EX-99.2 3 ex992prq42018.htm EXHIBIT 99.2 Exhibit


Impact of Adopting ASC 606 on U.S. GAAP Financial Statements to the Fourth Quarter 2018
The Financial Accounting Standards Board issued a new accounting standard on revenue from contracts with customers ("ASC 606"), effective January 1, 2018, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP.
The following tables summarize the impacts of adopting ASC 606 on the Company’s Condensed Consolidated Statement of Income, Financial Position, and Cash Flows as of and for the twelve months ended December 31, 2018.
Condensed Consolidated Statement of Income
 
 
Twelve months ended December 31, 2018
(millions)
 
As Reported
 
Adjustments
 
Balances Without Adoption of ASC 606
Revenue
 
 
 
 
 
 
Total revenue
 
$
10,770

 
$
(61
)
 
$
10,709

Expenses
 
 
 
 
 
 
Compensation and benefits
 
$
6,103

 
$
51

 
$
6,154

Other general expenses
 
$
1,500

 
$
(1
)
 
$
1,499

Other income (expense)
 
$
(25
)
 
$
1

 
$
(24
)
Income taxes
 
$
146

 
$
(34
)
 
$
112

Adoption of ASC 606 had a favorable impact of $78 million on net income from continuing operations, or $0.32 per share, for the twelve months ended December 31, 2018.
Condensed Consolidated Statement of Financial Position
 
 
As of December 31, 2018
(millions)
 
As Reported
 
Adjustments
 
Balances Without Adoption of ASC 606
Assets
 
 

 
 
 
 

Receivables, net
 
$
2,760

 
$
(301
)
 
$
2,459

Other current assets
 
$
618

 
$
(319
)
 
$
299

Deferred tax assets
 
$
561

 
$
137

 
$
698

Other non-current assets
 
$
448

 
$
(155
)
 
$
293

 
 
 
 
 
 
 
Liabilities
 
 

 
 
 
 

Other current liabilities
 
$
936

 
$
(43
)
 
$
893

Deferred tax liabilities
 
$
181

 
$
(28
)
 
$
153

Other non-current liabilities
 
$
1,097

 
$
2

 
$
1,099

 
 
 
 
 
 
 
Equity
 
 

 
 
 
 

Total equity
 
$
4,219

 
$
(569
)
 
$
3,650





Condensed Consolidated Statement of Cash Flows
 
 
Twelve months ended December 31, 2018
(millions)
 
As Reported
 
Adjustments
 
Balances Without Adoption of ASC 606
Cash flows from operating activities
 
 

 
 
 
 

Net income
 
$
1,174

 
$
(78
)
 
$
1,096

Receivables, net
 
$
(127
)
 
$
49

 
$
(78
)
Accounts payable and accrued liabilities
 
$
25

 
$
8

 
$
33

Current income taxes
 
$
34

 
$
(34
)
 
$
—

Other assets and liabilities
 
$
2

 
$
55

 
$
57

The adoption of ASC 606 had no impact on total Cash Provided by Operating Activities.