Segment Information

6 Months Ended

Jun. 30, 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 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 income (loss).  The “Other” column includes items not related to the Company’s reportable segments including real estate and corporate items.

	Exploration and
	Production			Midstream		Other			Total
	(in millions)
Three months ended June 30, 2016:
Revenues from external customers	$	291		$	231	$	–		$	522
Intersegment revenues		(7)			328		–			321
Depreciation, depletion and amortization expense		90			17		–			107
Impairment of natural gas and oil properties		470			–		–			470
Operating income (loss)		(549)	(1)		57		–			(492)
Interest expense (3)		16			1		–			17
Other income (loss), net		3			(2)		(1)			–
Loss on derivatives		(85)			–		–			(85)
Benefit for income taxes (3)		(1)			–		–			(1)
Assets		5,000			1,227		1,150	(4)		7,377
Capital investments (5)		73			–		1			74
Three months ended June 30, 2015:
Revenues from external customers	$	496		$	267	$	1		$	764
Intersegment revenues		(6)			499		(1)			492
Depreciation, depletion and amortization expense		291			17		–			308
Impairment of natural gas and oil properties		1,535			–		–			1,535
Operating income (loss)		(1,639)			355		–			(1,284)
Interest expense (3)		–			–		1			1
Other income, net		3			–		–			3
Gain (loss) on derivatives		2			–		(1)			1
Provision (benefit) for income taxes (3)		(630)			138		(1)			(493)
Assets		11,882			1,352		246			13,480
Capital investments (5)		389			19		7			415

	Exploration and
	Production			Midstream			Other			Total
	(in millions)
Six months ended June 30, 2016:
Revenues from external customers	$	634		$	467		$	–		$	1,101
Intersegment revenues		(14)			713			–			699
Depreciation, depletion and amortization expense		217			33			–			250
Impairment of natural gas and oil properties		1,504			–			–			1,504
Operating income (loss)		(1,709)	(1)		117	(2)		–			(1,592)
Interest expense (3)		30			1			–			31
Other income (loss), net		1			(3)			(1)			(3)
Loss on derivatives		(98)			(1)			–			(99)
Assets		5,000			1,227			1,150	(4)		7,377
Capital investments (5)		193			2			1			196
Six months ended June 30, 2015:
Revenues from external customers	$	1,156		$	540		$	1		$	1,697
Intersegment revenues		(11)			1,164			–			1,153
Depreciation, depletion and amortization expense		569			32			–			601
Impairment of natural gas and oil properties		1,535			–			–			1,535
Operating income (loss)		(1,561)			443			(1)			(1,119)
Interest expense (3)		45			7			–			52
Other income, net		2			–			–			2
Gain (loss) on derivatives		17			–			(2)			15
Provision (benefit) for income taxes (3)		(612)			169			(1)			(444)
Assets		11,882			1,352			246			13,480
Capital investments (5)		1,419			157			10			1,586

(1) Operating income (loss) for the E&P segment includes $11 million and $72 million related to restructuring charges for the three and six months ended June 30, 2016, respectively.

(2) Operating income (loss) for the Midstream segment includes $3 million related to restructuring charges for the six months ended June 30, 2016.

(3) Interest expense and the provision for income 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 June 30, 2016, other assets includes approximately $986 million in marketable securities.

(5) Capital investments includes a  $27 million increaseand an $11 million decrease for the three months ended June 30, 2016 and 2015, respectively, and decreases of $51 million and $11 million for the six months ended June 30, 2016 and 2015, respectively, relating to the change in accrued expenditures between periods.  E&P capital for the three month period ended June 30, 2015 includes approximately $516 million related to the WPX Property and Statoil Property Acquisitions.  Midstream capital for the six months ended June 30, 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 segment are $267 million and $419 million for the three months ended June 30, 2016 and 2015, respectively, and $586 million and $995 million for the six months ended June 30, 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.