XML 30 R17.htm IDEA: XBRL DOCUMENT
v3.19.2

Revenues | 6 Months Ended
--- | ---
Jun. 30, 2019
Revenue from Contract with Customer [Abstract] |
Revenues | Revenues The Company’s revenues are primarily derived from the transportation of freight as performance obligations that arise from its contracts with customers are satisfied. The following table presents the Company’s revenues disaggregated by market as this best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors:
| Second Quarters |  | Six Months
(Dollars in millions) | 2019 | 2018 |  | 2019 | 2018
Chemicals | $ | 591 |  | $ | 588 |  |  | $ | 1,177 |  | $ | 1,145 |
Agricultural and Food Products | 358 |  | 327 |  |  | 702 |  | 634 |
Automotive | 329 |  | 330 |  |  | 640 |  | 634 |
Forest Products | 223 |  | 215 |  |  | 439 |  | 410 |
Metals and Equipment | 187 |  | 198 |  |  | 376 |  | 384 |
Minerals | 144 |  | 137 |  |  | 267 |  | 251 |
Fertilizers | 112 |  | 112 |  |  | 222 |  | 228 |
Total Merchandise | 1,944 |  | 1,907 |  |  | 3,823 |  | 3,686 |
Coal | 557 |  | 569 |  |  | 1,095 |  | 1,072 |
Intermodal | 436 |  | 490 |  |  | 864 |  | 939 |
Other | 124 |  | 136 |  |  | 292 |  | 281 |
Total | $ | 3,061 |  | $ | 3,102 |  |  | $ | 6,074 |  | $ | 5,978 |
Revenue Recognition The Company generates revenue from freight billings under contracts with customers generally on a rate per carload, container or ton-basis based on length of haul and commodities carried. The Company’s performance obligation arises when it receives a bill of lading (“BOL”) to transport a customer's commodities at a negotiated price contained in a transportation services agreement or a publicly disclosed tariff rate. Once a BOL is received, a contract is formed whereby the parties are committed to perform, collectability of consideration is probable and the rights of the parties, shipping terms and conditions, and payment terms are identified. A customer may submit several BOLs for transportation services at various times throughout a service agreement term but each shipment represents a distinct service that is a separately identified performance obligation. The average transit time to complete a shipment is between 3 to 8 days depending on market. Payments for transportation services are normally billed once a BOL is received and are generally due within 15 days after the invoice date. The Company recognizes revenue over transit time of freight as it moves from origin to destination. Revenue for services started but not completed at the reporting date is allocated based on the relative transit time in each reporting period, with the portion allocated for services subsequent to the reporting date considered remaining performance obligations. NOTE 9. Revenues, continued The certain key estimates included in the recognition and measurement of revenue and related accounts receivable are as follows:
• | Revenue associated with shipments in transit is recognized ratably over transit time and is based on average cycle times to move commodities and products from their origin to their final destination or interchange;
• | Adjustments to revenue for billing corrections and billing discounts;
• | Adjustments to revenue for overcharge claims filed by customers, which are based on historical payments to customers for rate overcharges as a percentage of total billing; and
• | Incentive-based refunds to customers, which are primarily volume-related, are recorded as a reduction to revenue on the basis of the projected liability (this estimate is based on historical activity, current volume levels and forecasted future volume).
Revenue related to interline transportation services that involve the services of another party, such as another railroad, is reported on a net basis. The portion of the gross amount billed to customers that is remitted by the Company to another party is not reflected as revenue. Other revenue is comprised of revenue from regional subsidiary railroads and incidental charges, including demurrage and switching. It is recorded upon completion of the service and accounts for an immaterial percentage of the Company's total revenue. Revenue from regional subsidiary railroads includes shipments by railroads that the Company does not directly operate. Demurrage represents charges assessed when freight cars are held by a customer beyond a specified period of time. Switching revenue is primarily generated when the Company switches cars for a customer or another railroad. During the second quarters and six months 2019 and 2018, revenue recognized from performance obligations related to prior periods (for example, due to changes in transaction price), was not material. Remaining Performance Obligations Remaining performance obligations represent the transaction price allocated to future reporting periods for freight services started but not completed at the reporting date. This includes the unearned portion of billed and unbilled amounts for cancellable freight shipments in transit. The Company expects to recognize the unearned portion of revenue for freight services in transit within one week of the reporting date. As of June 30, 2019, the Company had no material remaining performance obligations. Contract Balances and Accounts Receivable The timing of revenue recognition, billings and cash collections results in accounts receivable and customer advances and deposits (contract liabilities) on the consolidated balance sheets. The Company had no material contract assets, contract liabilities or deferred contract costs recorded on the consolidated balance sheet as of June 30, 2019. NOTE 9. Revenues, continued The Company’s accounts receivable - net consists of freight and non-freight receivables, reduced by an allowance for doubtful accounts.
(Dollars in millions) | June 30, 2019 | December 31, 2018
Freight Receivables | $ | 884 |  | $ | 846 |
Freight Allowance for Doubtful Accounts | (20 | ) | (18 | )
Freight Receivables, net | 864 |  | 828 |
Non-Freight Receivables | 256 |  | 190 |
Non-Freight Allowance for Doubtful Accounts | (9 | ) | (8 | )
Non-Freight Receivables, net | 247 |  | 182 |
Total Accounts Receivable, net | $ | 1,111 |  | $ | 1,010 |
Freight receivables include amounts earned, billed and unbilled, and currently due from customers for transportation-related services. Non-freight receivables include amounts billed and unbilled and currently due related to government reimbursement receivables and other non-revenue receivables. The Company maintains an allowance for doubtful accounts to provide for the estimated amount of receivables that will not be collected. The allowance is based upon an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables and economic conditions. Impairment losses recognized on the Company’s accounts receivable were no t material in the second quarters or six months 2019 and 2018.

X
- References No definition available. + Details
Name: | us-gaap_RevenueFromContractWithCustomerAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 + Details
Name: | us-gaap_RevenueFromContractWithCustomerTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration