v3.20.2
Revenue Recognition
 6 Months Ended
Jun. 30, 2020
Revenue from Contract with Customer [Abstract]  
Revenue from Contract with Customer [Text Block] NOTE 5. REVENUE RECOGNITION

Revenue Categories

The following tables set forth reported revenue by category and by business unit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended June 30, 2020

 

Service Revenues

 

 

 

 

 

 

 

 

Wireless

 

 

Advanced Data

 

 

Legacy Voice & Data

 

 

Subscription

 

 

Content

 

 

Advertising

 

 

Other

 

 

Equipment

 

 

Total

Communications

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mobility

$

13,611

 

$

-

 

$

-

 

$

-

 

$

-

 

$

58

 

$

-

 

$

3,480

 

$

17,149

Entertainment Group

 

-

 

 

2,092

 

 

560

 

 

6,682

 

 

-

 

 

294

 

 

397

 

 

44

 

 

10,069

Business Wireline

 

-

 

 

3,320

 

 

2,067

 

 

-

 

 

-

 

 

-

 

 

782

 

 

205

 

 

6,374

WarnerMedia

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Turner

 

-

 

 

-

 

 

-

 

 

1,804

 

 

334

 

 

796

 

 

54

 

 

-

 

 

2,988

Home Box Office

 

-

 

 

-

 

 

-

 

 

1,441

 

 

181

 

 

-

 

 

5

 

 

-

 

 

1,627

Warner Bros.

 

-

 

 

-

 

 

-

 

 

16

 

 

3,179

 

 

1

 

 

60

 

 

-

 

 

3,256

Eliminations and other

 

-

 

 

-

 

 

-

 

 

71

 

 

(1,516)

 

 

378

 

 

10

 

 

-

 

 

(1,057)

Latin America

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vrio

 

-

 

 

-

 

 

-

 

 

752

 

 

-

 

 

-

 

 

-

 

 

-

 

 

752

Mexico

 

345

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

135

 

 

480

Corporate and Other

 

178

 

 

10

 

 

152

 

 

-

 

 

-

 

 

-

 

 

62

 

 

35

 

 

437

Eliminations and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

consolidations

 

-

 

 

-

 

 

-

 

 

-

 

 

(765)

 

 

(294)

 

 

(66)

 

 

-

 

 

(1,125)

Total Operating Revenues

$

14,134

 

$

5,422

 

$

2,779

 

$

10,766

 

$

1,413

 

$

1,233

 

$

1,304

 

$

3,899

 

$

40,950

For the three months ended June 30, 2019

 

Service Revenues

 

 

 

 

 

 

 

 

Wireless

 

 

Advanced Data

 

 

Legacy Voice & Data

 

 

Subscription

 

 

Content

 

 

Advertising

 

 

Other

 

 

Equipment

 

 

Total

Communications

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mobility

$

13,753

 

$

-

 

$

-

 

$

-

 

$

-

 

$

71

 

$

-

 

$

3,468

 

$

17,292

Entertainment Group

 

-

 

 

2,109

 

 

658

 

 

7,636

 

 

-

 

 

399

 

 

563

 

 

3

 

 

11,368

Business Wireline

 

-

 

 

3,208

 

 

2,324

 

 

-

 

 

-

 

 

-

 

 

897

 

 

178

 

 

6,607

WarnerMedia

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Turner

 

-

 

 

-

 

 

-

 

 

1,943

 

 

111

 

 

1,266

 

 

90

 

 

-

 

 

3,410

Home Box Office

 

-

 

 

-

 

 

-

 

 

1,516

 

 

198

 

 

-

 

 

2

 

 

-

 

 

1,716

Warner Bros.

 

-

 

 

-

 

 

-

 

 

23

 

 

3,175

 

 

10

 

 

181

 

 

-

 

 

3,389

Eliminations and other

 

-

 

 

-

 

 

-

 

 

54

 

 

(237)

 

 

494

 

 

9

 

 

-

 

 

320

Latin America

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vrio

 

-

 

 

-

 

 

-

 

 

1,032

 

 

-

 

 

-

 

 

-

 

 

-

 

 

1,032

Mexico

 

479

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

246

 

 

725

Corporate and Other

 

150

 

 

14

 

 

7

 

 

-

 

 

-

 

 

-

 

 

210

 

 

39

 

 

420

Eliminations and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

consolidations

 

-

 

 

-

 

 

-

 

 

-

 

 

(840)

 

 

(399)

 

 

(83)

 

 

-

 

 

(1,322)

Total Operating Revenues

$

14,382

 

$

5,331

 

$

2,989

 

$

12,204

 

$

2,407

 

$

1,841

 

$

1,869

 

$

3,934

 

$

44,957

For the six months ended June 30, 2020

 

Service Revenues

 

 

 

 

 

 

 

 

Wireless

 

 

Advanced Data

 

 

Legacy Voice & Data

 

 

Subscription

 

 

Content

 

 

Advertising

 

 

Other

 

 

Equipment

 

 

Total

Communications

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mobility

$

27,503

 

$

-

 

$

-

 

$

-

 

$

-

 

$

134

 

$

-

 

$

6,914

 

$

34,551

Entertainment Group

 

-

 

 

4,201

 

 

1,141

 

 

13,664

 

 

-

 

 

707

 

 

816

 

 

55

 

 

20,584

Business Wireline

 

-

 

 

6,595

 

 

4,196

 

 

-

 

 

-

 

 

-

 

 

1,535

 

 

380

 

 

12,706

WarnerMedia

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Turner

 

-

 

 

-

 

 

-

 

 

3,853

 

 

420

 

 

1,753

 

 

124

 

 

-

 

 

6,150

Home Box Office

 

-

 

 

-

 

 

-

 

 

2,779

 

 

338

 

 

-

 

 

7

 

 

-

 

 

3,124

Warner Bros.

 

-

 

 

-

 

 

-

 

 

26

 

 

6,239

 

 

3

 

 

228

 

 

-

 

 

6,496

Eliminations and other

 

-

 

 

-

 

 

-

 

 

134

 

 

(2,162)

 

 

887

 

 

33

 

 

-

 

 

(1,108)

Latin America

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vrio

 

-

 

 

-

 

 

-

 

 

1,639

 

 

-

 

 

-

 

 

-

 

 

-

 

 

1,639

Mexico

 

812

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

371

 

 

1,183

Corporate and Other

 

295

 

 

24

 

 

286

 

 

-

 

 

-

 

 

-

 

 

145

 

 

75

 

 

825

Eliminations and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

consolidations

 

-

 

 

-

 

 

-

 

 

-

 

 

(1,559)

 

 

(707)

 

 

(155)

 

 

-

 

 

(2,421)

Total Operating Revenues

$

28,610

 

$

10,820

 

$

5,623

 

$

22,095

 

$

3,276

 

$

2,777

 

$

2,733

 

$

7,795

 

$

83,729

For the six months ended June 30, 2019

 

Service Revenues

 

 

 

 

 

 

 

 

Wireless

 

 

Advanced Data

 

 

Legacy Voice & Data

 

 

Subscription

 

 

Content

 

 

Advertising

 

 

Other

 

 

Equipment

 

 

Total

Communications

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mobility

$

27,315

 

$

-

 

$

-

 

$

-

 

$

-

 

$

138

 

$

-

 

$

7,202

 

$

34,655

Entertainment Group

 

-

 

 

4,179

 

 

1,341

 

 

15,360

 

 

-

 

 

749

 

 

1,063

 

 

4

 

 

22,696

Business Wireline

 

-

 

 

6,380

 

 

4,721

 

 

-

 

 

-

 

 

-

 

 

1,647

 

 

337

 

 

13,085

WarnerMedia

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Turner

 

-

 

 

-

 

 

-

 

 

3,908

 

 

246

 

 

2,527

 

 

172

 

 

-

 

 

6,853

Home Box Office

 

-

 

 

-

 

 

-

 

 

2,850

 

 

371

 

 

-

 

 

5

 

 

-

 

 

3,226

Warner Bros.

 

-

 

 

-

 

 

-

 

 

44

 

 

6,507

 

 

20

 

 

336

 

 

-

 

 

6,907

Eliminations and other

 

-

 

 

-

 

 

-

 

 

103

 

 

(389)

 

 

928

 

 

12

 

 

-

 

 

654

Latin America

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vrio

 

-

 

 

-

 

 

-

 

 

2,099

 

 

-

 

 

-

 

 

-

 

 

-

 

 

2,099

Mexico

 

921

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

455

 

 

1,376

Corporate and Other

 

272

 

 

27

 

 

14

 

 

-

 

 

-

 

 

-

 

 

419

 

 

79

 

 

811

Eliminations and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

consolidations

 

-

 

 

-

 

 

-

 

 

-

 

 

(1,677)

 

 

(749)

 

 

(152)

 

 

-

 

 

(2,578)

Total Operating Revenues

$

28,508

 

$

10,586

 

$

6,076

 

$

24,364

 

$

5,058

 

$

3,613

 

$

3,502

 

$

8,077

 

$

89,784

Deferred Customer Contract Acquisition and Fulfillment Costs

Costs to acquire and fulfill customer contracts, including commissions on service activations, for our wireless, business wireline and video entertainment services, are deferred and amortized over the contract period or expected customer relationship life, which typically ranges from three years to five years. For contracts with an estimated amortization period of less than one year, we expense incremental costs immediately.

 

The following table presents the deferred customer contract acquisition and fulfillment costs included on our consolidated balance sheets:

 

 

June 30,

 

 

December 31,

Consolidated Balance Sheets

 

2020

 

 

2019

Deferred Acquisition Costs

 

 

 

 

 

Other current assets

$

2,630

 

$

2,462

Other Assets

 

3,117

 

 

2,991

Total deferred customer contract acquisition costs

$

5,747

 

$

5,453

 

 

 

 

 

 

Deferred Fulfillment Costs

 

 

 

 

 

Other current assets

$

4,362

 

$

4,519

Other Assets

 

5,980

 

 

6,439

Total deferred customer contract fulfillment costs

$

10,342

 

$

10,958

The following table presents deferred customer contract acquisition and fulfillment cost amortization included in “Other cost of revenue” for the six months ended:

 

 

June 30,

 

 

June 30,

Consolidated Statements of Income

 

2020

 

 

2019

Deferred acquisition cost amortization

$

1,278

 

$

1,026

Deferred fulfillment cost amortization

 

2,636

 

 

2,381

Contract Assets and Liabilities

A contract asset is recorded when revenue is recognized in advance of our right to bill and receive consideration. The contract asset will decrease as services are provided and billed. For example, when installment sales include promotional discounts (e.g., “buy one get one free”) the difference between revenue recognized and consideration received is recorded as a contract asset to be amortized over the contract term.

 

When consideration is received in advance of the delivery of goods or services, a contract liability is recorded for deferred revenue. Reductions in the contract liability will be recorded as we satisfy the performance obligations.

 

The following table presents contract assets and liabilities on our consolidated balance sheets:

 

 

 

June 30,

 

 

December 31,

Consolidated Balance Sheets

 

 

2020

 

 

2019

 

 

 

 

 

 

 

Contract asset

 

$

2,546

 

$

2,472

Contract liability

 

 

6,533

 

 

6,999

Our beginning of period contract liability recorded as customer contract revenue during 2020 was $5,004.

 

Our consolidated balance sheets at June 30, 2020 and December 31, 2019 included approximately $1,638 and $1,611, respectively, for the current portion of our contract asset in “Other current assets” and $5,616 and $5,939, respectively, for the current portion of our contract liability in “Advanced billings and customer deposits.”

 

Remaining Performance Obligations

Remaining performance obligations represent services we are required to provide to customers under bundled or discounted arrangements, which are satisfied as services are provided over the contract term. In determining the transaction price allocated, we do not include non-recurring charges and estimates for usage, nor do we consider arrangements with an original expected duration of less than one year, which are primarily prepaid wireless, video and residential internet agreements.

 

Remaining performance obligations associated with business contracts reflect recurring charges billed, adjusted to reflect estimates for sales incentives and revenue adjustments. Performance obligations associated with wireless contracts are estimated using a portfolio approach in which we review all relevant promotional activities, calculating the remaining performance obligation using the average service component for the portfolio and the average device price. As of June 30, 2020, the aggregate amount of the transaction price allocated to remaining performance obligations was $36,362, of which we expect to recognize approximately 82% by the end of 2021, with the balance recognized thereafter.