Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2018

Revenue from Contract with Customer [Abstract]

Schedule of new accounting pronouncements and changes in accounting principles

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

Consolidated Statement of Operations

	Results under prior accounting standards
			Adjustment		As reported
Three Months Ended March 31, 2018
(Dollars and shares in millions, except per share amounts)
Operating revenues
Service	$	754	$	(30)	$	724
Equipment sales		198		20		218
Total operating revenues		952		(10)		942
Cost of equipment sold		222		(3)		219
(Gain) loss on license sales and exchanges, net		(6)		(1)		(7)
Total operating expenses		882		(5)		877
Operating income (loss)		70		(5)		65
Income (loss) before income taxes		82		(5)		77
Income tax expense (benefit)		24		(2)		22
Net income (loss)		58		(3)		55
Net income (loss) attributable to U.S. Cellular shareholders		48		(3)		45
Basic earnings (loss) per share attributable to
U.S. Cellular shareholders	$	0.56	$	(0.04)	$	0.52
Diluted earnings (loss) per share attributable to
U.S. Cellular shareholders	$	0.56	$	(0.04)	$	0.52

Consolidated Balance Sheet

	Results under prior accounting standards
			Adjustment		As reported
As of March 31, 2018
(Dollars in millions)
Accounts receivable
Customers and agents, less allowances	$	730	$	59	$	789
Roaming		26		(11)		15
Prepaid expenses		87		(21)		66
Other current assets		19		13		32
Total current assets		1,550		41		1,591
Licenses		2,230		1		2,231
Investments in unconsolidated entities		436		14		450
Other assets and deferred charges		383		154		537
Total assets		6,838		210		7,048
Customer deposits and deferred revenues		158		(26)		132
Accrued taxes		59		(1)		58
Other current liabilities		86		4		90
Total current liabilities		638		(22)		616
Deferred income tax liability, net		477		49		526
Other deferred liabilities and credits		349		10		359
Retained earnings		2,203		172		2,375
Total U.S. Cellular shareholders' equity		3,735		172		3,907
Noncontrolling interests		10		1		11
Total equity		3,745		173		3,918
Total liabilities and equity		6,838		210		7,048

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.  

		Three Months Ended
		March 31, 2018
(Dollars in millions)
Revenues from contracts with customers:
Retail service		$	649
Inbound roaming			27
Other service			32
Service revenues from contracts with customers			708
Equipment sales			218
Total revenues from contracts with customers 1		$	926
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 $19 million.

		Three Months Ended
		March 31, 2018
(Dollars in millions)
Accounts receivable
Customer and agents		$	789
Roaming			15
Other			27
Total 1		$	831
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		26
Contract additions		8
Terminated contracts		(1)
Bad debts expense		–
Revenue recognized		(8)
Balance at March 31, 2018	$	25

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			167
Change in accounting policy - Retained earnings impact			(21)
Contract additions			24
Terminated contracts			–
Revenue recognized			(43)
Balance at March 31, 2018		$	127
1	This amount represents U.S. Cellular's 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 obligation

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		$	244
2019			86
Thereafter			3
	Total	$	333