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Revenue Recognition (Tables)
 12 Months Ended
Dec. 31, 2018
Revenue from Contract with Customer [Abstract]  
Adoption impact of ASU 2014-09 and ASU 2017-15 on financial statements
Consolidated Balance Sheet
As of December 31, 2018
Results under prior accounting standards
 
Adjustment
 
As reported
(Dollars in millions)
 
 
 

 
 
Accounts receivable
 

 
 

 
 

Customers and agents, less allowances
$
928

 
$
64

 
$
992

Prepaid expenses
128

 
(25
)
 
103

Other current assets
24

 
4

 
28

Total current assets
2,286

 
44

 
2,330

Licenses
2,194

 
1

 
2,195

Investments in unconsolidated entities
463

 
17

 
480

Other assets and deferred charges
435

 
181

 
616

Total assets
9,540

 
243

 
9,783

Customer deposits and deferred revenues
218

 
(21
)
 
197

Other current liabilities
110

 
4

 
114

Total current liabilities
895

 
(16
)
 
879

Deferred income tax liability, net
583

 
57

 
640

Other deferred liabilities and credits
526

 
15

 
541

Retained earnings
2,499

 
157

 
2,656

Total TDS shareholders' equity
4,403

 
157

 
4,560

Noncontrolling interests
704

 
29

 
733

Total equity
5,107

 
186

 
5,293

Total liabilities and equity
$
9,540

 
$
243

 
$
9,783

Numbers may not foot due to rounding.
The line items impacted by the adoption of ASU 2014-09 and ASU 2017-05 in the Consolidated Statement of Operations and the Consolidated Balance Sheet are presented below.
Consolidated Statement of Operations
Year Ended December 31, 2018
Results under prior accounting standards
 
Adjustment
 
As reported
(Dollars in millions, except per share amounts)
 
 
 
 
 
Operating revenues
 
 
 
 
 
Service
$
4,108

 
$
(109
)
 
$
3,999

Equipment and product sales
1,014

 
96

 
1,110

Total operating revenues
5,122

 
(13
)
 
5,109

Cost of equipment and products
1,129

 
1

 
1,130

Selling, general and administrative
1,697

 
(3
)
 
1,694

(Gain) loss on license sales and exchanges, net
(17
)
 
(1
)
 
(18
)
Total operating expenses
4,907

 
(3
)
 
4,904

Operating income (loss)
215

 
(10
)
 
205

Income (loss) before income taxes
231

 
(10
)
 
221

Income tax expense (benefit)
48

 
(2
)
 
46

Net income
183

 
(8
)
 
175

Less: Net income attributable to noncontrolling interests, net of tax
42

 
(2
)
 
40

Net income attributable to TDS shareholders
141

 
(6
)
 
135

Net income available to TDS common shareholders
141

 
(6
)
 
135

Basic earnings per share available to TDS common shareholders
$
1.25

 
$
(0.05
)
 
$
1.20

Diluted earnings per share available to TDS common shareholders
$
1.22

 
$
(0.05
)
 
$
1.17

Numbers may not foot due to rounding
Schedule of Multiple-deliverable Arrangements
The following is a description of principal activities from which TDS generates its revenues.
Services and products
Nature, timing of satisfaction of performance obligations, and significant payment terms 
 
 
Wireless services
Wireless service includes voice, messaging and data services. Revenue is recognized in Service revenues as wireless service is provided to the customer. Wireless services generally are billed and paid in advance on a monthly basis.
 
 
Wireless devices and accessories
U.S. Cellular offers a comprehensive range of wireless devices such as handsets, tablets, mobile hotspots, home phones and routers for use by its customers, as well as accessories. U.S. Cellular also sells wireless devices to agents and other third-party distributors for resale. U.S. Cellular frequently discounts wireless devices sold to new and current customers. U.S. Cellular also offers customers the option to purchase certain devices and accessories under installment contracts over a specified time period. For certain equipment installment plans, after a specified period of time, the customer may have the right to upgrade to a new device. Such upgrades require the customer to enter into an equipment installment contract for the new device, and transfer the existing device to U.S. Cellular. U.S. Cellular recognizes revenue in Equipment and product sales revenues when control of the device or accessory is transferred to the customer, which is generally upon delivery.
 
 
Wireless roaming
U.S. Cellular receives roaming revenues when other wireless carriers’ customers use U.S. Cellular’s wireless systems. U.S. Cellular recognizes revenue in Service revenues when the roaming service is provided to the other carrier’s customer.
 
 
Wireless Eligible Telecommunications Carrier (ETC) Revenues
Telecommunications companies may be designated by states, or in some cases by the FCC, as an ETC to receive support payments from the Universal Service Fund if they provide specified services in “high cost” areas. ETC revenues recognized in the reporting period represent the amounts which U.S. Cellular is entitled to receive for such period, as determined and approved in connection with U.S. Cellular’s designation as an ETC in various states.
 
 
Wireless tower rents
U.S. Cellular receives tower rental revenues when another carrier leases tower space on a U.S. Cellular owned tower. U.S. Cellular recognizes revenue in Service revenues in the period during which the services are provided.
 
 
Activation fees
TDS charges its end customers activation fees in connection with the sale of certain services and equipment. Activation fees are deferred and recognized over the period benefitted. 
 
 
Wireline services
Wireline services include broadband, video and voice services. Revenue is recognized in Service revenues as service is provided to the customer. Wireline services are generally billed and paid in advance on a monthly basis.
 
 
Wireline wholesale revenues
Wholesale revenues include network access services primarily to interexchange and wireless carriers for carrying data and voice traffic on TDS Telecom’s network, special access services and state and federal support payments, including A-CAM. Wholesale revenues are recorded as the related service is provided.
 
 
Cable services
Cable services include broadband, video and voice services. Revenue is recognized in Service revenues as service is provided to the customer. Cable services are generally billed and paid in advance on a monthly basis.
 
 
IT hardware sales
TDS recognizes equipment revenue when it no longer has any requirements to perform, when title has passed and when the products are accepted by the customer.
 
 
Hosted and managed services
HMS Service revenues consist of cloud and hosting solutions, managed services, Enterprise Resource Planning (ERP) application management, colocation services, and IT hardware related maintenance and professional services. Revenues related to these services are recognized as services are provided.
Disaggregation of Revenues
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
 
 
 
 
Year Ended December 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
$
2,623

 
$
—

 
$
—

 
$
—

 
$
—

 
$
2,623

Inbound roaming
154

 
—

 
—

 
—

 
—

 
154

Residential
—

 
321

 
188

 
509

 
—

 
509

Commercial
—

 
184

 
42

 
226

 
—

 
226

Wholesale
—

 
191

 
—

 
191

 
—

 
191

Other service
135

 
—

 
—

 
(1
)
 
72

 
206

Service revenues from contracts with customers
2,912

 
696

 
230

 
925

 
72

 
3,909

Equipment and product sales
989

 
2

 
—

 
2

 
119

 
1,110

Total revenues from contracts with customers1
$
3,901

 
$
698

 
$
230

 
$
927

 
$
191

 
$
5,019

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 year ended December 31, 2018, related to receivables was $100 million.
 
December 31, 2018
(Dollars in millions)
 
Accounts receivable
 
Customer and agents
$
987

Other
73

Total1
$
1,060

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
24

Terminated contracts
(1
)
Reclassified to receivables
(40
)
Balance at December 31, 2018
$
11

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 reclassification1
209

Change in accounting policy - Retained earnings impact
(22
)
Contract additions
190

Terminated contracts
(2
)
Revenue recognized
(172
)
Balance at December 31, 2018
$
203

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
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. The estimates represent service revenue to be recognized when services are delivered to customers pursuant to service plan contracts. These estimates are based on contracts in place as of December 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 month-to-month contracts, are excluded from these estimates.
 
Service Revenue
(Dollars in millions)
 
2019
$
411

2020
128

Thereafter
72

Total
$
611
Contract Cost Assets
Contract cost asset balances, which are recorded in Other assets and deferred charges in the Consolidated Balance Sheet, were as follows:
 
December 31, 2018
(Dollars in millions)
 
Costs to obtain contracts
 

Sales commissions
$
154

Fulfillment costs
 
Installation costs
10

Total contract cost assets
$
164