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Revenue Recognition (Tables)
 12 Months Ended
Dec. 31, 2018
Revenue from Contract with Customer [Abstract]  
Schedule of New Accounting Pronouncements and Changes in Accounting Principles
The elimination of the failed leaseback will result in the following increase (decrease) to our balance sheet at January 1, 2019:
Balance Sheet
 
(Dollars in millions)
Property, plant and equipment
 
$
(409
)
Deferred rent
 
(3
)
Long-term debt
 
(558
)
Deferred income taxes
 
37

Stockholder's equity
 
115

The following tables present our reported results under ASC 606 and a reconciliation to results using the historical accounting method:
 
Year Ended December 31, 2018
 
Reported Balances
 
Impact of ASC 606
 
ASC 605
Historical Adjusted Balances
 
(Dollars in millions, except per share amounts
and shares in thousands)
Operating revenue
$
23,443

 
39

 
23,482

Cost of services and products (exclusive of depreciation and amortization)
10,862

 
22

 
10,884

Selling, general and administrative
4,165

 
71

 
4,236

Interest expense
2,177

 
(9
)
 
2,168

Income tax expense
170

 
(12
)
 
158

Net loss
(1,733
)
 
(33
)
 
(1,766
)
 
 
 
 
 
 
BASIC AND DILUTED LOSS PER COMMON SHARE
 
 
 
 
 
BASIC
$
(1.63
)
 
(0.03
)
 
(1.66
)
DILUTED
$
(1.63
)
 
(0.03
)
 
(1.66
)
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
 
 
 
 
 
BASIC
1,065,866

 
—

 
1,065,866

DILUTED
1,065,866

 
—

 
1,065,866


The following table presents a reconciliation of certain consolidated balance sheet captions under ASC 606 to the balance sheet results using the historical accounting method:
 
As of December 31, 2018
 
Reported Balances
 
Impact of ASC 606
 
ASC 605
Historical Adjusted Balances
 
(Dollars in millions)
Other current assets
$
918

 
(172
)
 
746

Other long-term assets, net
1,060

 
(112
)
 
948

Deferred revenue
2,375

 
71

 
2,446

Deferred income taxes, net
2,395

 
(131
)
 
2,264

Other long-term liabilities
1,099

 
147

 
1,246

Accumulated deficit
(1,643
)
 
(371
)
 
(2,014
)
Disaggregation of Revenue
The following tables provide disaggregation of revenue from contracts with customers based on service offerings for the year ended December 31, 2018, respectively. It also shows the amount of revenue that is not subject to ASC 606, but is instead governed by other accounting standards.
 
Year Ended December 31, 2018
 
Total Revenue
 
Adjustments for Non-ASC 606 Revenue (8)
 
Total Revenue from Contracts with Customers
 
(Dollars in millions)
Business segment
 
 
 
 
 
IP and Data Services (1)
$
6,971

 
—

 
6,971

Transport and Infrastructure (2)
5,356

 
(569
)
 
4,787

Voice and Collaboration (3)
4,401

 
—

 
4,401

IT and Managed Services (4)
621

 
—

 
621

Total business segment revenue
17,349

 
(569
)
 
16,780

 
 
 
 
 
 
Consumer segment
 
 
 
 
 
IP and Data Services (5)
308

 
(33
)
 
275

Transport and Infrastructure (6)
2,892

 
(213
)
 
2,679

Voice and Collaboration (3)
2,171

 
—

 
2,171

Total consumer segment revenue
5,371

 
(246
)
 
5,125

 
 
 
 
 
 
Non-segment revenue
 
 
 
 
 
Regulatory Revenue (7)
723

 
(723
)
 
—

Total non-segment revenue
723

 
(723
)
 
—

 
 
 
 
 
 
Total revenue
$
23,443

 
(1,538
)
 
21,905

 
 
 
 
 
 
Timing of Revenue
 
 
 
 
 
Goods and services transferred at a point in time
 
 
 
 
$
230

Services performed over time
 
 
 
 
21,675

Total revenue from contracts with customers
 
 
 
 
$
21,905

(1
)
Includes primarily VPN data network, Ethernet, IP, video and ancillary revenue.
(2
)
Includes primarily broadband, private line (including business data services), colocation and data centers, wavelength and ancillary revenue.
(3
)
Includes local, long-distance and other ancillary revenue.
(4
)
Includes IT services and managed services revenue.
(5
)
Includes retail video revenue (including our facilities-based video revenue).
(6
)
Includes primarily broadband and equipment sales and professional services revenue.
(7
)
Includes CAF Phase I, CAF Phase II, federal and state USF support revenue, sublease rental income and failed-sale leaseback income.
(8
)
Includes regulatory revenue, lease revenue, sublease rental income, revenue from fiber capacity lease arrangements and failed sale leaseback income, which are not within the scope of ASC 606.
Contract with Customer, Asset and Liability
The following table provides balances of customer receivables, contract assets and contract liabilities as of December 31, 2018 and January 1, 2018:
 
December 31, 2018
 
January 1, 2018
 
(Dollars in millions)
Customer receivables(1)
$
2,346

 
2,504

Contract liabilities
860

 
904

Contract assets
140

 
145

(1
)
Gross customer receivables of $2.5 billion and $2.7 billion, net of allowance for doubtful accounts of $132 million and $155 million, at December 31, 2018 and January 1, 2018, respectively.
The following table provides information about revenue recognized for the year ended December 31, 2018:
 
(Dollars in millions)
Revenue recognized in the period from:
 
Amounts included in contract liability at the beginning of the period (January 1, 2018)
$
295

Performance obligations satisfied in previous periods
—
Capitalized Contract Cost
The following table provides changes in our contract acquisition costs and fulfillment costs:
 
Year Ended December 31, 2018
 
Acquisition Costs
 
Fulfillment Costs
 
(Dollars in millions)
Beginning of period balance
$
268

 
133

Costs incurred
226

 
146

Amortization
(172
)
 
(92
)
End of period balance
$
322

 
187