UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-Q

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For the Quarterly Period Ended September 30, 2001

                                       OR

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                 For the Transition Period from        to
                                                ------   ------

                         Commission File Number 1-16619


                             KERR-McGEE CORPORATION
             (Exact Name of Registrant as Specified in its Charter)



             A Delaware Corporation               73-1612389
         (State or Other Jurisdiction of       (I.R.S. Employer
         Incorporation or Organization)       Identification No.)


                Kerr-McGee Center, Oklahoma City, Oklahoma 73125
              (Address of Principal Executive Offices and Zip Code)

        Registrant's telephone number, including area code (405) 270-1313


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
                                   ---

Number of shares of common stock, $1.00 par value, outstanding as of
October 31, 2001: 100,186,350




                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.
<TABLE>

                                            KERR-McGEE CORPORATION AND SUBSIDIARY COMPANIES
                                                   CONSOLIDATED STATEMENT OF INCOME
                                                              (UNAUDITED)
<CAPTION>

                                                                       Three Months Ended               Nine Months Ended
                                                                         September 30,                    September 30,
 (Millions of dollars, except per-share amounts)                      2001             2000            2001             2000
                                                                     ------         --------        --------         --------

<S>                                                                  <C>            <C>             <C>              <C>
 Sales                                                               $883.5         $1,106.1        $2,880.5         $3,003.5
                                                                     ------         --------        --------         --------

 Costs and Expenses
   Costs and operating expenses                                       331.8            339.0           936.6            945.0
   Selling, general and administrative expenses                        60.1             45.6           168.1            151.7
   Shipping and handling expenses                                      31.2             27.4            90.3             74.2
   Depreciation and depletion                                         182.4            171.5           523.3            510.2
   Asset impairment                                                    47.3                -            47.3                -
   Exploration, including dry holes and
     amortization of undeveloped leases                                45.6             49.0           139.2            137.9
   Taxes, other than income taxes                                      25.8             31.0            88.9             89.4
   Provision for environmental remediation and
     restoration of inactive sites, net of reimbursements              78.4                -            82.1             90.0
   Purchased in-process research and development                          -                -               -             32.5
   Interest and debt expense                                           47.1             49.1           127.5            162.4
                                                                     ------         --------        --------         --------
         Total Costs and Expenses                                     849.7            712.6         2,203.3          2,193.3
                                                                     ------         --------        --------         --------

                                                                       33.8            393.5           677.2            810.2
 Other Income                                                           7.0             11.6           207.6             53.7
                                                                     ------         --------        --------         --------
 Income before Income Taxes                                            40.8            405.1           884.8            863.9
 Taxes on Income                                                      (14.5)          (140.5)         (328.5)          (304.2)
                                                                     ------         --------        --------         --------

 Income before Change in Accounting Principle                          26.3            264.6           556.3            559.7
 Cumulative Effect of Change in Accounting Principle (net of
  benefit for income taxes of $10.8)                                      -                -           (20.3)               -
                                                                     ------         --------        --------         --------

 Net Income                                                          $ 26.3         $  264.6        $  536.0         $  559.7
                                                                     ======         ========        ========         ========

 Net Income per Common Share
   Basic -
     Income before cumulative effect of change
       in accounting principle                                       $  .27         $   2.81        $   5.79         $   6.01
     Cumulative effect of change in accounting
       principle                                                          -                -            (.21)               -
                                                                     ------         --------        --------         --------

         Total                                                       $  .27         $   2.81        $   5.58         $   6.01
                                                                     ======         ========        ========         ========

   Diluted -
     Income before cumulative effect of change
       in accounting principle                                       $  .27         $   2.57        $   5.39         $   5.62
     Cumulative effect of change in accounting
       principle                                                          -                -            (.19)               -
                                                                     ------         --------        --------         --------

         Total                                                       $  .27         $   2.57        $   5.20         $   5.62
                                                                     ======         ========        ========         ========

The accompanying notes are an integral part of this statement.
</TABLE>


<TABLE>

                         KERR-McGEE CORPORATION AND SUBSIDIARY COMPANIES
                                   CONSOLIDATED BALANCE SHEET
                                           (UNAUDITED)
<CAPTION>

                                                                   September 30,       December 31,
(Millions of dollars)                                                       2001               2000
                                                                   -------------       ------------

<S>                                                                    <C>                <C>
ASSETS
Current Assets
    Cash                                                               $   121.4          $   144.0
    Notes and accounts receivable                                          623.2              666.8
    Inventories                                                            437.5              390.9
    Deposits and prepaid expenses                                          147.3              113.1
                                                                       ---------          ---------
             Total Current Assets                                        1,329.4            1,314.8
                                                                       ---------          ---------

Property, Plant and Equipment                                           16,065.2           12,770.4
    Less reserves for depreciation, depletion and amortization           7,867.3            7,387.0
                                                                       ---------          ---------
                                                                         8,197.9            5,383.4
                                                                       ---------          ---------

Investments and Other Assets                                               806.2              967.8
Goodwill                                                                   326.6                  -
                                                                       ---------          ---------
                                                                       $10,660.1          $ 7,666.0
                                                                       =========          =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
    Short-term borrowings                                              $    13.7          $     5.8
    Accounts payable                                                       876.1              637.7
    Long-term debt due within one year                                      26.4              175.2
    Other current liabilities                                              435.6              530.3
                                                                       ---------          ---------
             Total Current Liabilities                                   1,351.8            1,349.0
                                                                       ---------          ---------

Long-Term Debt                                                           3,970.7            2,243.7
                                                                       ---------          ---------

Deferred Credits and Reserves                                            2,073.9            1,440.4
                                                                       ---------          ---------

Stockholders' Equity
    Common stock, par value $1 - 300,000,000
       shares authorized, 100,186,250 shares issued at
       9-30-01 and 101,417,309 shares issued at 12-31-00                   100.0              101.4
    Capital in excess of par value                                       1,661.2            1,655.4
    Preferred stock purchase rights                                           .9                 .9
    Restricted stock                                                        12.1                5.0
    Retained earnings                                                    1,640.5            1,233.0
    Accumulated other comprehensive income (loss)                          (64.3)             113.1
    Common shares in treasury, at cost - no shares
       at 9-30-01 and 6,932,790 shares at 12-31-00                             -             (383.4)
    Deferred compensation                                                  (86.7)             (92.5)
                                                                       ---------          ---------
             Total Stockholders' Equity                                  3,263.7            2,632.9
                                                                       ---------          ---------

                                                                       $10,660.1          $ 7,666.0
                                                                       =========          =========

The "successful efforts" method of accounting for oil and gas exploration and
production activities has been followed in preparing this balance sheet.

The accompanying notes are an integral part of this statement.
</TABLE>




<TABLE>

                        KERR-McGEE CORPORATION AND SUBSIDIARY COMPANIES
                             CONSOLIDATED STATEMENT OF CASH FLOWS
                                          (UNAUDITED)
<CAPTION>

                                                                             Nine Months Ended
                                                                               September 30,
(Millions of dollars)                                                      2001               2000
                                                                        ---------         ---------

<S>                                                                     <C>               <C>
Operating Activities
--------------------
Net income                                                              $   536.0         $   559.7
Adjustments to reconcile net income to net cash
  provided by operating activities -
    Depreciation, depletion and amortization                                562.9             548.4
    Asset impairment                                                         47.3                 -
    Dry hole costs                                                           43.6              53.1
    Deferred income taxes                                                   147.0             (73.1)
    Provision for environmental remediation and
      restoration of inactive sites, net of reimbursement                    82.1              90.0
    Purchased in-process research and development                              -               32.5
    (Gain) loss on sale and retirement of assets                             (3.6)              4.1
    Noncash items affecting net income                                     (151.8)             37.3
    Other net cash used in operating activities                             (49.7)            (30.7)
                                                                        ---------         ---------
        Net Cash Provided by Operating Activities                         1,213.8           1,221.3
                                                                        ---------         ---------

Investing Activities
--------------------
Capital expenditures                                                     (1,349.2)           (387.6)
Dry hole expense                                                            (43.6)            (53.1)
Acquisitions                                                               (980.7)           (999.4)
Other investing activities                                                  (47.4)              7.4
                                                                        ---------         ---------
        Net Cash Used in Investing Activities                            (2,420.9)         (1,432.7)
                                                                        ---------         ---------

Financing Activities
--------------------
Issuance of long-term debt                                                1,703.0             841.3
Repayment of long-term debt                                                (416.2)           (965.5)
Decrease in short-term borrowings                                            (3.3)             (4.9)
Issuance of common stock                                                     31.8             374.8
Dividends paid                                                             (127.9)           (123.6)
                                                                        ---------         ---------
        Net Cash Provided by Financing Activities                         1,187.4             122.1
                                                                        ---------         ---------

Effects of Exchange Rate Changes on Cash and Cash Equivalents                (2.9)             (2.5)
                                                                        ---------         ---------

Net Decrease in Cash and Cash Equivalents                                   (22.6)            (91.8)

Cash and Cash Equivalents at Beginning of Period                            144.0             266.6
                                                                        ---------         ---------

Cash and Cash Equivalents at End of Period                              $   121.4         $   174.8
                                                                        =========         =========


The accompanying notes are an integral part of this statement.
</TABLE>


                 KERR-McGEE CORPORATION AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2001


A.      The condensed  financial  statements  included herein have been prepared
        by the company,  without audit, pursuant to the rules and regulations of
        the  Securities  and  Exchange   Commission   and,  in  the  opinion  of
        management, include all adjustments, consisting only of normal recurring
        accruals,  necessary to present fairly the resulting  operations for the
        indicated periods. Certain information and footnote disclosures normally
        included in financial  statements  prepared in accordance with generally
        accepted  accounting  principles have been condensed or omitted pursuant
        to such rules and  regulations.  Although the company  believes that the
        disclosures  are  adequate  to  make  the   information   presented  not
        misleading, it is suggested that these condensed financial statements be
        read in conjunction with the financial  statements and the notes thereto
        included in the company's latest annual report on Form 10-K.

B.      In  June  1998,  the  Financial  Accounting   Standards   Board   issued
        Statement No. 133,  "Accounting  for Derivative  Instruments and Hedging
        Activities" (FAS 133). The statement as amended  requires  recording all
        derivative instruments as assets or liabilities, measured at fair value.
        Kerr-McGee  adopted this  standard on January 1, 2001,  by recording the
        fair  value of all the  foreign  currency  forward  purchase  and  sales
        contracts, and by separating and recording the fair value of the options
        associated  with the  company's  debt  exchangeable  for  stock of Devon
        Energy Corporation  (Devon) presently owned by the company.  In adopting
        the standard,  the company recognized an expense of $20.3 million in the
        2001 first  quarter as a  cumulative  effect of the  accounting  change.
        Also, in accordance with FAS 133, the company chose to reclassify 85% of
        the  Devon  shares  owned to  "trading"  from the  "available  for sale"
        category of  investments.  On January 1, 2001,  the  company  recognized
        after-tax income totaling $117.9 million for the unrealized appreciation
        on the Devon shares  reclassified  to trading.  The portion of the stock
        investment  now  classified  as  "trading" is  marked-to-market  through
        income each month.

        From time to time, the company enters into forward  contracts to buy and
        sell  foreign  currencies.  Certain  of these  contracts  (purchases  of
        Australian  dollars and British pound sterling) have been designated and
        have qualified as cash flow hedges of the company's  anticipated  future
        cash flow needs for a portion of its capital  expenditures and operating
        costs.  These forward  contracts  generally  have durations of less than
        three years. The resulting  changes in fair value of these contracts are
        recorded  in  accumulated  other  comprehensive  income.  The amounts in
        accumulated other comprehensive  income, $21.4 million loss at September
        30, 2001, will be recognized in earnings in the periods during which the
        hedged  forecasted  transactions  affect earnings (i.e., when the hedged
        transaction  is paid in the case of a hedge of operating  costs and when
        the  hedged  assets  are  depreciated  in the case of a hedge of capital
        expenditures).  In the third  quarter and the first nine months of 2001,
        the company reclassified $2.4 million and $7 million,  respectively,  of
        losses on forward contracts from accumulated other comprehensive  income
        to  operating  expenses in the income  statement.  Of the  existing  net
        losses  at  September  30,  2001,  approximately  $12  million  will  be
        reclassified  into  earnings  during  the next 12  months,  assuming  no
        further  changes  in  fair  value  of  the  contracts.  No  hedges  were
        discontinued  during the third quarter or the first nine months of 2001,
        and no ineffectiveness was recognized.

        The company has entered  into other  forward  contracts  to sell foreign
        currencies,  which  will be  collected  as a  result  of  pigment  sales
        denominated in foreign currencies,  primarily European currencies. These
        contracts have not been designated as hedges even though they do protect
        the company from changes in foreign currency rate changes. Almost all of
        the  pigment  receivables  have  been  sold in an  asset  securitization
        program  at  their   equivalent  U.S.  dollar  value  at  the  date  the
        receivables were sold. However,  the company retains the risk of foreign
        currency  rate changes  between the date of sale and  collection  of the
        receivables.

        As discussed in Note J., the company  purchased 100% of the  outstanding
        shares of common  stock of HS  Resources  effective  August 1, 2001.  HS
        Resources  and  its  trading  subsidiary  had  a  number  of  derivative
        contracts  for  purchases  and  sales  of oil and  gas as well as  basis
        differences,  and energy related  contracts.  All of these contracts are
        being  treated by Kerr-McGee  as  speculative  and are recorded at their
        fair value on the balance sheet and marked-to-market through income each
        month.  Kerr-McGee has not generally  entered into derivative  contracts
        for  commodities,  and  therefore  plans to simply let the contracts run
        until  maturity,  unless  closed  earlier.  In  addition,  the former HS
        Resources  trading  company  had taken  positions  in certain  commodity
        trading  contracts that have now been closed with offsetting  positions.
        The only risk that remains is the credit risk  associated with the other
        parties to the  contracts;  however,  the company  believes that risk is
        minimal due to the credit worthiness of the other companies.

C.      In  June  2001,  the   Financial   Accounting  Standards  Board   issued
        Statement of Financial  Accounting  Standards  (FAS) No. 141,  "Business
        Combinations," and FAS 142, "Goodwill and Other Intangible  Assets." FAS
        141 requires all business combinations initiated after June 30, 2001, to
        be accounted for under the purchase method.  The company was required to
        adopt FAS 141 for its business combination of HS Resources.  The company
        also will be required to adopt FAS 142 at the  beginning of 2002 for all
        goodwill  and  other  intangible  assets  recognized  in  the  company's
        statement of financial  position as of January 1, 2002.  This  statement
        changes the  accounting  for  goodwill and  intangible  assets that have
        indefinite  useful lives from an  amortization  method to an  impairment
        approach.   The   nonamortization   provisions   of  this  standard  are
        immediately  applicable  for any goodwill  acquired after June 30, 2001.
        During  2002,  the company will  perform the first  required  impairment
        tests of goodwill and indefinite  lived intangible  assets.  The company
        does not  believe  that the  adoption  of these  statements  will have a
        material effect on its financial position, results of operations or cash
        flows.

        In June 2001, the Financial  Accounting  Standards Board also issued FAS
        143,  "Accounting for Asset  Retirement  Obligations."  FAS 143 requires
        asset  retirement  costs  to be  capitalized  as part of the cost of the
        related tangible long-lived asset and subsequently  allocated to expense
        using a  systematic  and  rational  method  over the useful  life of the
        asset.  The company  will adopt the  statement  effective  no later than
        January 1, 2003, as required.  The transition  adjustment resulting from
        the  adoption of FAS 143 will be reported  as a  cumulative  effect of a
        change  in  accounting  principle.  At this  time,  the  company  cannot
        reasonably  estimate the effect of the adoption of this statement on its
        financial position, results of operations or cash flows.

        In August 2001, the Financial Accounting Standards Board issued FAS 144,
        "Accounting  for the  Impairment or Disposal of Long-Lived  Assets." FAS
        144  supersedes  FAS 121,  "Accounting  for the Impairment of Long-Lived
        Assets and for Long-Lived  Assets to be Disposed Of," and the portion of
        the Accounting  Principle  Board Opinion No. 30 that deals with disposal
        of  a  business   segment.   The  new  standard   resolves   significant
        implementation   issues  related  to  FAS  121,   establishes  a  single
        accounting model for long-lived  assets to be disposed of by sale and is
        effective for fiscal years  beginning  after  December 15, 2001. At this
        time,  the company  cannot  estimate the effect of this statement on its
        financial position, results of operations or cash flows.


D.      Net  cash  provided  by  operating activities reflects cash payments for
        income taxes and interest as follows:

                                                       Nine Months Ended
                                                         September 30,
        (Millions of dollars)                        2001             2000
                                                    ------           ------

        Income tax payments                         $344.3           $203.0
        Less refunds received                        (19.0)           (33.9)
                                                    ------           ------
        Net income tax payments                     $325.3           $169.1
                                                    ======           ======

        Interest payments                           $130.2           $138.0
                                                    ======           ======

E.      During  the  third  quarter of 2001 and 2000,  comprehensive  income was
        $30.6  million  and $248.7  million,  respectively.  For the nine months
        ended  September  30,  2001 and 2000,  comprehensive  income  was $476.5
        million and $603.5 million, respectively.

        The company has certain  investments that are considered to be available
        for sale.  These financial  instruments are carried in the  Consolidated
        Balance Sheet at fair value, which is based on quoted market prices. The
        company had no  securities  classified  as held to maturity at September
        30, 2001, or December 31, 2000. At September 30, 2001,  and December 31,
        2000,   available-for-sale  securities  for  which  fair  value  can  be
        determined are as follows:

<TABLE>
<CAPTION>
                                                 September 30, 2001                       December 31, 2000
                                          -------------------------------        --------------------------------
                                                                  Gross                                   Gross
                                                               Unrealized                              Unrealized
                                           Fair                  Holding          Fair                   Holding
     (Millions of dollars)                Value      Cost         Gain            Value      Cost      Gain (Loss)
                                          -----      -----     ----------        ------      ----      ----------

      <S>                                 <C>        <C>           <C>           <C>        <C>           <C>
      Equity securities                   $52.2      $31.9         $20.3         $606.9     $208.8        $398.1
      Exchangeable debt (1)                                                       514.3      330.3        (184.0)
      U.S. government obligations -
        Maturing within one year             .8         .8             -            1.9        1.9             -
        Maturing between one year
         and four years                     3.7        3.7             -            4.3        4.3             -
                                                                   -----                                  ------
             Total                                                 $20.3                                  $214.1
                                                                   =====                                  ======

    (1) With  the  adoption  of  FAS 133, the exchangeable debt and its embedded
        option  features  were  separated.  The  debt  is  now  recorded  in the
        Consolidated Balance Sheet at face value less unamortized discount,  and
        the options  associated with the exchangeable  features of the debt have
        been recorded separately as derivatives at fair value (see Note B).
</TABLE>


F.      Investments  in  equity  affiliates  totaled  $63.3 million at September
        30, 2001, and $40.5 million at December 31, 2000.  Equity income related
        to the  investments  is  included  in Other  Income in the  Consolidated
        Statement  of Income and was a loss of $2.6 million for the three months
        ended  September 30, 2001,  compared with income of $6.3 million for the
        same 2000  period.  For the first nine  months of 2001,  the equity loss
        totaled $3.6 million, compared with income of $19.8 million for the same
        2000 period.

 G.     The  following  tables  set  forth the  computation of basic and diluted
        earnings  per share (EPS) for the  three-month  and  nine-month  periods
        ended September 30, 2001 and 2000.
<TABLE>
<CAPTION>

                                                    For the Three Months Ended September 30,
                                    ------------------------------------------------------------------------
                                                   2001                                   2000
                                    ---------------------------------      ---------------------------------
(In millions, except                                        Per-Share                              Per-Share
per-share amounts)                  Income      Shares        Income       Income      Shares        Income
                                    ------      ------      ---------      ------      ------      ---------

<S>                                  <C>          <C>          <C>         <C>           <C>         <C>
Basic EPS                            $26.3        98.5         $.27        $264.6        94.3        $2.81
                                                               ====                                  =====

Effect of Dilutive Securities:
  5 1/4% convertible debentures          -           -                        5.3         9.8
  7 1/2% convertible debentures          -           -                        2.2         1.7
  Stock options                          -           -                          -          .2
                                     -----        ----                     ------       -----
Diluted EPS                          $26.3        98.5         $.27        $272.1       106.0        $2.57
                                     =====        ====         ====        ======       =====        =====
</TABLE>



<TABLE>
<CAPTION>

                                                    For the Nine Months Ended September 30,
                                    ------------------------------------------------------------------------
                                                   2001                                       2000
                                    ---------------------------------      ---------------------------------
(In millions, except                                        Per-Share                              Per-Share
per-share amounts)                  Income      Shares        Income       Income      Shares        Income
                                    ------      ------      ---------      ------      ------      ---------

<S>                                 <C>           <C>          <C>         <C>           <C>         <C>
Basic EPS                           $536.0        96.1         $5.58       $559.7        93.1        $6.01
                                                               =====                                 =====

Effect of Dilutive Securities:
  5 1/4% convertible debentures       16.0         9.8                       13.6         8.3
  7 1/2% convertible debentures          -           -                        6.8         1.7
  Stock options                          -          .2                          -          .2
                                    ------       -----                     ------    --------
Diluted EPS                         $552.0       106.1         $5.20       $580.1       103.3        $5.62
                                    ======       =====         =====       ======    ========     ========
</TABLE>

H.      In  December  2000,   the   company   began   an   accounts   receivable
        monetization  for its  pigment  business  through  the sale of  selected
        accounts  receivable  with a three-year,  credit-insurance-backed  asset
        securitization program. The company retained servicing  responsibilities
        and subordinated  interests and will receive a servicing fee of 1.07% of
        the receivables sold for the period of time outstanding, generally 60 to
        120 days. No recourse  obligations  were recorded  since the company has
        very  limited   obligations  for  any  recourse   actions  on  the  sold
        receivables.  The  collection of the  receivables  is insured,  and only
        receivables  that qualify for credit insurance can be sold. A portion of
        the insurance is reinsured by the company's captive  insurance  company;
        however,  the company  believes that the risk of insurance  loss is very
        low since its bad-debt  experience has historically been  insignificant.
        The company  received  preference  stock in the  special-purpose  entity
        equal  to  3.5%  of  the  receivables  sold.  The  preference  stock  is
        essentially a retained  deposit to provide further credit  enhancements,
        if needed,  but otherwise  recoverable  by the company at the end of the
        program.

        During the 2001 third  quarter,  the company sold $152.6  million of its
        pigment receivables, resulting in pretax losses of $2.3 million. For the
        first  nine  months  of  2001,   the  company  sold  $460.5  million  of
        receivables, resulting in pretax losses of $6.9 million. The losses were
        equal to the  difference in the book value of the  receivables  sold and
        the  total of cash and the fair  value of the  deposit  retained  by the
        special-purpose  entity. At September 30, 2001, the outstanding  balance
        on receivables sold totaled $106.2 million.

I.      Production  from  the  Hutton  Field  in the North Sea was  suspended in
        May 2001 due to  concerns  about the oil  export  pipeline's  integrity.
        During the 2001 third quarter,  it was determined that due to the amount
        of corrosion present in the pipeline,  replacement of the pipeline would
        be required to allow  production  to resume.  After careful  study,  the
        company, as operator,  and the other partners decided not to replace the
        pipeline due to the small amount of remaining field reserves and plan to
        decommission  the  field.  The Hutton  Field was  deemed to be  impaired
        because  recovery  of the net book value from future cash flows could no
        longer be expected.

        An  impairment  loss  of  $43.7  million  was  determined  based  on the
        difference  between  the  carrying  value of the assets and the  present
        value of the  field's  discounted  future  cash  flows,  net of expected
        proceeds  from the sale of the Hutton  Tension Leg Platform  (TLP).  The
        Hutton TLP is a production,  drilling and accommodation facility located
        at the Hutton Field.

J.      On August 1, 2001,  the  company  completed  the  acquisition  of all of
        the  outstanding  shares  of  common  stock of HS  Resources,  Inc.,  an
        independent oil and gas  exploration and production  company with active
        projects in the  Denver-Julesburg  Basin, Gulf Coast,  Mid-Continent and
        Northern Rocky Mountain regions. The acquisition added approximately 250
        million cubic feet  equivalent of daily gas  production and 1.3 trillion
        cubic feet  equivalent of proved gas reserves,  primarily in the Denver,
        Colorado,  area one of the fastest-growing markets in the United States.
        The  addition of these  primarily  natural  gas  reserves  provides  the
        company a more balanced portfolio of products,  geographic diversity and
        production   mix.   In   addition,    the   acquisition   provides   low
        risk-exploitation  drilling opportunities from identified projects based
        on HS Resources' seismic  inventory.  The acquisition price totaled $1.8
        billion in cash,  company  stock and  assumption  of debt.  The  company
        reflected  the  assets  and  liabilities  acquired  at fair value in its
        balance sheet effective August 1, 2001, and the results of operations of
        HS Resources in the company's income statement beginning August 1, 2001.
        The  purchase  price was  allocated to specific  assets and  liabilities
        based on their  estimated  fair  value at the date of  acquisition.  The
        allocations include $318 million recorded as goodwill.  The cash portion
        of the acquisition totaled $963 million,  including direct expenses, and
        was  initially  financed  through  borrowings  obtained  under  a  newly
        executed revolving credit facility,  which is discussed in the Financial
        Condition  section of this Form  10-Q.  A total of  5,057,273  shares of
        Kerr-McGee  common stock were issued in connection with the acquisition.
        The shares were valued at $70.33 per share,  the average  price two days
        before and after the purchase was announced.

        The following unaudited pro forma condensed income statement information
        has been prepared to give effect to the HS Resources  acquisition  as if
        it had  occurred at the  beginning of the periods  presented,  including
        purchase accounting adjustments.
<TABLE>
<CAPTION>

                                                      Pro Forma Results
                                   ----------------------------------------------------------
                                     Three Months Ended                  Nine Months Ended
     (Millions of dollars,              September 30,                      September 30,
     except per-share              -----------------------          -------------------------
     amounts)                       2001             2000              2001             2000
                                   ------         --------          --------         --------

     <S>                           <C>            <C>               <C>              <C>
     Sales                         $908.5         $1,183.8          $3,112.3         $3,224.4

     Income from Continuing
       Operations                   $22.5           $260.0            $569.8           $539.2

     Net Income                     $22.5           $260.0            $548.5           $539.2

     Earnings per Share -
       Basic                         $.22            $2.62             $5.42            $5.49
       Diluted                       $.22            $2.41             $5.08            $5.17
</TABLE>

K.      To   accomplish   the   acquisition   of   HS  Resources,   the  company
        reorganized and formed a new holding company,  Kerr-McGee Holdco,  which
        later changed its name to Kerr-McGee Corporation.  The former Kerr-McGee
        Corporation was renamed  Kerr-McGee  Operating  Corporation and is now a
        wholly owned subsidiary of the holding company.

        In August 2001, the new holding company, Kerr-McGee Corporation, filed a
        shelf registration statement with the Securities and Exchange Commission
        for $2  billion  of debt and  other  securities.  On  October  3,  2001,
        Kerr-McGee  Corporation  issued  $1.5  billion of  long-term  notes in a
        public  offering.  The notes are general,  unsecured  obligations of the
        company and rank on parity with all of the company's other unsecured and
        unsubordinated   indebtedness.   Kerr-McGee  Operating  Corporation  has
        guaranteed the notes. Additionally Kerr-McGee Corporation has guaranteed
        all indebtedness of its subsidiaries,  including the public indebtedness
        of HS  Resources  assumed  in the  August  1, 2001  purchase.  Financial
        information for HS Resources for the first and second quarter of 2001 is
        contained in the March 31, 2001, Form 10-Q filed by HS Resources and the
        Form  8-K/A  filed  August  29,   2001,   by   Kerr-McGee   Corporation,
        respectively,  and is incorporated  herein by reference.  As a result of
        these  guarantee  arrangements,  the company is now  required to present
        condensed  consolidating  financial  information.  Since neither the new
        holding  company nor any  guarantee  arrangement  existed  during  2000,
        comparative consolidated financial information is not presented.

        The following condensed consolidating financial information presents the
        balance  sheet as of September 30, 2001,  and the related  statements of
        income and cash  flows for the third  quarter  and first nine  months of
        2001,  for (a)  Kerr-McGee  Corporation,  the holding  company,  (b) the
        guarantor  subsidiary,  and  (c)  the  non-guarantor  subsidiaries  on a
        consolidated basis.

<TABLE>

                                                Kerr-McGee Corporation and Subsidiaries
                                                 Condensed Consolidating Balance Sheet
                                                          September 30, 2001

<CAPTION>

                                                                   Kerr-McGee
                                                  Kerr-McGee        Operating       Non-Guarantor
  (Millions of dollars)                          Corporation      Corporation       Subsidiaries      Eliminations      Consolidated
                                                ------------      -----------       -------------     ------------      ------------

  <S>                                               <C>             <C>               <C>              <C>                 <C>
  ASSETS
  Current Assets
    Cash                                            $      -        $    2.4          $   119.0        $        -          $   121.4
    Intercompany receivables                            59.6           (34.7)           1,092.7          (1,117.6)                 -
    Notes and accounts receivable                          -             1.4              621.8                 -              623.2
    Inventories                                            -               -              437.5                 -              437.5
    Deposits and prepaid expenses                          -             6.1              143.0              (1.8)             147.3
                                                    --------        --------          ---------        ----------          ---------
      Total Current Assets                              59.6           (24.8)           2,414.0          (1,119.4)           1,329.4

  Property, Plant and Equipment, net                       -            54.3            8,143.7               (.1)           8,197.9
  Other Assets                                             -           553.3              333.0             (80.1)             806.2
  Goodwill                                                 -               -              326.6                 -              326.6
  Investments in and Advances to Subsidiaries        1,669.1         4,834.5            2,381.5          (8,885.1)                 -
                                                    --------        --------          ---------        ----------          ---------
         Total Assets                               $1,728.7        $5,417.3          $13,598.8        $(10,084.7)         $10,660.1
                                                    ========        ========          =========        ==========          =========

  LIABILITIES AND STOCKHOLDERS' EQUITY
  Current Liabilities
    Short-term borrowings                           $      -        $      -          $    13.7        $        -          $    13.7
    Accounts payable                                    45.1            14.1              816.9                 -              876.1
    Intercompany borrowings                                -            57.6            1,060.1          (1,117.7)                 -
    Long-term debt due within one year                     -            23.2                3.2                 -               26.4
    Other current liabilities                           14.9          (269.9)             692.4              (1.8)             435.6
                                                    --------        --------          ---------        ----------          ---------
       Total Current Liabilities                        60.0          (175.0)           2,586.3          (1,119.5)           1,351.8

  Long-Term Debt                                       900.0         1,973.3            1,097.4                 -            3,970.7
  Deferred Credits and Reserves                            -           478.4            1,596.3               (.8)           2,073.9
  Intercompany Advances                                    -            35.6              955.9            (991.5)                 -
  Stockholders' Equity                                 768.7         3,105.0            7,362.9          (7,972.9)           3,263.7
                                                    --------        --------          ---------        ----------          ---------
      Total Liabilities and Stockholders' Equity    $1,728.7        $5,417.3          $13,598.8        $(10,084.7)         $10,660.1
                                                    ========        ========          =========        ==========          =========
</TABLE>


<TABLE>

                                                Kerr-McGee Corporation and Subsidiaries
                                              Condensed Consolidating Statement of Income
                                             For the Three Months Ended September 30, 2001

<CAPTION>

                                                                  Kerr-McGee
                                                Kerr-McGee        Operating        Non-Guarantor
  (Millions of dollars)                         Corporation      Corporation       Subsidiaries       Eliminations     Consolidated
                                                -----------      -----------       -------------      ------------     ------------

  <S>                                               <C>              <C>                <C>               <C>                <C>
  Sales                                             $     -          $  (2.2)           $ 951.1           $ (65.4)           $883.5
                                                    -------          -------            -------           -------            ------

  Costs and Expenses
    Costs and operating expenses                          -              1.2              396.2             (65.6)            331.8
    Selling, general and administrative                   -             14.4               45.8               (.1)             60.1
      expenses
    Shipping and handling expenses                        -                -               31.2                 -              31.2
    Depreciation and depletion                            -              2.1              180.3                 -             182.4
    Asset impairment                                      -                -               47.3                 -              47.3
    Exploration, including dry holes and
      amortization of undeveloped leases                  -                -               45.6                 -              45.6
    Taxes, other than income taxes                        -               .9               24.9                 -              25.8
    Provision for environmental remediation
      and restoration of inactive sites,
      net of reimbursements                               -             78.4                  -                 -              78.4
    Interest and debt expenses                          6.6             50.0               33.2             (42.7)             47.1
                                                    -------          -------            -------           -------            ------
        Total Costs and Expenses                        6.6            147.0              804.5            (108.4)            849.7
                                                    -------          -------            -------           -------            ------

                                                       (6.6)          (149.2)             146.6              43.0              33.8
  Other Income (Loss)                                (124.7)           (18.1)              49.9              99.9               7.0
                                                    -------          -------            -------           -------            ------
  Income before Income Taxes                         (131.3)          (167.3)             196.5             142.9              40.8
  Taxes on Income                                         -            175.2             (189.7)                -             (14.5)
                                                    -------          -------            -------           -------            ------

  Net Income (Loss)                                 $(131.3)         $   7.9            $   6.8           $ 142.9            $ 26.3
                                                    =======          =======            =======           =======            ======
</TABLE>


<TABLE>

                                                Kerr-McGee Corporation and Subsidiaries
                                              Condensed Consolidating Statement of Income
                                             For the Nine Months Ended September 30, 2001

<CAPTION>

                                                                  Kerr-McGee
                                                Kerr-McGee        Operating        Non-Guarantor
  (Millions of dollars)                         Corporation      Corporation        Subsidiaries      Eliminations     Consolidated
                                               ------------      -----------       -------------      ------------     ------------

  <S>                                               <C>              <C>               <C>                <C>              <C>
  Sales                                             $     -          $  (6.4)          $3,160.5           $(273.6)         $2,880.5
                                                    -------          -------           --------           -------          --------

  Costs and Expenses
    Costs and operating expenses                          -              3.3            1,207.7            (274.4)            936.6
    Selling, general and administrative                   -             41.8              126.3                 -             168.1
      expenses
    Shipping and handling expenses                        -                -               90.3                                90.3
    Depreciation and depletion                            -              6.2              517.1                 -             523.3
    Asset impairment                                      -                -               47.3                 -              47.3
    Exploration, including dry holes and
      amortization of undeveloped leases                  -               .1              139.1                 -             139.2
    Taxes, other than income taxes                        -              4.3               84.6                 -              88.9
    Provision for environmental remediation
      and restoration of inactive sites, net of
      reimbursements                                      -             82.1                  -                 -              82.1
    Interest and debt expenses                          6.6            148.9              102.9            (130.9)            127.5
                                                    -------          -------          ---------           -------          --------
        Total Costs and Expenses                        6.6            286.7            2,315.3            (405.3)          2,203.3
                                                    -------          -------          ---------           -------          --------

                                                       (6.6)          (293.1)             845.2             131.7             677.2
  Other Income (Loss)                                (124.7)           680.0              141.9            (489.6)            207.6
                                                    -------          -------          ---------           -------          --------
  Income before Income Taxes                         (131.3)           386.9              987.1            (357.9)            884.8
  Taxes on Income                                         -            151.1             (479.6)                -            (328.5)
                                                    -------          -------          ---------           -------          --------

  Income before Change in Accounting                 (131.3)           538.0              507.5            (357.9)            556.3
  Principle
  Cumulative Effect of Change in Accounting
    Principle (net of benefit for income taxes)           -            (21.0)                .7                 -             (20.3)
                                                     -------          -------          ---------           -------          --------

  Net Income (Loss)                                 $(131.3)         $ 517.0          $   508.2           $(357.9)         $  536.0
                                                    =======          =======          =========           =======          ========
</TABLE>


<TABLE>

                                                Kerr-McGee Corporation and Subsidiaries
                                            Condensed Consolidating Statement of Cash Flows
                                             For the Three Months Ended September 30, 2001

<CAPTION>

                                                                  Kerr-McGee
                                                Kerr-McGee        Operating         Non-Guarantor
  (Millions of dollars)                         Corporation      Corporation        Subsidiaries       Eliminations     Consolidated
                                                -----------      -----------        -------------      ------------     ------------

  <S>                                               <C>              <C>                  <C>              <C>            <C>
  Operating Activities
  --------------------
  Net income (loss)                                 $(131.3)         $   7.9              $   6.8          $  142.9       $    26.3
  Adjustments to reconcile net income to net
     cash provided by operating activities -
       Depreciation, depletion and                        -              2.1                194.3                 -           196.4
         amortization
       Asset impairment                                   -                -                 47.3                 -            47.3
       Equity in earnings of subsidiaries             124.7             17.9                    -            (142.6)              -
       Dry hole costs                                     -                -                 12.9                 -            12.9
       Deferred income taxes                              -            160.7                (69.9)                -            90.8
       Provision for environmental
         remediation and restoration of
         inactive sites, net of reimbursement             -             78.4                    -                 -            78.4
      Gain on sale and retirement of assets               -                -                 (4.6)                -            (4.6)
      Noncash items affecting income                      -              3.4                 (8.9)                -            (5.5)
      Other net cash provided by (used in)
         operating activities                           6.6            (55.5)               (38.3)              (.3)          (87.5)
                                                    -------          -------              -------           -------       ---------
             Net Cash Provided by Operating
               Activities                                 -            214.9                139.6                 -           354.5
                                                    -------          -------              -------           -------       ---------

  Investing Activities
  --------------------
  Capital expenditures                                    -             (1.0)              (492.9)                -          (493.9)
  Dry hole expense                                        -                -                (12.9)                -           (12.9)
  Acquisitions                                       (956.9)               -                    -                 -          (956.9)
  Other investing activities                              -                -                (21.5)                -           (21.5)
                                                    -------          -------              -------           -------       ---------
             Net Cash Used in Investing
               Activities                            (956.9)            (1.0)              (527.3)                -        (1,485.2)
                                                    -------          -------              -------           -------       ---------

  Financing Activities
  --------------------
  Issuance of long-term debt                          900.0                -                383.2                 -         1,283.2
  Repayment of long-term debt                             -           (176.0)                   -                 -          (176.0)
  Decrease in short-term borrowings                       -                -                 (4.7)                -            (4.7)
  Increase (decrease) in intercompany
    notes and advances                                 56.9              1.6                (58.5)                -               -
  Issuance of common stock                                -               .1                    -                 -              .1
  Dividends paid                                          -            (42.8)                   -                 -           (42.8)
                                                    -------          -------              -------           -------       ---------
             Net Cash Provided by Financing
               Activities                             956.9           (217.1)               320.0                 -         1,059.8
                                                    -------          -------              -------           -------       ---------

  Effects of Exchange Rate Changes on Cash
     and Cash Equivalents                                 -                -                 (4.3)                -            (4.3)
                                                    -------          -------              -------           -------       ---------
  Net Increase (Decrease) in Cash and Cash
     Equivalents                                          -             (3.2)               (72.0)                -           (75.2)
  Cash and Cash Equivalents at Beginning of
     Period                                               -              5.7                191.0                 -           196.7
                                                    -------          -------              -------           -------       ---------
  Cash and Cash Equivalents at End of Period        $     -          $   2.5               $119.0           $     -       $   121.5
                                                    =======          =======              =======           =======       =========
</TABLE>


<TABLE>

                                                Kerr-McGee Corporation and Subsidiaries
                                            Condensed Consolidating Statement of Cash Flows
                                             For the Nine Months Ended September 30, 2001

<CAPTION>

                                                                  Kerr-McGee
                                                Kerr-McGee        Operating         Non-Guarantor
  (Millions of dollars)                         Corporation      Corporation         Subsidiaries      Eliminations     Consolidated
                                                -----------      -----------        -------------      ------------     ------------

  <S>                                               <C>              <C>                <C>                 <C>           <C>
  Operating Activities
  --------------------
  Net income (loss)                                 $(131.3)         $ 517.0            $   508.2           $(357.9)      $   536.0
  Adjustments to reconcile net income to net
     cash provided by operating activities -
        Depreciation, depletion and                       -              6.2                556.7                 -           562.9
          amortization
        Asset impairment                                  -                -                 47.3                 -            47.3
        Equity in earnings of subsidiaries            124.7           (483.3)                   -             358.6               -
        Dry hole costs                                    -                -                 43.6                 -            43.6
        Deferred income taxes                             -            327.1               (180.1)                -           147.0
        Provision for environmental
          remediation and restoration of
          inactive sites, net of reimbursement            -             82.1                    -                 -            82.1
        Gain on sale and retirement of assets             -             (3.6)                   -                 -            (3.6)
        Noncash items affecting income                    -           (164.5)                12.7                 -          (151.8)
        Other net cash provided by (used in)
           operating activities                         6.6            (49.9)                (5.7)              (.7)          (49.7)
                                                    -------          -------            ---------           -------       ---------
             Net Cash Provided by Operating
               Activities                                 -            231.1                982.7                 -         1,213.8
                                                    -------          -------            ---------           -------       ---------

  Investing Activities
  --------------------
  Capital expenditures                                    -             (7.3)            (1,341.9)                -        (1,349.2)
  Dry hole expense                                        -                -                (43.6)                -           (43.6)
  Acquisitions                                       (956.9)               -                (23.8)                -          (980.7)
  Other investing activities                              -              6.0                (53.4)                -           (47.4)
                                                    -------          -------            ---------           -------       ---------
             Net Cash Used in Investing
               Activities                            (956.9)            (1.3)            (1,462.7)                -        (2,420.9)
                                                    -------          -------            ---------           -------       ---------

  Financing Activities
  --------------------
  Issuance of long-term debt                          900.0            200.0                603.0                 -         1,703.0
  Repayment of long-term debt                             -           (342.0)               (74.2)                -          (416.2)
  Decrease in short-term borrowings                       -                -                 (3.3)                -            (3.3)
  Increase (decrease) in intercompany
    notes and advances                                 56.9              8.2                (65.1)                -               -
  Issuance of common stock                                -             31.8                    -                 -            31.8
  Dividends paid                                          -           (127.9)                   -                 -          (127.9)
                                                    -------          -------            ---------           -------       ---------
             Net Cash Provided by Financing
               Activities                             956.9           (229.9)               460.4                 -         1,187.4
                                                    -------          -------            ---------           -------       ---------

  Effects of Exchange Rate Changes on Cash
     and Cash Equivalents                                 -                -                 (2.9)                -            (2.9)
                                                    -------          -------            ---------           -------       ---------
  Net Increase (Decrease) in Cash and Cash
     Equivalents                                          -              (.1)               (22.5)                -           (22.6)
  Cash and Cash Equivalents at Beginning of
     Period                                               -              2.6                141.4                 -           144.0
                                                    -------          -------            ---------           -------       ---------
  Cash and Cash Equivalents at End of Period        $     -          $   2.5            $   118.9           $     -       $   121.4
                                                    =======          =======            =========           =======       =========
</TABLE>

L.      CONTINGENCIES

        West Chicago, Illinois

        In 1973, a wholly owned subsidiary, Kerr-McGee Chemical Corporation, now
        Kerr-McGee Chemical LLC (Chemical), closed the facility in West Chicago,
        Illinois,   that  processed  thorium  ores.  Historical  operations  had
        resulted in low-level  radioactive  contamination at the facility and in
        the surrounding  areas. In 1979,  Chemical filed a plan with the Nuclear
        Regulatory  Commission (NRC) to decommission the facility.  In 1990, the
        NRC transferred  jurisdiction over the facility to the State of Illinois
        (the  State).  Following  is  the  current  status  of  various  matters
        associated with the closed facility.

        Closed Facility - In 1994, Chemical, the City of West Chicago (the City)
        and  the  State   reached   agreement  on  the  initial   phase  of  the
        decommissioning plan for the closed West Chicago facility,  and Chemical
        began shipping material from the site to a licensed  permanent  disposal
        facility.

        In February 1997,  Chemical executed an agreement with the City covering
        the  terms  and   conditions   for   completing   the  final   phase  of
        decommissioning  work. The State has indicated approval of the agreement
        and has issued license amendments authorizing much of the work. Chemical
        expects  most of the work to be  completed  within the next three years,
        leaving  principally only groundwater  remediation and/or monitoring for
        subsequent years.

        In 1992,  the State enacted  legislation  imposing an annual storage fee
        equal to $2 per cubic foot of byproduct  material  located at the closed
        facility,  which  cannot  exceed $26  million per year.  Initially,  all
        storage fee  payments  were  reimbursed  to Chemical as  decommissioning
        costs were incurred.  Chemical was fully reimbursed for all storage fees
        paid pursuant to this  legislation.  In June 1997, the  legislation  was
        amended to provide that future storage fee  obligations are to be offset
        against decommissioning costs incurred but not yet reimbursed.

        Vicinity  Areas - The U.S.  Environmental  Protection  Agency  (EPA) has
        listed four areas in the vicinity of the closed West Chicago facility on
        the National  Priority List  promulgated  by EPA under  authority of the
        Comprehensive Environmental Response, Compensation, and Liability Act of
        1980 (CERCLA) and has designated  Chemical as a potentially  responsible
        party in these four  areas.  Two of the four areas  presently  are being
        studied to determine the extent of  contamination  and the nature of any
        remedy.  These two areas are  known as the  Sewage  Treatment  Plant and
        Kress Creek.  The scope of the required  cleanup for these two areas has
        not been determined. The EPA previously issued unilateral administrative
        orders  for the  other two areas  (known  as the  residential  areas and
        Reed-Keppler Park), which require Chemical to conduct removal actions to
        excavate  contaminated  soils and ship the soils elsewhere for disposal.
        Without  waiving any of its rights or defenses,  Chemical is  conducting
        the work required by the two orders. Chemical has completed the required
        excavation and restoration  work at the park site and will be monitoring
        the site pending final EPA approval.

        Government  Reimbursement - Pursuant to Title X of the Energy Policy Act
        of 1992  (Title  X),  the U.S.  Department  of  Energy is  obligated  to
        reimburse  Chemical  for certain  decommissioning  and cleanup  costs in
        recognition  of the fact  that  much of the  facility's  production  was
        dedicated to U.S. government  contracts.  Title X was amended in 1998 to
        increase the amount  authorized for  reimbursement  to $140 million plus
        inflation  adjustments.  Through  September 30, 2001,  Chemical has been
        reimbursed   approximately   $146   million   under   Title   X.   These
        reimbursements are provided by congressional appropriations.

        Other Matters

        The company and/or its subsidiaries are parties to a number of legal and
        administrative  proceedings involving environmental and/or other matters
        pending  in  various  courts  or  agencies.  These  include  proceedings
        associated with facilities  currently or previously  owned,  operated or
        used by the company,  its subsidiaries  and/or their  predecessors,  and
        include claims for personal injuries and property damages. The company's
        current and former  operations  also  involve  management  of  regulated
        materials and are subject to various environmental laws and regulations.
        These  laws  and  regulations  will  obligate  the  company  and/or  its
        subsidiaries  to clean up  various  sites at which  petroleum  and other
        hydrocarbons,  chemicals,  low-level radioactive substances and/or other
        materials  have been  disposed of or released.  Some of these sites have
        been designated Superfund sites by EPA pursuant to CERCLA.

        The company provides for costs related to  contingencies  when a loss is
        probable and the amount is reasonably estimable.  It is not possible for
        the  company to  estimate  reliably  the amount and timing of all future
        expenditures  related  to  environmental  and  legal  matters  and other
        contingencies because:

             *    some  sites  are  in the early  stages of  investigation,  and
                  other sites may be identified in the future;

             *    cleanup  requirements  are difficult to predict at sites where
                  remedial  investigations  have  not  been  completed  or final
                  decisions have not  been  made regarding cleanup requirements,
                  technologies or other factors that bear on cleanup costs;

             *    environmental  laws  frequently  impose  joint   and   several
                  liability  on  all potentially responsible parties, and it can
                  be  difficult  to determine the number and financial condition
                  of  other  potentially  responsible parties and their share of
                  responsibility for cleanup costs; and

             *    environmental  laws  and regulations are continually changing,
                  and court proceedings are inherently uncertain.

        As of September 30, 2001, the company had reserves totaling $227 million
        for cleaning up and  remediating  environmental  sites,  reflecting  the
        reasonably estimable costs for addressing these sites. This includes $69
        million  for the West  Chicago  sites.  Cumulative  expenditures  at all
        environmental  sites  through  September  30, 2001,  total $878 million.
        Management  believes,  after  consultation  with general  counsel,  that
        currently  the  company  has  reserved  adequately  for  the  reasonably
        estimable costs of contingencies. However, additions to the reserves may
        be required as  additional  information  is  obtained  that  enables the
        company to better estimate its liabilities, including liability at sites
        now under review,  though the company  cannot now reliably  estimate the
        amount of future additions to the reserves.

Item 2. Management's  Discussion   and  Analysis  of  Results  of Operations and
        Financial Condition.

Comparison of 2001 Results with 2000 Results

CONSOLIDATED OPERATIONS

Third-quarter  2001 net income  totaled  $26.3  million,  compared  with  $264.6
million for the same 2000  period.  Net income for the first nine months of 2001
totaled $536 million, compared with $559.7 million a year earlier. Third-quarter
2001 operating  profit totaled $176.1  million,  compared with $458.6 million in
the 2000 third  quarter.  This decline in operating  profit was primarily due to
lower crude oil and natural gas sales  prices,  lower  pigment sales volumes and
prices,  lower  crude oil  sales  volumes,  higher  depreciation  and  depletion
expense,  and higher  general and  administrative  expenses.  In  addition,  the
company recorded a $47.3 million special charge for asset impairment in the 2001
third quarter  relating to the shut-in of the North Sea Hutton field.  Partially
offsetting  the  decline in  operating  profit for the 2001 third  quarter  were
higher  natural gas sales  volumes,  lower  pigment  production  costs and lower
exploration  expenses.  Operating  profit for the first nine  months of 2001 was
$940.5 million, compared with $1.1 billion in the same 2000 period. The decrease
in operating  profit for the first nine months of 2001 reflects  lower crude oil
sales prices and volumes,  the 2001 asset impairment charge, lower pigment sales
prices and volumes, a 2001 special charge for the termination of manganese metal
production at the company's  Hamilton,  Miss.,  electrolytic  chemical facility,
higher general and administrative  expenses,  and higher product  transportation
costs. Partially offsetting these decreases were higher natural gas sales prices
and volumes, the 2000 write-off of purchased in-process research and development
associated  with  an  acquisition,  higher  tariff  income,  and  lower  pigment
production costs.

Other expense for the third  quarter of 2001 totaled  $135.3  million,  compared
with $53.5 million for the 2000  quarter.  The increase was primarily due to the
2001 environmental provision,  foreign currency transaction losses compared with
2000  income  and losses  from  equity  affiliates  compared  with 2000  income,
partially offset by realized and unrealized  gains on derivative  contracts that
were part of the HS  Resources  transaction.  Other  expense  for the first nine
months of 2001 was $55.7 million,  compared with $257.1 million  expense for the
same 2000 period.  The improved  results were  primarily due to a pretax special
gain of  $181.4  million  associated  with  the  reclassification  of 85% of the
company's  investment  in Devon common stock to "trading"  from  "available  for
sale" (see Note B),  lower net interest  expense and costs  incurred in 2000 for
certain chemical facility closings and product-line discontinuations,  partially
offset by  foreign  currency  transaction  losses  compared  with 2000 gains and
losses from equity affiliates compared with 2000 income.

The income tax provision was $14.5 million for the 2001 third quarter,  compared
with $140.5  million for the same 2000 period.  The provision for the 2001 third
quarter   included  a  $42.4  million  tax  benefit  related  to   environmental
provisions,  asset impairment and costs  associated with employee  severance and
merger  transition.  The income tax  provision for the first nine months of 2001
was $328.5  million,  compared  with  $304.2  million for the 2000  period.  The
provision  for the first  nine  months of 2001  included  $63.5  million  of tax
expense  related to the  reclassification  of the Devon  stock (see Note B). The
provision for the first nine months of 2000 included a $38.7 million tax benefit
primarily   related   to   environmental   provisions   and   chemical   product
discontinuations.  Excluding the tax effect on these special items, the decrease
in the provisions for both 2001 periods is due primarily to lower income.

SEGMENT OPERATIONS

Following is a summary of sales and  operating  profit and a discussion of major
factors  influencing the results of each of the company's  business segments for
the third quarter and first nine months of 2001,  compared with the same periods
last year.
<TABLE>
<CAPTION>

                                                     Three Months Ended                   Nine Months Ended
                                                       September 30,                        September 30,
(Millions of dollars)                               2001             2000                2001            2000
                                                  -------         --------            --------         --------

<S>                                               <C>             <C>                 <C>              <C>
Sales
  Exploration and production                      $ 601.5         $  750.9            $2,008.5         $2,061.0
  Chemicals - Pigment                               234.4            296.2               727.6            773.4
  Chemicals - Other                                  47.5             58.9               144.2            168.8
                                                  -------         --------            --------         --------
                                                    883.4          1,106.0             2,880.3          3,003.2
  All other                                            .1               .1                  .2               .3
                                                  -------         --------            --------         --------
      Total Sales                                 $ 883.5         $1,106.1            $2,880.5         $3,003.5
                                                  =======         ========            ========         ========

Operating Profit
  Exploration and production                      $ 169.6         $  405.6            $  891.2         $1,022.2
  Chemicals - Pigment                                 3.5             47.3                65.8             85.6
  Chemicals - Other                                   3.0              5.7               (16.5)            13.2
                                                  -------         --------            --------         --------
      Total Operating Profit                        176.1            458.6               940.5          1,121.0

Other Expense                                      (135.3)           (53.5)              (55.7)          (257.1)
                                                  -------         --------            --------         --------

Income before Income Taxes                           40.8            405.1               884.8            863.9

Taxes on Income                                     (14.5)          (140.5)             (328.5)          (304.2)
                                                  -------         --------            --------         --------
Income before Change in
  Accounting Principle                               26.3            264.6               556.3            559.7

Cumulative Effect of Change in Accounting
  Principle, Net of Income Taxes                        -                -               (20.3)               -
                                                  -------         --------            --------         --------

Net Income                                        $  26.3         $  264.6            $  536.0         $  559.7
                                                  =======         ========            ========         ========
</TABLE>

Exploration and Production -

Operating profit for the third quarter of 2001 was $169.6 million, compared with
$405.6  million for the same 2000  period.  Operating  profit for the first nine
months of 2001 and 2000 was $891.2 million and $1,022.2  million,  respectively.
The decrease in operating profit for the 2001 third quarter was primarily due to
the  decline in crude oil and natural  gas sales  prices,  lower crude oil sales
volumes,  the 2001 special charge for asset impairment,  and higher depreciation
and depletion expense,  partially offset by higher natural gas sales volumes and
lower  exploration  expense.  The decline in operating profit for the first nine
months of 2001 was  primarily  due to lower crude oil sales  prices and volumes,
the 2001 special charge for asset  impairment and higher product  transportation
costs, partially offset by the increase in natural gas sales prices and volumes,
lower depreciation and depletion expense, and higher tariff income.

Revenues  were $601.5  million and $750.9  million  for the three  months  ended
September  30,  2001 and 2000,  respectively,  and  $2,008.5  million and $2,061
million for the first nine months of 2001 and 2000, respectively.  The following
table shows the  company's  average  crude oil and natural gas sales  prices and
volumes for both the third quarter and first nine months of 2001 and 2000.
<TABLE>
<CAPTION>

                                                   Three Months Ended          Nine Months Ended
                                                      September 30,              September 30,
                                                    2001         2000           2001         2000
                                                  ------       ------         ------       ------
<S>                                               <C>          <C>            <C>          <C>
Crude oil and condensate sales
(thousands of bbls/day)
  Domestic
    Offshore                                        55.6         57.1           55.8         57.4
    Onshore                                         25.8         16.5           21.4         16.9
  North Sea                                         93.8        111.9          100.9        117.9
  Other International                               18.5         16.5           17.4         14.5
                                                  ------       ------         ------       ------
        Total                                      193.7        202.0          195.5        206.7
                                                  ======       ======         ======       ======

Average crude oil sales price (per barrel)
  Domestic
    Offshore                                      $22.32       $28.49         $23.39       $26.73
    Onshore                                        23.24        30.39          24.98        28.61
  North Sea                                        24.22        29.73          25.17        27.47
  Other International                              22.65        27.20          23.05        25.99
        Average                                   $23.40       $29.23         $24.45       $27.25

Natural gas sold (MMCF/day)
  Domestic
    Offshore                                         273          291            284          294
    Onshore                                          323          173            217          173
  North Sea                                           58           63             63           68
                                                  ------       ------         ------       ------
        Total                                        654          527            564          535
                                                  ======       ======         ======       ======

Average natural gas sales price (per MCF)
  Domestic
    Offshore                                       $2.97        $4.48          $4.95        $3.57
    Onshore                                         2.79         4.46           4.27         3.68
  North Sea                                         1.37         2.09           2.27         2.03
        Average                                    $2.74        $4.19          $4.39        $3.41
</TABLE>

Chemicals - Pigment

Third-quarter  2001  operating  profit was $3.5  million on  revenues  of $234.4
million,  compared with operating  profit of $47.3 million on revenues of $296.2
million  for the same 2000  period.  For the first nine months of 2001 and 2000,
operating profit was $65.8 million and $85.6 million,  respectively, on revenues
of $727.6 million and $773.4 million,  respectively.  Operating  profit for both
2001 periods decreased  primarily due to lower pigment sales prices and volumes,
partially  offset  by lower  production  costs.  In  addition,  the  decline  in
operating  profit for the first nine months of 2001 was partially  offset by the
2000 second-quarter  write-off of purchased  in-process research and development
and  transition-related  expenses associated with the acquisition of two pigment
plants.

Chemicals - Other

Operating  profit in the 2001 third  quarter was $3 million on revenues of $47.5
million,  compared  with  operating  profit of $5.7 million on revenues of $58.9
million for the 2000  period.  Operating  loss for the first nine months of 2001
was $16.5 million on revenues of $144.2 million,  compared with operating profit
of $13.2 million on revenues of $168.8 million.  Impacting the first nine months
of 2001 was a $25.1  million  special  charge for the  termination  of manganese
metal production at the Hamilton,  Miss.,  electrolytic facility and $.5 million
relating to an employee  severance  program.  Excluding  these special  charges,
operating  profit  for the first  nine  months  of 2001  totaled  $9.1  million,
compared  with $13.2 million in the same 2000 period.  Operating  profit for the
first nine months of 2001  declined  primarily  due to lower results from forest
products operations.

Financial Condition

At September 30, 2001, the company's net working capital position was a negative
$22.4 million, compared with a positive $77.4 million at September 30, 2000, and
a negative $34.2 million at December 31, 2000. The current ratio was 1.0 to 1 at
September 30, 2001,  compared with 1.1 to 1 at September 30, 2000,  and 1.0 to 1
at December 31, 2000. The negative working capital at September 30, 2001, is not
indicative of a lack of liquidity as the company  maintains  sufficient  current
assets to settle current  liabilities  when due.  Additionally,  the company has
significant unused lines of credit and revolving credit facilities, as discussed
below.  Current  asset  balances  are  minimized  as one way to finance  capital
expenditures and to lower borrowing costs.

The company's  percentage of net debt (debt less cash) to capitalization was 54%
at September  30, 2001,  compared  with 50% at  September  30, 2000,  and 46% at
December 31, 2000.  The company had unused lines of credit and revolving  credit
facilities  of $1,254.3  million at  September  30, 2001.  Of this amount,  $820
million can be used to support  commercial paper borrowings of Kerr-McGee Credit
LLC, and $337 million can be used to support euro commercial paper borrowings of
Kerr-McGee (G.B.) PLC, Kerr-McGee  Chemical GmbH,  Kerr-McGee Pigments (Holland)
B.V. and Kerr-McGee International ApS.

On August 1, 2001,  the  company  and  Kerr-McGee  Credit  LLC,  a wholly  owned
subsidiary,  entered  into  a  364-day  revolving  credit  facility  with  Chase
Manhattan  Bank to provide  borrowings up to $900 million at variable  rates.  A
total of $900  million was  outstanding  on September  30,  2001,  of which $833
million was used to fund the cash  portion of the HS Resources  acquisition.  On
October 17,  2001,  the  outstanding  balance of the  revolver  was paid and the
facility was terminated.

On October 3, 2001,  the company  issued three series of notes as follows:  $325
million of 5-7/8% notes due September 15, 2006; $675 million of 6-7/8% notes due
September 15, 2011, and $500 million of 7-7/8% notes due September 15, 2031. The
proceeds received by the company were used to repay borrowings  incurred to fund
the HS Resources acquisition and various other short-term borrowings.

Capital expenditures for the first nine months of 2001, excluding dry hole costs
and acquisitions, totaled $1,349.2 million, compared with $387.6 million for the
same period last year. Exploration and production  expenditures,  principally in
the Gulf of Mexico and North Sea, were 91% of the 2001 total. Chemical - pigment
expenditures were 8% of the 2001 total.  Chemical - other and corporate incurred
the  remaining  1% of the  expenditures.  Management  anticipates  that the cash
requirements  for the next  several  years can be  provided  through  internally
generated funds and selective borrowings.

                           Forward-Looking Information

Statements in this  quarterly  report  regarding  the company's or  management's
intentions, beliefs, expectations, or that otherwise speak to future events, are
forward-looking  statements  within  the  meaning of the  Securities  Litigation
Reform Act. Future results and developments discussed in these statements may be
affected by numerous factors and risks,  such as the accuracy of the assumptions
that underlie the  statements,  the success of the oil and gas  exploration  and
production program,  drilling risks, the market value of Kerr-McGee's  products,
uncertainties in interpreting engineering data, demand for consumer products for
which Kerr-McGee's businesses supply raw materials, general economic conditions,
and other  factors and risks  discussed in the  company's  SEC  filings.  Actual
results and  developments  may differ  materially  from those  expressed in this
quarterly report.

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings -

        For a discussion  of  contingencies,  reference is made to  Management's
        Discussion  and  Analysis,  Item 7,  of Form  10-K  for the  year  ended
        December 31, 2000, and  Contingencies  Footnote L., to the  Consolidated
        Financial Statements of this Form 10-Q.

Item 6. Exhibits and Reports on Form 8-K

        (a)  Exhibits -

             Exhibit No.
             -----------

                 4.1      Indenture  dated  as  of  August 1, 2001,  between the
                          company and Citibank, N.A., as trustee, related to the
                          company's 5-7/8% Notes due September 15, 2006,  6-7/8%
                          Notes  due  September 15, 2011, and  7-7/8% Notes  due
                          September 15, 2031, filed as Exhibit 4.1 to  Form S-3,
                          effective August 31, 2001, Registration No. 333-68136,
                          and incorporated herein by reference.

        (b)  Reports on Form 8-K -

             On  August  1,  2001,  the  company  filed a  report  on  Form  8-K
             announcing  it had  completed the merger with HS Resources and that
             the company had guaranteed the publicly held debt  securities of HS
             Resources and Kerr-McGee Operating Corporation.

             On  August  16,  2001,  the  company  filed a  report  on Form  8-K
             announcing a conference  call to discuss its interim  third-quarter
             2001 results.

             On August 29,  2001,  the  company  filed a report on Form 8-K/A to
             provide financial  information for the second quarter and first six
             months  of 2001  for HS  Resources  and to  provide  the pro  forma
             statements of the company and HS Resources combined.

             On  September  20,  2001,  the  company  filed a report on Form 8-K
             announcing a conference  call to discuss its interim  third-quarter
             2001 results.

             On  September  21,  2001,  the  company  filed a report on Form 8-K
             announcing its decision to provide for certain  special  charges in
             the 2001 third quarter.

             On  October  2,  2001,  the  company  filed a  report  on Form  8-K
             announcing  the pricing of three series of notes and the  execution
             of an underwriting agreement and indenture.

             On  October  3,  2001,  the  company  filed a report on Form  8-K/A
             announcing  the pricing of three series of notes and the  execution
             of an underwriting agreement and indenture.

             On  October  18,  2001,  the  company  filed a  report  on Form 8-K
             announcing  a  conference  call to discuss its  third-quarter  2001
             results.

                                    SIGNATURE

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

                             KERR-McGEE CORPORATION


  Date  November 14, 2001               By:(Deborah A. Kitchens)
        -----------------                  ------------------------------
                                            Deborah A. Kitchens
                                              Vice President and Controller
                                              and Chief Accounting Officer