Segment Information

3 Months Ended

Mar. 31, 2016

Segment Information [Abstract]

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 liquids. The Midstream Services segment generates revenue through the marketing of both Company and third-party produced natural gas and liquids 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 2015 Annual Report. 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, gain (loss) on derivatives, and other 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 March 31, 2016:
Revenues from external customers	$	343		$	236		$	–		$	579
Intersegment revenues		(7)			385			–			378
Depreciation, depletion and amortization expense		127			16			–			143
Impairment of natural gas and oil properties		1,034			–			–			1,034
Operating income (loss)		(1,160)	(1)		60	(2)		–			(1,100)
Interest expense (3)		14			–			–			14
Other loss, net		(2)			(1)			–			(3)
Loss on derivatives		(13)			(1)			–			(14)
Provision for income taxes (3)		1			–			–			1
Assets		5,538			1,220			1,760	(4)		8,518
Capital investments (5)		120			2			–			122
Three months ended March 31, 2015:
Revenues from external customers	$	660		$	273		$	–		$	933
Intersegment revenues		(5)			665			1			661
Depreciation, depletion and amortization expense		278			15			–			293
Operating income (loss)		78			88			(1)			165
Interest expense (3)		45			7			(1)			51
Other loss, net		(1)			–			–			(1)
Gain (loss) on derivatives		15			–			(1)			14
Provision for income taxes (3)		18			31			–			49
Assets		13,703			1,616			242	(4)		15,561
Capital investments (5)		1,030			138			3			1,171

(1) Operating income (loss) for the E&P segment includes $61 million related to restructuring charges.

(2) Operating income (loss) for the Midstream segment includes $3 million related to restructuring charges.

(3) Interest expense and the provision forincome taxes by segment are an allocation of corporate amounts as they are incurred at the corporate level.

(4) Other assets represent corporate assets not allocated to segments and assets for non-reportable segments.  At March 31, 2016, other assets includes $1.55 billion in marketable securities, which were sold on April 1, 2016 to repay revolver debt.  See Note 2 to the unaudited condensed consolidated financial statements included in this Quarterly Report for additional discussion.

(5) Capital investments includes a  $78 million decrease and an immaterial increase for the three months ended March 31, 2016 and 2015, respectively, relating to the change in accrued expenditures between periods.  E&P capital for the three month period ended March 31, 2015 includes approximately $534 million related to the WPX Property and Statoil Property Acquisitions. Midstream capital for the three months ended March 31, 2015 includes approximately $119 million associated with the intangible asset related to the firm transportation acquired through the WPX Property Acquisition.

Included in intersegment revenues of the Midstream Services segment are $319 million and $576 million for the three months ended March 31, 2016 and 2015, respectively for marketing of the Company’s E&P sales. Corporate assets include cash and cash equivalents, furniture and fixtures and other costs. Corporate general and administrative costs, depreciation expense and taxes other than income are allocated to the segments. Capital investments within the E&P segment include $1 million for the three months ended March 31, 2016 and 2015, related to the Company’s activities in Canada. The Company’s E&P segment assets included $53 million and $71 million at March 31, 2016 and 2015, respectively, related to the Company’s activities in Canada.