2. Revenue from Contracts with Customers

Change in Accounting Policy The Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), on January 1, 2018, using the modified retrospective method applied to contracts that were not completed as of January 1, 2018. Refer to Note 1—Summary of Significant Accounting Policies for additional information. The primary impacts of the Company’s change in accounting policy for revenue recognition effective January 1, 2018, are detailed below.

Exploration and Production There were no significant changes to the timing or valuation of revenue recognized for sales of production by the Exploration and Production segment.

WES Midstream and Other Midstream Gathering and processing revenues will decrease for contracts where the Company is acting as an agent for its processing customer in the sale of processed volumes and increase for contracts with noncash consideration, with an offset to gathering and processing expense upon product sale. The magnitude of these presentation changes in subsequent periods is dependent on future customer volumes subject to the impacted contracts and commodity prices for those volumes. These presentation changes will not impact net earnings.

Impacts on Financial Statements The following tables summarize the impacts of adopting Topic 606 on the Company’s consolidated financial statements for the three months ended March 31, 2018, as described in the Change in Accounting Policy section above:



CONSOLIDATED STATEMENT OF INCOME	Impact of Change in Accounting Policy
millions	As Reported		Without Adoption of Topic 606		Effect of Change Increase/(Decrease)
Three Months Ended March 31, 2018
Revenues
Gathering, processing, and marketing sales	$	360	$	577	$	(217	)
Gains (losses) on divestitures and other, net	19		21		(2		)
Expenses
Gathering, processing, and marketing	237		451		(214		)
Income tax expense (benefit)	126		127		(1		)
Net income (loss) attributable to noncontrolling interests	53		54		(1		)
Net Income (Loss) Attributable to Common Stockholders	$	121	$	124	$	(3	)



CONSOLIDATED BALANCE SHEET	Impact of Change in Accounting Policy
millions	As Reported		Without Adoption of Topic 606		Effect of Change Increase/(Decrease)
March 31, 2018
Assets
Net properties and equipment	$	27,758	$	27,715	$	43
Other assets	2,134		2,122		12
Liabilities
Other current liabilities	1,437		1,434		3
Deferred income taxes	2,267		2,274		(7		)
Other	4,166		4,056		110
Equity
Total equity	11,756		11,807		(51		)

2. Revenue from Contracts with Customers (Continued)

Disaggregation of Revenue from Contracts with Customers The following table disaggregates revenue by significant product type and segment:



millions	Exploration & Production			WES Midstream			Other Midstream		Other and Intersegment Eliminations			Total

Three Months Ended March 31, 2018
Product Type
Oil sales	$	2,127		$	—		$	—	$	—		$	2,127
Natural-gas sales	247			—			—		—			247
Natural-gas liquids sales	292			—			—		—			292
Gathering, processing, and marketing sales ⁽¹⁾	—			438			86		24			548
Other, net	3			—			—		19			22
Total Revenue from Customers	$	2,669		$	438		$	86	$	43		$	3,236
Gathering, processing, and marketing sales ⁽²⁾	—			(1		)	2		(189		)	(188		)
Gains (losses) on divestitures, net	(33		)	—			9		—			(24		)
Other, net	(12		)	29			10		(6		)	21
Total Revenue from Other than Customers	$	(45	)	$	28		$	21	$	(195	)	$	(191	)
Total Revenue and Other	$	2,624		$	466		$	107	$	(152	)	$	3,045

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⁽¹⁾	The amount in Other and Intersegment Eliminations primarily represents sales of third-party natural gas and NGLs of $224 million and intercompany eliminations of $(196) million.


⁽²⁾	The amount in Other and Intersegment Eliminations represents purchases of third-party natural gas and NGLs. Although these purchases are reported net in gathering, processing, and marketing sales in the Company’s Consolidated Statements of Income, they are shown separately on this table, as the purchases are not considered revenue from customers.

Contract Liabilities Contract liabilities primarily relate to midstream fees and capital reimbursements that are charged to customers for only a portion of the contract term and must be recognized as revenues over the expected period of benefit, fixed and variable fees that are received from customers but revenue recognition is deferred under midstream cost of service contracts, and hard-minerals bonus payments received from customers that must be recognized to revenue over the expected period of benefit. The following table summarizes the current period activity related to contract liabilities from contracts with customers:



millions
Balance at December 31, 2017	$	37
Increase due to cumulative effect of adopting Topic 606	98
Increase due to cash received, excluding revenues recognized in the period	40
Decrease due to revenue recognized	(12		)
Balance at March 31, 2018	$	163

Contract liabilities at March 31, 2018
Other current liabilities	$	39
Other long-term liabilities - other	124
Total contract liabilities from contracts with customers	$	163

2. Revenue from Contracts with Customers (Continued)

Transaction Price Allocated to Remaining Performance Obligations Revenue expected to be recognized from certain performance obligations that are unsatisfied as of March 31, 2018, is reflected in the table below. The Company applies the optional exemptions in Topic 606 and does not disclose consideration for remaining performance obligations with an original expected duration of one year or less or for variable consideration related to unsatisfied performance obligations. Therefore, the following table represents only a small portion of Anadarko’s expected future consolidated revenues as future revenue from the sale of most products and services is dependent on future production or variable customer volumes and variable commodity prices for those volumes.



millions	Exploration & Production		WES Midstream		Other Midstream		Other and Intersegment Eliminations			Total
Remainder of 2018	$	74	$	268	$	38	$	(167	)	$	213
2019	102		440		74		(327		)	289
2020	103		496		87		(394		)	292
2021	103		470		94		(395		)	272
2022	7		461		98		(394		)	172
Thereafter	62		1,698		194		(1,321		)	633
Total	$	451	$	3,833	$	585	$	(2,998	)	$	1,871