Rollins, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

UNEARNED REVENUE

UNEARNED REVENUE

3 Months Ended

Mar. 31, 2018

Revenue from Contract with Customer [Abstract]

REVENUE

Adoption of ASC Topic 606, "Revenue from Contracts with Customers" On January 1, 2018, and the Company adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2017. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605.

There was no impact on the Company’s financial statements as a result of adopting Topic 606 for the three months ended March 31, 2018 and 2017, or the twelve months ended December 31, 2017.

The following tables present our revenues disaggregated by revenue source (in thousands, unaudited).

Sales and usage-based taxes are excluded from revenues. No sales to an individual customer or country other than the United States accounted for more than 10% of the three months ended March 31, 2018 and 2017, respectively. Revenue, classified by the major geographic areas in which our customers are located, was as follows:



	(in thousands)
	Three Months Ended
	March 31,
	2018		2017
United States	$	375,959	$	345,580
Other countries	32,783		29,667
Total Revenues	$	408,742	$	375,247

Revenue from external customers, classified by significant product and service offerings, was as follows:



	(in thousands)
	Three Months Ended
	March 31,
	2018		2017
Residential contract revenue	$	144,197	$	132,344
Commercial contract revenue	132,079		124,833
Termite completions, bait monitoring, & renewals	76,491		65,652
Other revenues	55,975		52,418
Total Revenues	$	408,742	$	375,247

UNEARNED REVENUE

Changes in unearned revenue were as follows:



(In thousands)
Three Months ended March 31, 2018
Balance at December 31, 2017	$	117,614
Deferral of unearned revenue	47,725
Recognition of unearned revenue	(38,809		)
Balance at March 31, 2018	126,530

Year ended December 31, 2017
Balance at December 31, 2016	$	106,323
Deferral of unearned revenue	140,019
Recognition of unearned revenue	(128,728		)
Balance at December 31, 2017	117,614

Deferred revenue recognized in the three month period ended March 31, 2018 and March 31, 2017 were $38.8 million and $32.6 million, respectively.

Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized (“contracted not recognized revenue”), which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods. The Company has no material contracted not recognized revenue as of March 31, 2018 or December 31, 2017.

At March 31, 2018 and December 31, 2017, the Company had long-term unearned revenue of $8.6 million. Unearned short-term revenue is recognized over the next 12 month period. The majority of unearned long-term revenue is recognized over a period of five years or less with immaterial amounts recognized through 2025.