| Nature of Business and Summary of Significant Accounting Policies | Note 1 – Nature of Business and Summary of Significant Accounting Policies ADTRAN, Inc. (ADTRAN) is a leading global provider of networking and communications equipment. Our solutions enable voice, data, video and Internet communications across a variety of network infrastructures. These solutions are deployed by many of the United States’ and the world’s largest communications service providers (CSPs), distributed enterprises and small and medium-sized businesses, public and private enterprises, and millions of individual users worldwide. Principles of Consolidation Our consolidated financial statements include ADTRAN and its wholly owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Our more significant estimates include the obsolete and excess inventory reserves, warranty reserves, customer rebates, determination of the deferred revenue components of multiple element sales agreements, estimated costs to complete obligations associated with deferred revenues and network installations, estimated income tax provision and income tax contingencies, the fair value of stock-based compensation, impairment of goodwill, valuation and estimated lives of intangible assets, estimated pension liability, fair value of investments, and the evaluation of other-than-temporary declines in the value of investments. Actual amounts could differ significantly from these estimates. Cash and Cash Equivalents Cash and cash equivalents represent demand deposits, money market funds, and short-term investments classified as available-for-sale with original maturities of three months or less. We maintain depository investments with certain financial institutions. Although these depository investments may exceed government insured depository limits, we have evaluated the credit worthiness of these applicable financial institutions, and determined the risk of material financial loss due to the exposure of such credit risk to be minimal. As of December 31, 2017, $83.7 million of our cash and cash equivalents, primarily certain domestic money market funds and foreign depository accounts, were in excess of government provided insured depository limits. Financial Instruments The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to the immediate or short-term maturity of these financial instruments. The carrying amount reported for bonds payable was $26.7 million, compared to an estimated fair value of $26.7 million, based on a debt security with a comparable interest rate and maturity and a Standard & Poor’s credit rating of AAA. Investments with contractual maturities beyond one year, such as our variable rate demand notes, may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. Despite the long-term nature of their stated contractual maturities, we routinely buy and sell these securities and we believe we have the ability to quickly sell them to the remarketing agent, tender agent, or issuer at par value plus accrued interest in the event we decide to liquidate our investment in a particular variable rate demand note. All income generated from these investments was recorded as interest income. We have not been required to record any losses relating to variable rate demand notes. Long-term investments represent a restricted certificate of deposit held at cost, deferred compensation plan assets, corporate bonds, municipal fixed-rate bonds, asset-backed bonds, mortgage/agency backed bonds, U.S. and foreign government bonds, variable rate demand notes, marketable equity securities, and other equity investments. Marketable equity securities are reported at fair value as determined by the most recently traded price of the securities at the balance sheet date, although the securities may not be readily marketable due to the size of the available market. Unrealized gains and losses, net of tax, are reported as a separate component of stockholders’ equity. Realized gains and losses on sales of securities are computed under the specific identification method and are included in current income. We review our investment portfolio quarterly for investments considered to have sustained an other-than-temporary decline in value. Impairment charges for other-than-temporary declines in value are recorded as realized losses in the accompanying consolidated statements of income. All of our investments at December 31, 2017 and 2016 are classified as available-for-sale securities. See Note 4 of Notes to Consolidated Financial Statements for additional information. Accounts Receivable We record accounts receivable at net realizable value. Prior to establishing payment terms for a new customer, we evaluate the credit risk of the customer. Credit limits and payment terms established for new customers are re-evaluated periodically based on customer collection experience and other financial factors. At December 31, 2017, single customers comprising more than 10% of our total accounts receivable balance included two customers, which accounted for 63.8% of our total accounts receivable. At December 31, 2016, single customers comprising more than 10% of our total accounts receivable balance included three customers, which accounted for 63.3% of our total accounts receivable. We regularly review the need to maintain an allowance for doubtful accounts and consider factors such as the age of accounts receivable balances, the current economic conditions that may affect a customer’s ability to pay, significant one-time events and our historical experience. If the financial condition of a customer deteriorates, resulting in an impairment of their ability to make payments, we may be required to record an allowance for doubtful accounts. If circumstances change with regard to individual receivable balances that have previously been determined to be uncollectible (and for which a specific reserve has been established), a reduction in our allowance for doubtful accounts may be required. We did not have an allowance for doubtful accounts at December 31, 2017 or December 31, 2016. Other Receivables Other receivables are comprised primarily of lease receivables, amounts due from subcontract manufacturers for product component transfers, unbilled receivables, amounts due from various jurisdictions for value-added tax, income tax receivable, accrued interest on investments and on a restricted certificate of deposit, and amounts due from employee stock option exercises. Inventory Inventory is carried at the lower of cost and net realizable value, with cost being determined using the first-in, first-out method. Standard costs for material, labor and manufacturing overhead are used to value inventory. Standard costs are updated at least quarterly; therefore, inventory costs approximate actual costs at the end of each reporting period. We establish reserves for estimated excess, obsolete or unmarketable inventory equal to the difference between the cost of the inventory and the estimated fair value of the inventory based upon assumptions about future demand, market conditions and age. When we dispose of excess and obsolete inventories, the related disposals are charged against the inventory reserve. See Note 6 of Notes to Consolidated Financial Statements for additional information. Property, Plant and Equipment Property, plant and equipment, which is stated at cost, is depreciated using the straight-line method over the estimated useful lives of the assets. We depreciate building and land improvements from five to 39 years, office machinery and equipment from three to seven years, engineering machinery and equipment from three to seven years, and computer software from three to five years. Expenditures for repairs and maintenance are charged to expense as incurred. Betterments that materially prolong the lives of the assets are capitalized. Gains and losses on the disposal of property, plant and equipment are recorded in operating income. See Note 7 of Notes to Consolidated Financial Statements for additional information. Liability for Warranty Our products generally include warranties of 90 days to five years for product defects. We accrue for warranty returns at the time revenue is recognized based on our historical return rate and estimate of the cost to repair or replace the defective products. We engage in extensive product quality programs and processes, including actively monitoring and evaluating the quality of our component suppliers. Our products continue to become more complex in both size and functionality as many of our product offerings migrate from line card applications to total systems. The increasing complexity of our products will cause warranty incidences, when they arise, to be more costly. Our estimates regarding future warranty obligations may change due to product failure rates, material usage, and other rework costs incurred in correcting a product failure. In addition, from time to time, specific warranty accruals may be recorded if unforeseen problems arise. Should our actual experience relative to these factors be worse than our estimates, we will be required to record additional warranty expense. Alternatively, if we provide for more reserves than we require, we will reverse a portion of such provisions in future periods. During 2017, we recorded a reduction in warranty expense related to a settlement with a third party supplier for a defective component, the impact of which is reflected in the following table. The liability for warranty obligations totaled $9.7 million and $8.5 million at December 31, 2017 and 2016, respectively. These liabilities are included in accrued expenses in the accompanying consolidated balance sheets. A summary of warranty expense and write-off activity for the years ended December 31, 2017, 2016 and 2015 is as follows:
Year Ended December 31,
2017
2016
2015
(In thousands)
Balance at beginning of period
$
8,548
$
8,739
$
8,415
Plus: Amounts charged to cost and expenses
6,951
8,561
2,998
Less: Deductions
(5,775
)
(8,752
)
(2,674
)
Balance at end of period
$
9,724
$
8,548
$
8,739
Pension Benefit Plan Obligations We maintain a defined benefit pension plan covering employees in certain foreign countries. Pension benefit plan obligations are based on various assumptions used by our actuaries in calculating these amounts. These assumptions include discount rates, compensation rate increases, expected return on plan assets, retirement rates and mortality rates. Actual results that differ from the assumptions and changes in assumptions could affect future expenses and obligations. Stock-Based Compensation We have two Board and stockholder approved stock incentive plans from which stock options, performance stock units (PSUs), restricted stock units (RSUs) and restricted stock are available for grant to employees and directors. All employee and director stock options granted under our stock option plans have an exercise price equal to the fair market value of the award, as defined in the plan, of the underlying common stock on the grant date. All of our outstanding stock option awards are classified as equity awards. Stock-based compensation expense recognized in 2017, 2016 and 2015 was approximately $7.4 million, $6.7 million and $6.7 million, respectively. As of December 31, 2017, total compensation cost related to non-vested stock options, market-based PSUs, RSUs and restricted stock not yet recognized was approximately $17.1 million, which is expected to be recognized over an average remaining recognition period of 2.9 years. In addition, there was $11.4 million of unrecognized compensation expense related to unvested performance-based PSUs, which will be recognized over the requisite service period of three years as achievement of the performance obligation becomes probable. Impairment of Long-Lived Assets We review long-lived assets used in operations for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and the undiscounted cash flows estimated to be generated by the asset are less than the asset’s carrying value. An impairment loss would be recognized in the amount by which the recorded value of the asset exceeds the fair value of the asset, measured by the quoted market price of an asset or an estimate based on the best information available in the circumstances. There were no impairment losses recognized during 2017, 2016 or 2015. Goodwill and Purchased Intangible Assets We evaluate the carrying value of goodwill during the fourth quarter of each year and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. We have elected to first assess the qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit to which the goodwill is assigned is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step impairment test. If we determine that it is more likely than not that its fair value is less than its carrying amount, then the two-step impairment test will be performed. Based on the results of our qualitative assessment in 2017, we concluded that it was not necessary to perform the two-step impairment test. There have been no impairment losses recognized since the goodwill was acquired in an acquisition in 2011. Purchased intangible assets with finite lives are carried at cost, less accumulated amortization. Amortization is recorded over the estimated useful lives of the respective assets, which is 9 months to 14 years. Research and Development Costs Research and development costs include compensation for engineers and support personnel, outside contracted services, depreciation and material costs associated with new product development, the enhancement of current products, and product cost reductions. We continually evaluate new product opportunities and engage in intensive research and product development efforts. Research and development costs totaled $130.4 million, $124.8 million and $129.9 million for the years ended December 31, 2017, 2016 and 2015, respectively. Other Comprehensive Income Other comprehensive income consists of unrealized gains (losses) on available-for-sale securities; unrealized gains (losses) on cash flow hedges; reclassification adjustments for amounts included in net income related to impairments of available-for-sale securities, realized gains (losses) on available-for-sale securities, realized gains (losses) on cash flow hedges, and amortization of actuarial gains (losses) related to our defined benefit plan; defined benefit plan adjustments; and foreign currency translation adjustments. The following table presents changes in accumulated other comprehensive income, net of tax, by component for the years ended December 31, 2015, 2016 and 2017:
(In thousands)
Unrealized Gains (Losses) on Available- for-Sale Securities
Unrealized Gains (Losses) on Cash Flow Hedges
Defined Benefit Plan Adjustments
Foreign Currency Adjustments
Total
Balance, December 31, 2014
$
8,964
$
—
$
(5,757
)
$
(3,282
)
$
(75
)
Other comprehensive income (loss) before reclassifications
(844
)
—
1,589
(3,724
)
(2,979
)
Amounts reclassified from accumulated other comprehensive income
(6,188
)
—
273
—
(5,915
)
Balance, December 31, 2015
1,932
—
(3,895
)
(7,006
)
(8,969
)
Other comprehensive income (loss) before reclassifications
1,515
—
(1,229
)
(569
)
(283
)
Amounts reclassified from accumulated other comprehensive income
(3,043
)
—
107
—
(2,936
)
Balance, December 31, 2016
404
—
(5,017
)
(7,575
)
(12,188
)
Other comprehensive income (loss) before reclassifications
5,020
(619
)
451
5,999
10,851
Amounts reclassified from accumulated other comprehensive income
(2,857
)
619
280
—
(1,958
)
Balance at December 31, 2017
$
2,567
$
—
$
(4,286
)
$
(1,576
)
$
(3,295
) The following tables present the details of reclassifications out of accumulated other comprehensive income for the years ended December 31, 2017, 2016 and 2015:
(In thousands)
2017
Details about Accumulated Other Comprehensive Income Components
Amount Reclassified from Accumulated Other Comprehensive Income
Affected Line Item in the Statement Where Net Income Is Presented
Unrealized gains (losses) on available-for-sale securities:
Net realized gain on sales of securities
$
4,864
Net realized investment gain
Impairment expense
(180
)
Net realized investment gain
Net losses on derivatives designated as hedging instruments
(897
)
Cost of sales
Defined benefit plan adjustments – actuarial losses
(406
)
(1)
Total reclassifications for the period, before tax
3,381
Tax (expense) benefit
(1,423
)
Total reclassifications for the period, net of tax
$
1,958
(1)
Included in the computation of net periodic pension cost. See Note 12 of Notes to Consolidated Financial Statements.
(In thousands)
2016
Details about Accumulated Other Comprehensive Income Components
Amount Reclassified from Accumulated Other Comprehensive Income
Affected Line Item in the Statement Where Net Income Is Presented
Unrealized gains (losses) on available-for-sale securities:
Net realized gain on sales of securities
$
5,408
Net realized investment gain
Impairment expense
(419
)
Net realized investment gain
Defined benefit plan adjustments – actuarial losses
(156
)
(1)
Total reclassifications for the period, before tax
4,833
Tax (expense) benefit
(1,897
)
Total reclassifications for the period, net of tax
$
2,936
(1)
Included in the computation of net periodic pension cost. See Note 12 of Notes to Consolidated Financial Statements.
(In thousands)
2015
Details about Accumulated Other Comprehensive Income Components
Amount Reclassified from Accumulated Other Comprehensive Income
Affected Line Item in the Statement Where Net Income Is Presented
Unrealized gains (losses) on available-for-sale securities:
Net realized gain on sales of securities
$
10,348
Net realized investment gain
Impairment expense
(203
)
Net realized investment gain
Defined benefit plan adjustments – actuarial losses
(396
)
(1)
Total reclassifications for the period, before tax
9,749
Tax (expense) benefit
(3,834
)
Total reclassifications for the period, net of tax
$
5,915
(1)
Included in the computation of net periodic pension cost. See Note 12 of Notes to Consolidated Financial Statements. The following tables present the tax effects related to the change in each component of other comprehensive income for the years ended December 31, 2017, 2016 and 2015:
2017
(In thousands)
Before-Tax Amount
Tax (Expense) Benefit
Net-of-Tax Amount
Unrealized gains (losses) on available-for-sale securities
$
8,230
$
(3,210
)
$
5,020
Reclassification adjustment for amounts related to available-for-sale investments included in net income
(4,684
)
1,827
(2,857
)
Unrealized gains (losses) on cash flow hedges
(897
)
278
(619
)
Reclassification adjustment for amounts related to cash flow hedges included in net income
897
(278
)
619
Defined benefit plan adjustments
654
(203
)
451
Reclassification adjustment for amounts related to defined benefit plan adjustments included in net income
406
(126
)
280
Foreign currency translation adjustment
5,999
—
5,999
Total Other Comprehensive Income (Loss)
$
10,605
$
(1,712
)
$
8,893
2016
(In thousands)
Before-Tax Amount
Tax (Expense) Benefit
Net-of-Tax Amount
Unrealized gains (losses) on available-for-sale securities
$
2,484
$
(969
)
$
1,515
Reclassification adjustment for amounts related to available-for-sale investments included in net income
(4,989
)
1,946
(3,043
)
Defined benefit plan adjustments
(1,782
)
553
(1,229
)
Reclassification adjustment for amounts related to defined benefit plan adjustments included in net income
156
(49
)
107
Foreign currency translation adjustment
(569
)
—
(569
)
Total Other Comprehensive Income (Loss)
$
(4,700
)
$
1,481
$
(3,219
)
2015
(In thousands)
Before-Tax Amount
Tax (Expense) Benefit
Net-of-Tax Amount
Unrealized gains (losses) on available-for-sale securities
$
(1,384
)
$
540
$
(844
)
Reclassification adjustment for amounts related to available-for-sale investments included in net income
(10,145
)
3,957
(6,188
)
Defined benefit plan adjustments
2,303
(714
)
1,589
Reclassification adjustment for amounts related to defined benefit plan adjustments included in net income
396
(123
)
273
Foreign currency translation adjustment
(3,724
)
—
(3,724
)
Total Other Comprehensive Income (Loss)
$
(12,554
)
$
3,660
$
(8,894
) Income Taxes The provision for income taxes has been determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from the difference between financial and tax bases of our assets and liabilities and are adjusted for changes in tax rates and tax laws when such changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. We establish reserves to remove some or all of the tax benefit of any of our tax positions at the time we determine that the positions become uncertain. We adjust these reserves, including any impact on the related interest and penalties, as facts and circumstances change. On December 22, 2017, the Tax Cuts and Jobs Act (the Act) was signed into law. As a result of the Act, we have recognized an estimated expense of $11.9 million in the fourth quarter of 2017, of which $9.2 million related to the write-down of deferred tax assets and $2.7 million related to tax on unrepatriated foreign earnings. We have calculated our best estimate of the impact of the Act in our year-end income tax provision, in accordance with Staff Accounting Bulletin No. 118, which was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared or analyzed to finalize the accounting for certain income tax effects of the Act. Additional work is necessary to do a more detailed analysis of historical foreign earnings, as well as the full impact relating to the write-down of deferred tax assets. Any subsequent adjustments to these amounts will be recorded as income tax expense in the quarter the analysis is complete. F oreign Currency We record transactions denominated in foreign currencies on a monthly basis using exchange rates from throughout the year. Assets and liabilities denominated in foreign currencies are remeasured at the balance sheet dates using the closing rates of exchange between those foreign currencies and the functional currency with any transaction gains or losses reported in other income (expense). Our primary exposures to foreign currency exchange rate movements are with our German subsidiary, whose functional currency is the Euro, our Australian subsidiary, whose functional currency is the Australian dollar, and our Mexican subsidiary, whose functional currency is the U.S. dollar. Adjustments resulting from translating financial statements of international subsidiaries are recorded as a component of accumulated other comprehensive income (loss). Revenue Recognition Revenue is generally recognized when persuasive evidence of an arrangement exists, delivery has occurred, the product price is fixed or determinable, collection of the resulting receivable is reasonably assured, and product returns are reasonably estimable. For product sales, revenue is generally recognized upon shipment of the product to our customer in accordance with the title transfer terms of the sales agreement, generally Ex Works, per International Commercial Terms. In the case of consigned inventory, revenue is recognized when the end customer assumes ownership of the product. Contracts that contain multiple deliverables are evaluated to determine the units of accounting, and the consideration from the arrangement is allocated to each unit of accounting based on the relative selling price and corresponding terms of the contract. When this is not available, we are generally not able to determine third-party evidence of selling price because of the extent of customization among competing products or services from other companies. In these instances, we use best estimates to allocate consideration to each respective unit of accounting. These estimates include analysis of respective bills of material and review and analysis of similar product and service offerings. We record revenue associated with installation services when respective contractual obligations are complete. In instances where customer acceptance is required, revenue is deferred until respective acceptance criteria have been met. Contracts that include both installation services and product sales are evaluated for revenue recognition in accordance with contract terms. As a result, installation services may be considered a separate deliverable or may be considered a combined single unit of accounting with the delivered product. Generally, either the purchaser, ADTRAN, or a third party can perform the installation of our products. Shipping fees are recorded as revenue and the related cost is included in cost of sales. Sales taxes invoiced to customers are included in revenues, and represent less than one percent of total revenues. The corresponding sales taxes paid are included in cost of goods sold. Value added taxes collected from customers in international jurisdictions are recorded in accrued expenses as a liability. Revenue is recorded net of discounts. Sales returns are recorded as a reduction of revenue and accrued based on historical sales return experience, which we believe provides a reasonable estimate of future returns. A portion of our products are sold to a non-exclusive distribution network of major technology distributors in the United States. These large organizations then distribute or provide fulfillment services to an extensive network of VARs and SIs. VARs and SIs may be affiliated with us as a channel partner, or they may purchase from the distributor in an unaffiliated fashion. Additionally, with certain limitations our distributors may return unused and unopened product for stock-balancing purposes when such returns are accompanied by offsetting orders for products of equal or greater value. We participate in cooperative advertising and market development programs with certain customers. We use these programs to reimburse customers for certain forms of advertising, and in general, to allow our customers credits up to a specified percentage of their net purchases. Our costs associated with these programs are estimated and included in marketing expenses in our consolidated statements of income. We also participate in rebate programs to provide sales incentives for certain products. Our costs associated with these programs are estimated and accrued at the time of sale, and are recorded as a reduction of sales in our consolidated statements of income. Unearned Revenue Unearned revenue primarily represents customer billings on our maintenance service programs and leases and unearned revenues relating to multiple element contracts where we still have contractual obligations to our customers. We currently offer maintenance contracts ranging from one to five years. Revenue attributable to maintenance contracts is recognized on a straight-line basis over the related contract term. In addition, we provide software maintenance and a variety of hardware maintenance services to customers under contracts with terms up to ten years. When we defer revenue related to multiple-element contracts where we still have contractual obligations, we also defer the related costs. Current deferred costs are included in prepaid expenses and other assets and totaled $11.4 million and $10.7 million at December 31, 2017 and 2016, respectively. Non-current deferred costs are included in other assets and totaled $2.8 million and $0.9 million at December 31, 2017 and 2016, respectively. Other Income (Expense), Net Other income (expense), net, is comprised primarily of miscellaneous income and expense, gains and losses on foreign currency transactions, gains and losses on foreign exchange forward contracts, investment account management fees, and scrap raw material sales. Earnings per Share Earnings per common share, and earnings per common share assuming dilution, are based on the weighted average number of common shares and, when dilutive, common equivalent shares outstanding during the year. See Note 15 of Notes to Consolidated Financial Statements for additional information. Dividends During 2017, 2016 and 2015, we paid shareholder dividends totaling $17.4 million, $17.6 million and $18.4 million, respectively. The Board of Directors presently anticipates that it will declare a regular quarterly dividend so long as the present tax treatment of dividends exists and adequate levels of liquidity are maintained. The following table shows dividends paid to our shareholders in each quarter of 2017, 2016 and 2015.
Dividends per Common Share
2017
2016
2015
First Quarter
$
0.09
$
0.09
$
0.09
Second Quarter
$
0.09
$
0.09
$
0.09
Third Quarter
$
0.09
$
0.09
$
0.09
Fourth Quarter
$
0.09
$
0.09
$
0.09
On January 16, 2018, the Board of Directors declared a quarterly cash dividend of $0.09 per common share to be paid to shareholders of record at the close of business on January 31, 2018. The ex-dividend date was January 30, 2018 and the payment date was February 14, 2018. The quarterly dividend payment was $4.4 million. Business Combinations We use the acquisition method to account for business combinations. Under the acquisition method of accounting, we recognize the assets acquired and liabilities assumed at their fair value on the acquisition date. Goodwill is measured as the excess of the consideration transferred over the net assets acquired. Costs incurred to complete the business combination, such as legal, accounting or other professional fees, are charged to general and administrative expenses as they are incurred. Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue Recognition Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, The two areas of impact of these ASUs are network installation service revenue performance obligations and contract costs. The output method will be used to measure network installation services progress. The primary impact will be the timing of revenue recognition for certain performance obligations related to service revenue arrangements that are currently deferred until customer acceptance. In connection with the adoption of the new revenue standard, effective January 1, 2018, we adopted ASC 340-40, Other Assets and Deferred Costs - Contracts with Customers We will recognize the cumulative adjustment for network installation service revenue performance obligations and contract costs to retained earnings during the three months ended March 31, 2018. We do not believe the cumulative adjustment will have a significant impact on our consolidated financial statements during 2018. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles – Goodw |
