(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.

Prior to December 2018, the Midstream segment included the Company’s natural gas gathering business associated with its Fayetteville Shale assets. With the closing of the Fayetteville Shale sale in December 2018, the Midstream segment consists almost entirely of the Company’s marketing business.

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. 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
(in millions)	Production			Midstream			Other			Total
2018 (1)
Revenues from external customers	$	2,551		$	1,311		$	–		$	3,862
Intersegment revenues		(26)			2,434			–			2,408
Depreciation, depletion and amortization expense		514			46			–			560
Impairments		15			155			1			171
Operating income (loss)		794	(2)		4	(3)		(1)			797
Interest expense (4)		124			–			–			124
Loss on derivatives		(118)			–			–			(118)
Loss on early extinguishment of debt		–			–			(17)			(17)
Other loss, net		2			(2)			–			–
Provision for income taxes (4)		1			–			–			1
Assets		4,872	(5)		539			386	(6)		5,797
Capital investments (7)		1,231			9			8			1,248

2017
Revenues from external customers	$	2,105		$	1,098		$	–		$	3,203
Intersegment revenues		(19)			2,100			–			2,081
Depreciation, depletion and amortization expense		440			64			–			504
Operating income (loss)		549			183			(1)			731
Interest expense (4)		135			–			–			135
Gain on derivatives		421			1			–			422
Loss on early extinguishment of debt		–			–			(70)			(70)
Other income, net		4			1			–			5
Benefit for income taxes (4)		(93)			–			–			(93)
Assets		5,109	(5)		1,288			1,124	(6)		7,521
Capital investments (7)		1,248			32			13			1,293

2016
Revenues from external customers	$	1,435		$	1,001		$	–		$	2,436
Intersegment revenues		(22)			1,568			–			1,546
Depreciation, depletion and amortization expense		371			65			–			436
Impairment of natural gas and oil properties		2,321			–			–			2,321
Operating income (loss)		(2,399)	(8)		209	(9)		–			(2,190)
Interest expense (4)		87			1			–			88
Loss on derivatives		(338)			(1)			–			(339)
Loss on early extinguishment of debt		–			–			(51)			(51)
Other income (loss), net		–			(2)			(2)			(4)
Benefit for income taxes (4)		(29)			–			–			(29)
Assets		4,178	(5)		1,331			1,567	(6)		7,076
Capital investments (7)		623			21			4			648

(1)

Includes the impact of approximately eleven months of Fayetteville Shale-related E&P and Midstream operations which were divested on December 3, 2018.

(2)

Operating income for the E&P segment includes $37 million related to restructuring charges for the year ended December 31, 2018.

(3)

Operating income for the Midstream segment includes $2 million related to restructuring charges for the year ended December 31, 2018.

(4)

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

(5)

Includes office, technology, water infrastructure, drilling rigs and other ancillary equipment not directly related to natural gas and oil property acquisition, exploration and development activities.

(6)

Other assets represent corporate assets not allocated to segments and assets for non-reportable segments. At December 31, 2018, other assets includes approximately $201 million in cash and cash equivalents.

(7)

Capital investments include a decrease of $53 million for 2018 and an increase of $43 million for 2016 related to the change in accrued expenditures between years. There was no impact to 2017.

(8)

Operating loss for the E&P segment includes $81 million related to restructuring and other one-time charges for the year ended December 31, 2016.

(9)

Operating income for the Midstream segment includes $3 million related to restructuring charges for the year ended December 31, 2016.

Included in intersegment revenues of the Midstream segment are $2.3 billion, $1.9 billion and $1.3 billion for 2018, 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.