(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 September 30, 2017:
Revenues from external customers	$	475		$	262	$	–		$	737
Intersegment revenues		(5)			472		–			467
Depreciation, depletion and amortization expense		120			15		–			135
Operating income		64			46		–			110
Interest expense (1)		31			–		–			31
Gain on derivatives		45			–		–			45
Loss on early extinguishment of debt		–			–		(59)			(59)
Other income (loss), net		1			(3)		–			(2)
Benefit for income taxes (1)		(14)			–		–			(14)
Assets		4,842			1,240		1,120	(2)		7,202
Capital investments (3)		320			9		2			331

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)	(4)		52		–			(725)
Interest expense (1)		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 (1)		(20)			–		–			(20)
Assets		4,015			1,253		1,622	(2)		6,890
Capital investments (3)		179			1		–			180


	Exploration and Production			Midstream Services			Other			Total
	(in millions)
Nine months ended September 30, 2017:
Revenues from external customers	$	1,572		$	822		$	–		$	2,394
Intersegment revenues		(13)			1,592			–			1,579
Depreciation, depletion and amortization expense		317			47			–			364
Operating income		435			129			–			564
Interest expense (1)		97			–			–			97
Gain on derivatives		295			–			–			295
Loss on early extinguishment of debt		–			–			(70)			(70)
Other income, net		5			1			–			6
Benefit for income taxes(1)		(14)			–			–			(14)
Assets		4,842			1,240			1,120	(2)		7,202
Capital investments (3)		921			21			4			946

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)	(4)		169	(5)		–			(2,317)
Interest expense (1)		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		(20)			–			–			(20)
Assets		4,015			1,253			1,622	(2)		6,890
Capital investments (3)		372			3			1			376

(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 September 30, 2017 and 2016, other assets includes approximately $989 million and $1.5 billion in cash and cash equivalents, respectively.

(3)

Capital investments includes a decrease of $2 million and an increase of $27 million for the three months ended September 30, 2017 and 2016, respectively, and decreases of $13 million and $24 million for the nine months ended September 30, 2017 and 2016, respectively, relating to the change in capital accruals between periods.

(4)

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.

(5)

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

Included in intersegment revenues of the Midstream Services segment are $422 million and $355 million for the three months ended September 30, 2017 and 2016, respectively and $1,436 million and $941 million for the nine months ended September 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.