Note 11 – Segment Reporting

The Company’s operations are all related to the exploration, development, and production of oil, gas, and NGLs in the United States, from which the Company derives all of its revenue. The nature of the production process, the types of purchasers, and the regulatory environment under which the Company operates are consistent across the Company. Additionally, for financial reporting purposes related to oil and gas extraction activities, the United States is considered to be one geographic area. As a result of these factors, the Company has one reportable segment: the oil, gas, and NGL exploration and production segment (“E&P Segment”). The E&P Segment constitutes all of the consolidated entity and the accompanying consolidated financial statements and the notes to the accompanying consolidated financial statements are representative of such amounts for the E&P Segment. The accounting policies of the E&P Segment are the same as those described in Note 1 – Summary of Significant Accounting Policies.

The Company’s Chief Operating Decision Maker (“CODM”) is the President and Chief Executive Officer. The CODM uses net income as presented on the accompanying statements of operations to measure E&P Segment profit or loss, and to evaluate income generated from E&P Segment assets in deciding whether to reinvest profits into operational activities or to use profits for other purposes, such as debt reduction, acquisitions, or the Company’s Stock Repurchase Program. Additionally, net income is used in assessing budget versus actual results and in benchmarking to the Company’s competitors.

Segment Revenue, Significant Expenses, and Net Income


	For the Years Ended December 31,
	2025		2024		2023
	(in millions)

Total operating revenues and other income	$	3,154	$	2,690	$	2,374
Less:
Lease operating expense	431		319		285
Transportation costs	292		167		136
Production taxes	127		116		105
Ad valorem tax expense	35		35		37
Depletion, depreciation, and amortization	1,207		809		690
Exploration	57		64		59

General and administrative	161		138		121
Net derivative gain	(178)		(50)		(68)
Other operating expense, net	22		16		21
Interest expense	173		141		92
Interest income	(3)		(32)		(20)

Other non-operating income	—		1		1
Income tax expense	182		196		96
E&P Segment net income	$	648	$	770	$	818

___________________________________________

Note: Amounts may not recalculate due to rounding.

There are no reconciling items between net income presented on the accompanying statements of operations and E&P Segment net income.

Historical Timeline

Fiscal Year	Filed
2025	Feb 26, 2026	Showing above
2024	Feb 20, 2025

About Segments Disclosures

Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.

Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.

SM Energy Co Segments Disclosure

Historical Timeline

About Segments Disclosures

Other Available Disclosures