Note 2 Revenue Recognition

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,
	2019		2018
(Dollars in millions)
Revenues from contracts with customers:
Retail service	$	659	$	649
Inbound roaming	34		27
Other service	32		32
Service revenues from contracts with customers	725		708
Equipment sales	225		218
Total revenues from contracts with customers¹	$	950	$	926


¹	Revenue line items in this table will not agree to amounts presented in the Consolidated Statement of Operations as the balances do not include all sources of revenues.

Contract Balances

The accounts receivable balance related to amounts billed and not paid on contracts with customers, net of allowances, is shown in the table below.



	March 31, 2019		December 31, 2018
(Dollars in millions)
Accounts receivable
Customer and agents	$	882	$	908
Roaming	20		20
Other	32		32
Total¹	$	934	$	960


¹	Accounts receivable line items presented in this table will not agree to amounts presented in the Consolidated Balance Sheet as certain receivables are excluded from these balances.

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, 2018	$	9
Contract additions	4
Reclassified to receivables	(5		)
Balance at March 31, 2019	$	8

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, 2018	$	163
Contract additions	45
Terminated contracts	(2		)
Revenue recognized	(37		)
Balance at March 31, 2019	$	169

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 represent service revenue to be recognized when wireless services are delivered to customers pursuant to service plan contracts and under certain roaming agreements with other carriers. These estimates are based on contracts in place as of March 31, 2019, 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 month-to-month contracts, are excluded from these estimates.



	Service Revenue
(Dollars in millions)
Remainder of 2019	$	198
2020	61
Thereafter	16
Total	$	275

U.S. Cellular has certain contracts in which it bills an amount equal to a fixed per-unit price multiplied by a variable quantity (e.g., certain roaming agreements with other carriers). Because U.S. Cellular invoices for such items in an amount that corresponds directly with the value of the performance completed to date, U.S. Cellular may recognize revenue in that amount. As a practical expedient, these contracts are excluded from the estimate of future revenues expected to be recognized related to performance obligations that are unsatisfied as of the end of a reporting period.

Amounts Collected from Customers and Remitted to Governmental Authorities

U.S. Cellular records amounts collected from customers and remitted to governmental authorities on a net basis within a liability account if the amount is assessed upon the customer and U.S. Cellular merely acts as an agent in collecting the amount on behalf of the imposing governmental authority. If the amount is assessed upon U.S. Cellular, then amounts collected from customers are recorded in Service revenues and amounts remitted to governmental authorities are recorded in Selling, general and administrative expenses in the Consolidated Statement of Operations. The amounts recorded gross in revenues that are billed to customers and remitted to governmental authorities totaled $11 million and $17 million for the three months ended March 31, 2019 and 2018, respectively.