Revenue Recognition (Tables)

12 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

The following tables present our reported results under ASC 606 and a reconciliation to results using the historical accounting method:



	Year Ended December 31, 2018
	Reported Balances			Impact of ASC 606		ASC 605 Historical Adjusted Balances
	(Dollars in millions, except per share amounts and shares in thousands)
Operating revenue	$	23,443		39		23,482
Cost of services and products (exclusive of depreciation and amortization)	10,862			22		10,884
Selling, general and administrative	4,165			71		4,236
Interest expense	2,177			(9	)	2,168
Income tax expense	170			(12	)	158
Net loss	(1,733		)	(33	)	(1,766	)

BASIC AND DILUTED LOSS PER COMMON SHARE
BASIC	$	(1.63	)	(0.03	)	(1.66	)
DILUTED	$	(1.63	)	(0.03	)	(1.66	)
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
BASIC	1,065,866			—		1,065,866
DILUTED	1,065,866			—		1,065,866

Revenue from External Customers by Products and Services

The following tables provide disaggregation of revenue from contracts with customers based on reporting segments and service offerings for the years ended December 31, 2019 and 2018. It also shows the amount of revenue that is not subject to ASC 606, but is instead governed by other accounting standards.



	Year Ended December 31, 2019
	Total Revenue		Adjustments for Non-ASC 606 Revenue⁽⁹⁾		Total Revenue from Contracts with Customers
	(Dollars in millions)
International and Global Accounts
IP and Data Services ⁽¹⁾	$	1,676	—		1,676
Transport and Infrastructure ⁽²⁾	1,318		(365	)	953
Voice and Collaboration ⁽³⁾	377		—		377
IT and Managed Services ⁽⁴⁾	225		—		225
Total International and Global Accounts Segment Revenue	3,596		(365	)	3,231

Enterprise
IP and Data Services ⁽¹⁾	2,763		—		2,763
Transport and Infrastructure ⁽²⁾	1,545		(134	)	1,411
Voice and Collaboration ⁽³⁾	1,567		—		1,567
IT and Managed Services ⁽⁴⁾	258		—		258
Total Enterprise Segment Revenue	6,133		(134	)	5,999

Small and Medium Business
IP and Data Services ⁽¹⁾	1,184		—		1,184
Transport and Infrastructure ⁽²⁾	420		(36	)	384
Voice and Collaboration ⁽³⁾	1,306		—		1,306
IT and Managed Services ⁽⁴⁾	46		—		46
Total Small and Medium Business Segment Revenue	2,956		(36	)	2,920

Wholesale
IP and Data Services ⁽¹⁾	1,377		—		1,377
Transport and Infrastructure ⁽²⁾	1,920		(545	)	1,375
Voice and Collaboration ⁽³⁾	771		—		771
IT and Managed Services ⁽⁴⁾	6		—		6
Total Wholesale Business Segment Revenue	4,074		(545	)	3,529

Consumer
Broadband ⁽⁵⁾	2,876		(215	)	2,661
Voice ⁽⁶⁾	1,881		—		1,881
Regulatory ⁽⁷⁾	634		(634	)	—
Other ⁽⁸⁾	251		(24	)	227
Total Consumer Segment Revenue	5,642		(873	)	4,769

Total revenue	$	22,401	(1,953	)	20,448

Timing of revenue
Goods and services transferred at a point in time					$	221
Services performed over time					20,227
Total revenue from contracts with customers					$	20,448



	Year Ended December 31, 2018
	Total Revenue		Adjustments for Non-ASC 606 Revenue⁽⁹⁾		Total Revenue from Contracts with Customers
	(Dollars in millions)
International and Global Accounts
IP and Data Services ⁽¹⁾	$	1,728	—		1,728
Transport and Infrastructure ⁽²⁾	1,276		(83	)	1,193
Voice and Collaboration ⁽³⁾	387		—		387
IT and Managed Services ⁽⁴⁾	262		—		262
Total International and Global Accounts Segment Revenue	3,653		(83	)	3,570

Enterprise
IP and Data Services ⁽¹⁾	2,673		—		2,673
Transport and Infrastructure ⁽²⁾	1,550		(43	)	1,507
Voice and Collaboration ⁽³⁾	1,607		—		1,607
IT and Managed Services ⁽⁴⁾	303		—		303
Total Enterprise Segment Revenue	6,133		(43	)	6,090

Small and Medium Business
IP and Data Services ⁽¹⁾	1,178		—		1,178
Transport and Infrastructure ⁽²⁾	471		(40	)	431
Voice and Collaboration ⁽³⁾	1,443		—		1,443
IT and Managed Services ⁽⁴⁾	52		—		52
Total Small and Medium Business Segment Revenue	3,144		(40	)	3,104

Wholesale
IP and Data Services ⁽¹⁾	1,382		—		1,382
Transport and Infrastructure ⁽²⁾	2,136		(397	)	1,739
Voice and Collaboration ⁽³⁾	872		—		872
IT and Managed Services ⁽⁴⁾	7		—		7
Total Wholesale Business Segment Revenue	4,397		(397	)	4,000

Consumer
Broadband ⁽⁵⁾	2,822		(213	)	2,609
Voice ⁽⁶⁾	2,173		—		2,173
Regulatory ⁽⁷⁾	729		(729	)	—
Other ⁽⁸⁾	392		(33	)	359
Total Consumer Segment Revenue	6,116		(975	)	5,141

Total revenue	$	23,443	(1,538	)	21,905

Timing of revenue
Goods and services transferred at a point in time					$	230
Services performed over time					21,675
Total revenue from contracts with customers					$	21,905

______________________________________________________________________



(1	)	Includes primarily VPN data network, Ethernet, IP, content delivery and other ancillary services.
(2	)	Includes wavelengths, private line, dark fiber services, colocation and data center services, including cloud, hosting and application management solutions, professional services and other ancillary services.
(3	)	Includes local, long-distance voice, including wholesale voice, and other ancillary services, as well as VoIP services.
(4	)	Includes information technology services and managed services, which may be purchased in conjunction with our other network services.
(5	)	Includes high speed, fiber-based and lower speed DSL broadband services.
(6	)	Includes local and long-distance services.
(7	)	Includes (i) CAF, USF and other support payments designed to reimburse us for various costs related to certain telecommunications services and (ii) other operating revenue from the leasing and subleasing of space.
(8	)	Includes retail video services (including our linear TV services), professional services and other ancillary services.
(9	)	Includes regulatory revenue, lease revenue, sublease rental income, revenue from fiber capacity lease arrangements and failed sale leaseback income in 2018, which are not within the scope of ASC 606.

Contract with Customer, Asset and Liability

The following table provides balances of customer receivables, contract assets and contract liabilities as of December 31, 2019 and December 31, 2018:



	December 31, 2019		December 31, 2018
	(Dollars in millions)
Customer receivables⁽¹⁾	$	2,194	2,346
Contract liabilities	1,028		860
Contract assets	130		140



(1	)	Gross customer receivables of $2.3 billion and $2.5 billion, net of allowance for doubtful accounts of $94 million and $132 million, at December 31, 2019 and December 31, 2018, respectively.

Capitalized Contract Cost

The following table provides changes in our contract acquisition costs and fulfillment costs:



	Year Ended December 31, 2019
	Acquisition Costs			Fulfillment Costs
	(Dollars in millions)
Beginning of period balance	$	322		187
Costs incurred	208			158
Amortization	(204		)	(124	)
End of period balance	$	326		221



	Year Ended December 31, 2018
	Acquisition Costs			Fulfillment Costs
	(Dollars in millions)
Beginning of period balance	$	268		133
Costs incurred	226			146
Amortization	(172		)	(92	)
End of period balance	$	322		187