Segment Information

9 Months Ended

Sep. 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   September 30,					Nine Months Ended   September 30,
millions	2013			2012		2013			2012
Income (loss) before income taxes	$	463		$	390	$	2,929		$	3,019
Exploration expense	272			297		714			1,662
DD&A	996			979		2,958			2,936
Impairments	593			4		632			166
Interest expense	177			185		513			561
Unrealized (gains) losses on derivatives, net	36			456		(359		)	539
Realized (gains) losses on interest-rate and other derivatives, net	—			—		—			2
Deepwater Horizon settlement and related costs	5			4		12			15
Algeria exceptional profits tax settlement	—			7		33			(1,797		)
Tronox-related contingent loss	—			—		—			(250		)
Certain other nonoperating items	(10		)	—		75			—
Less net income attributable to noncontrolling interests	41			21		95			67
Consolidated Adjusted EBITDAX	$	2,491		$	2,301	$	7,412		$	6,786

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:

millions	Oil and Gas Exploration & Production		Midstream			Marketing			Other and Intersegment Eliminations			Total
Three Months Ended September 30, 2013
Sales revenues	$	1,916	$	95		$	1,778		$	—		$	3,789
Intersegment revenues	1,516		287			(1,629		)	(174		)	—
Gains (losses) on divestitures and other, net	7		—			—			57			64
Total revenues and other	3,439		382			149			(117		)	3,853
Operating costs and expenses (1)	930		216			164			(12		)	1,298
Realized (gains) losses on commodity    derivatives, net	—		—			—			26			26
Other (income) expense, net (2)	—		—			—			(13		)	(13		)
Net income attributable to noncontrolling interests	—		41			—			—			41
Total expenses and other	930		257			164			1			1,352
Unrealized (gains) losses on derivatives, net    included in marketing revenue	—		—			(10		)	—			(10		)
Adjusted EBITDAX	$	2,509	$	125		$	(25	)	$	(118	)	$	2,491
Three Months Ended September 30, 2012
Sales revenues	$	1,393	$	80		$	1,810		$	—		$	3,283
Intersegment revenues	1,587		232			(1,682		)	(137		)	—
Gains (losses) on divestitures and other, net	12		(6		)	—			43			49
Total revenues and other	2,992		306			128			(94		)	3,332
Operating costs and expenses (1)	840		182			152			51			1,225
Realized (gains) losses on commodity    derivatives, net	—		—			—			(200		)	(200		)
Other (income) expense, net (2)	—		—			—			(10		)	(10		)
Net income attributable to noncontrolling interests	—		21			—			—			21
Total expenses and other	840		203			152			(159		)	1,036
Unrealized (gains) losses on derivatives, net    included in marketing revenue	—		—			5			—			5
Adjusted EBITDAX	$	2,152	$	103		$	(19	)	$	65		$	2,301

 __________________________________________________________________

⁽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)

millions	Oil and Gas Exploration & Production			Midstream			Marketing			Other and Intersegment Eliminations			Total
Nine Months Ended September 30, 2013
Sales revenues	$	5,044		$	267		$	5,636		$	—		$	10,947
Intersegment revenues	4,904			805			(5,234		)	(475		)	—
Gains (losses) on divestitures and other, net	12			—			—			284			296
Total revenues and other	9,960			1,072			402			(191		)	11,243
Operating costs and expenses (1)	2,656			613			492			15			3,776
Realized (gains) losses on commodity    derivatives, net	—			—			—			(46		)	(46		)
Other (income) expense, net (2)	—			—			—			(6		)	(6		)
Net income attributable to noncontrolling interests	—			95			—			—			95
Total expenses and other	2,656			708			492			(37		)	3,819
Unrealized (gains) losses on derivatives, net    included in marketing revenue	—			—			(12		)	—			(12		)
Adjusted EBITDAX	$	7,304		$	364		$	(102	)	$	(154	)	$	7,412
Nine Months Ended September 30, 2012
Sales revenues	$	5,180		$	248		$	4,467		$	—		$	9,895
Intersegment revenues	3,796			701			(4,101		)	(396		)	—
Gains (losses) on divestitures and other, net	(17		)	(8		)	—			131			106
Total revenues and other	8,959			941			366			(265		)	10,001
Operating costs and expenses (1)	2,639			545			464			132			3,780
Realized (gains) losses on commodity    derivatives, net	—			—			—			(600		)	(600		)
Other (income) expense, net (2)	—			—			—			(14		)	(14		)
Net income attributable to noncontrolling interests	—			67			—			—			67
Total expenses and other	2,639			612			464			(482		)	3,233
Unrealized (gains) losses on derivatives, net    included in marketing revenue	—			—			18			—			18
Adjusted EBITDAX	$	6,320		$	329		$	(80	)	$	217		$	6,786

 __________________________________________________________________

⁽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.