Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2018

Revenue from Contract with Customer [Abstract]

Adoption impact of ASU 2014-09 and ASU 2017-15 on financial statements

The line items impacted by the adoption of ASU 2014-09 and ASU 2017-05 on the Consolidated Statement of Operations, Consolidated Statement of Cash Flows and the Consolidated Balance Sheet are presented below.

Consolidated Statement of Operations

	Results under prior guidance		Adjustment		As reported
Three Months Ended March 31, 2018	Results under prior guidance		Adjustment		As reported
(Dollars and shares in millions, except per share amounts)
Operating revenues
Service	$	1,008	$	(30)	$	978
Equipment and product sales		226		21		247
Total operating revenues		1,235		(10)		1,225
Cost of equipment and products		249		(3)		246
(Gain) loss on license sales and exchanges, net		(6)		(1)		(7)
Total operating expenses		1,149		(4)		1,145
Operating income (loss)		86		(6)		80
Income (loss) before income taxes		87		(6)		81
Income tax expense (benefit)		26		(2)		24
Net income (loss)		61		(4)		57
Less: Net income attributable to noncontrolling interests, net of tax		19		(1)		18
Net income (loss) attributable to TDS shareholders		42		(3)		39
Net income (loss) available to TDS common shareholders		42		(3)		39
Basic earnings (loss) per share available to TDS common shareholders		0.38		(0.03)		0.35
Diluted earnings (loss) per share available to TDS common shareholders		0.37		(0.03)		0.34

Consolidated Balance Sheet

	Results under prior guidance		Adjustment		As reported
As of March 31, 2018	Results under prior guidance		Adjustment		As reported
(Dollars in millions)
Accounts receivable
Customers and agents, less allowances	$	808	$	59	$	867
Other, less allowances		99		(11)		88
Prepaid expenses		125		(21)		104
Other current assets		28		14		42
Total current assets		2,001		42		2,043
Licenses		2,239		1		2,240
Investments in unconsolidated entities		474		14		488
Other assets and deferred charges		412		175		587
Total assets		9,249		232		9,481
Customer deposits and deferred revenues		194		(25)		169
Other current liabilities		91		4		95
Total current liabilities		771		(21)		750
Deferred income tax liability, net		580		54		634
Other deferred liabilities and credits		509		7		516
Retained earnings		2,535		161		2,696
Total TDS shareholders' equity		4,311		161		4,472
Noncontrolling interests		637		30		667
Total equity		4,948		191		5,139
Total liabilities and equity		9,249		232		9,481

Disaggregation of Revenues

Disaggregation of Revenue

In the following table, revenue is disaggregated by type of service and timing of revenue recognition. Service revenues are recognized over time and Equipment sales are point in time.

				TDS Telecom
Three Months Ended March 31, 2018		U.S. Cellular		Wireline		Cable		TDS Telecom Total		Corporate, Eliminations and Other		Total
(Dollars in millions)
Revenues from contracts with customers:
	Type of service:
	Retail service	$	649		–		–		–		–	$	649
	Inbound roaming		27		–		–		–		–		27
	Residential		–		80		46		126		–		126
	Commercial		–		48		10		57		–		57
	Wholesale		–		47		–		47		–		47
	Other service		32		–		–		–		18		50
	Service revenues from contracts with customers		708		175		55		230		18		956
	Equipment and product sales		218		–		–		–		29		247
	Total revenues from contracts with customers 1	$	926		175		55		230		47	$	1,203

Numbers may not foot due to rounding.

1	These amounts do not include revenues outside the scope of ASU 2014-09; therefore, revenue line items in this table will not agree to amounts presented in the Consolidated Statement of Operations.

Contract with Customer, Assets and Liabilities

The accounts receivable balance related to amounts billed and not paid on contracts with customers, net of allowances, is shown in the table below. Bad debts expense recognized for the three months ended March 31, 2018, related to receivables was $20 million.

		Three Months Ended
		March 31, 2018
(Dollars in millions)
Accounts receivable
Customer and agents		$	863
Other			66
Total 1		$	929

1	These amounts do not include accounts receivable related to revenues outside the scope of ASU 2014-09; therefore, accounts receivable line items presented in this table will not agree to amounts presented in the Consolidated Balance Sheet.

The following table provides a rollforward of contract assets from contracts with customers, which are recorded in Other current assets and Other assets and deferred charges in the Consolidated Balance Sheet.

	Contract Assets
(Dollars in millions)
Balance at December 31, 2017	$	–
Change in accounting policy		28
Contract additions		8
Terminated contracts		(1)
Bad debts expense		–
Revenue recognized		(8)
Balance at March 31, 2018	$	27

The following table provides a rollforward of contract liabilities from contracts with customers, which are recorded in Customer deposits and deferred revenues and Other deferred liabilities and credits in the Consolidated Balance Sheet.

		Contract Liabilities
(Dollars in millions)
Balance at December 31, 2017		$	–
Change in accounting policy - Deferred revenues reclassification 1			209
Change in accounting policy - Retained earnings impact			(22)
Contract additions			54
Terminated contracts			–
Revenue recognized			(74)
Balance at March 31, 2018		$	167

1	This amount represents TDS' obligation to transfer goods or services to customers for which it had received payment and classified as deferred revenue at December 31, 2017.

Remaining Performance Obligations

Transaction price allocated to the remaining performance obligations

The following table includes estimated service revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. These estimates are based on contracts in place as of March 31, 2018, and may vary from actual results due to future contract modifications. As a practical expedient, revenue related to contracts of less than one year, generally contracts with month-to-month customers, are excluded from these estimates.

		Service Revenue
(Dollars in millions)
Remainder of 2018		$	371
2019			173
Thereafter			68
	Total	$	612

Contract Cost Assets

Capitalized commission fees and fulfillment costs are amortized based on the transfer of the goods or services to which the assets relate, typically the contract term. Contract cost asset balances, which are recorded in Other assets and deferred charges in the Consolidated Balance Sheet, were as follows:

	March 31, 2018
(Dollars in millions)
Costs to obtain contracts
Sales commissions	$	149
Fulfillment costs
Installation costs		10
Total contract cost assets	$	159