Segment Information

6 Months Ended

Jun. 30, 2014

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 2013 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 millions)
Three months ended June 30, 2014:
Revenues from external customers	$	721	$	314	$	–		$	1,035
Intersegment revenues		4		817		–			821
Operating income (loss)		275		93		(1)			367
Loss on derivatives		(7)		(1)		–			(8)
Depreciation, depletion and amortization expense		216		14		–			230
Interest expense(1)		10		2		–			12
Provision for income taxes(1)		105		35		–			140
Assets		7,127		1,532		228	(2)		8,887
Capital investments(3)		676		36		9			721
Three months ended June 30, 2013:
Revenues from external customers	$	617	$	245	$	–		$	862
Intersegment revenues		2		642		(1)			643
Operating income (loss)		253		73		(1)			325
Other gain, net		1		–		–			1
Gain on derivatives		93		–		–			93
Depreciation, depletion and amortization expense		174		13		–			187
Interest expense(1)		6		3		–			9
Provision for income taxes(1)		138		26		–			164
Assets		6,006		1,384		245	(2)		7,635
Capital investments(3)		631		57		7			695

	Exploration
	and		Midstream
	Production		Services		Other			Total
	(in millions)
Six months ended June 30, 2014:
Revenues from external customers	$	1,517	$	631	$	–		$	2,148
Intersegment revenues		10		1,730		–			1,740
Operating income		627		175		–			802
Other gain, net		1		–		–			1
Loss on derivatives		(107)		(1)		–			(108)
Depreciation, depletion and amortization expense		427		28		–			455
Interest expense(1)		18		7		–			25
Provision for income taxes(1)		202		67		–			269
Assets		7,127		1,532		228	(2)		8,887
Capital investments(3)		1,175		75		13			1,263
Six months ended June 30, 2013:
Revenues from external customers	$	1,126	$	469	$	–		$	1,595
Intersegment revenues		3		1,139		–			1,142
Operating income		428		149		–			577
Gain on derivatives		64		–		–			64
Depreciation, depletion and amortization expense		342		24		–			366
Interest expense(1)		14		5		–			19
Provision for income taxes(1)		194		55		–			249
Assets		6,006		1,384		245	(2)		7,635
Capital investments(3)		1,107		95		11			1,213

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

⁽²⁾ Other assets represent corporate assets not allocated to segments and assets for non reportable segments.

⁽³⁾ Capital investments includes increases of $56 million and $8 million for the threemonth periods ended June 30, 2014 and 2013, respectively, and increases of $61 million and $40 million for the six month periods ended June 30, 2014 and 2013, respectively,  relating to the change in accrued expenditures between periods.

Included in intersegment revenues of the Midstream Services segment are $725 million and $559 million for the three months ended June 30, 2014 and 2013, respectively, and $1,549 million and $979 million for the six months ended June 30, 2014 and 2013, respectively, for marketing of the Company’s E&P sales. Corporate assets include cash and cash equivalents, 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. At June 30, 2014, E&P segment assets included  $85 million and at June 30, 2013,  E&P segment assets included  $51  million related to the Company’s activities in Canada.