The following table presents our reportable segment revenues, disaggregated by revenue source. We disaggregate revenue from contracts with customers into major product lines. We have determined that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. On April 1, 2019, we divested the assets associated with our fumigation service line and now provide fumigation services to our customers through arrangements with independent third parties. Revenue related to fumigation completion services and the related renewals (the “Fumigation Services”) is shown in Fumigation below and prior period amounts related to the Fumigation Services have been reclassified from Termite and Home Services to Fumigation to conform to the current period presentation. Additionally, prior period revenue for Residential Pest Control and Commercial Pest Control has been reclassified to conform to the current period presentation.

As noted in the business segment reporting information in Note 4, our reportable segments are Terminix and ServiceMaster Brands. Revenue for Corporate and Other Operations presented below includes revenue from our pest control operations in Europe.


	Terminix						ServiceMaster Brands							Corporate and Other Operations					Total
	Year ended December 31,						Year ended December 31,							Year ended December 31,					Year ended December 31,
(In millions)		2019		2018		2017		2019		2018		2017		2019		2018		2017		2019		2018		2017
Major service line
Residential Pest Control	$	704	$	645	$	603	$	—	$	—	$	—	$	—	$	—	$	—	$	704	$	645	$	603
Commercial Pest Control		399		327		265		—		—		—		—		—		—		399		327		265
Termite and Home Services		567		549		540		—		—		—		—		—		—		567		549		540
Royalty Fees		—		—		—		133		132		127		—		—		—		133		132		127
Commercial Cleaning and other National Accounts		—		—		—		73		65		53		—		—		—		73		65		53
Sales of Products and Other		88		84		81		50		48		32		—		—		—		138		132		113
Fumigation		40		50		53		—		—				—		—		—		40		50		53
European Pest Control				—		—		—		—		—		21		—		—		21		—		—
Corporate and Other Operations		—		—		—		—		—		—		1		1		2		1		1		2
Total	$	1,798	$	1,655	$	1,541	$	257	$	244	$	212	$	22	$	1	$	2	$	2,077	$	1,900	$	1,755

At contract inception, we assess the goods and services promised in our contracts with customers and identify a performance obligation for each promise to transfer to the customer a good or service (or a bundle of goods and services) that is distinct. To identify the performance obligation, we consider all of the goods and services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices.

Deferred revenue represents a contract liability and is recognized when cash payments are received in advance of the performance of services, including when the amounts are refundable. For Terminix, amounts are recognized as revenue upon completion of services.

Deferred revenue by segment was as follows (in millions):


	As of December 31,
(In millions)	2019		2018
Terminix	$	92	$	91
ServiceMaster Brands⁽¹⁾		9		11
Total	$	101	$	101

___________________________________

(1)Includes approximately $5 million and $7 million of Deferred revenue included within Other long-term obligations, primarily self-insured claims on the consolidated statement of financial position as of December 31, 2019 and 2018, respectively.

Approximately $15 million of deferred revenue is recognized in the Consolidated Statements of Financial Position in Corporate and Other Operations as of December 31, 2019, related to our acquisition of Nomor. This amount is being evaluated and is subject to change as we finalize our purchase accounting. See Note 7 to the consolidated financial statements for further discussion.

Changes in deferred revenue for the years ended December 31, 2019 and 2018 were as follows (in millions):


(In millions)	Deferred revenue
Balance, January 1, 2018	$	101
Deferral of revenue		149
Recognition of deferred revenue		(149)
Balance, December 31, 2018	$	101
Deferral of revenue		133
Recognition of deferred revenue		(134)
Balance, December 31, 2019	$	101

There was approximately $62 million recognized in the year ended December 31, 2019 that was included in the deferred revenue balance as of December 31, 2018. There was approximately $67 million of revenue recognized in the year ended December 31, 2018, that was included in the deferred revenue balance as of January 1, 2018.

Arrangements with Multiple Performance Obligations

Our contracts with customers may include multiple performance obligations. For such arrangements, we allocate revenue to each performance obligation based on its relative standalone selling price. Any discounts given are allocated to the services to which the discounts relate.

Practical Expedients and Exemptions

We offer certain interest-free contracts to customers where payments are received over a period not exceeding one year. Additionally, certain Terminix customers may pay in advance for services. We do not adjust the promised amount of consideration for the effects of these financing components. At contract inception, the period of time between the performance of services and the customer payment is one year or less.

Revenue is recognized net of any taxes collected from customers which are subsequently remitted to taxing authorities.

We do not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.

Certain non-commission related incremental costs to obtain a contract with a customer are expensed as incurred because the amortization period would have been one year or less. These costs are included in Selling and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income (Loss).

We utilize the portfolio approach to recognize revenue in situations where a portfolio of contracts has similar characteristics. The revenue recognized under the portfolio approach is not materially different than if every individual contract in the portfolio was accounted for separately.

Impact of ASC 606 on the Consolidated Financial Statements

We recorded a net reduction to opening retained earnings of $16 million, net of tax, as of January 1, 2018 due to the cumulative impact of adopting ASC 606. Changes to the Consolidated Statements of Operations and Comprehensive Income (Loss) included: i) costs of obtaining a contract that would have been incurred regardless of whether the contract was obtained, such as direct mail and digital advertising, are now expensed as incurred; ii) initial fees and the related commissions from sales of franchise licenses, previously recognized in the year of the sale, are now recognized over the term of the initial franchise agreement; iii) ServiceMaster Brands national advertising fund income, previously recorded net of advertising expense incurred for our advertising programs, is now reported gross, generally with offsetting increases to both revenue and expense such that there will not be a significant, if any, impact on net income (loss); and iv) commissions costs at Terminix incremental to a successful sale are deferred and recognized over the

expected customer relationship period. Previously, commissions and other sales-related costs were deferred and recognized over the initial contract period.

During the year ended December 31, 2019, we corrected our calculation of deferred tax assets related to the adoption of ASC 606. As a result, approximately $3 million was recognized in Retained earnings in the Consolidated Statements of Financial Position.

The primary change to the Consolidated Statements of Financial Position is the reclassification of Deferred customer acquisition costs to long-term assets as costs are recognized over the expected customer relationship period, which is in excess of one year.

The following tables compare affected lines of the consolidated financial statements as prepared under the provisions of ASC 606 to a presentation of these financial statements under the prior revenue recognition guidance (in millions):


	As of December 31, 2018
Consolidated Statement of Financial Position		As reported		Under Prior Revenue Recognition Guidance
Current Assets:
Receivables	$	186	$	186
Prepaid expenses and other assets		61		74
Deferred customer acquisition costs		—		22
Other Assets:
Deferred customer acquisition costs		77		—
Total Assets	$	5,023	$	4,982

Current Liabilities:
Deferred revenue	$	95	$	91
Other Long-Term Liabilities:
Deferred taxes		484		473
Other long-term obligations, primarily self-insured claims		182		176
Total Liabilities		2,818		2,798

Retained earnings (accumulated deficit)		156		141
Accumulated other comprehensive income		5		5
Net (Loss)		(41)		(46)
Liabilities and Equity	$	5,023	$	4,982