		144			11,018
Provision (benefit) for income taxes(2)		87,779		36,671		(301)			124,149
Assets		6,264,845		1,387,765		241,778	(3)		7,894,388
Capital investments(4)		496,331		40,052		5,726			542,109
Three months ended September 30, 2012:
Revenues from external customers	$	499,083	$	192,619	$	25		$	691,727
Intersegment revenues		(982)		409,720		825			409,563
Operating income (loss)(1)		(141,865)		75,488		418			(65,959)
Other income (loss), net		213		27		(2)			238
Loss on derivatives		(5,879)		–		–			(5,879)
Depreciation, depletion and amortization expense		192,994		10,620		321			203,935
Impairment of natural gas and oil properties		289,821		–		–			289,821
Interest expense(2)		6,707		3,659		240			10,606
Provision (benefit) for income taxes(2)		(55,220)		27,006		61			(28,153)
Assets		5,854,055		1,158,638		343,869	(3)		7,356,562
Capital investments(4)		385,585		31,693		7,608			424,886

	Exploration
	and		Midstream
	Production		Services		Other			Total
	(in thousands)
Nine months ended September 30, 2013:
Revenues from external customers	$	1,748,821	$	715,155	$	80		$	2,464,056
Intersegment revenues		3,817		1,740,132		177			1,744,126
Operating income (loss)		650,996		235,854		(344)			886,506
Other income (loss), net		61		(27)		(532)			(498)
Gain on derivatives		74,540		1,232		7			75,779
Depreciation, depletion and amortization expense		533,577		37,377		314			571,268
Interest expense(2)		21,101		7,682		534			29,317
Provision (benefit) for income taxes(2)		282,231		91,785		(559)			373,457
Assets		6,264,845		1,387,765		241,778	(3)		7,894,388
Capital investments(4)		1,602,885		135,425		16,748			1,755,058
Nine months ended September 30, 2012:
Revenues from external customers	$	1,400,749	$	551,796	$	93		$	1,952,638
Intersegment revenues		(1,716)		1,085,392		2,459			1,086,135
Operating income (loss)(1)		(745,533)		216,598		1,256			(527,679)
Other income (loss), net		(34)		4		2,645			2,615
Loss on derivatives		(10,593)		–		–			(10,593)
Depreciation, depletion and amortization expense		571,934		32,499		959			605,392
Impairment of natural gas and oil properties		1,090,473		–		–			1,090,473
Interest expense(2)		14,459		10,904		942			26,305
Provision (benefit) for income taxes(2)		(289,875)		78,268		1,126			(210,481)
Assets		5,854,055		1,158,638		343,869	(3)		7,356,562
Capital investments(4)		1,450,569		105,576		30,486			1,586,631

(1) The operating loss for the E&P segment for the three and nine months ended September 30, 2012 includes a $289.8 million and $1,090.5 million non-cash ceiling test impairment of our natural gas and oil properties respectively.

(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 decreases of $14.6 million and $56.2 million for the three-month periods ended September 30, 2013 and 2012, respectively, and increase of $25.8 million and decrease of $40.7 million for the nine-month periods ended September 30, 2013 and 2012, respectively, relating to the change in accrued expenditures between periods.

Included in intersegment revenues of the Midstream Services segment are $515.3 million and $332.1 million for the three months ended September  30, 2013 and 2012, respectively, and $1,493.8 million and $863.7 million for the nine months ended September 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 September  30, 2013 and 2012, capital investments within the E&P segment include$11.9million and $2.2 million, respectively, related to the Company’s activities in Canada.  For the nine months ended September 30, 2013 and 2012, capital investments within the E&P segment include $19.8 million and $6.9 million, respectively, relating to the Company’s activities in Canada. At September  30, 2013, E&P segment assets include $64.8 million and at September  30, 2012, assets include $36.4  million related to the Company’s activities in Canada.