Segment Information

12 Months Ended

Dec. 31, 2019

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 Marketing segment generates revenue through the marketing of both Company and third-party produced natural gas and liquids volumes.

Prior to December 2018, the Marketing segment included the Company’s natural gas gathering business in its Fayetteville Shale assets. With the closing of the Fayetteville Shale sale in December 2018, the Company's marketing business comprises substantially all of the Company’s Marketing segment.

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 (loss), interest expense, gain (loss) on derivatives, gain (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.


(in millions)	Exploration and Production			Marketing			Other			Total
2019
Revenues from external customers	$	1,740		$	1,298		$	—		$	3,038
Intersegment revenues	(37)			1,552			—			1,515
Depreciation, depletion and amortization expense	462			9			—			471
Impairments	13			3			—			16
Operating income (loss)	283		⁽¹⁾	(13)			—			270
Interest expense ⁽²⁾	65			—			—			65
Gain on derivatives	274			—			—			274
Gain on early extinguishment of debt	—			—			8			8
Other income (loss), net	(9)			—			2			(7)
Benefit from income taxes ⁽²⁾	(411)			—			—			(411)
Assets	6,235		⁽³⁾	314			168		⁽⁴⁾	6,717
Capital investments ⁽⁵⁾	1,138			—			2			1,140

2018 ⁽⁶⁾
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		⁽⁸⁾	1			171
Operating income (loss)	794		⁽⁷⁾	4		⁽⁹⁾	(1)			797
Interest expense ⁽²⁾	124			—			—			124
Loss on derivatives	(118)			—			—			(118)
Loss on early extinguishment of debt	—			—			(17)			(17)
Other income (loss), net	2			(2)			—			—
Provision for income taxes ⁽²⁾	1			—			—			1
Assets	4,872		⁽³⁾	539			386		⁽⁴⁾	5,797
Capital investments ⁽⁵⁾	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 ⁽²⁾	135			—			—			135
Gain on derivatives	421			1			—			422
Loss on early extinguishment of debt	—			—			(70)			(70)
Other income, net	4			1			—			5
Benefit from income taxes ⁽²⁾	(93)			—			—			(93)
Assets	5,109		⁽³⁾	1,288			1,124		⁽⁴⁾	7,521
Capital investments ⁽⁵⁾	1,248			32			13			1,293

(1)Operating income for the E&P segment includes $11 million of restructuring charges for the year ended December 31, 2019.

(2)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.

(3)E&P assets includes office, technology, water infrastructure, drilling rigs and other ancillary equipment not directly related to natural gas and oil properties. This also includes deferred tax assets which 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 December 31, 2019, 2018 and 2017, other assets included approximately $5 million, $205 million and $914 million, respectively, in cash and cash equivalents, $30 million, $89 million and $89 million, respectively, in income taxes receivable, $27 million, $60 million and $95 million, respectively, in property, plant and equipment, $11 million, $11 million and $5 million, respectively, in unamortized debt expense, $8 million, $8 million and $11 million, respectively, in prepayments and $7 million, $8 million and $10 million, respectively, in a non-qualified retirement plan. Additionally, the December 31, 2019 asset balance includes $80 million in right-of-use lease assets and the December 31, 2018 asset balance includes $4 million of accounts receivable and $1 million of current hedging assets.

(5)Capital investments include an increase of $34 million for 2019 and a decrease of $53 million for 2018 related to the change in accrued expenditures between years. There was no impact to 2017.

(6)Includes the impact of approximately eleven months of Fayetteville Shale-related E&P and midstream gathering operations which were divested in December 2018.

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

(8)Marketing includes a $10 million non-cash impairment related to certain non-core midstream gathering assets at December 31, 2018.

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

Included in intersegment revenues of the Marketing segment are $1.6 billion, $2.3 billion and $1.9 billion for 2019, 2018 and 2017, 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.