Revenue from Contracts with Customers

9 Months Ended

Sep. 30, 2022

Revenue from Contracts with Customers

Revenue from Contracts with Customers

Note 4. Revenue from Contracts with Customers

Revenue by Service Offering

The following table presents revenue by service offering:

	Three months ended				Nine months ended
	September 30,				September 30,
	2022		2021		2022		2021
	(in millions)
Residential subscription
HSD	$	84.2	$	85.6	$	251.1	$	246.6
Video		42.4		50.0		132.8		156.1
Telephony		6.1		7.0		18.5		21.9
Total residential subscription	$	132.7	$	142.6	$	402.4	$	424.6
Business subscription
HSD	$	18.1	$	17.7	$	53.9	$	52.0
Video		2.9		2.8		8.8		8.4
Telephony		6.7		7.2		20.5		21.9
Total business subscription	$	27.7	$	27.7	$	83.2	$	82.3
Total subscription services revenue		160.4		170.3		485.6		506.9
Other business services revenue(1)		5.4		5.6		16.1		16.9
Other revenue		7.9		8.1		22.7		23.6
Total revenue	$	173.7	$	184.0	$	524.4	$	547.4

(1) Includes wholesale and colocation lease revenue of $4.8 million and $4.8 million for the three months ended September 30, 2022 and 2021, respectively, and $14.4 million and $14.6 million for the nine months ended September 30, 2022 and 2021, respectively.

Costs of Obtaining Contracts with Customers

The following table summarizes the activity of costs of obtaining contracts with customers:

	Three months ended				Nine months ended
	September 30,				September 30,
	2022		2021		2022		2021
	(in millions)
Balance at beginning of period	$	38.2	$	35.4	$	37.3	$	31.8
Deferral		4.6		4.3		12.4		12.2
Amortization		(3.7)		(2.7)		(10.6)		(7.0)
Balance at end of period	$	39.1	$	37.0	$	39.1	$	37.0

The following table presents the current and non-current portion of costs of obtaining contracts with customers as of the end of the corresponding periods:

	September 30,  2022		December 31,  2021
	(in millions)
Current costs of obtaining contracts with customers	$	15.4	$	14.1
Non-current costs of obtaining contracts with customers		23.7		23.2
Total costs of obtaining contracts with customers	$	39.1	$	37.3

The current portion and the non-current portion of costs of obtaining contracts with customers are included in prepaid expenses and other and other non-current assets, respectively, in the Company’s unaudited condensed consolidated balance sheets. Amortization of costs of obtaining contracts with customers is included in selling, general and administrative expense in the Company’s unaudited condensed consolidated statements of operations.

Contract Liabilities

The following table summarizes the activity of current and non-current contract liabilities:

	Three months ended				Nine months ended
	September 30,				September 30,
	2022		2021		2022		2021
	(in millions)
Balance at beginning of period	$	2.9	$	3.3	$	3.3	$	2.9
Deferral		2.9		3.3		9.1		9.1
Revenue recognized		(3.0)		(3.2)		(9.6)		(8.6)
Balance at end of period	$	2.8	$	3.4	$	2.8	$	3.4

The following table presents the current and non-current portion of contract liabilities as of the end of the corresponding periods:

	September 30,  2022		December 31,  2021
	(in millions)
Current contract liabilities	$	2.5	$	2.9
Non-current contract liabilities		0.3		0.4
Total contract liabilities	$	2.8	$	3.3

The current and the non-current portion of contract liabilities are included in the current portion of unearned service revenue and other non-current liabilities, respectively, in the Company’s unaudited condensed consolidated balance sheets.

Unsatisfied Performance Obligations

Revenue from month-to-month residential subscription service contracts have historically represented a significant portion of the Company’s revenue and the Company expects that this will continue to be the case in future periods.  All residential subscription service performance obligations will be satisfied within one year.

A summary of expected business subscription and other business services revenue to be recognized in future periods related to performance obligations which have not been satisfied or are partially unsatisfied as of September 30, 2022 is set forth in the table below:

	2022		2023		2024		Thereafter		Total
	(in millions)
Subscription services	$	13.7	$	37.8	$	21.8	$	9.3	$	82.6
Other business services		0.8		2.2		0.9		0.2		4.1
Total expected revenue	$	14.5	$	40.0	$	22.7	$	9.5	$	86.7

Provision for Doubtful Accounts

The provision for doubtful accounts and the allowance for doubtful accounts are based on the aging of the individual receivables, historical trends and current and anticipated future economic conditions. The Company manages credit risk by disconnecting services to customers who are delinquent, generally after 100 days of delinquency. The individual receivables are written-off after all reasonable efforts to collect the funds have been made. Actual write-offs may differ from the amounts reserved.

The following table presents the change in the allowance for doubtful accounts for trade accounts receivable:

	Three months ended				Nine months ended
	September 30,				September 30,
	2022		2021		2022		2021
	(in millions)
Balance at beginning of period	$	2.4	$	5.0	$	4.3	$	6.7
Provision charged to expense (1)		2.0		2.1		2.7		5.7
Accounts written off, net of recoveries		(1.0)		(1.6)		(3.6)		(6.9)
Balance at end of period	$	3.4	$	5.5	$	3.4	$	5.5

(1) The Company released nil and $1.6 million of reserves established in 2020 related to COVID-19 during the three and nine months ended September 30, 2022, respectively.