Segment Information

9 Months Ended

Sep. 30, 2011

Disclosure Text Block [Abstract]

Segment Information

14.  Segment Information

       Anadarko's primary business segments are vertically integrated within the oil and gas industry. These 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 marketing segment sells most of Anadarko's production, as well as third-party purchased volumes.

During the first quarter of 2011, the chief operating decision maker (CODM) began separately assessing the performance of, and resource allocation to, the WES operating segment. As a result, the midstream operating segment was separated into two operating segments, WES and other midstream activities. The WES and other midstream activities operating segments are aggregated into a single midstream reporting segmentdue to similar financial and operating characteristics.

To assess the performance of Anadarko's operating segments, the CODM analyzes income (loss) before income taxes, interest expense, exploration expense, depreciation, depletion, and amortization (DD&A), impairments,Deepwater Horizon settlement and related costs, and unrealized (gains) losses on derivative instruments, net, less net income attributable to noncontrolling interests (Adjusted EBITDAX). The Company's definition of Adjusted EBITDAX excludes interest expense to allow for assessment of segment operating results without regard to Anadarko's financing methods or capital structure. Anadarko's definition of Adjusted EBITDAX also excludes exploration expense, as exploration expense 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. Anadarko's definition of Adjusted EBITDAX also excludes Deepwater Horizon settlement and related costs as these costs are outside the normal operations of the Company. See Note 2 for a discussion of Deepwater Horizon Events. Finally, unrealized (gains) losses on derivative instruments, net are excluded from Adjusted EBITDAX because unrealized (gains) losses are not considered a measure of assetoperating 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 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				Nine Months Ended
	September 30,				September 30,
millions	2011		2010		2011		2010
Income (loss) before income taxes	$	(4,496)	$	86	$	(2,991)	$	1,352
Exploration expense		307		296		722		649
DD&A		932		962		2,902		2,845
Impairments		183		20		287		147
Deepwater Horizon settlement and related costs(1)		4,042		2		4,055		2
Interest expense		206		218		642		642
Unrealized (gains) losses on derivative instruments, net(2)		692		174		767		(66)
Less: Net income attributable to noncontrolling interests		23		18		62		42
Consolidated Adjusted EBITDAX	$	1,843	$	1,740	$	6,322	$	5,529

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(1)In the third quarter of 2011, the Company revised the definition of Adjusted EBITDAX to exclude the Deepwater Horizon settlement and related costs. The prior periods have been adjusted to reflect this change.

(2)In the fourth quarter of 2010, the Company revised the definition of Adjusted EBITDAX to exclude the impact of unrealized (gains) losses on derivative instruments, net. The prior periods have been adjusted to reflect this change.

       The following presents selected financial information for Anadarko's reporting segments. Information presented below as “Other and Intersegment Eliminations” includes results from hard-minerals non-operated joint ventures androyalty arrangements,and corporate, financing, and certain hedging activities.

		Oil and Gas						Other and
		Exploration						Intersegment
millions		& Production		Midstream		Marketing		Eliminations		Total
Three Months Ended September 30, 2011:
Sales revenues		$	1,801	$	76	$	1,507	$	—	$	3,384
Intersegment revenues			1,244		251		(1,386)		(109)		—
Gains (losses) on divestitures and other, net			(193)		(31)		—		39		(185)
	Total revenues and other		2,852		296		121		(70)		3,199
Operating costs and expenses(1)			955		210		143		53		1,361
Realized (gains) losses on derivatives, net			—		—		—		(71)		(71)
Other (income) expense, net			—		—		—		40		40
Net income attributable to
	noncontrolling interests		—		23		—		—		23
	Total expenses and other		955		233		143		22		1,353
Unrealized (gains) losses on derivatives, net
	included in marketing revenue		—		—		(3)		—		(3)
Adjusted EBITDAX		$	1,897	$	63	$	(25)	$	(92)	$	1,843
Three Months Ended September 30, 2010:
Sales revenues		$	1,318	$	45	$	1,153	$	—	$	2,516
Intersegment revenues			950		198		(1,051)		(97)		—
Gains (losses) on divestitures and other, net			(3)		—		—		37		34
	Total revenues and other		2,265		243		102		(60)		2,550
Operating costs and expenses(1)			723		152		116		83		1,074
Realized (gains) losses on derivatives, net			—		—		—		(157)		(157)
Other (income) expense, net			—		—		—		(129)		(129)
Net income attributable to
	noncontrolling interests		—		18		—		—		18
	Total expenses and other		723		170		116		(203)		806
Unrealized (gains) losses on derivatives, net
	included in marketing revenue		—		—		(4)		—		(4)
Adjusted EBITDAX		$	1,542	$	73	$	(18)	$	143	$	1,740

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(1) Operating costs and expenses exclude exploration expense, DD&A, impairments, and Deepwater Horizon settlement and related costs since these expenses are excluded from Adjusted EBITDAX. For the three months ended September 30, 2010, $25million has been reclassified from the oil and gas exploration and production segment to the midstream segment to properly reflect the previously reported amounts.

		Oil and Gas						Other and
		Exploration						Intersegment
millions		& Production		Midstream		Marketing		Eliminations		Total
Nine Months Ended September 30, 2011:
Sales revenues		$	5,668	$	238	$	4,436	$	—	$	10,342
Intersegment revenues			3,699		684		(4,066)		(317)		—
Gains (losses) on divestitures and other, net			(307)		(11)		—		104		(214)
	Total revenues and other		9,060		911		370		(213)		10,128
Operating costs and expenses(1)			2,739		575		414		163		3,891
Realized (gains) losses on derivatives, net			—		—		—		(153)		(153)
Other (income) expense, net			—		—		—		(2)		(2)
Net income attributable to
	noncontrolling interests		—		62		—		—		62
	Total expenses and other		2,739		637		414		8		3,798
Unrealized (gains) losses on derivatives, net
	included in marketing revenue		—		—		(8)		—		(8)
Adjusted EBITDAX		$	6,321	$	274	$	(52)	$	(221)	$	6,322
Nine Months Ended September 30, 2010:
Sales revenues		$	4,117	$	145	$	3,947	$	—	$	8,209
Intersegment revenues			3,259		630		(3,593)		(296)		—
Gains (losses) on divestitures and other, net			(15)		—		—		99		84
	Total revenues and other		7,361		775		354		(197)		8,293
Operating costs and expenses(1)			2,169		501		349		139		3,158
Realized (gains) losses on derivatives, net			—		—		—		(339)		(339)
Other (income) expense, net			—		—		—		(106)		(106)
Net income attributable to
	noncontrolling interests		—		42		—		—		42
	Total expenses and other		2,169		543		349		(306)		2,755
Unrealized (gains) losses on derivatives, net
	included in marketing revenue		—		—		(9)		—		(9)
Adjusted EBITDAX		$	5,192	$	232	$	(4)	$	109	$	5,529

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(1) Operating costs and expenses exclude exploration expense, DD&A, impairments, and Deepwater Horizon settlement and related costs since these expenses are excluded from Adjusted EBITDAX. For the nine months ended September 30, 2010, $57million has been reclassified from the oil and gas exploration and production segment to the midstream segment to properly reflect the previously reported amounts.