Anadarko Petroleum 10-K 23 Feb 10 2009 FY Annual report Financial data

Statement Of Income Alternative

Statement Of Income Alternative (USD $)
In Millions, except Per Share data	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Revenues and Other
Gas sales	$2,924	$5,770	$4,043
Oil and condensate sales	4,022	6,425	5,407
Natural-gas-liquids sales	536	802	719
Gathering, processing and marketing sales	728	1,082	1,487
Gains (losses) on divestitures and other, net	133	1,083	4,760
Reversal of accrual for DWRRA dispute (Note 14)	657	0	0
Total	9,000	15,162	16,416
Costs and Expenses
Oil and gas operating	933	1,104	1,101
Oil and gas transportation and other	590	553	453
Exploration	1,107	1,369	905
Gathering, processing and marketing	617	800	1,025
General and administrative	983	866	936
Depreciation, depletion and amortization	3,532	3,194	2,840
Other taxes	746	1,452	1,234
Impairments	115	223	51
Total	8,623	9,561	8,545
Operating Income	377	5,601	7,871
Other (Income) Expense
Interest expense	702	732	1,083
(Gains) losses on commodity derivatives, net	408	(561)	524
(Gains) losses on other derivatives, net	(582)	10	9
Other (income) expense, net	(43)	52	(71)
Total	485	233	1,545
Income (Loss) from Continuing Operations Before Income Taxes	(108)	5,368	6,326
Income Tax Expense (Benefit)	(5)	2,148	2,559
Income (Loss) from Continuing Operations	(103)	3,220	3,767
Income from Discontinued Operations, net of taxes	0	63	11
Net Income (Loss)	(103)	3,283	3,778
Net Income Attributable to Noncontrolling Interests	32	23	0
Net Income (Loss) Attributable to Common Stockholders	(135)	3,260	3,778
Amounts Attributable to Common Stockholders
Income (loss) from continuing operations attributable to common stockholders	(135)	3,197	3,767
Income from discontinued operations, net of taxes	0	63	11
Net Income (Loss) Attributable to Common Stockholders	($135)	$3,260	$3,778
Per Common Share (amounts attributable to common stockholders):
Income (loss) from continuing operations attributable to common stockholders-basic	-0.28	6.79	8.01
Income (loss) from continuing operations attributable to common stockholders- diluted	-0.28	6.78	7.99
Income from discontinued operations, net of taxes-basic	$0	0.13	0.02
Income from discontinued operations, net of taxes-diluted	$0	0.13	0.02
Net income (loss) attributable to common stockholders-basic	-0.28	6.92	8.03
Net income (loss) attributable to common stockholders-diluted	-0.28	6.91	8.01
Average Number of Common Shares Outstanding-Basic	480	465	465
Average Number of Common Shares Outstanding-Diluted	480	466	467
Dividends (per Common Share)	0.36	0.36	0.36

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Millions	Dec. 31, 2009	Dec. 31, 2008
Current Assets
Cash and cash equivalents	$3,531	$2,360
Accounts receivable, net of allowance:
Customers	1,019	791
Others	1,033	896
Other current assets	500	1,048
Total	6,083	5,095
Properties and Equipment
Cost	50,344	47,073
Less accumulated depreciation, depletion and amortization	13,140	10,026
Net properties and equipment	37,204	37,047
Other Assets	1,514	1,368
Goodwill and Other Intangible Assets	5,322	5,413
Total Assets	50,123	48,923
Current Liabilities
Accounts payable	2,876	3,166
Accrued expenses	948	898
Current debt	0	1,472
Total	3,824	5,536
Long-term Debt	11,149	9,128
Midstream Subsidiary Note Payable to a Related Party	1,599	1,739
Other Long-term Liabilities
Deferred income taxes	9,925	9,974
Other	3,211	3,390
Total	13,136	13,364
Stockholders' Equity
Common stock, par value $0.10 per share (1.0 billion shares authorized, 505.0 million and 471.6 million shares issued as of December 31, 2009 and 2008, respectively)	50	47
Paid-in capital	7,243	5,696
Retained earnings	13,868	14,179
Treasury stock (12.4 million and 11.7 million shares as of December 31, 2009 and 2008, respectively)	(721)	(686)
Accumulated other comprehensive income (loss):
Gains (losses) on derivative instruments	(96)	(118)
Foreign currency translation adjustments	0	(1)
Pension and other postretirement plans	(416)	(322)
Total	(512)	(441)
Total Stockholders' Equity	19,928	18,795
Noncontrolling Interests	487	361
Total Equity	20,415	19,156
Commitments and Contingencies (Note 13 and Note 14)
Total Liabilities and Equity	$50,123	$48,923

1_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
	Dec. 31, 2009	Dec. 31, 2008
Common stock, par value	0.1	0.1
Common stock, shares authorized	1,000,000,000	1,000,000,000
Common stock, shares issued	505,000,000	471,600,000
Treasury stock, shares	12,400,000	11,700,000

Statement Of Shareholders Equit

Statement Of Shareholders Equity And Other Comprehensive Income (USD $)
In Millions	Preferred Stock	Common Stock	Paid-in Capital	Retained Earnings	Treasury Stock	Accumulated Other Comprehensive Income (Loss)	Total Stockholders' Equity	Non-controlling Interests	Total
Beginning Balance at Dec. 31, 2006	$46	$47	$5,255	$7,409	($20)	($334)	$12,403	$0	$12,403
Net income (loss)				3,778			3,778		3,778
Preferred stock repurchased and retired	(1)						(1)		(1)
Common stock issued			256				256		256
Dividends - common				(170)			(170)		(170)
Adoption of accounting standard for uncertain tax positions				72			72		72
Repurchase of common stock					(35)		(35)		(35)
Previously deferred losses on derivative instruments						5	5		5	[1]
Foreign currency translation adjustments						(1)	(1)		(1)
Pensions and other postretirement plans adjustments						57	57		57
Ending Balance at Dec. 31, 2007	45	47	5,511	11,089	(55)	(273)	16,364	0	16,364
Net income (loss)				3,260			3,260	23	3,283
Preferred stock repurchased and retired	(45)						(45)		(45)
Common stock issued			189				189		189
Dividends - common				(170)			(170)		(170)
Repurchase of common stock					(631)		(631)		(631)
Sale of subsidiary units								343	343
Contributions from (distributions to) noncontrolling interest owners and other, net			(4)				(4)	(5)	(9)
Previously deferred losses on derivative instruments						14	14		14	[1]
Pensions and other postretirement plans adjustments						(182)	(182)		(182)
Ending Balance at Dec. 31, 2008	0	47	5,696	14,179	(686)	(441)	18,795	361	19,156
Net income (loss)				(135)			(135)	32	(103)
Common stock issued		3	1,547				1,550		1,550
Dividends - common				(176)			(176)		(176)
Repurchase of common stock					(35)		(35)		(35)
Sale of subsidiary units								120	120
Contributions from (distributions to) noncontrolling interest owners and other, net								(26)	(26)
Previously deferred losses on derivative instruments						22	22		22	[1]
Foreign currency translation adjustments						1	1		1
Pensions and other postretirement plans adjustments						(94)	(94)		(94)
Ending Balance at Dec. 31, 2009	$0	$50	$7,243	$13,868	($721)	($512)	$19,928	$487	$20,415
[1]Net of income tax benefit (expense) of $(12) million, $(8) million, and $(3) million for the year ended December 31, 2009, 2008, and 2007, respectively.

Statement Of Other Comprehensiv

Statement Of Other Comprehensive Income (USD $)
In Millions	12 Months Ended Dec. 31, 2009		12 Months Ended Dec. 31, 2008		12 Months Ended Dec. 31, 2007
Net income (loss)	($103)		$3,283		$3,778
Other Comprehensive Income (Loss), net of taxes
Previously deferred losses on derivative instruments	22	[1]	14	[1]	5	[1]
Foreign currency translation adjustments	1		0		(1)
Pension and other postretirement plans adjustments:
Net gain (loss) incurred during period	(124)	[3]	(187)	[3]	42	[3]
Amortization of net (gain) loss included in net periodic pension cost	30	[2]	9	[2]	11	[2]
Prior service credit (cost) incurred during period	0	[4]	(4)	[4]	4	[4]
Total pension and other postretirement plans adjustments	(94)		(182)		57
Other	0		1		3
Total	(71)		(167)		64
Comprehensive Income (Loss)	(174)		3,116		3,842
Comprehensive Income Attributable to Noncontrolling Interests	32		23		0
Comprehensive Income (Loss) Attributable to Common Stockholders	($206)		$3,093		$3,842
[1]Net of income tax benefit (expense) of $(12) million, $(8) million, and $(3) million for the year ended December 31, 2009, 2008, and 2007, respectively.
[2]Net of income tax benefit (expense) of $(17) million, $(5) million, and $(7) million for the year ended December 31, 2009, 2008, and 2007, respectively.
[3]Net of income tax benefit (expense) of $70 million, $107 million, and $(23) million for the year ended December 31, 2009, 2008, and 2007, respectively.
[4]Net of income tax benefit (expense) of zero, $2 million, and $(2) million for the year ended December 31, 2009, 2008, and 2007, respectively.

2_Statement Of Other Comprehens

Statement Of Other Comprehensive Income (Parenthetical) (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Previously deferred losses on derivative instruments, income tax benefit (expense)	($12)	($8)	($3)
Net gain (loss) incurred during period, income tax benefit (expense)	70	107	(23)
Amortization of net (gain) loss included in net periodic pension cost, income tax benefit (expense)	(17)	(5)	(7)
Prior service credit (cost) incurred during period, income tax benefit (expense)	$0	$2	($2)

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Cash Flow from Operating Activities
Net income (loss)	($103)	$3,283	$3,778
Less income from discontinued operations, net of taxes	0	63	11
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization	3,532	3,194	2,840
Deferred income taxes	(165)	(22)	(1,057)
Dry hole expense and impairments of unproved properties	780	1,005	632
Impairments	115	223	51
(Gains) losses on divestitures, net	(44)	(993)	(4,660)
Unrealized (gains) losses on derivatives	717	(919)	1,048
Reversal of accrual for DWRRA dispute (Note 14)	(657)	0	0
Other non-cash items	183	125	175
Changes in assets and liabilities:
(Increase) decrease in accounts receivable	(290)	803	391
Increase (decrease) in accounts payable and accrued expenses	269	158	(1,521)
Other items-net	(411)	(347)	1,100
Cash provided by (used in) operating activities - continuing operations	3,926	6,447	2,766
Cash provided by (used in) operating activities - discontinued operations	0	(5)	134
Net cash provided by (used in) operating activities	3,926	6,442	2,900
Cash Flow from Investing Activities
Additions to properties and equipment and dry hole costs	(4,352)	(4,801)	(4,246)
Divestitures of properties and equipment and other assets	176	2,455	8,260
Investment in Trinity Associates LLC	0	0	(100)
Other-net	(60)	(182)	(70)
Cash provided by (used in) investing activities - continuing operations	(4,236)	(2,528)	3,844
Cash provided by (used in) investing activities - discontinued operations	0	0	(66)
Net cash provided by (used in) investing activities	(4,236)	(2,528)	3,778
Cash Flow from Financing Activities
Borrowings, net of issuance costs	1,975	0	(40)
Borrowings from affiliates, net of issuance costs	0	1	2,848
Issuance of midstream subsidiary note payable, net of issuance costs	0	0	2,176
Repayments of debt	(1,470)	(1,960)	(10,475)
Repayments on midstream subsidiary note payable	(140)	(461)	0
Increase (decrease) in accounts payable, banks	(139)	89	(29)
Dividends paid	(176)	(170)	(170)
Settlement of derivatives with a financing element	0	6	(306)
Repurchase of common stock	(35)	(631)	(35)
Repurchase and retirement of preferred stock	0	(45)	(1)
Issuance of common stock	1,372	25	114
Sale of subsidiary units	120	343	0
Distributions to noncontrolling interest owners	(29)	(16)	0
Contributions from noncontrolling interest owners	3	7	0
Other financing activities	0	(10)	(3)
Net cash provided by (used in) financing activities	1,481	(2,822)	(5,921)
Net Increase (Decrease) in Cash and Cash Equivalents	1,171	1,092	757
Cash and Cash Equivalents at Beginning of Period	2,360	1,268	511
Cash and Cash Equivalents at End of Period	$3,531	$2,360	$1,268

Summary of Significant Accounti

Summary of Significant Accounting Policies
	12 Months Ended Dec. 31, 2009 USD / shares
Summary of Significant Accounting Policies	1. Summary of Significant Accounting Policies GeneralAnadarko Petroleum Corporation is engaged in the exploration, development, production, and marketing of natural gas, crude oil, condensate and natural gas liquids (NGLs). The Company also engages in the gathering, processing, treating and transporting of natural gas, as well as participates in the hard minerals business through its ownership in non-operated joint ventures and royalty arrangements. The terms Anadarko and Company refer to Anadarko Petroleum Corporation and its consolidated subsidiaries. Basis of PresentationThe consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States. The consolidated financial statements include the accounts of Anadarko and entities in which it holds a controlling financial interest. Undivided interests in oil and gas joint ventures are consolidated on a proportionate basis. All intercompany transactions have been eliminated. Investments in non-controlled entities over which Anadarko exercises significant influence are accounted for under the equity method. Other investments are carried at cost. Certain amounts for prior periods have been reclassified to conform to the current presentation. The Company changed the manner in which gains and losses on commodity derivatives, used to economically hedge production, are presented within the Consolidated Statements of Income to provide enhanced transparency into asset-operating performance. Previously, all realized and unrealized gains and losses on commodity derivatives were reported in gas sales, oil and condensate sales, or NGLs sales. (Gains) losses on commodity derivatives are now presented as a separate line item on the Consolidated Statements of Income. Prior periods have been reclassified to conform to this presentation. See Derivative Instruments below. Use of EstimatesIn preparing financial statements in accordance with accounting principles generally accepted in the United States, management makes informed judgments and estimates that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the periods reported. Management reviews its estimates periodically, including those related to the carrying value of properties and equipment, proved reserves, goodwill, intangible assets, asset retirement obligations, litigation reserves, environmental liabilities, pension assets and liabilities and costs, income taxes, and fair values. Changes in facts and circumstances or additional information may result in revised estimates and actual results may differ from these estimates. Fair ValueFair value is defined as the price that would be received to sell an asset or price paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standard characterizes inputs used in determining fair value according to a hierarchy that prioritizes those inputs based upon the degree to which they are observable. The three levels of the fair-value-measurement hierarchy are as follows: Level 1-inp

Divestitures and Other

Divestitures and Other
	12 Months Ended Dec. 31, 2009 USD / shares
Divestitures and Other	2. Divestitures and Other Gains (Losses) on Divestitures and OtherDuring 2009, 2008 and 2007, the Company closed several unrelated property divestiture transactions, realizing proceeds of approximately $176million, $2.5billion, and $11.1billion before income taxes, respectively. During 2009, 2008 and 2007, net gains on divestitures were $44million, $1.2billion, and $4.7billion, respectively. The 2009 gains included $29million primarily related to divestitures of certain oil and gas properties in Qatar. In December 2009, Anadarko entered into a non-monetary exchange for certain oil and gas properties in the Rockies area. The properties received were recorded at fair value of approximately $230million and the properties conveyed were accounted for as a retirement as the conveyance did not significantly affect the depletion rate of the properties. During 2008, the Company entered into an agreement to divest its 50% interest in the Peregrino field, offshore Brazil, and certain related assets. The Peregrino divestiture closed in December 2008. Anadarko received approximately $1.4billion in net after-tax cash proceeds from the sale, recognizing a gain of approximately $800million. In connection with the sale of its interest in the Peregrino field, Anadarko may receive contingent consideration in future periods. Contingent consideration is based on the value of oil produced from properties subject to the sale transaction. The Company has not recorded any amounts for this contingent consideration. Additionally, the Company has cash on deposit with the Brazilian federal court pending a decision regarding the appropriate rate of tax on the sale of the Peregrino field. The 2007 gains included $4.1billion related to the divestiture of certain oil and gas properties and $0.6billion related to the divestiture of certain gathering and processing facilities. In 2008, gains (losses) on divestitures and other, net included a net $82million ($52million after tax) reduction related to corrections resulting from analysis of property records after the adoption of the successful efforts method of accounting. This net amount included a reduction of $163million related to 2007. Management concluded that this misstatement was not material relative to 2007 interim and annual results, or to the 2008 periods, and corrected the error in the first quarter of 2008. Discontinued OperationsIn November 2006, Anadarko sold its wholly owned subsidiary, Anadarko Canada Corporation. The results of Anadarkos Canadian operations have been classified as discontinued operations in the consolidated statements of income and cash flows for 2008 and 2007 primarily related to adjustments to an indemnity obligation provided by the Company to the purchaser, as well as expenses associated with finalizing exit activities. See Note 14. Severance and Asset-Realignment ExpensesDuring 2007, general and administrative expense included charges of $85million associated with employee severance and benefits arising from the Companys post-acquisition asset-realignment and restructuring efforts initiated in the fourth quarter of 2006. These expenses were not material in 2008 or 2009.

Noncontrolling Interest

Noncontrolling Interest
	12 Months Ended Dec. 31, 2009 USD / shares
Noncontrolling Interest	3. Noncontrolling Interest During the second quarter of 2008, Western Gas Partners, LP (WES) completed its initial public offering of 20.8million common units (representing a 38.4% limited partner interest) for net proceeds of $321million ($343million less $22million for underwriting discounts and structuring fees). WES is a limited partnership formed by Anadarko to own, operate, acquire and develop midstream assets. Anadarko contributed assets to WES in exchange for an aggregate 59.6% initial limited partner interest (consisting of common and subordinated limited partner units) in WES, a 2% general partner interest and incentive distribution rights (IDRs). IDRs entitle the holder to specified increasing percentages of cash distributions as WESs per-unit cash distributions increase. In addition, Anadarko maintains control over the assets owned by WES through ownership of the general partner. Proceeds from the offering were used to reduce debt. All proceeds from the sale of the common units to the public is reported as noncontrolling interests in the consolidated balance sheet, including $29million that will be transferred to paid-in capital if and when the WES subordinated units convert to common units. The results of operations and financial position of WES are included in the consolidated financial statements of Anadarko. The portion of WES results of operations that is attributable to common units held by the public (units not held by Anadarko) is recorded as noncontrolling interests. In December 2009, WES issued 6.9million common units representing limited partner interests to the public. This offering raised proceeds of approximately $120million and was recorded as noncontrolling interests. Anadarko holds an aggregate 54.8% limited partner interest in WES as of December31, 2009.

Inventories

Inventories
	12 Months Ended Dec. 31, 2009 USD / shares
Inventories	4. Inventories The major classes of inventories, which are included in other current assets, are as follows: millions 2009 2008 Crude oil and NGLs $ 142 $ 89 Natural gas 94 51 Total $ 236 $ 140

Properties and Equipment

Properties and Equipment
	12 Months Ended Dec. 31, 2009 USD / shares
Properties and Equipment	5. Properties and Equipment A summary of the cost of properties and equipment by function follows: millions 2009 2008 Oil and gas (includes unproved properties of $9,505 and $10,428 as of December 31, 2009 and 2008, respectively) $ 44,328 $ 41,496 Gathering, processing and marketing 3,705 3,510 Minerals 1,188 1,196 Other 1,123 871 Total $ 50,344 $ 47,073 During 2009, the Company recognized total impairments of $41million related to long-lived assets. This includes $22million related to the oil and gas exploration and production operating segment, which was triggered by the current economic and commodity price environment. In addition, certain midstream operating segment assets were impaired by $7million due to reduced operating activity, and an LNG facility site, included in the marketing operating segment, was impaired by $12million. All assets were impaired to fair value resulting in Level 3 measurements, and, along with current-year depreciation, reduced the net book value to $26million. During 2008 and 2007, the Company recognized impairments of $211million and $51million, respectively. Impairments in 2008 included $113million associated with United States properties included in the oil and gas exploration and production operating segment, and $98million associated with certain gathering and processing facilities in the United States included in the midstream operating segment. These impairments resulted primarily from lower commodity prices at year-end 2008. Suspended Exploratory Drilling CostsIf an exploratory well provides evidence as to the existence of sufficient quantities of hydrocarbons to justify potential completion as a producing well, drilling costs associated with the well are initially capitalized, or suspended, pending a determination as to whether a commercially sufficient quantity of proved reserves can be attributed to the area as a result of drilling. This determination may take longer than one year in certain areas (generally, deepwater and international locations) depending upon, among other things, the amount of hydrocarbons discovered, the outcome of planned geological and engineering studies, the need for additional appraisal drilling activities to determine whether the discovery is sufficient to support an economic development plan and, the requirement for government sanctioning in certain international locations before proceeding with development activities. At the end of each quarter, management reviews the status of all suspended exploratory drilling costs in light of ongoing exploration activities in particular, whether the Company is making sufficient progress in its ongoing exploration and appraisal efforts or, in the case of discoveries requiring government sanctioning, whether development negotiations are underway and proceeding as planned. If management determines that future appraisal drilling or development activities are unlikely to occur, any associated suspended exploratory drilling costs are expensed in that period. The following table presents the amount of suspended explo

Investments

Investments
	12 Months Ended Dec. 31, 2009 USD / shares
Investments	6. Investments Noncontrolling Mandatorily Redeemable InterestsIn 2007, Anadarko contributed certain of its oil and gas properties ($1.0billion fair value at date of contribution) and gathering and processing assets ($1.9billion fair value at date of contribution), to newly formed unconsolidated entities in exchange for noncontrolling mandatorily redeemable interests. The common equity of the investee entities is 95% owned by third parties that also maintain operational control over the assets. Distributions to the interest holders, including Anadarko, are payable quarterly. Subsequent to their formation, the investee entities loaned Anadarko an aggregate of $2.9billion. These loans were funded through third-party equity contributions to the investee entities. The Company accounts for its investment in these entities under the equity method of accounting. Anadarko has legal right of setoff and intends to net-settle its obligations under each of the notes payable to the investees and the distributable fair value of its interest in the corresponding investee entity. Accordingly, the investments and the obligations are presented net on the consolidated balance sheet with the excess of the notes payable to investee entities over the aggregate investment carrying amounts included in other long-term liabilitiesother for all periods presented. The noncontrolling mandatorily redeemable interests entitle Anadarko to a LIBOR-based preferred return on the value of the contributed assets plus a common return consisting of a 5% participation in profits, losses and any residual value of the investee entities. At December31, 2009, the priority return rates applicable to Anadarkos interests were 0.78% for Anadarkos interest in the oil and gas investee entity and 0.70% for Anadarkos interests in gathering and processing investee entities. Anadarkos interest in these entities also provides the Company with limited consent rights with respect to certain matters, such as acquisition and disposition of assets and incurrence of debt. Anadarko may redeem its noncontrolling interests, and the owners of the controlling interests may cause a redemption of Anadarkos interests, in 2022 and thereafter. Anadarkos interests are mandatorily redeemable in 2037. The notes issued by Anadarko have 35-year terms and variable LIBOR-based interest rates that fluctuate with Anadarkos credit rating. At December31, 2009, the applicable interest rate for all above-described notes was 1.25%. Interest on the notes is due quarterly, while principal is due at maturity, subject to the net-settlement provisions. The notes are equal in seniority to Anadarkos other unsecured unsubordinated indebtedness. The note with the oil and gas entity contains a maximum 67% debt-to-capitalization covenant. Proceeds from the notes were used to repay a portion of Anadarkos indebtedness related to its 2006 acquisitions. Anadarko recognized gains of approximately $443million and $300million on the exchange with the oil and gas investee entity and the gathering and processing investee entities, respectively, in 2007. At December31, 2009, the carrying amount of these investments was $2.8billion, wh

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets
	12 Months Ended Dec. 31, 2009 USD / shares
Goodwill and Other Intangible Assets	7. Goodwill and Other Intangible Assets Changes in the carrying amount of goodwill by segment for 2009 and 2008 are as follows: 2009 2008 millions OilandGas Exploration Production Midstream Total OilandGas Exploration Production Midstream Total Balance at beginning of year $ 5,143 $ 139 $ 5,282 $ 4,847 $ 108 $ 4,955 Goodwill associated with 2006 acquisitions 298 31 329 Other changes, net (2 ) (2 ) Balance at end of year $ 5,143 $ 139 $ 5,282 $ 5,143 $ 139 $ 5,282 During 2008, the carrying amount of goodwill increased $327million largely attributable to revisions in estimates of deferred tax liabilities recorded upon the acquisitions of Kerr-McGee Corporation (Kerr-McGee) and Western Gas Resources, Inc. (Western). None of Anadarkos goodwill is deductible for tax purposes. Intangible assets subject to amortization at December31, 2009 and 2008 are as follows: millions GrossCarrying Amount Accumulated Amortization NetCarrying Amount Balance at December31, 2009 Drilling contracts $ 155 $ (155 ) $ Transportation contracts 171 (163 ) 8 Offshore platform leases 60 (28 ) 32 $ 386 $ (346 ) $ 40 Balance at December31, 2008 Drilling contracts $ 155 $ (153 ) $ 2 Transportation contracts 171 (76 ) 95 Offshore platform leases 60 (26 ) 34 $ 386 $ (255 ) $ 131 Costs associated with acquired drilling contract intangibles were initially capitalized as intangible assets. Amortization of these costs is recorded to oil and gas properties as exploratory and development drilling costs and ultimately expensed through depletion. In 2009, 2008 and 2007, $2million, $35million and $81million, respectively, of drilling contract intangible value was amortized and recorded to oil and gas properties. Drilling contract intangibles relate to the Companys oil and gas exploration and production operating segment. The Company recognized impairments of $74million, $12million and zero for 2009, 2008 and 2007, respectively, related to certain transportation contracts included in intangible assets due to changes in price differentials at specific locations. These assets were impaired to fair value, determined using a discounted cash flow approach, which incorporates market-based inputs that represent a Level 2 fair-value measurement. Amortization expense for the transportation contracts was $13million, $26million and $28million for 2009, 2008 and 2007, respectively. The transportation contract impairments and amortization relate to the marketing operating segment. Costs associated with offshore platform leases were capitalized as intangible assets. Amortization expense for the offshore platform lease intangibles was $2million, $7million and $19milli

Derivative Instruments

Derivative Instruments
	12 Months Ended Dec. 31, 2009 USD / shares
Derivative Instruments	8. Derivative Instruments Objective and StrategyThe Company is exposed to commodity price and interest-rate risk, and management considers it prudent to periodically reduce the Companys exposure to cash flow variability resulting from commodity price changes and interest-rate fluctuations. Accordingly, the Company enters into certain derivative instruments in order to manage its exposure to these risks. Futures, swaps and options are used to manage the Companys cash flow exposure to commodity price risk inherent in the Companys oil and gas production and gas-processing operations (Oil and Gas Production/Processing Derivative Activities). Futures contracts and commodity swap agreements are used to fix the price of expected future oil and gas sales at major industry trading locations, such as Henry Hub, Louisiana for gas and Cushing, Oklahoma for oil. Basis swaps are used to fix or float the price differential between the product price at one market location versus another. Options are used to establish a floor and a ceiling price (collar) for expected future oil and gas sales. Derivative instruments are also used to manage commodity price risk inherent in customer pricing requirements and to fix margins on the future sale of natural gas and NGLs from the Companys leased storage facilities (Marketing and Trading Derivative Activities). The Company may also enter into physical-delivery sales contracts to manage cash flow variability. These contracts call for the receipt or delivery of physical product at a specified location and price, which may be fixed or market-based. Interest-rate swaps are used to fix or float interest rates on existing or anticipated indebtedness. The purpose of these instruments is to mitigate the Companys existing or anticipated exposure to unfavorable interest-rate changes. The Company does not apply hedge accounting to any of its derivative instruments. The application of hedge accounting was discontinued by the Company for periods beginning on or after January1, 2007. As a result, both realized and unrealized gains and losses associated with derivative instruments are recognized in earnings. Net derivative losses attributable to derivatives previously subject to hedge accounting reside in accumulated other comprehensive income (loss) and are reclassified to earnings in future periods as the economic transactions to which the derivatives relate are recorded in earnings. The accumulated other comprehensive loss balances related to commodity derivatives at December31, 2009 and December31, 2008, were $10million ($7million after tax) and $22million ($14million after tax), respectively. The accumulated other comprehensive loss balances related to interest-rate derivatives at December31, 2009 and December31, 2008, were $141million ($89million after tax) and $163million ($104million after tax), respectively. Oil and Gas Production/Processing Derivative ActivitiesBelow is a summary of the Companys derivative instruments related to its oil and gas production as of December31, 2009. The natural-gas prices listed below are New York Mercantile Exchange (NYMEX) Henry Hub prices. The crude-oil prices listed belo

Asset Retirement Obligations

Asset Retirement Obligations
	12 Months Ended Dec. 31, 2009 USD / shares
Asset Retirement Obligations	9. Asset Retirement Obligations The majority of Anadarkos asset retirement obligations relate to the plugging and abandonment of oil and gas properties. The following table provides a rollforward of the asset retirement obligations. Liabilities settled include settlement payments for obligations as well as obligations that were assumed by the purchasers of divested properties. Revisions to estimated liabilities during the period relate primarily to changes in estimates of asset retirement costs and include, but are not limited to, revisions of estimated inflation rates, changes in property lives and the expected timing of settling asset retirement obligations. millions 2009 2008 Carrying amount of asset retirement obligations at beginning of year $ 1,368 $ 1,101 Liabilities incurred 46 84 Liabilities settled (60 ) (84 ) Accretion expense 89 70 Revisions in estimated liabilities 3 197 Carrying amount of asset retirement obligations at end of year $ 1,446 $ 1,368 At December31, 2009 and 2008, long-term asset retirement obligations of $1.4billion were included in other long-term liabilities.

Debt and Interest Expense

Debt and Interest Expense
	12 Months Ended Dec. 31, 2009 USD / shares
Debt and Interest Expense	10. Debt and Interest Expense December31, 2009 2008 millions Principal Carrying Value Fair Value Principal Carrying Value Fair Value 7.30% Notes due 2009 $ $ $ $ 52 $ 52 $ 52 Floating-Rate Notes due 2009 1,420 1,420 1,359 6.75% Notes due 2011 950 940 1,004 950 934 950 6.875% Notes due 2011 675 688 726 675 695 668 6.125% Notes due 2012 170 169 180 170 169 168 5.00% Notes due 2012 82 82 85 82 82 77 5.75% Notes due 2014 275 274 296 7.625% Notes due 2014 500 499 571 5.95% Notes due 2016 1,750 1,744 1,893 1,750 1,744 1,546 7.05% Debentures due 2018 114 108 120 114 108 107 6.95% Notes due 2019 300 297 340 8.70% Notes due 2019 600 598 749 6.95% Notes due 2024 650 673 704 650 674 570 7.50% Debenture due 2026 112 106 115 112 106 100 7.00% Debentures due 2027 54 54 54 54 54 47 7.125% Debentures due 2027 150 157 152 150 157 132 6.625% Debentures due 2028 17 17 17 17 17 14 7.15% Debentures due 2028 235 215 233 235 215 204 7.20% Debentures due 2029 135 135 139 135 135 119 7.95% Debentures due 2029 117 117 127 117 116 109 7.50% Notes due 2031 900 858 1,010 900 856 796 7.875% Notes due 2031 500 580 583 500 581 460 Zero-Coupon Notes due 2036 2,360 591 623 2,360 561 572 6.45% Notes due 2036 1,750 1,742 1,827 1,750 1,742 1,380 7.95% Notes due 2039 325 324 398 7.73% Debentures due 2096 61 60 66 61 61 55 7.50% Debentures due 2096 78 72 74 78 72 66 7.25% Debentures due 2096 49 49 47 49 49 41 Midstream Subsidiary Note Payable to a Related Party due 2012 1,599 1,599 1,599 1,739 1,739 1,739 Total debt 14,508 12,748 13,732 14,120 12,339 11,331 Less: Current maturities 1,472 1,472 1,411 Total long-term debt $ 14,508 $ 12,748 $ 13,732 $ 12,648 $ 10,867 $ 9,920 The fair value of debt is the estimated amount the Company would have to pay to repurchase its debt, including any premium or discount attributable to the difference between the stated interest rate and market rate of interest at the balance sheet date. Fair values are based on quoted market prices or average valuations of similar debt instruments at the balance sheet date for those debt instruments for which quoted market prices are not avail

Stockholders' Equity

Stockholders' Equity
	1/1/2009 - 12/31/2009 USD / shares
Stockholders' Equity	11. Stockholders Equity Common StockIn August 2008, the Company announced a $5billion share-repurchase program under which shares may be repurchased either in the open market or through privately negotiated transactions. The program is authorized to extend through August 2011 and replaced the $1billion stock-buyback program authorized in 2005. The repurchase program does not obligate Anadarko to acquire any specific number of shares and may be discontinued at any time. During 2008, Anadarko purchased 10million shares of common stock for $600million under the program through purchases in the open market and under share-repurchase agreements. During 2009 and 2007, no shares were repurchased under the programs in effect at those times. In May 2009, Anadarko completed a public offering of 30million shares of common stock at $45.50 per share. After deducting the underwriting discount and other offering costs of $28million, net proceeds to the Company were approximately $1.3billion. Net proceeds from the offering were used for general corporate purposes, including capital expenditures. The changes in the Companys shares of common stock are as follows: millions 2009 2008 2007 Shares of common stock issued Beginning of year 472 469 463 Issuance of common stock 30 Exercise of stock options 1 1 4 Issuance of restricted stock 2 2 2 End of year 505 472 469 Shares of common stock held in treasury Beginning of year 12 1 Purchase of treasury stock 10 Shares received for restricted stock vested and options exercised 1 1 End of year 12 12 1 Shares of common stock outstanding at end of year 493 460 468 The number of shares of common stock issued and outstanding presented in the table above excludes 4million shares held by the Anadarko Petroleum Corporation Executives and Directors Benefits Trust, a grantor trust associated with the Companys obligations under certain of its pension and deferred-compensation plans. For all periods presented, quarterly dividends of nine cents per share were paid to holders of common stock. As of December31, 2009, the covenants contained in certain of the Companys credit and lease agreements provided for a maximum debt-to-capitalization ratio of 65%. The covenants do not specifically restrict the payment of dividends; however, the impact of dividends paid on the Companys debt-to-capitalization ratio must be considered in order to ensure covenant compliance. Based on these covenants, as of December31, 2009, retained earnings of approximately $13.3billion were not limited as to the payment of dividends. The reconciliation between basic and diluted EPS from continuing operations attributable to common stockholders is as follows: millions except per share amounts 2009 2008 2007 Income: Income (loss) from continuing operations attributable to common stockholders $ (135 ) $ 3,197 $ 3,767 Less: Distributions to participating securities

Stock-Based Compensation

Stock-Based Compensation
	12 Months Ended Dec. 31, 2009 USD / shares
Stock-Based Compensation	12. Stock-Based Compensation The Company generally issues new shares to satisfy employee share-based payment plans. At December31, 2009, 24million shares of the 35million shares of Anadarko common stock originally authorized for awards under the active share-based compensation plans remain available for future issuance. The number of shares available is reduced by awards granted. A summary of stock-based compensation cost is presented below: millions 2009 2008 2007 Compensation cost: Restricted stock $ 138 $ 131 $ 115 Value Creation Plan and other 171 43 55 Total compensation cost, pretax 309 174 170 Income tax benefit 112 63 62 For 2009, 2008 and 2007, $12.3million, $9.4million and $23.4million, respectively, in excess tax benefits were included in cash flow from financing activities. Cash received from stock option exercises for 2009, 2008 and 2007 was $22.3million, $14.1million and $88.7million, respectively. Equity-Classified Awards Stock OptionsCertain employees may be granted options to purchase shares of Anadarko common stock with an exercise price equal to, or greater than, the fair market value of Anadarko common stock on the date of grant. These stock options vest over service periods ranging from three to four years and will terminate at the earlier of seven years from the date of grant or the date of exercise. Nonemployee directors may be granted nonqualified stock options with an exercise price equal to the fair market value of Anadarko common stock on the date of grant. These stock options vest over a one-year service period from the date of grant and terminate at the earlier of ten years from the date of grant or the date of exercise. The fair value of stock option awards is determined using the Black-Scholes option-pricing model. The expected life of the option is estimated based upon historical exercise behavior. The expected forfeiture rate is estimated based upon historical forfeiture experience. The volatility assumption was estimated based upon expectations of volatility over the life of the option as measured by historical and implied volatility. The risk-free interest rate was based on the U.S. Treasury rate for a term commensurate with the expected life of the option. The dividend yield was based upon a 12-month average dividend yield. The Company used the following weighted-average assumptions to estimate the fair value of stock options granted during 2009, 2008 and 2007. 2009 2008 2007 Expected option lifeyears 4.9 4.9 5.0 Volatility 46.3 % 37.3 % 28.9 % Risk-free interest rate 1.9 % 2.5 % 4.4 % Dividend yield 0.8 % 0.6 % 0.8 % A summary of stock option activity for the year ended December31, 2009 is presented below: Shares(millions) Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term(years) Aggregate Intrinsic Value(millions) Outstanding at January1, 2009 6.39 $ 42.59 Granted 3.95 $

Commitments

Commitments
	12 Months Ended Dec. 31, 2009 USD / shares
Commitments	13. Commitments LeasesThe Company has $2.5billion in long-term drilling rig commitments that satisfy operating lease criteria. The Company also has various commitments under noncancelable operating lease agreements of $0.9billion for production platforms and equipment, buildings, facilities and aircraft. These operating leases expire at various dates through 2024. Certain of these operating leases contain residual value guarantees at the end of the lease term; however, at December31, 2009, no material liabilities were accrued for these guarantees. At December31, 2009, future minimum lease payments under existing operating leases are as follows: millions Operating Leases 2010 $ 971 2011 872 2012 776 2013 383 2014 95 Later years 296 Total future minimum lease payments $ 3,393 Total rent expense, net of sublease income, amounted to $188million in 2009, $226million in 2008 and $229million in 2007. Total rent expense includes contingent rent expense related to processing fees of $39million, $32million and $6million in 2009, 2008 and 2007, respectively. Drilling Rig CommitmentsAnadarko has entered into various agreements to secure a portion of the drilling rigs necessary to execute its drilling plans over the next several years. The table of future minimum lease payments above includes approximately $2.3billion related to 5 offshore drilling vessels and $186million related to certain contracts for onshore United States drilling rigs. The portion of these lease payments associated with exploratory wells and development wells, net of amounts billed to partners, will initially be capitalized as a component of oil and gas properties, and either depreciated in future periods or written off as exploration expense. Production PlatformsDuring 2004, Anadarko and a group of energy companies (Atwater Valley Producers Group) executed agreements with third parties for the dedication, processing and gathering of natural-gas and condensate production from several natural-gas fields in the deepwater Gulf of Mexico. Third parties constructed and own Independence Hub, a semi-submersible platform in the deepwater Gulf of Mexico. Anadarko became operator of the platform structure upon mechanical completion in 2007. The table of future minimum lease payments above includes $72million related to the monthly demand charges due under the above-described agreements. The agreements do not contain any purchase options, purchase obligations or value guarantees. Spar Platform and Production Vessel LeasesAnadarko has operating leases related to certain spar platforms in the Gulf of Mexico and a floating production, storage and offloading vessel in China. The table of future minimum lease payments above includes approximately $450million for these agreements. These agreements also contain residual value guarantees totaling $37million at the end of the lease periods. BuildingsThe table of future minimum lease payments above includes the Companys lease payment obligations of $99million related to office building leases, including the corporate office building located in Denver,

Contingencies

Contingencies
	12 Months Ended Dec. 31, 2009 USD / shares
Contingencies	14. Contingencies GeneralLitigation charges of $24million, $112million and $56million were expensed during 2009, 2008 and 2007, respectively. The Company is a defendant in a number of lawsuits and is involved in governmental proceedings, including, but not limited to, royalty claims, contract claims and environmental claims. The Company has also been named as a defendant in various personal injury claims, including claims by employees of third-party contractors alleging exposure to asbestos, silica and benzene while working at refineries (previously owned by predecessors of acquired companies) located in Texas, California and Oklahoma. While the ultimate outcome and impact on the Company cannot be predicted with certainty, management believes that the resolution of these proceedings will not have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company. LitigationThe Company is subject to various claims from its royalty owners in the regular course of business as an oil and gas producer, including disputes regarding measurement, post-production costs and expenses and royalty valuations. The Company was named as a defendant in a case styled U.S. of America ex rel. Harold E. Wright v. AGIP Company, et al. filed in September 2000 in the U.S. District Court for the Eastern District of Texas, Lufkin Division. Kerr-McGee was also named as a defendant in this legal proceeding. This lawsuit generally alleges that the Company, including Kerr-McGee, and other industry defendants knowingly undervalued natural gas in connection with royalty payments on production from federal and Indian lands. Based on the Companys present understanding of these various governmental and False Claims Act proceedings, the Company believes that it has substantial defenses to these claims and is vigorously asserting such defenses. However, if the Company is found to have violated the False Claims Act, the Company could be subject to a variety of damages, including treble damages and substantial monetary fines. The discovery process is ongoing. The court has entered an order whereby the case will be tried in phases. The claims against the Company have yet to be set for trial. The Company is currently in settlement discussions with the U.S. government in efforts to globally resolve this litigation against Anadarko and Kerr-McGee, as well as any related administrative actions. Management has accrued a liability for only the settlement amount. The Company believes that an additional loss is unlikely to have a material adverse effect on Anadarkos consolidated financial position, results of operations or cash flows. Deepwater Royalty Relief ActIn 1995, the United States Congress passed the Deepwater Royalty Relief Act (DWRRA) to stimulate exploration and production of oil and natural gas by providing relief from the obligation to pay royalties on certain federal leases located in the deep waters of the Gulf of Mexico. The Company currently owns interests in several deepwater Gulf of Mexico leases granted during the 1996-2000 time period (some originally owned by Kerr-McGee). After the passage of the DWRRA, the Min

Other Taxes

Other Taxes
	12 Months Ended Dec. 31, 2009 USD / shares
Other Taxes	15. Other Taxes Taxes incurred, other than income taxes, are as follows: 2009 2008 2007 Production and severance $ 523 $ 1,135 $ 998 Ad valorem 189 221 178 Other 34 96 58 Total $ 746 $ 1,452 $ 1,234 In July 2006, the Algerian parliament approved legislation establishing an exceptional profits tax on foreign companies Algerian oil production. In December 2006, implementing regulations regarding this legislation were issued. These regulations provide for an exceptional profits tax imposed on gross production at rates of taxation ranging from 5% to 50% based on average daily production volumes for each calendar month in which the price of Brent crude averages over $30 per barrel, retroactively effective to August-2006 production. Uncertainty existed at that time as to whether the exceptional profits tax would apply to the full value of production or only to the value of production in excess of $30 per barrel. In 2006, Anadarko recorded a $103million accrual for the tax, assuming the tax would be applied only to the amounts in excess of $30 per barrel. In January 2007, Sonatrach, the national oil and gas company of Algeria, advised Anadarko that it would begin collecting the exceptional profits tax from Anadarkos share of production commencing with March 2007 liftings, including for the prior months since the new tax went into effect. In April 2007, ALNAFT, an agency under the control of the Algerian Ministry of Energy and Mines responsible for overseeing the Algerian hydrocarbons industry, issued the Application Procedure further defining the procedure and conditions under which the exceptional profits tax is applied and the methodology for its calculation. The Application Procedure and other information supplied by Sonatrach revealed that the exceptional profits tax applied to the full value of production rather than to the amounts in excess of $30 per barrel. This was evidenced by changes in the Companys crude-oil lifting schedule, which was conveyed to Anadarko by Sonatrach. As a result, Anadarko changed the measurement basis for the exceptional profits tax liability in the first quarter of 2007 to reflect the application of the tax rate to the full value of production. On that measurement basis, the Company recognized production tax expense of $379million, $648million and $705million for 2009, 2008 and 2007, respectively. Of the 2007 amount, $87million, or $0.19 per diluted share, was related to 2006 sales and income from continuing operations. In response to the Algerian governments imposition of the exceptional profits tax, the Company has notified Sonatrach of its disagreement with the collection of the exceptional profits tax, based on the Companys interpretation of the Production Sharing Agreement (PSA), which provides for fiscal stability through several provisions that require Sonatrach to pay all taxes and royalties. To facilitate discussions between the parties in an effort to resolve the dispute, on October31, 2007, the Company initiated a conciliation proceeding on the exceptional profits tax as p

Income Taxes

Income Taxes
	12 Months Ended Dec. 31, 2009 USD / shares
Income Taxes	16. Income Taxes Components of income tax expense (benefit) are as follows: millions 2009 2008 2007 Current Federal $ (233 ) $ 1,111 $ 2,764 State (13 ) 40 189 Foreign 409 1,031 658 Total 163 2,182 3,611 Deferred Federal (25 ) 89 (989 ) State (91 ) (7 ) (40 ) Foreign (52 ) (116 ) (23 ) Total (168 ) (34 ) (1,052 ) Total income tax expense (benefit) $ (5 ) $ 2,148 $ 2,559 Total income taxes differed from the amounts computed by applying the statutory income tax rate to income (loss) from continuing operations before income taxes. The sources of these differences are as follows: millions except percentages 2009 2008 2007 Income (loss) from continuing operations before income taxes Domestic $ (660 ) $ 3,297 $ 5,446 Foreign 552 2,071 880 Total $ (108 ) $ 5,368 $ 6,326 Statutory tax rate 35 % 35 % 35 % Tax computed at statutory rate $ (38 ) $ 1,879 $ 2,215 Adjustments resulting from: State income taxes (net of federal income tax benefit) (68 ) 23 111 Texas margin tax law change (net of federal income tax benefit) (14 ) Foreign taxes greater than (less than) federal statutory tax rate 46 (56 ) 59 Non-deductible Algerian exceptional profits tax(1) 144 246 268 U.S. tax on foreign income inclusions and distributions 119 120 142 Excess U.S. foreign tax credit generated (8 ) (102 ) U.S. tax impact from losses and restructuring of foreign operations (94 ) (36 ) (36 ) Net changes in tax contingencies (110 ) 45 2 Federal manufacturing deduction 19 (71 ) (66 ) Othernet (15 ) (2 ) (20 ) Total income tax expense (benefit) $ (5 ) $ 2,148 $ 2,559 Effective tax rate 5 % 40 % 40 % (1) Exceptional profits tax is not deductible for Algerian income tax purposes. Certain tax effects have been recorded directly to the balance sheet at December31, 2009 and 2008. Tax effects related to internal restructuring of certain foreign operations in prior years have been recorded to other long-term liabilities and are being recognized in the income statement over the estimated life of the related properties. During 2008 and 2007, liabilities of $47million and $184million, respectively, were recorded to other long-term liabilities. During 2009, $51million of the liabilities recorded in prior years were reversed to income. As of December31, 2009, the balance in other long-term liabilities re

Statements of Cash Flows Supple

Statements of Cash Flows Supplemental Information
	12 Months Ended Dec. 31, 2009 USD / shares
Statements of Cash Flows Supplemental Information	17. Statements of Cash Flows Supplemental Information In cash flow from operating activities for 2007, the changes reported as other items-net include increases in other long-term liabilities-other of $619million related to operating activities. The following table presents amounts of cash paid for interest (net of amounts capitalized) and income taxes, including amounts related to discontinued operations, and non-cash transactions. millions 2009 2008 2007 Cash paid: Interest $ 724 $ 762 $ 1,107 Income taxes(1) $ 194 $ 1,060 $ 2,241 Non-cash investing activities: Receipt of interest in oil and gas investee entity in exchange for interests in oil and gas properties (See Note 6) $ $ $ 1,000 Receipt of interest in gathering and processing investee entities in exchange for interests in natural-gas gathering systems and associated processing plants (See Note 6) $ $ $ 1,848 Fair value of properties and equipment received in non-cash exchange transactions $ 280 $ 108 $ 88 (1) Includes $378million and $2.3billion in 2008 and 2007, respectively, related to taxable gains on divestitures. Also, 2008 includes $567million of federal income tax refunds.

Major Customers

Major Customers
	12 Months Ended Dec. 31, 2009 USD / shares
Major Customers	18. Major Customers The Companys natural gas is sold to interstate and intrastate gas pipelines, direct end-users, industrial users, local distribution companies and gas marketers. Crude oil and condensate are sold to marketers, gatherers and refiners. NGLs are sold to direct end-users, refiners and marketers. These purchasers are located in the United States and China. The majority of the Companys receivables are paid within two months following the month of purchase. The Company conducts credit analyses of customers prior to making any sales to new customers or increasing credit for existing customers. Based upon these analyses, the Company may require a standby letter of credit or a financial guarantee. As of December31, 2009 and 2008, accounts receivable are shown net of allowance for uncollectible accounts of $11million and $24million, respectively. In 2009, 2008 and 2007, there were no sales to individual customers that exceeded 10% of the Companys total sales revenues.

Segment Information

Segment Information
	12 Months Ended Dec. 31, 2009 USD / shares
Segment Information	19. Segment Information Anadarkos primary business segments are vertically integrated within the oil and gas industry. These segments are separately managed because of the nature of their products and services, as well as unique technology, distribution and marketing requirements. The Companys three reportable operating segments are oil and gas exploration and production, midstream, and marketing. The 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 and gas production. The marketing segment sells most of Anadarkos production, as well as production purchased from third parties. To assess the operating results of Anadarkos segments, the chief operating decision maker (CODM) analyzes income from continuing operations before income taxes, interest expense, exploration expense, DDA and impairments less net income attributable to noncontrolling interests (Adjusted EBITDAX). Anadarkos definition of Adjusted EBITDAX excludes exploration expense, as exploration expense is not an indicator of operating efficiency for a given reporting period, but is monitored by management as part of costs incurred in exploration and development activities. Similarly, DDA expense 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. The Companys definition of Adjusted EBITDAX also excludes interest expense to allow for assessment of segment operating results without regard to Anadarkos financing methods or capital structure. Management believes that the presentation of Adjusted EBITDAX provides information useful in assessing the Companys financial condition and results of operations and that Adjusted EBITDAX is a widely accepted financial indicator of a companys 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. Adjusted EBITDAX should be considered in conjunction with income (loss) from continuing operations attributable to common stockholders and other performance measures, such as operating income or cash flow from operating activities. Below is a reconciliation of consolidated Adjusted EBITDAX to income (loss) from continuing operations before income taxes. millions 2009 2008 2007 Income (loss) from continuing operations before income taxes $ (108 ) $ 5,368 $ 6,326 Exploration expense 1,107 1,369 905 Depreciation, depletion and amortization 3,532 3,194 2,840 Impairments 115 223 51 Interest expense 702 732 1,083 Less: Net income attributable to noncontrolling interests 32 23 Consolidated Adjusted EBITDAX $ 5,316 $ 10,863 $ 11,205 The Companys accounting policies for individual segments are the same as those described in the summary of

Pension Plans, Other Postretire

Pension Plans, Other Postretirement Benefits and Employee Savings Plans
	12 Months Ended Dec. 31, 2009 USD / shares
Pension Plans, Other Postretirement Benefits and Employee Savings Plans	20. Pension Plans, Other Postretirement Benefits and Employee Savings Plans Pension Plans and Other Postretirement BenefitsThe Company has non-contributory defined-benefit pension plans, including both qualified and supplemental plans, and a foreign contributory defined-benefit pension plan. The Company also provides certain health care and life insurance benefits for retired employees. Retiree health care benefits are funded by contributions from the Company and the retiree. The Companys retiree life insurance plan is noncontributory. In 2009, the Company made contributions of $144million to its funded pension plans, $19million to its unfunded pension plans and $16million to its unfunded other postretirement benefit plans. Although reported benefit obligations exceed the fair value of pension and other postretirement plan assets at December31, 2009, the Company monitors the funded status of its funded pension and other postretirement benefit plans to ensure that plan funds are sufficient to continue paying benefits. Contributions to the funded plans increase the plan assets while contributions to unfunded plans are used for current benefit payments. The Company expects to contribute up to $114million to its funded pension plans in 2010. In addition, the Company expects to contribute $19million to its unfunded pension plans and $19million to its unfunded other postretirement benefit plans in2010. The following table sets forth changes in the benefit obligations and fair value of plan assets for the Companys pension and other postretirement benefit plans for the years ended December31, 2009 and 2008, as well as the funded status of the plans and amounts recognized in the financial statements as of December31, 2009 and 2008. PensionBenefits OtherBenefits millions 2009 2008 2009 2008 Change in benefit obligations Benefit obligations at beginning of year $ 1,280 $ 1,321 $ 319 $ 327 Service cost 54 56 9 14 Interest cost 79 78 17 20 Plan amendments 7 3 Actuarial (gain) loss 313 (23 ) (16 ) (23 ) Contributions by plan participants 1 1 4 5 Settlements (17 ) Benefit payments (87 ) (140 ) (20 ) (24 ) Foreign currency exchange rate changes 7 (20 ) Benefit obligations at end of year $ 1,630 $ 1,280 $ 316 $ 319 Change in plan assets Fair value of plan assets at beginning of year $ 748 $ 1,088 $ $ Actual return on plan assets 165 (260 ) Employer contributions 163 76 16 19 Contributions by plan participants 1 1 4 5 Settlements (17 ) Benefit payments (87 ) (140 ) (20 ) (24 ) Foreign currency exchange rate changes 6 (17 ) Fair value of plan

SUPPLEMENTAL QUARTERLY INFORMAT

SUPPLEMENTAL QUARTERLY INFORMATION
	12 Months Ended Dec. 31, 2009 USD / shares
SUPPLEMENTAL QUARTERLY INFORMATION	ANADARKO PETROLEUM CORPORATION SUPPLEMENTAL QUARTERLY INFORMATION (Unaudited) Quarterly Financial Data The following table shows summary quarterly financial data for 2009 and 2008. The Company changed the manner in which gains and losses on commodity derivatives used to economically hedge production are presented within the Consolidated Statements of Income. Previously, all realized and unrealized gains and losses on commodity derivatives were reported in sales revenues. For all periods presented, realized and unrealized gains and losses on commodity derivatives are included within income (loss) from continuing operations. First Quarter Second Quarter Third Quarter Fourth Quarter millions except share amounts 2009 Sales revenues $ 1,751 $ 1,894 $ 2,167 $ 2,398 Gains (losses) on divestitures and other, net $ 45 $ 19 $ 50 $ 19 Reversal of accrual for DWRRA dispute $ $ $ 657 $ Operating income (loss) $ (271 ) $ (322 ) $ 779 $ 191 Income (loss) from continuing operations $ (331 ) $ (216 ) $ 206 $ 238 Income from discontinued operations, net of taxes $ $ $ $ Net income (loss) $ (331 ) $ (216 ) $ 206 $ 238 Net income attributable to noncontrolling interests $ 7 $ 10 $ 6 $ 9 Net income (loss) attributable to common stockholders $ (338 ) $ (226 ) $ 200 $ 229 Amounts attributable to common stockholders: Income (loss) from continuing operations attributable to common stockholders $ (338 ) $ (226 ) $ 200 $ 229 Income from discontinued operations, net of taxes $ $ $ $ Net income (loss) attributable to common stockholders $ (338 ) $ (226 ) $ 200 $ 229 Earnings per share: Income (loss) from continuing operations attributable to common stockholders basic $ (0.73 ) $ (0.48 ) $ 0.40 $ 0.46 Income (loss) from continuing operations attributable to common stockholders diluted $ (0.73 ) $ (0.48 ) $ 0.40 $ 0.46 Income from discontinued operations, net of taxes basic $ $ $ $ Income from discontinued operations, net of taxes diluted $ $ $ $ Net income (loss) attributable to common stockholders basic $ (0.73 ) $ (0.48 ) $ 0.40 $ 0.46 Net income (loss) attributable to common stockholders diluted $ (0.73 ) $ (0.48 ) $ 0.40 $ 0.46 Average number common shares outstanding basic 460 477 491 492 Average number common shares outstanding diluted 460 477 493 494 First Quarter Second Quarter Third Quarter Fourth Quarter millions except share amounts 2008 Sales revenues $ 3,557 $ 4,379 $ 4,029 $ 2,114 Gains (losses) on divestitures and other, net (1) $ (40 ) $ 370 $ (60 ) $ 813 Ope

SUPPLEMENTAL INFORMATION ON OIL

SUPPLEMENTAL INFORMATION ON OIL AND GAS EXPLORATION AND PRODUCTION ACTIVITIES
	12 Months Ended Dec. 31, 2009 USD / shares
SUPPLEMENTAL INFORMATION ON OIL AND GAS EXPLORATION AND PRODUCTION ACTIVITIES	ANADARKO PETROLEUM CORPORATION SUPPLEMENTAL INFORMATION ON OIL AND GAS EXPLORATION AND PRODUCTION ACTIVITIES (Unaudited) In December 2009, Anadarko adopted revised oil and gas reserve estimation and disclosure requirements. The primary impact of the new disclosures is to conform the definition of proved reserves with the SEC Modernization of Oil and Gas Reporting rules, which were issued by the SEC at the end of 2008. The accounting standards update revised the definition of proved oil and gas reserves to require that the average, first-day-of-the-month price during the 12-month period before the end of the year rather than the year-end price, must be used when estimating whether reserve quantities are economical to produce. This same 12-month average price is also used in calculating the aggregate amount of (and changes in) future cash inflows related to the standardized measure of discounted future net cash flows. The rules also allow for the use of reliable technology to estimate proved oil and gas reserves if those technologies have been demonstrated to result in reliable conclusions about reserve volumes. The unaudited supplemental information on oil and gas exploration and production activities for 2009 has been presented in accordance with the new reserve estimation and disclosure rules, which may not be applied retrospectively. The 2006, 2007 and 2008 data are presented in accordance with FASB oil and gas disclosure requirements effective during those periods. However, historical information has been reclassified to conform to the geographic areas required to be disclosed for 2009 under the revised accounting standard. Disclosures by geographic area include the United States and International geographic areas, which are located primarily in Algeria, China and Ghana. The effect of applying the new definition of reliable technology and other non-price related aspects of the updated rules did not significantly impact 2009 net proved reserve volumes. Less than 1% of the Companys total proved reserves, as of year-end 2009, were added as a result of pressure-gradient analyses, well-control and seismic reliable technologies. The effect of applying the 12-month average price, versus the 2009 year-end price, decreased the net remaining reserve volumes by less than 3% of total proved reserves. The standardized measure of discounted future net cash flows for 2009 decreased by $8.3billion as a result of using the 12-month average price rather than the year-end 2009 price. Oil and Gas Reserves The reserve disclosures that follow reflect estimates of proved reserves, proved developed reserves and proved undeveloped reserves, net of royalty interests, of natural gas, crude oil, condensate and NGLs owned at year end and changes in proved reserves during the last three years. Natural-gas volumes are inbillions of cubic feet (Bcf) at a pressure base of 14.73 pounds per square inch and volumes for oil, condensate and NGLs are inmillions of barrels (MMBbls). Total volumes are inmillions of barrels of oil equivalent (MMBOE). For this computation, one barrel is assumed to be the equivalent of 6,000 cubic feet of gas. NGLs are included

Document Information

Document Information
	12 Months Ended Dec. 31, 2009 USD / shares
Document Type	10-K
Amendment Flag	false
Document Period End Date	2009-12-31

Entity Information

Entity Information (USD $)
	12 Months Ended Dec. 31, 2009	Jan. 29, 2010	Jun. 30, 2009
Trading Symbol	APC
Entity Registrant Name	ANADARKO PETROLEUM CORP
Entity Central Index Key	0000773910
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		492,562,381
Entity Public Float			$22,200,000,000