Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

7. Goodwill and Other Intangible Assets

Goodwill At December 31, 2015, the Company had $5.4 billion of goodwill allocated to the following reporting units: $4.9 billion to oil and gas exploration and production, $383 million to WES gathering and processing, $5 million to WES transportation, and $62 million to other gathering and processing. The Company’s 2015 annual impairment assessment of goodwill indicated no impairment. An additional assessment was also performed in December 2015 to consider the impact of commodity-price changes since the annual test. This assessment also indicated no impairment.

Although commodity prices declined during the year, as of December 31, 2015, the estimated fair value of the oil and gas reporting unit exceeded the carrying value by more than 15%, without consideration for any control premium, and the other reporting units were not at risk of impairment. However, prolonged low or further declines in commodity prices, decreases in proved reserves, changes in exploration or development plans, significant property impairments, increases in operating or drilling costs, significant changes in regulations, or other negative changes to the economic environment in which Anadarko operates, could result in further goodwill impairment tests in the near term, the results of which may have a material adverse impact on the Company’s results of operations.

Other Intangible Assets Intangible assets and associated amortization expense were as follows:



millions	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Amortization Expense
December 31, 2015
Offshore platform leases	$	33	$	(31	)	$	2	$	2
Customer contracts	980		(46		)	934		31
	$	1,013	$	(77	)	$	936	$	33
December 31, 2014
Offshore platform leases	$	33	$	(29	)	$	4	$	—
Customer contracts	1,004		(15		)	989		6
	$	1,037	$	(44	)	$	993	$	6

Customer contract intangible assets are primarily related to WES’s DBM acquisition in 2014. These contracts are being amortized over 30 years. See Note 3—Acquisitions, Divestitures, and Assets Held for Sale. The annual aggregate amortization expense for intangible assets is expected to be $31 million each of the next five years.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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