Segment Information

6 Months Ended

Jun. 30, 2013

Disclosure Text Block [Abstract]

Segment Information

15. Segment Information

       Anadarko’s business segments are separately managed due to distinct operational differences and unique technology, distribution, and marketing requirements. The Company’s three reporting segments are oil and gas exploration and production, midstream, and marketing. The oil and gas exploration and production segment explores for and produces natural gas, crude oil, condensate, and NGLs. The midstream segment engages in gathering, processing, treating, and transporting Anadarko and third-party oil, natural-gas, and NGLs production. The midstream reporting segment consists of two operating segments, WES and other midstream, which are aggregated into one reporting segment due to similar financial and operating characteristics. The marketing segment sells much of Anadarko’s production, as well as third-party purchased volumes.

15. Segment Information (Continued)

       To assess the performance of Anadarko’s operating segments, the chief operating decision maker analyzes Adjusted EBITDAX. The Company defines Adjusted EBITDAX as income (loss) before income taxes; exploration expense; depreciation, depletion, and amortization (DD&A); impairments; interest expense; unrealized (gains) losses on derivatives, net; realized (gains) losses on interest-rate and other derivatives, net; and certain items not related to the Company’s normal operations, less net income attributable to noncontrolling interests. During the periods presented, these items included Deepwater Horizon settlement and related costs, Algeria exceptional profits tax settlement, Tronox-related contingent loss, and certain other nonoperating items included in other (income) expense, net. The Company’s definition of Adjusted EBITDAX excludes exploration expense, as it is not an indicator of operating efficiency for a given reporting period. However, exploration expense is monitored by management as part of costs incurred in exploration and development activities. Similarly, DD&A and impairments are excluded from Adjusted EBITDAX as a measure of segment operating performance because capital expenditures are evaluated at the time capital costs are incurred. Adjusted EBITDAX also excludes interest expense to allow for assessment of segment operating results without regard to Anadarko’s financing methods or capital structure. Finally, unrealized (gains) losses on derivatives, net and realized (gains) losses on interest-rate and other derivatives, net are excluded from Adjusted EBITDAX because these (gains) losses are not considered a measure of asset operating performance. Management believes that the presentation of Adjusted EBITDAX provides information useful in assessing the Company’s financial condition and results of operations and that Adjusted EBITDAX is a widely accepted financial indicator of a company’s ability to incur and service debt, fund capital expenditures, and make distributions to stockholders.

       Adjusted EBITDAX, as defined by Anadarko, may not be comparable to similarly titled measures used by other companies and should be considered in conjunction with net income (loss) attributable to common stockholders and other performance measures, such as operating income or cash flows from operating activities. Below is a reconciliation of consolidated Adjusted EBITDAX to income (loss) before income taxes:

	Three Months Ended   June 30,						Six Months Ended   June 30,
millions	2013			2012			2013			2012
Income (loss) before income taxes	$	1,526		$	94		$	2,466		$	2,629
Exploration expense	178			1,121			442			1,365
DD&A	940			1,027			1,962			1,957
Impairments	10			112			39			162
Interest expense	172			190			336			376
Unrealized (gains) losses on derivatives, net	(641		)	225			(395		)	83
Realized (gains) losses on interest-rate and other derivatives, net	—			2			—			2
Deepwater Horizon settlement and related costs	4			3			7			11
Algeria exceptional profits tax settlement	—			—			33			(1,804		)
Tronox-related contingent loss	—			(525		)	—			(250		)
Certain other nonoperating items	85			—			85			—
Less net income attributable to noncontrolling interests	30			19			54			46
Consolidated Adjusted EBITDAX	$	2,244		$	2,230		$	4,921		$	4,485

15. Segment Information (Continued)

       Information presented below as “Other and Intersegment Eliminations” includes results from hard-minerals royalty arrangements and corporate, financing, and certain hedging activities. The following summarizes selected financial information for Anadarko’s reporting segments:

	Oil and Gas									Other and
	Exploration									Intersegment
millions	& Production			Midstream			Marketing			Eliminations			Total
Three Months Ended June 30, 2013
Sales revenues	$	1,587		$	88		$	1,765		$	—		$	3,440
Intersegment revenues	1,526			265			(1,639		)	(152		)	—
Gains (losses) on divestitures and other, net	1			—			—			56			57
Total revenues and other	3,114			353			126			(96		)	3,497
Operating costs and expenses (1)	845			209			164			7			1,225
Realized (gains) losses on commodity    derivatives, net	—			—			—			(21		)	(21		)
Other (income) expense, net (2)	—			—			—			13			13
Net income attributable to noncontrolling interests	—			30			—			—			30
Total expenses and other	845			239			164			(1		)	1,247
Unrealized (gains) losses on derivatives, net    included in marketing revenue	—			—			(6		)	—			(6		)
Adjusted EBITDAX	$	2,269		$	114		$	(44	)	$	(95	)	$	2,244
Three Months Ended June 30, 2012
Sales revenues	$	1,888		$	81		$	1,231		$	—		$	3,200
Intersegment revenues	1,035			220			(1,124		)	(131		)	—
Gains (losses) on divestitures and other, net	(12		)	(1		)	—			35			22
Total revenues and other	2,911			300			107			(96		)	3,222
Operating costs and expenses (1)	873			174			158			33			1,238
Realized (gains) losses on commodity    derivatives, net	—			—			—			(263		)	(263		)
Other (income) expense, net (2)	—			—			—			6			6
Net income attributable to noncontrolling interests	—			19			—			—			19
Total expenses and other	873			193			158			(224		)	1,000
Unrealized (gains) losses on derivatives, net    included in marketing revenue	—			—			8			—			8
Adjusted EBITDAX	$	2,038		$	107		$	(43	)	$	128		$	2,230

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⁽¹⁾   Operating costs and expenses excludes exploration expense, DD&A, impairments, Deepwater Horizon settlement and related costs, and Algeria exceptional profits tax settlement since these expenses are excluded from Adjusted EBITDAX.

⁽²⁾   Other (income) expense, net excludes Tronox-related contingent loss and certain other nonoperating items since these expenses are excluded from Adjusted EBITDAX.

15. Segment Information (Continued)

	Oil and Gas									Other and
	Exploration									Intersegment
millions	& Production			Midstream			Marketing			Eliminations			Total
Six Months Ended June 30, 2013
Sales revenues	$	3,128		$	172		$	3,858		$	—		$	7,158
Intersegment revenues	3,388			518			(3,605		)	(301		)	—
Gains (losses) on divestitures and other, net	5			—			—			227			232
Total revenues and other	6,521			690			253			(74		)	7,390
Operating costs and expenses (1)	1,726			397			328			27			2,478
Realized (gains) losses on commodity    derivatives, net	—			—			—			(72		)	(72		)
Other (income) expense, net (2)	—			—			—			7			7
Net income attributable to noncontrolling interests	—			54			—			—			54
Total expenses and other	1,726			451			328			(38		)	2,467
Unrealized (gains) losses on derivatives, net    included in marketing revenue	—			—			(2		)	—			(2		)
Adjusted EBITDAX	$	4,795		$	239		$	(77	)	$	(36	)	$	4,921
Six Months Ended June 30, 2012
Sales revenues	$	3,787		$	168		$	2,657		$	—		$	6,612
Intersegment revenues	2,209			469			(2,419		)	(259		)	—
Gains (losses) on divestitures and other, net	(29		)	(2		)	—			88			57
Total revenues and other	5,967			635			238			(171		)	6,669
Operating costs and expenses (1)	1,799			363			312			81			2,555
Realized (gains) losses on commodity    derivatives, net	—			—			—			(400		)	(400		)
Other (income) expense, net (2)	—			—			—			(4		)	(4		)
Net income attributable to noncontrolling interests	—			46			—			—			46
Total expenses and other	1,799			409			312			(323		)	2,197
Unrealized (gains) losses on derivatives, net    included in marketing revenue	—			—			13			—			13
Adjusted EBITDAX	$	4,168		$	226		$	(61	)	$	152		$	4,485

 __________________________________________________________________

⁽¹⁾   Operating costs and expenses excludes exploration expense, DD&A, impairments, Deepwater Horizon settlement and related costs, and Algeria exceptional profits tax settlement since these expenses are excluded from Adjusted EBITDAX.

⁽²⁾   Other (income) expense, net excludes Tronox-related contingent loss and certain other nonoperating items since these expenses are excluded from Adjusted EBITDAX.