Anadarko Petroleum Corp. (NYSE:APC)

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Area Asset Turnover: United States

Anadarko Petroleum Corp.; United States; area asset turnover calculation

	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012
Selected Financial Data (US$ in millions)
Sales revenues	7,049)	7,819)	13,083)	11,290)	9,911)
Net properties and equipment	28,024)	29,625)	37,186)	35,486)	33,337)
Area Activity Ratio
Area asset turnover¹	0.25	0.26	0.35	0.32	0.30

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

¹ 2016 Calculation
Area asset turnover = Sales revenues ÷ Net properties and equipment
= 7,049 ÷ 28,024 = 0.25

The financial performance of the United States geographic area exhibits a distinct two-phase trajectory between 2012 and 2016, characterized by an initial period of growth and efficiency gains followed by a significant contraction in both revenue and asset utilization.

Sales Revenues: A growth trend is observed from 2012 to 2014, with revenues increasing from 9,911 million US$ to a peak of 13,083 million US$. However, this trend reversed sharply in 2015, where revenues fell to 7,819 million US$, continuing a downward trajectory to 7,049 million US$ by the end of 2016.
Net Properties and Equipment: The asset base expanded steadily during the first three years of the period, rising from 33,337 million US$ in 2012 to 37,186 million US$ in 2014. Following this peak, there was a substantial reduction in net properties and equipment, falling to 29,625 million US$ in 2015 and further declining to 28,024 million US$ in 2016.
Area Asset Turnover: The area asset turnover ratio improved from 0.30 in 2012 to a peak of 0.35 in 2014, indicating an increase in the efficiency of asset utilization to generate sales. This efficiency declined precipitously in 2015 to 0.26 and reached a period low of 0.25 in 2016. The decline in the turnover ratio indicates that the reduction in sales revenues outpaced the reduction in the asset base during the latter part of the analyzed period.

The correlation between the decline in sales revenues and the decrease in asset turnover suggests a significant impairment in the revenue-generating capacity of the US assets after 2014. Although the company reduced its net properties and equipment, these reductions were insufficient to offset the steep drop in sales, leading to a overall decline in operational efficiency.

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Area Asset Turnover: Algeria

Anadarko Petroleum Corp.; Algeria; area asset turnover calculation

	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012
Selected Financial Data (US$ in millions)
Sales revenues	1,103)	1,189)	2,435)	2,184)	2,182)
Net properties and equipment	1,117)	1,271)	1,431)	1,582)	1,575)
Area Activity Ratio
Area asset turnover¹	0.99	0.94	1.70	1.38	1.39

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

¹ 2016 Calculation
Area asset turnover = Sales revenues ÷ Net properties and equipment
= 1,103 ÷ 1,117 = 0.99

The financial performance in the Algeria geographic area between 2012 and 2016 exhibits a period of peak operational efficiency in 2014, followed by a substantial contraction in both revenue generation and asset utilization.

Sales Revenues: Revenue remained stable between 2012 and 2013 before reaching a peak of US$ 2,435 million in 2014. However, a significant downturn occurred in 2015, where revenues fell by approximately 51% to US$ 1,189 million, continuing a slight downward trajectory to US$ 1,103 million by the end of 2016.
Net Properties and Equipment: A consistent downward trend in the asset base is observed starting after 2013. Net properties and equipment declined from a high of US$ 1,582 million in 2013 to US$ 1,117 million in 2016, representing a total reduction in the asset base of approximately 29% over the final three years of the period.
Area Asset Turnover: The asset turnover ratio reached its highest efficiency level in 2014 at 1.70, driven by the combination of peaking revenues and a reducing asset base. This efficiency collapsed in 2015, with the ratio dropping to 0.94, as the decline in sales revenues far outpaced the reduction in net properties and equipment. A marginal recovery to 0.99 was noted in 2016, though the ratio remained significantly below the levels observed prior to 2015.

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Area Asset Turnover: Other International

Anadarko Petroleum Corp.; Other International; area asset turnover calculation

	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012
Selected Financial Data (US$ in millions)
Sales revenues	295)	478)	857)	1,393)	1,214)
Net properties and equipment	3,027)	2,855)	2,972)	3,861)	3,486)
Area Activity Ratio
Area asset turnover¹	0.10	0.17	0.29	0.36	0.35

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

¹ 2016 Calculation
Area asset turnover = Sales revenues ÷ Net properties and equipment
= 295 ÷ 3,027 = 0.10

A significant decline in operational efficiency is observed within the Other International geographic area between 2012 and 2016, characterized by a sharp reduction in sales revenues relative to the maintained asset base.

Sales Revenue Trends: Revenues experienced an initial increase from US$ 1,214 million in 2012 to a peak of US$ 1,393 million in 2013. However, a precipitous downward trend followed, with revenues falling to US$ 857 million in 2014, US$ 478 million in 2015, and reaching a low of US$ 295 million by December 31, 2016.
Net Properties and Equipment: The asset base exhibited higher stability than revenues, despite some fluctuations. After peaking at US$ 3,861 million in 2013, net properties and equipment decreased to US$ 2,972 million in 2014 and remained relatively stagnant through 2016, ending the period at US$ 3,027 million.
Area Asset Turnover Ratio: The area asset turnover ratio peaked at 0.36 in 2013, reflecting the highest level of asset productivity during the period. From 2014 onward, the ratio declined consistently to 0.29, 0.17, and finally 0.10 in 2016. This trajectory indicates a substantial erosion in the ability of the geographic area's assets to generate sales, as the collapse in revenue far outpaced the reduction in the value of net properties and equipment.

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Anadarko Petroleum Corp., sales revenues by geographic area

US$ in millions

	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012
United States	7,049)	7,819)	13,083)	11,290)	9,911)
Algeria	1,103)	1,189)	2,435)	2,184)	2,182)
Other International	295)	478)	857)	1,393)	1,214)
Total	8,447)	9,486)	16,375)	14,867)	13,307)

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

Total revenues exhibited a growth phase between 2012 and 2014, peaking at 16,375 million USD. This expansion was followed by a substantial contraction in 2015 and a further decrease in 2016, resulting in a total revenue of 8,447 million USD by the end of the analyzed period.

United States Revenue Trend: The domestic market served as the primary revenue contributor throughout the period. Revenue increased steadily from 9,911 million USD in 2012 to a peak of 13,083 million USD in 2014. A sharp decline occurred in 2015, with revenues falling to 7,819 million USD, followed by a continued decrease to 7,049 million USD in 2016.
Algerian Revenue Trend: Revenues from Algeria remained relatively stable from 2012 to 2013 before increasing to 2,435 million USD in 2014. A significant reduction is observed in 2015, where revenue dropped to 1,189 million USD, representing a decrease of over 50% from the previous year, with a further slight decline to 1,103 million USD in 2016.
Other International Revenue Trend: The Other International segment demonstrated the most consistent downward trajectory after 2013. Following a peak of 1,393 million USD in 2013, revenues declined annually, falling to 857 million USD in 2014, 478 million USD in 2015, and reaching a low of 295 million USD in 2016.

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Anadarko Petroleum Corp., net properties and equipment by geographic area

US$ in millions

	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012
United States	28,024)	29,625)	37,186)	35,486)	33,337)
Algeria	1,117)	1,271)	1,431)	1,582)	1,575)
Other International	3,027)	2,855)	2,972)	3,861)	3,486)
Total	32,168)	33,751)	41,589)	40,929)	38,398)

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

Between 2012 and 2016, total net properties and equipment experienced a period of initial growth followed by a significant contraction. Total valuations increased from $38.398 billion in 2012 to a peak of $41.589 billion in 2014, before declining to $32.168 billion by the end of 2016.

United States Asset Trends: The United States constitutes the vast majority of the asset base. Net properties and equipment in this region grew from $33.337 billion in 2012 to $37.186 billion in 2014. This was followed by a sharp downward trend, with values falling to $29.625 billion in 2015 and further decreasing to $28.024 billion by December 31, 2016.
Algerian Asset Trends: Assets in Algeria remained relatively stagnant between 2012 and 2013, peaking at $1.582 billion. From 2014 onward, a consistent year-over-year decline is observed, with the valuation ending at $1.117 billion in 2016.
Other International Asset Trends: The other international segment exhibited fluctuations throughout the period. After an initial increase to $3.861 billion in 2013, these assets declined to a low of $2.855 billion in 2015 before recovering slightly to $3.027 billion by the end of 2016.
Aggregate Geographic Analysis: The overall decline in total net properties and equipment from 2014 to 2016 is primarily driven by the reduction in United States assets. While international segments also saw declines or volatility, the scale of the domestic asset reduction was the dominant factor in the overall contraction of the balance sheet items for this category.

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