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. See Note 1—Summary of Significant Accounting Policies for additional information.

Impacts on Financial Statements

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 decreased for contracts where the Company is acting as an agent for its processing customer in the sale of processed volumes and increased 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 do not impact net earnings.

The following tables summarize the impacts of adopting Topic 606 on the Company’s consolidated financial statements:



CONSOLIDATED BALANCE SHEET	Impact of Change in Accounting Policy
millions	As Reported		Without Adoption of Topic 606		Effect of Change Increase/(Decrease)
June 30, 2018
Assets
Net properties and equipment	$	28,502	$	28,454	$	48
Other assets	2,301		2,289		12
Liabilities
Other current liabilities	1,699		1,692		7
Deferred income taxes	2,317		2,325		(8		)
Other	4,031		3,918		113
Equity
Total equity	11,495		11,547		(52		)

2. Revenue from Contracts with Customers (Continued)



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 June 30, 2018
Revenues
Gathering, processing, and marketing sales	$	382		$	650		$	(268	)
Gains (losses) on divestitures and other, net	123			123			—
Expenses
Gathering, processing, and marketing	252			518			(266		)
Income tax expense (benefit)	125			126			(1		)
Net income (loss) attributable to noncontrolling interests	(12		)	(14		)	2
Net Income (Loss) Attributable to Common Stockholders	$	29		$	32		$	(3	)

Six Months Ended June 30, 2018
Revenues
Gathering, processing, and marketing sales	$	742		$	1,227		$	(485	)
Gains (losses) on divestitures and other, net	142			144			(2		)
Expenses
Gathering, processing, and marketing	489			969			(480		)
Income tax expense (benefit)	251			253			(2		)
Net income (loss) attributable to noncontrolling interests	41			40			1
Net Income (Loss) Attributable to Common Stockholders	$	150		$	156		$	(6	)

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 June 30, 2018
Product Type
Oil sales	$	2,265		$	—		$	—	$	—		$	2,265
Natural-gas sales	203			—			—		—			203
Natural-gas liquids sales	318			—			—		—			318
Gathering, processing, and marketing sales ⁽¹⁾	—			438			107		58			603
Other, net	4			—			—		21			25
Total Revenue from Customers	$	2,790		$	438		$	107	$	79		$	3,414
Gathering, processing, and marketing sales ⁽²⁾	—			(2		)	1		(220		)	(221		)
Gains (losses) on divestitures, net	52			—			—		—			52
Other, net	(1		)	32			8		7			46
Total Revenue from Other than Customers	$	51		$	30		$	9	$	(213	)	$	(123	)
Total Revenue and Other	$	2,841		$	468		$	116	$	(134	)	$	3,291

Six Months Ended June 30, 2018
Product Type
Oil sales	$	4,392		$	—		$	—	$	—		$	4,392
Natural-gas sales	450			—			—		—			450
Natural-gas liquids sales	610			—			—		—			610
Gathering, processing, and marketing sales ⁽¹⁾	—			876			193		82			1,151
Other, net	7			—			—		40			47
Total Revenue from Customers	$	5,459		$	876		$	193	$	122		$	6,650
Gathering, processing, and marketing sales ⁽²⁾	—			(3		)	3		(409		)	(409		)
Gains (losses) on divestitures, net	19			—			9		—			28
Other, net	(13		)	61			18		1			67
Total Revenue from Other than Customers	$	6		$	58		$	30	$	(408	)	$	(314	)
Total Revenue and Other	$	5,465		$	934		$	223	$	(286	)	$	6,336

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⁽¹⁾	The amount in Other and Intersegment Eliminations primarily represents sales of third-party natural gas and NGLs of $261 million and intercompany eliminations of $(207) million for the three months ended June 30, 2018, and sales of third-party natural gas and NGLs of $485 million and intercompany eliminations of $(403) million for the six months ended June 30, 2018.


⁽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.

2. Revenue from Contracts with Customers (Continued)

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 as 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 ⁽¹⁾	52
Decrease due to revenue recognized ⁽²⁾	(21		)
Balance at June 30, 2018	$	166

Contract liabilities at June 30, 2018
Other current liabilities	$	37
Other long-term liabilities - other	129
Total contract liabilities from contracts with customers	$	166

__________________________________________________________________


⁽¹⁾	Includes $12 million for the three months ended June 30, 2018.


⁽²⁾	Includes $(9) million for the three months ended June 30, 2018.

Transaction Price Allocated to Remaining Performance Obligations Revenue expected to be recognized from certain performance obligations that are unsatisfied as of June 30, 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	$	51	$	220	$	25	$	(129	)	$	167
2019	102		493		136		(390		)	341
2020	103		542		207		(516		)	336
2021	103		527		248		(562		)	316
2022	7		527		289		(610		)	213
Thereafter	65		2,168		1,761		(3,288		)	706
Total	$	431	$	4,477	$	2,666	$	(5,495	)	$	2,079