(13) 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 2016 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 Services		Other			Total
	(in millions)
Three months ended June 30, 2017:
Revenues from external customers	$	531		$	280	$	–		$	811
Intersegment revenues		(5)			542		–			537
Depreciation, depletion and amortization expense		107			16		–			123
Operating income		146			42		–			188
Interest expense (1)		34			–		–			34
Gain on derivatives		134			–		–			134
Loss on early extinguishment of debt		–			–		(10)			(10)
Other income, net		2			4		–			6
Assets		4,633			1,281		1,236	(2)		7,150
Capital investments (3)		318			6		1			325

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)	(4)		57		–			(492)
Interest expense (1)		16			1		–			17
Loss on derivatives		(85)			–		–			(85)
Other income (loss), net		3			(2)		(1)			–
Benefit for income taxes (1)		(1)			–		–			(1)
Assets		5,000			1,227		1,150	(2)		7,377
Capital investments (3)		73			–		1			74


	Exploration and Production			Midstream Services			Other			Total
	(in millions)
Six months ended June 30, 2017:
Revenues from external customers	$	1,097		$	560		$	–		$	1,657
Intersegment revenues		(8)			1,120			–			1,112
Depreciation, depletion and amortization expense		197			32			–			229
Operating income		371			83			–			454
Interest expense (1)		66			–			–			66
Gain on derivatives		250			–			–			250
Loss on early extinguishment of debt		–			–			(11)			(11)
Other income, net		4			4			–			8
Assets		4,633			1,281			1,236	(2)		7,150
Capital investments (3)		601			12			2			615

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)	(4)		117	(5)		–			(1,592)
Interest expense (1)		30			1			–			31
Loss on derivatives		(98)			(1)			–			(99)
Other income (loss), net		1			(3)			(1)			(3)
Assets		5,000			1,227			1,150	(2)		7,377
Capital investments (3)		193			2			1			196

(1)

Interest expense and the benefit for income taxes by segment are an allocation of corporate amounts as they are incurred at the corporate level.

(2)

Other assets represent corporate assets not allocated to segments and assets for non-reportable segments. At June 30, 2017 and 2016, other assets includes approximately $1.1 billion and $998 million in cash and cash equivalents, respectively.

(3)

Capital investments includes increases of $41 million and $27 million for the three months ended June 30, 2017 and 2016, respectively, and decreases of $11 million and $51 million for the six months ended June 30, 2017 and 2016, respectively, relating to the change in accrued expenditures between periods.

(4)

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.

(5)

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

Included in intersegment revenues of the Midstream Services segment are $490 million and $267 million for the three months ended June 30, 2017 and 2016, respectively and $1,014 million and $586 million for the six months ended June 30, 2017 and 2016, 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.