| Segment Information |
(11)Segment Information
See Note 2(f) for a description of the Company’s determination of its reportable segments. Revenues from gathering and processing and water handling and treatment operations are primarily derived from intersegment transactions for services provided to the Company’s exploration and production operations. Marketing revenues are primarily derived from activities to purchase and sell third-party natural gas and NGLs and to market excess firm transportation capacity to third parties.
Operating segments are evaluated based on their contribution to consolidated results, which is primarily determined by the respective operating income of each segment. General and administrative expenses are allocated to the gathering and processing and water handling and treatment segments based on the nature of the expenses and on a combination of the segments’ proportionate share of the Company’s consolidated property and equipment, capital expenditures, and labor costs, as applicable. General and administrative expenses related to the marketing segment are not allocated because they are immaterial. Other income, income taxes, and interest expense are primarily managed and evaluated on a consolidated basis. Intersegment sales are transacted at prices which approximate market. Accounting policies for each segment are the same as the Company’s accounting policies described in Note 2 to the condensed consolidated financial statements.
The operating results and assets of the Company’s reportable segments were as follows for the three months ended March 31, 2016 and 2017 (in thousands):
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Exploration
and
production
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Gathering and
processing
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Water handling and treatment
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Marketing
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Elimination of
intersegment
transactions
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Consolidated
total
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Three months ended March 31, 2016:
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Sales and revenues:
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Third-party
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$
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617,944
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3,587
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257
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99,216
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—
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721,004
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Intersegment
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3,825
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66,040
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66,189
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—
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(136,054)
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—
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Total
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$
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621,769
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69,627
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66,446
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99,216
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(136,054)
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721,004
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Operating expenses:
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Lease operating
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$
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11,332
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—
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40,714
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—
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(40,753)
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11,293
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Gathering, compression, processing, and transportation
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267,445
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7,170
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—
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—
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(65,877)
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208,738
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Depletion, depreciation, and amortization
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167,552
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17,068
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6,962
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—
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—
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191,582
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General and administrative expense
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43,552
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9,335
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3,756
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—
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(356)
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56,287
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Other operating expenses
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35,165
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|
449
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4,204
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137,933
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(3,396)
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174,355
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Total
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525,046
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34,022
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55,636
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137,933
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(110,382)
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642,255
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Operating income (loss)
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$
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96,723
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35,605
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10,810
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(38,717)
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(25,672)
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78,749
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Equity in earnings of unconsolidated affiliates
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$
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—
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—
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—
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—
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—
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—
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Segment assets
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$
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12,738,875
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1,518,554
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524,348
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35,983
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(529,048)
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14,288,712
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Capital expenditures for segment assets
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$
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449,830
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48,686
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37,036
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—
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(25,429)
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510,123
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Exploration
and
production
|
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Gathering and
processing
|
|
Water handling and treatment
|
|
Marketing
|
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Elimination of
intersegment
transactions
|
|
Consolidated
total
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Three months ended March 31, 2017:
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Sales and revenues:
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Third-party
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$
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1,127,051
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2,539
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65
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65,924
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—
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1,195,579
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Intersegment
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4,440
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89,120
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83,045
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—
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(176,605)
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—
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Total
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$
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1,131,491
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91,659
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83,110
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65,924
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(176,605)
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1,195,579
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Operating expenses:
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Lease operating
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$
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15,742
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—
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38,622
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—
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(38,813)
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15,551
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Gathering, compression, processing, and transportation
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347,768
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8,114
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—
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—
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(89,053)
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266,829
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Depletion, depreciation, and amortization
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174,969
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19,924
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7,836
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—
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—
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202,729
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General and administrative expense
|
|
|
51,056
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10,138
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|
4,319
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—
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(815)
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64,698
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Other operating expenses
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53,618
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|
—
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4,344
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89,993
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(3,526)
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144,429
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Total
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643,153
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38,176
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55,121
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89,993
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(132,207)
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694,236
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Operating income (loss)
|
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$
|
488,338
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|
53,483
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27,989
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(24,069)
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(44,398)
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501,343
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Equity in earnings of unconsolidated affiliates
|
|
$
|
—
|
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2,231
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—
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|
—
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—
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|
2,231
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Segment assets
|
|
$
|
12,989,013
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1,941,668
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645,943
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27,730
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(715,700)
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14,888,654
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Capital expenditures for segment assets
|
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$
|
456,950
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66,559
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36,954
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—
|
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(44,229)
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516,234
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