Revenue Recognition (Tables)

6 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

The following tables provide total revenue by segment, sales channel and product category. They also provide the amount of revenue that is not subject to ASC 606, "Revenue from Contracts with Customers" ("ASC 606"), but is instead governed by other accounting standards:


	Three Months Ended June 30, 2022				Three Months Ended June 30, 2021
	Total Revenue		Adjustments for Non-ASC 606 revenue (1)	Total revenue from Contracts with Customers	Total Revenue	Adjustments for Non-ASC 606 revenue (1)	Total revenue from Contracts with Customers
	(Dollars in millions)
Business Segment by Sales Channel and Product Category
International and Global Accounts ("IGAM")
Compute and Application Services	$	184	(71)	113	181	(70)	111
IP and Data Services	417		—	417	427	—	427
Fiber Infrastructure	224		(35)	189	217	(32)	185
Voice and Other	171		—	171	186	—	186
Total IGAM Revenue	996		(106)	890	1,011	(102)	909

Large Enterprise
Compute and Application Services	162		(15)	147	174	(15)	159
IP and Data Services	385		—	385	396	—	396
Fiber Infrastructure	129		(11)	118	130	(12)	118
Voice and Other	208		—	208	245	—	245
Total Large Enterprise Revenue	884		(26)	858	945	(27)	918

Mid-Market Enterprise
Compute and Application Services	34		(7)	27	32	(9)	23
IP and Data Services	408		(1)	407	428	(2)	426
Fiber Infrastructure	50		(2)	48	50	(2)	48
Voice and Other	134		—	134	151	—	151
Total Mid-Market Enterprise Revenue	626		(10)	616	661	(13)	648

Wholesale
Compute and Application Services	73		(39)	34	48	(41)	7
IP and Data Services	285		—	285	298	—	298
Fiber Infrastructure	161		(29)	132	155	(28)	127
Voice and Other	391		(63)	328	404	(62)	342
Total Wholesale Revenue	910		(131)	779	905	(131)	774

Business Segment by Product Category
Compute and Application Services	453		(132)	321	435	(135)	300
IP and Data Services	1,495		(1)	1,494	1,549	(2)	1,547
Fiber Infrastructure	564		(77)	487	552	(74)	478
Voice and Other	904		(63)	841	986	(62)	924
Total Business Segment Revenue	3,416		(273)	3,143	3,522	(273)	3,249

Mass Markets Segment by Product Category
Fiber Broadband	151		(5)	146	130	—	130
Other Broadband	596		(55)	541	632	(55)	577
Voice and Other	449		(20)	429	640	(143)	497
Total Mass Markets Revenue	1,196		(80)	1,116	1,402	(198)	1,204

Total Revenue	$	4,612	(353)	4,259	4,924	(471)	4,453


	Six Months Ended June 30, 2022				Six Months Ended June 30, 2021
	Total revenue		Adjustments for non-ASC 606 revenue (1)	Total revenue from contracts with customers	Total revenue	Adjustments for non-ASC 606 revenue (1)	Total revenue from contracts with customers
	(Dollars in millions)
Business Segment by Sales Channel and Product Category
International and Global Accounts ("IGAM")
Compute and Application Services	$	367	(144)	223	364	(139)	225
IP and Data Services	840		—	840	856	—	856
Fiber Infrastructure	443		(69)	374	434	(62)	372
Voice and Other	345		—	345	377	—	377
Total IGAM Revenue	1,995		(213)	1,782	2,031	(201)	1,830

Large Enterprise
Compute and Application Services	325		(29)	296	343	(30)	313
IP and Data Services	773		—	773	798	—	798
Fiber Infrastructure	242		(24)	218	260	(27)	233
Voice and Other	421		—	421	497	—	497
Total Large Enterprise Revenue	1,761		(53)	1,708	1,898	(57)	1,841

Mid-Market Enterprise
Compute and Application Services	67		(14)	53	64	(17)	47
IP and Data Services	823		(2)	821	870	(3)	867
Fiber Infrastructure	99		(4)	95	106	(4)	102
Voice and Other	273		—	273	314	—	314
Total Mid-Market Enterprise Revenue	1,262		(20)	1,242	1,354	(24)	1,330

Wholesale
Compute and Application Services	121		(79)	42	95	(81)	14
IP and Data Services	581		—	581	603	—	603
Fiber Infrastructure	315		(56)	259	309	(59)	250
Voice and Other	782		(127)	655	827	(125)	702
Total Wholesale Revenue	1,799		(262)	1,537	1,834	(265)	1,569

Business Segment by Product Category
Compute and Application Services	880		(266)	614	866	(267)	599
IP and Data Services	3,017		(2)	3,015	3,127	(3)	3,124
Fiber Infrastructure	1,099		(153)	946	1,109	(152)	957
Voice and Other	1,821		(127)	1,694	2,015	(125)	1,890
Total Business Segment Revenue	6,817		(548)	6,269	7,117	(547)	6,570

Mass Markets Segment by Product Category
Fiber Broadband	296		(10)	286	252	—	252
Other Broadband	1,206		(111)	1,095	1,280	(110)	1,170
Voice and Other	969		(99)	870	1,304	(288)	1,016
Total Mass Markets Revenue	2,471		(220)	2,251	2,836	(398)	2,438

Total Revenue	$	9,288	(768)	8,520	9,953	(945)	9,008

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(1)Includes regulatory revenue and lease revenue 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, net of amounts reclassified as held for sale, as of June 30, 2022 and December 31, 2021:


	June 30, 2022		December 31, 2021
	(Dollars in millions)
Customer receivables(1)	$	1,411	1,493
Contract assets(2)	64		73
Contract liabilities(3)	673		680

______________________________________________________________________

(1)Reflects gross customer receivables of $1.5 billion and $1.6 billion, net of allowance for credit losses of $92 million and $102 million, at June 30, 2022 and December 31, 2021, respectively. As of June 30, 2022 and December 31, 2021, these amounts exclude customer receivables, net reclassified as held for sale of $294 million and $288 million, respectively.

(2)As of both June 30, 2022 and December 31, 2021, these amounts exclude contract assets reclassified as held for sale of $9 million.

(3)As of June 30, 2022 and December 31, 2021, these amounts exclude contract liabilities reclassified as held for sale of $152 million and $161 million, respectively.

Capitalized Contract Cost

The following tables provide changes in our contract acquisition costs and fulfillment costs:


	Three Months Ended June 30, 2022			Three Months Ended June 30, 2021
	Acquisition Costs(1)		Fulfillment Costs(3)	Acquisition Costs	Fulfillment Costs
	(Dollars in millions)			(Dollars in millions)
Beginning of period balance	$	215	187	279	216
Costs incurred	41		41	45	38
Amortization	(49)		(39)	(53)	(37)
Change in contract costs held for sale	1		(1)	—	—
End of period balance	$	208	188	271	217


	Six Months Ended June 30, 2022			Six Months Ended June 30, 2021
	Acquisition Costs(2)		Fulfillment Costs(3)	Acquisition Costs	Fulfillment Costs
	(Dollars in millions)			(Dollars in millions)
Beginning of period balance	$	222	186	289	216
Costs incurred	84		81	89	75
Amortization	(101)		(78)	(107)	(74)
Change in contract costs held for sale	3		(1)	—	—
End of period balance	$	208	188	271	217

______________________________________________________________________

(1)The beginning and ending balance for the three months ended June 30, 2022 exclude acquisition costs reclassified as held for sale of $32 million and $31 million, respectively.

(2)The beginning and ending balance for the six months ended June 30, 2022 exclude acquisition costs reclassified as held for sale of $34 million and $31 million, respectively.

(3)The beginning and ending balance for the three and six months ended June 30, 2022 exclude fulfillment costs reclassified as held for sale of $32 million and $33 million, respectively.