Revenue Recognition

12 Months Ended

Dec. 31, 2020

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue RecognitionReconciliation of Total Revenue to Revenue from Contracts with Customers

The following tables provide disaggregation of revenue from contracts with customers based on reporting segments and service offerings for the years ended December 31, 2020, 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, 2020
	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)	$	1,556	—	1,556
Transport and Infrastructure (2)	1,265		(373)	892
Voice and Collaboration (3)	368		—	368
IT and Managed Services (4)	216		—	216
Total International and Global Accounts Segment Revenue	3,405		(373)	3,032
Enterprise
IP and Data Services (1)	2,474		(2)	2,472
Transport and Infrastructure (2)	1,608		(135)	1,473
Voice and Collaboration (3)	1,424		(1)	1,423
IT and Managed Services (4)	216		—	216
Total Enterprise Segment Revenue	5,722		(138)	5,584
Small and Medium Business
IP and Data Services (1)	1,062		(3)	1,059
Transport and Infrastructure (2)	352		(34)	318
Voice and Collaboration (3)	1,098		(3)	1,095
IT and Managed Services (4)	45		—	45
Total Small and Medium Business Segment Revenue	2,557		(40)	2,517
Wholesale
IP and Data Services (1)	1,280		—	1,280
Transport and Infrastructure (2)	1,764		(517)	1,247
Voice and Collaboration (3)	731		—	731
IT and Managed Services (4)	2		—	2
Total Wholesale Business Segment Revenue	3,777		(517)	3,260
Consumer
Broadband (5)	2,909		(217)	2,692
Voice (6)	1,622		—	1,622
Regulatory (7)	615		(615)	—
Other (8)	105		(15)	90
Total Consumer Segment Revenue	5,251		(847)	4,404
Total revenue	$	20,712	(1,915)	18,797
Timing of revenue
Goods and services transferred at a point in time				$	250
Services performed over time				18,547
Total revenue from contracts with customers				$	18,797

	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)	$	1,627	—	1,627
Transport and Infrastructure (2)	1,268		(365)	903
Voice and Collaboration (3)	354		—	354
IT and Managed Services (4)	227		—	227
Total International and Global Accounts Segment Revenue	3,476		(365)	3,111
Enterprise
IP and Data Services (1)	2,538		—	2,538
Transport and Infrastructure (2)	1,479		(134)	1,345
Voice and Collaboration (3)	1,423		—	1,423
IT and Managed Services (4)	256		—	256
Total Enterprise Segment Revenue	5,696		(134)	5,562
Small and Medium Business
IP and Data Services (1)	1,091		—	1,091
Transport and Infrastructure (2)	365		(36)	329
Voice and Collaboration (3)	1,226		—	1,226
IT and Managed Services (4)	45		—	45
Total Small and Medium Business Segment Revenue	2,727		(36)	2,691
Wholesale
IP and Data Services (1)	1,365		—	1,365
Transport and Infrastructure (2)	1,907		(545)	1,362
Voice and Collaboration (3)	763		—	763
IT and Managed Services (4)	7		—	7
Total Wholesale Business Segment Revenue	4,042		(545)	3,497
Consumer
Broadband (5)	2,876		(215)	2,661
Voice (6)	1,837		—	1,837
Regulatory (7)	632		(632)	—
Other (8)	172		(26)	146
Total Consumer Segment Revenue	5,517		(873)	4,644
Total revenue	$	21,458	(1,953)	19,505
Timing of revenue
Goods and services transferred at a point in time				$	221
Services performed over time				19,284
Total revenue from contracts with customers				$	19,505

	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)	$	1,682	—	1,682
Transport and Infrastructure (2)	1,230		(83)	1,147
Voice and Collaboration (3)	365		—	365
IT and Managed Services (4)	266		—	266
Total International and Global Accounts Segment Revenue	3,543		(83)	3,460
Enterprise
IP and Data Services (1)	2,485		—	2,485
Transport and Infrastructure (2)	1,484		(43)	1,441
Voice and Collaboration (3)	1,495		—	1,495
IT and Managed Services (4)	301		—	301
Total Enterprise Segment Revenue	5,765		(43)	5,722
Small and Medium Business
IP and Data Services (1)	1,078		—	1,078
Transport and Infrastructure (2)	424		(40)	384
Voice and Collaboration (3)	1,366		—	1,366
IT and Managed Services (4)	50		—	50
Total Small and Medium Business Segment Revenue	2,918		(40)	2,878
Wholesale
IP and Data Services (1)	1,369		—	1,369
Transport and Infrastructure (2)	2,118		(397)	1,721
Voice and Collaboration (3)	865		—	865
IT and Managed Services (4)	8		—	8
Total Wholesale Business Segment Revenue	4,360		(397)	3,963
Consumer
Broadband (5)	2,824		(213)	2,611
Voice (6)	2,127		—	2,127
Regulatory (7)	727		(727)	—
Other (8)	316		(35)	281
Total Consumer Segment Revenue	5,994		(975)	5,019
Total revenue	$	22,580	(1,538)	21,042
Timing of revenue
Goods and services transferred at a point in time				$	230
Services performed over time				20,812
Total revenue from contracts with customers				$	21,042

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(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 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, revenue from leasing arrangements and failed-sale-leaseback income in 2018, which are not within the scope of ASC 606.

Customer Receivables and Contract Balances

The following table provides balances of customer receivables, contract assets and contract liabilities as of December 31, 2020 and December 31, 2019:

	December 31, 2020		December 31, 2019
	(Dollars in millions)
Customer receivables(1)	$	1,889	2,194
Contract assets	108		130
Contract liabilities	950		1,028

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(1)Reflects gross customer receivables of $2.1 billion and $2.3 billion, net of allowance for credit losses of $174 million and $94 million, at December 31, 2020 and December 31, 2019, respectively.

Contract liabilities are consideration we have received from our customers or billed in advance of providing goods or services promised in the future. We defer recognizing this consideration as revenue until we have satisfied the related performance obligation to the customer. Contract liabilities include recurring services billed one month in advance and installation and maintenance charges that are deferred and recognized over the actual or expected contract term, which typically ranges from one to five years depending on the service. Contract liabilities are included within deferred revenue in our consolidated balance sheet. During the years ended December 31, 2020 and December 31, 2019, we recognized $672 million and $630 million, respectively, of revenue that was included in contract liabilities as of January 1, 2020 and January 1, 2019, respectively.

Performance Obligations

As of December 31, 2020, our estimated revenue expected to be recognized in the future related to performance obligations associated with existing customer contracts that are partially or wholly unsatisfied is approximately $5.5 billion. We expect to recognize approximately 91% of this revenue through 2023, with the balance recognized thereafter.

These amounts exclude (i) the value of unsatisfied performance obligations for contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed (for example, uncommitted usage or non-recurring charges associated with professional or technical services to be completed), and (ii) contracts that are classified as leasing arrangements that are not subject to ASC 606.

Contract Costs

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

	December 31, 2020
	Acquisition Costs		Fulfillment Costs
	(Dollars in millions)
Beginning of period balance	$	326	221
Costs incurred	181		141
Amortization	(218)		(146)
End of period balance	$	289	216

	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

Acquisition costs include commission fees paid to employees as a result of obtaining contracts. Fulfillment costs include third party and internal costs associated with the provision, installation and activation of telecommunications services to customers, including labor and materials consumed for these activities.

Deferred acquisition and fulfillment costs are amortized based on the transfer of services on a straight-line basis over the average customer life of approximately 30 months for consumer and business customers. Amortized fulfillment costs are included in cost of services and products and amortized acquisition costs are included in selling, general and administrative expenses in our consolidated statements of operations. The amount of these deferred costs that are anticipated to be amortized in the next 12 months are included in other current assets on our consolidated balance sheets. The amount of deferred costs expected to be amortized beyond the next twelve months is included in other non-current assets on our consolidated balance sheets. Deferred acquisition and fulfillment costs are assessed for impairment on an annual basis.