Segment Information

9 Months Ended

Sep. 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, loss on early extinguishment of debt 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 September 30, 2016:
Revenues from external customers	$	381		$	270	$	–		$	651
Intersegment revenues		(3)			412		–			409
Depreciation, depletion and amortization expense		83			16		–			99
Impairment of natural gas and oil properties		817			–		–			817
Operating income (loss)		(777)	(1)		52		–			(725)
Interest expense (3)		26			–		–			26
Gain on derivatives		71			–		–			71
Loss on early extinguishment of debt		–			–		(51)			(51)
Other income, net		2			1		–			3
Benefit for income taxes (3)		(20)			–		–			(20)
Assets		4,015			1,253		1,622	(4)		6,890
Capital investments (5)		179			1		–			180
Three months ended September 30, 2015:
Revenues from external customers	$	491		$	258	$	–		$	749
Intersegment revenues		(3)			489		–			486
Depreciation, depletion and amortization expense		255			20		–			275
Impairment of natural gas and oil properties		2,839			–		–			2,839
Operating income (loss)		(2,910)			68		–			(2,842)
Gain on derivatives		15			–		–			15
Provision (benefit) for income taxes (3)		(1,112)			24		–			(1,088)
Assets		9,159			1,329		215			10,703
Capital investments (5)		461			7		–			468

	Exploration and
	Production			Midstream			Other			Total
	(in millions)
Nine months ended September 30, 2016:
Revenues from external customers	$	1,015		$	737		$	–		$	1,752
Intersegment revenues		(17)			1,125			–			1,108
Depreciation, depletion and amortization expense		300			49			–			349
Impairment of natural gas and oil properties		2,321			–			–			2,321
Operating income (loss)		(2,486)	(1)		169	(2)		–			(2,317)
Interest expense (3)		56			1			–			57
Loss on derivatives		(27)			(1)			–			(28)
Loss on early extinguishment of debt		–			–			(51)			(51)
Other income (loss), net		3			(2)			(1)			–
Benefit for income taxes (3)		(20)			–			–			(20)
Assets		4,015			1,253			1,622	(4)		6,890
Capital investments (5)		372			3			1			376
Nine months ended September 30, 2015:
Revenues from external customers	$	1,647		$	798		$	1		$	2,446
Intersegment revenues		(14)			1,653			–			1,639
Depreciation, depletion and amortization expense		824			52			–			876
Impairment of natural gas and oil properties		4,374			–			–			4,374
Operating income (loss)		(4,471)			511	(6)		(1)			(3,961)
Interest expense (3)		45			7			–			52
Gain (loss) on derivatives		32			–			(2)			30
Other income, net		2			–			–			2
Provision (benefit) for income taxes (3)		(1,724)			193			(1)			(1,532)
Assets		9,159			1,329			215			10,703
Capital investments (5)		1,880			164			10			2,054

(1) Operating income (loss) for the E&P segment includes $2 million and $74 million related to restructuring charges for the three and nine months ended September 30, 2016, respectively.

(2) Operating income (loss) for the Midstream segment includes $3 million related to restructuring charges for the nine months ended September 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 September 30, 2016, other assets includes approximately $1,443 million in marketable securities.

(5) Capital investments includes increases of $27 million and$6 million for the three months ended September 30, 2016 and 2015, respectively, and decreases of $24 millionand $5 million for the nine months ended September 30, 2016 and 2015, respectively, relating to the change in accrued expenditures between periods.  E&P capital for the nine month period ended September 30, 2015 includes approximately $516 million related to the WPX Property and Statoil Property Acquisitions.  Midstream capital for the nine months ended September 30, 2015 includes approximately $119 million associated with the intangible asset related to the firm transportation acquired through the WPX Property Acquisition.

(6) Operating income (loss) for the Midstream segment includes $277 milliongain on sale of assets for the nine months ended September 30, 2015.

Included in intersegment revenues of the Midstream segment are $355 million and $414 million for the three months ended September 30, 2016 and 2015, respectively, and $941 million and $1.4 billion for the nine months ended September 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.