<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Year Ended December 31, 1998
Commission File No. 1-8968
ANADARKO PETROLEUM CORPORATION
17001 Northchase Drive, Houston, Texas 77060-2141
(281) 875-1101
Incorporated in the Employer Identification
State of Delaware No. 76-0146568
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, par value $0.10 per share
Preferred Stock Purchase Rights
The above Securities are listed on the New York Stock Exchange.
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days. Yes X No .
Indicate by check mark if the disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. ____.
The aggregate market value of the voting stock held by non-affiliates of
the registrant on January 29, 1999 was $3,246,000,000.
The number of shares outstanding and entitled to vote of the Company's
common stock as of January 29, 1999 is shown below:
Title of Class Number of Shares Outstanding
Common Stock, par value $0.10 per share 120,453,338
<PAGE>
Part of
Form 10-K Documents Incorporated by Reference
Part I Portions of the Anadarko Petroleum Corporation 1998 Annual
Report to Stockholders.
Part III Portions of the Proxy Statement, dated March 22, 1999,
for the Annual Meeting of Stockholders of Anadarko
Petroleum Corporation to be held April 29, 1999.
<PAGE>
Anadarko Petroleum Corporation amends its Annual Report on Form 10-K for the
year ended December 31, 1998 to include the following exhibits:
Part IV
Item 14. Exhibits and Reports on Form 8-K
Exhibit
Number Description
23 Consent of KPMG LLP
99(b) Anadarko Employee Savings Plan Form 11-K for the year ended
December 31, 1998
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
ANADARKO PETROLEUM CORPORATION
(Registrant)
June 21, 1999 [MICHAEL E. ROSE]
Michael E. Rose - Senior Vice President,
Finance and Chief Financial Officer
<PAGE>
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
The Administrative Committee
Anadarko Employee Savings Plan:
We consent to incorporation by reference in the Registration
Statement (File No. 33-8643) on Form S-8 and S-3 of Anadarko
Petroleum Corporation of our report dated June 11, 1999,
relating to the statements of net assets available for
benefits (with fund information) including the related
supplemental schedules, of the Anadarko Employee Savings
Plan as of December 31, 1998 and 1997 and the related
statement of changes in net assets available for benefits
(with fund information) for the year ended December 31,
1998, which report appears in the December 31, 1998 Annual
Report on Form 11-K of the Anadarko Employee Savings Plan.
[KPMG LLP]
Houston, Texas
June 21, 1999
<PAGE>
Exhibit 99(b)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Year Ended December 31, 1998
Commission File No. 1-8968
_______________
ANADARKO EMPLOYEE SAVINGS PLAN
_______________
ANADARKO PETROLEUM CORPORATION
17001 Northchase Drive
Houston, Texas 77060-2141
(281) 875-1101
<PAGE>
ANADARKO EMPLOYEE SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
FINANCIAL STATEMENTS
Page
Statement of Net Assets Available for Benefits
(with Fund Information), December 31, 1998 1
Statement of Net Assets Available for Benefits
(with Fund Information), December 31, 1997 3
Statement of Changes in Net Assets Available for Benefits
(with Fund Information), Year Ended December 31, 1998 5
Notes to Financial Statements 9
Independent Auditors' Report 16
SCHEDULES
Schedule I - Item 27a - Schedule of Assets Held for
Investment Purposes, December 31, 1998 S-1
Schedule IV -Item 27d - Schedule of Reportable Transactions,
Year Ended December 31, 1998 S-2
All other schedules are omitted because they are not applicable, not
required or the information is included in the Financial Statements or
Notes thereto.
<PAGE>
<TABLE>
ANADARKO EMPLOYEE SAVINGS PLAN
Statement of Net Assets Available for Benefits
(with Fund Information)
December 31, 1998
<CAPTION>
Growth
Company Equity Balanced Small-Cap
thousands except number of shares Stock Fund Fund Fund Equity Fund
<S> <C> <C> <C> <C>
Assets
Investments, at fair value:
Anadarko Petroleum Corporation -
2,953,831 shares of common stock
(cost $80,480) $91,199 $ --- $ --- $ ---
Scudder Growth and Income Mutual Fund -
322,939 units (cost $9,261) --- 8,497 --- ---
George Putnam Mutual Fund -
493,269 units (cost $8,251) --- --- 8,899 ---
Franklin Balance Sheet Investment
Mutual Fund - 39,477 units (cost $1,370) --- --- --- 1,248
Janus Worldwide Mutual Fund - 45,946 units
(cost $1,945) --- --- --- ---
Vanguard Index 500 Mutual Fund - 47,066
units (cost $4,676) --- --- --- ---
Money market investments --- --- --- ---
Member loans receivable 4,134 --- --- ---
95,333 8,497 8,899 1,248
Accrued interest and dividends
receivable 35 590 --- ---
Member contribution receivable 449 110 82 18
Employer contribution receivable 558 --- --- ---
Other assets 636 --- --- ---
Total assets 97,011 9,197 8,981 1,266
Liabilities 1 691 84 28
Net Assets Available For Benefits $97,010 $8,506 $8,897 $1,238
(Continued)
</TABLE>
-1-
<PAGE>
<TABLE>
ANADARKO EMPLOYEE SAVINGS PLAN
Statement of Net Assets Available for Benefits (Continued)
(with Fund Information)
December 31, 1998
<CAPTION>
Global S&P 500 Money
thousands except number of shares Fund Index Fund Market Fund Total
<S> <C> <C> <C> <C>
Assets
Investments, at fair value:
Anadarko Petroleum Corporation -
2,953,831 shares of common stock
(cost $80,480) $ --- $ --- $--- $ 91,199*
Scudder Growth and Income Mutual Fund -
322,939 units (cost $9,261) --- --- --- 8,497*
George Putnam Mutual Fund -
493,269 units (cost $8,251) --- --- --- 8,899*
Franklin Balance Sheet Investment
Mutual Fund - 39,477 units (cost $1,370) --- --- --- 1,248
Janus Worldwide Mutual Fund - 45,946 units
(cost $1,945) 2,176 --- --- 2,176
Vanguard Index 500 Mutual Fund - 47,066
units (cost $4,676) --- 5,363 --- 5,363
Money market investments --- --- 13,541 13,541*
Member loans receivable --- --- --- 4,134
2,176 5,363 13,541 135,057
Accrued interest and dividends
receivable --- --- 57 682
Member contribution receivable 33 66 63 821
Employer contribution receivable --- --- --- 558
Other assets --- --- --- 636
Total assets 2,209 5,429 13,661 137,754
Liabilities 48 291 57 1,200
Net Assets Available For Benefits $2,161 $5,138 $13,604 $136,554
*Represents more than 5% of net assets available for benefits.
See accompanying notes to financial statements.
</TABLE>
-2-
<PAGE>
<TABLE>
ANADARKO EMPLOYEE SAVINGS PLAN
Statement of Net Assets Available for Benefits
(with Fund Information)
December 31, 1997
<CAPTION>
Growth
Company Equity Balanced Small-Cap
thousands except number of shares Stock Fund Fund Fund Equity Fund
<S> <C> <C> <C> <C>
Assets
Investments, at fair value:
Anadarko Petroleum Corporation -
2,602,472 shares of common stock
(cost $61,838) $78,969 $ --- $ --- $---
Scudder Growth and Income Mutual Fund -
305,939 units (cost $8,966) --- 8,361 --- ---
George Putnam Mutual Fund -
530,843 units (cost $8,545) --- --- 9,545 ---
Franklin Balance Sheet Investment
Mutual Fund - 27,416 units (cost $970) --- --- --- 920
Janus Worldwide Mutual Fund - 28,691 units
(cost $1,181) --- --- --- ---
Vanguard Index 500 Mutual Fund - 15,269
units (cost $1,364) --- --- --- ---
Money market investments 936 --- --- ---
Member loans receivable 3,849 --- --- ---
83,754 8,361 9,545 920
Accrued interest and dividends
receivable 6 --- --- ---
Total assets 83,760 8,361 9,545 920
Liabilities 503 --- --- ---
Net Assets Available For Benefits $83,257 $8,361 $9,545 $920
(Continued)
</TABLE>
-3-
<PAGE>
<TABLE>
ANADARKO EMPLOYEE SAVINGS PLAN
Statement of Net Assets Available for Benefits (Continued)
(with Fund Information)
December 31, 1997
<CAPTION>
Global S&P 500 Money
thousands except number of shares Fund Index Fund Market Fund Total
<S> <C> <C> <C> <C>
Assets
Investments, at fair value:
Anadarko Petroleum Corporation -
2,602,472 shares of common stock
(cost $61,838) $ --- $ --- $ --- $ 78,969*
Scudder Growth and Income Mutual Fund -
305,939 units (cost $8,966) --- --- --- 8,361*
George Putnam Mutual Fund -
530,843 units (cost $8,545) --- --- --- 9,545*
Franklin Balance Sheet Investment
Mutual Fund - 27,416 units (cost $970) --- --- --- 920
Janus Worldwide Mutual Fund - 28,691 units
(cost $1,181) 1,084 --- --- 1,084
Vanguard Index 500 Mutual Fund - 15,269
units (cost $1,364) --- 1,375 --- 1,375
Money market investments --- --- 11,108 12,044*
Member loans receivable --- --- --- 3,849
1,084 1,375 11,108 116,147
Accrued interest and dividends
receivable --- --- 49 55
Total assets 1,084 1,375 11,157 116,202
Liabilities 65 --- --- 568
Net Assets Available For Benefits $1,019 $1,375 $11,157 $115,634
*Represents more than 5% of net assets available for benefits.
See accompanying notes to financial statements.
</TABLE>
-4-
<PAGE>
<TABLE>
ANADARKO EMPLOYEE SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
(with Fund Information)
For the Year Ended December 31, 1998
<CAPTION>
Growth
Company Equity Balanced Small-Cap
thousands Stock Fund Fund Fund Equity Fund
<S> <C> <C> <C> <C>
Investment income:
Dividends on Anadarko Petroleum
Corporation common stock $ 516 $ --- $--- $ ---
Dividends on Scudder Growth and
Income units --- 1,431 --- ---
Dividends on George Putnam units --- --- 882 ---
Dividends on Franklin Balance Sheet
Investment units --- --- --- 61
Dividends on Janus Worldwide units --- --- --- ---
Dividends on Vanguard Index 500
units --- --- --- ---
Interest earned 31 --- --- ---
Interest income on participant loans 359 --- --- ---
Total investment income 906 1,431 882 61
Investment expenses:
Administrative expenses
(fees and commissions) 89 --- --- ---
Net investment income 817 1,431 882 61
Net realized gain on investments 7,045 49 92 12
Net unrealized appreciation (depreciation)
in fair value of investments $(1,413) $ (394) $(44) $(108)
(Continued)
</TABLE>
-5-
<PAGE>
ANADARKO EMPLOYEE SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits (Continued)
(with Fund Information)
For the Year Ended December 31, 1998
<TABLE>
<CAPTION>
Global S&P 500 Money
thousands Fund Index Fund Market Fund Total
<S> <C> <C> <C> <C>
Investment income:
Dividends on Anadarko Petroleum
Corporation common stock $--- $--- $--- $ 516
Dividends on Scudder Growth and
Income units --- --- --- 1,431
Dividends on George Putnam units --- --- --- 882
Dividends on Franklin Balance Sheet
Investment units --- --- --- 61
Dividends on Janus Worldwide units 8 --- --- 8
Dividends on Vanguard Index 500
units --- 74 --- 74
Interest earned --- --- 706 737
Interest income on participant loans --- --- --- 359
Total investment income 8 74 706 4,068
Investment expenses:
Administrative expenses
(fees and commissions) --- --- --- 89
Net investment income 8 74 706 3,979
Net realized gain on investments 124 253 --- 7,575
Net unrealized appreciation (depreciation)
in fair value of investments $210 $631 $--- $(1,118)
(Continued)
</TABLE>
-6-
<PAGE>
<TABLE>
ANADARKO EMPLOYEE SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits (Continued)
(with Fund Information)
For the Year Ended December 31, 1998
<CAPTION>
Growth
Company Equity Balanced Small-Cap
thousands except number of shares Stock Fund Fund Fund Equity Fund
<S> <C> <C> <C> <C>
Contributions:
Member $ 4,403 $1,146 $ 809 $ 186
Employer
Anadarko Petroleum Corporation
common stock (139,231 shares) 4,938 --- --- ---
9,341 1,146 809 186
Interfund transfers (483) (1,890) (2,148) 169
Additional contributions
resulting from forfeitures 36 --- --- ---
Total contributions 8,894 (744) (1,339) 355
Withdrawals:
Distributions to Members 1,554 197 239 2
Forfeitures 36 --- --- ---
Total withdrawals 1,590 197 239 2
Increase (decrease) in net assets
during the year 13,753 145 (648) 318
Net assets at beginning of year 83,257 8,361 9,545 920
Net assets at end of year $97,010 $8,506 $8,897 $1,238
(Continued)
</TABLE>
-7-
<PAGE>
<TABLE>
ANADARKO EMPLOYEE SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits (Continued)
(with Fund Information)
For the Year Ended December 31, 1998
Global S&P 500 Money
thousands except number of shares Fund Index Fund Market Fund Total
<S> <C> <C> <C> <C>
Contributions:
Member $ 377 $ 634 $ 575 $ 8,130
Employer
Anadarko Petroleum Corporation
common stock (139,231 shares) --- --- --- 4,938
377 634 575 13,068
Interfund transfers 433 2,216 1,703 ---
Additional contributions
resulting from forfeitures --- --- --- 36
Total contributions 810 2,850 2,278 13,104
Withdrawals:
Distributions to Members 10 45 537 2,584
Forfeitures --- --- --- 36
Total withdrawals 10 45 537 2,620
Increase (decrease) in net assets
during the year 1,142 3,763 2,447 20,920
Net assets at beginning of year 1,019 1,375 11,157 115,634
Net assets at end of year $2,161 $5,138 $13,604 $136,554
See accompanying notes to financial statements.
</TABLE>
-8-
<PAGE>
ANADARKO EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
Basis of Presentation The accounts of the Anadarko Employee Savings Plan
(Plan) are maintained on an accrual basis. Certain amounts for the prior year
have been restated to conform to the current presentation.
Use of Estimates The financial statements have been prepared in conformity
with generally accepted accounting principles. In preparing financial
statements, management makes informed judgements and estimates that affect the
reported amounts of assets and liabilities as of the date of the financial
statements and affect the additions and deductions to net assets available for
Plan benefits. Actual results may differ from these estimates.
Expenses All trustee fees, brokerage fees and other expenses incident to the
administration of the Plan may be paid by Anadarko Petroleum Corporation
(Anadarko, the Company or the Employer) and, if not paid by the Company, shall
be paid by the Plan. In 1998, the Company elected to pay the trustee fees for
the Plan and presently intends to continue to do so although the Company can,
at its discretion, discontinue this practice. Effective October 1997, a five-
cents per share brokerage fee is charged to participants for each share of
Anadarko stock transferred out of the Company Stock Fund.
Investments On each valuation date, as defined, securities held by the Plan
are valued at fair value and the increase or decrease in the value of
securities held, plus any net income or loss of the Plan, is allocated to the
participants' accounts. Fair value is based on the closing market price of
the securities at December 31. Security transactions are recorded on a trade-
date basis.
Realized gains and losses are based on the difference between fair values of
the withdrawn securities at the trade date and the fair value at January 1.
If no shares existed at the beginning of the period, realized gains and losses
reported on withdrawals of securities were based on the difference between
market values of the withdrawn securities at the trade date and the average
cost to the Plan.
Member loans receivable are valued at amortized cost, which approximates fair
value.
2. Description of the Plan
The Plan was adopted by the Company's Board of Directors and approved by its
sole stockholder on August 27, 1986. The Plan has been subsequently restated
and amended. The financial statements and accompanying notes relate to the
Plan as in effect on December 31, 1998.
-9-
<PAGE>
ANADARKO EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
2. Description of the Plan (Continued)
The purpose of the Plan is to encourage and assist employees in accumulating
retirement savings, to provide a means for employees to have an ownership
interest in common stock of the Company (Company Stock) and to encourage
employees to remain in the employ of the Company, its subsidiaries and
affiliates. The Plan has been adopted exclusively to provide benefits for
employees participating in the Plan (Members) and their beneficiaries, and no
part of the corpus or income of the trust fund (Trust) established pursuant to
the Plan to hold contributions of Members and the Company may be used for any
purpose other than to provide such benefits and defray reasonable expenses of
administering the Plan.
The Plan is a defined contribution plan that is qualified under Section 401 of
the Internal Revenue Code of 1986, as amended (Code). See Note 4. All
regular employees of the Company are eligible to participate in the Plan upon
employment. Participation is voluntary. Directors and officers who are also
employees of the Company may participate on the same basis as all other
employees. Members may contribute to the Plan up to 12% of their
compensation, which includes base salary or wages, as well as overtime and
incentive bonuses (excluding override payments, front-end bonuses and other
special payments). The Company will match 100% of a Member's contributions up
to a maximum of 6% of such Member's compensation. Subject to provisions of
the Plan and applicable provisions of the Code and Treasury Regulations, an
Eligible Employee may make a Qualified Rollover Contribution to the Plan.
Contributions by a Member are always the Member's property and not subject to
vesting. A Member has a 100% vested right to Employer matching contributions
after three years of service or upon death, retirement, disability or a change
of control of the Company. Subject to certain restrictions, Members may elect
to have amounts distributed from the Plan to them prior to termination of
employment through withdrawals or loans from the Plan. Contributions to the
Plan are subject to certain limitations under the Code. Generally, employee
contributions are withheld on the 25th of the month and sent to the Trustee by
the first of the following month.
The Employer contribution account of an employee who terminates employment
prior to the time that he or she is vested will be forfeited by the employee.
For 1998, employee forfeitures were $36,000. Forfeitures do not affect net
assets of the Plan but merely reduce future Employer contributions.
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate
the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants will become 100% vested in their accounts.
-10-
<PAGE>
ANADARKO EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
3. Investment Programs
Employer Contributions The Employer contribution accounts of Members will be
invested in Company Stock.
Investment Options for Tax-Deferred, After-Tax and Rollover Contributions
Each Member may designate the manner in which the amounts allocated to their
tax-deferred savings account, their after-tax savings account and their
rollover account shall be invested. The following is a listing of options:
Option 1 In shares of Company Stock. Amounts invested under Option 1 shall
be invested along with Employer matching contributions as one fund
referred to as the Company Stock Fund.
Option 2 In such general growth equity investments (other than Company Stock
unless purchased indirectly via a mutual fund investment) as the
Trustee may determine. Such investments may be made as direct
investments of the Trust or may be investments in mutual funds which
have investment guidelines and criteria which are consistent with
this Option 2. Amounts invested under Option 2 shall be invested as
one fund referred to as the Growth Equity Fund.
Option 3 In such general fixed income and equity investments (other than
Company Stock unless purchased indirectly via a mutual fund
investment) as the Trustee may determine. Such investments may be
made as direct investments of the Trust or may be investments in
mutual funds which have investment guidelines and criteria which are
consistent with this Option 3. Amounts invested under Option 3
shall be invested as one fund referred to as the Balanced Fund.
Option 4 In such general small-cap equity investments (other than Company
Stock unless purchased indirectly via a mutual fund investment) as
the Trustee may determine. Such investments may be made as direct
investments of the Trust or may be investments in mutual funds which
have investment guidelines and criteria which are consistent with
this Option 4. Amounts invested under Option 4 shall be invested as
one fund referred to as the Small-Cap Equity Fund.
Option 5 In such general worldwide equity investments (other than Company
Stock unless purchased indirectly via a mutual fund investment) as
the Trustee may determine. Such investments may be made as direct
investments of the Trust or may be investments in mutual funds which
have investment guidelines and criteria which are consistent with
this Option 5. Amounts invested under Option 5 shall be invested as
one fund referred to as the Global Fund.
-11-
<PAGE>
ANADARKO EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
3. Investment Programs (Continued)
Option 6 In such general equity index investments (other than Company Stock
unless purchased indirectly via a mutual fund investment) as the
Trustee may determine. Such investments may be made as direct
investments of the Trust or may be investments in mutual funds which
have investment guidelines and criteria which are consistent with
this Option 6. Amounts invested under Option 6 shall be invested as
one fund referred to as the S&P 500 Index Fund.
Option 7 In such money market investments as the Trustee may determine. Such
investments may be made as direct investments of the Trust or may be
investments in mutual funds which have investment guidelines and
criteria which are consistent with this Option 7. Amounts invested
under Option 7 shall be invested as one fund referred to as the
Money Market Fund.
A Member may designate one of such options for all of the contributions to
their tax-deferred savings account, their after-tax savings account and their
rollover account or a Member may designate a percentage in 10% increments of
such contributions to be invested pursuant to each option. Invested funds of
Members, including Employer contributions, can be transferred between funds at
the election of the Member, subject to certain restrictions as defined in the
Plan. The amount of such transfers are reported as interfund transfers in the
Statement of Changes in Net Assets Available for Benefits (with Fund
Information).
As of December 31, 1998, a total of 556 Members were investing their
contributions in the Company Stock Fund, 55 Members were investing their
contributions in the Money Market Fund, 23 Members were investing their
contributions in the Balanced Fund, 18 Members were investing their
contributions in the Growth Equity Fund, 15 Members were investing their
contributions in the S&P 500 Index Fund, 3 Members were investing their
contributions in the Global Fund, no Members were investing their
contributions in the Small-Cap Equity Fund and 661 Members were investing
their contributions in a combination of funds.
Member Loans Receivable The amount of a Member's loan may not be more than
the lesser of (1) 50% of the Member's vested account balance, or (2) $50,000
less the highest outstanding loan balance in the previous 12 months. Loan
terms range from six months to five years. The loans are secured by the
balance in the Member's account and bear interest at a rate fixed for the life
of the loan. The interest rate is determined to be the prime interest rate
plus 1% as reported in the Wall Street Journal on the first business day of
the quarter preceding the date the loan was requested. Interest rates for
current outstanding loans range from 6% to 10%. Principal and interest are
paid ratably through monthly or semi-monthly payroll deductions.
-12-
<PAGE>
ANADARKO EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
4. Federal Income Taxes
The Company has received a favorable determination letter from the Internal
Revenue Service that (i) the Plan as amended effective April 23, 1998 met the
requirements of section 401(a) of the Code and the Trust established
thereunder is exempt from federal income tax under section 501(a) of the Code
and (ii) the provisions of the Plan as amended effective April 23, 1998
regarding tax-deferred contributions constituted a qualified cash or deferred
arrangement within the meaning of section 401(k) of the Code.
The Company is entitled to deduct for federal income tax purposes the amount
of tax-deferred contributions and Employer matching contributions made to the
Plan. In general, neither such contributions to the Plan nor the income of
the Trust earned thereon and earned on Members' after-tax contributions to the
Plan will be taxable to Members as income prior to the time such Members
receive a distribution from the Plan. A Member's after-tax contributions to
the Plan are not deductible from their taxable income. A Member's tax-
deferred contributions are excluded from their taxable income for the year
contributions are made, except for any amounts which exceed limitations under
the Code.
Certain tax consequences apply upon withdrawal and distribution of amounts in
a Member's accounts, therefore a Member should seek tax advice prior to
requesting a withdrawal or distribution.
-13-
<PAGE>
ANADARKO EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
5. Net Realized Gain on Investments
The net realized gain on investments for the year ended December 31, 1998 was
computed as follows:
<TABLE>
<CAPTION>
Company Growth Equity Balanced Small-Cap
thousands Stock Fund Fund Fund Equity Fund
<S> <C> <C> <C> <C>
Total proceeds $36,726 $3,704 $3,850 $675
Total costs 29,681 3,655 3,758 663
Net realized
gain $ 7,045 $ 49 $ 92 $ 12
(Continued)
Global S&P 500
thousands Fund Index Fund Total
Total proceeds $1,185 $3,650 $49,790
Total costs 1,061 3,397 42,215
Net realized
gain $ 124 $ 253 $ 7,575
</TABLE>
-14-
<PAGE>
ANADARKO EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
6. Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
December 31
thousands 1998 1997
<S> <C> <C>
Net assets available for benefits per
the financial statements $136,554 $115,634
Amounts allocated to withdrawing
participants (1,796) ---
Net assets available for benefits per
the Form 5500 $134,758 $115,634
</TABLE>
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
Year Ended
thousands December 31, 1998
<S> <C>
Benefits paid to participants per
the financial statements $2,584
Add: Amounts allocated to withdrawing
participants at December 31, 1998 1,796
Benefits paid to participants per
the Form 5500 $4,380
</TABLE>
Amounts allocated to withdrawing participants are recorded on the Form 5500
for benefit claims that have been processed and approved for payment prior to
December 31 but not yet paid as of that date.
-15-
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Administrative Committee
Anadarko Employee Savings Plan:
We have audited the accompanying statements of net assets available
for benefits (with fund information) of the Anadarko Employee Savings
Plan (the Plan), as of December 31, 1998 and 1997 and the related
statement of changes in net assets available for benefits (with fund
information), for the year ended December 31, 1998. These financial
statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for
benefits (with fund information) of the Plan as of December 31, 1998
and 1997 and the changes in net assets available for benefits (with
fund information), for the year ended December 31, 1998, in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
schedules of assets held for investment purposes and reportable
transactions are presented for the purpose of additional analysis and
are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules
and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974, as amended. The supplemental
schedules have been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
[KPMG LLP]
Houston, Texas
June 11, 1999
-16-
Schedule I
ANADARKO EMPLOYEE SAVINGS PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
<TABLE>
<CAPTION>
Shares/Par Fair
Description Value Cost Value
<S> <C> <C> <C>
thousands except number of shares
Common Stock:
Anadarko Petroleum Corporation* 2,953,831 $ 80,480 $ 91,199
Mutual Funds:
Scudder Growth and Income 322,939 9,261 8,497
George Putnam 493,269 8,251 8,899
Franklin Balance Sheet
Investment 39,477 1,370 1,248
Janus Worldwide 45,946 1,945 2,176
Vanguard Index 500 47,066 4,676 5,363
25,503 26,183
Money Market - Nations Prime
Fund 13,541,094 13,541 13,541
Member Loans* (6% to 10%
interest rates) --- 4,134 4,134
$123,658 $135,057
*Party-in-interest
See accompanying Independent Auditors' Report.
</TABLE>
S-1
<PAGE>
Schedule IV
ANADARKO EMPLOYEE SAVINGS PLAN
Item 27d - Schedule of Reportable Transactions
For the Year Ended December 31, 1998
<TABLE>
<CAPTION>
---------------Disposed--------------- --------Acquired--------
Number of Number of
Description Transactions Proceeds Gain Transactions Cost
thousands except number
of transactions
<S> <C> <C> <C> <C> <C>
Anadarko Petroleum
Corporation Common Stock* 53 $36,174 $12,101 84 $39,352
Mutual Fund - Vanguard Index 500 -- $ --- $ --- 111 $ 6,754
Money Market -
Nations Prime Fund 141 $39,359 $ --- 125 $52,900
Pyramid Government Securities 117 $40,580 $ --- 169 $40,580
"Reportable transactions" represent a single or series of related transactions
that exceeds 5% of the fair market value of Plan assets at the beginning of the
year.
*Party-in-interest
See accompanying Independent Auditors' Report.
</TABLE>
S-2
<PAGE>
