Revenue Recognition

In the first quarter of 2018, the Company adopted ASC 606, Revenue from Contracts with Customers, using the modified retrospective approach. Results for 2018 are presented under ASC 606, while prior period consolidated financial statements have not been adjusted and continue to be presented under the accounting standards in effect for those periods.

Accounts receivable, net from revenue-generating activities were $150 million as of February 2, 2019 and $144 million as of the beginning of the period upon adoption of the new standard. Accounts receivable primarily relate to amounts due from the Company's franchise, license and wholesale partners. Under these arrangements, payment terms are typically 60 to 75 days.

The Company records deferred revenue when cash payments are received in advance of transfer of control of goods or services. Deferred revenue primarily relates to gift cards, loyalty and private label credit card programs and direct channel shipments, which are all impacted by seasonal and holiday-related sales patterns. The balance of deferred revenue was $331 million as of February 2, 2019 and $320 million as of the beginning of the period upon adoption of the new standard. The Company recognized $224 million as revenue in 2018 from amounts recorded as deferred revenue at the beginning of the period. The Company's deferred revenue balance would have been $287 million as of February 2, 2019 under accounting standards in effect prior to the adoption of the new standard. As of February 2, 2019, the Company recorded deferred revenues of $316 million within Accrued Expenses and Other, and $15 million within Other Long-term Liabilities on the Consolidated Balance Sheet.

The following table provides a disaggregation of Net Sales for 2018, 2017 and 2016:



	2018		2017 (a)(b)		2016 (a)
	(in millions)
Victoria’s Secret Stores (c)	$	5,628	$	5,879	$	6,199
Victoria’s Secret Direct	1,747		1,508		1,582
Victoria’s Secret North America	7,375		7,387		7,781
Bath & Body Works Stores (c)	3,907		3,589		3,400
Bath & Body Works Direct	724		559		452
Bath & Body Works North America	4,631		4,148		3,852
Victoria's Secret and Bath & Body Works International (d)	605		502		423
Other (e)	626		595		518
Total Net Sales	$	13,237	$	12,632	$	12,574

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(a)	2017 and 2016 amounts have not been adjusted under the modified retrospective approach.


(b)	2017 represents a 53-week fiscal year.


(c)	Includes company-owned stores in the U.S. and Canada.


(d)	Includes company-owned stores in the U.K., Ireland and Greater China, direct sales in Greater China and wholesale sales, royalties and other fees associated with non-company owned stores.


(e)	Includes wholesale revenues from the Company's sourcing function, Henri Bendel store and direct sales, and La Senza store and direct sales prior to January 6, 2019.