Revenue Recognition

9 Months Ended

Sep. 30, 2021

Revenue Recognition [Abstract]

Revenue Recognition

(5) Revenue Recognition:

We categorize our products, services and other revenues into the following categories:

Data and Internet services include broadband services for consumer and business customers. We provide data transmission services to high volume business customers and other carriers with dedicated high capacity circuits (“nonswitched access”) including services to wireless providers (wireless backhaul);

Voice services include traditional local and long-distance wireline services, Voice over Internet Protocol (VoIP) services, as well as a number of unified messaging services offered to our consumer and business customers. Voice services also include the long-distance voice origination and termination services that we provide to our business customers and other carriers;

Video services include revenues generated from services provided directly to consumer customers as linear terrestrial television services, through DISH® satellite TV service, and through partnerships with over-the-top (OTT) video providers. Video services also includes pay per view revenues, video on demand, equipment rentals, and video advertising. The Company has made the strategic decision to limit sales of new traditional TV services, focusing on our broadband products and OTT video options;

Other customer revenue includes switched access revenue, sales of customer premise equipment to our business customers, rents collected for collocation services, and revenue from other services and fees. Switched access revenue includes revenues derived from allowing other carriers to use our network to originate and/or terminate their local and long-distance voice traffic (switched access). These services are primarily billed on a minutes-of-use basis applying tariffed rates filed with the FCC or state agencies; and

Subsidy and other regulatory revenue includes revenues generated from cost subsidies from state and federal authorities, including the Connect America Fund Phase II.

The following tables provide a summary of revenues, by category. Prior year revenues in the following tables include revenues for the Northwest Operations for the three and nine months ended September 30, 2020 (prior to its disposal):

	Successor		Predecessor
	For the three months		For the three months
	ended September 30,		ended September 30,
($ in millions)	2021		2020
Data and Internet services	$	834	$	838
Voice services		411		500
Video services		149		186
Other		99		103
Revenue from contracts with customers (1)		1,493		1,627
Subsidy and other revenue (2)		83		99
Total revenue	$	1,576	$	1,726
	Successor		Predecessor
	For the three months		For the three months
	ended September 30,		ended September 30,
($ in millions)	2021		2020
Consumer (3)	$	800	$	865
Business and wholesale (3)		693		762
Revenue from contracts with customers (1)		1,493		1,627
Subsidy and other revenue (2)		83		99
Total revenue	$	1,576	$	1,726
	Successor		Predecessor
	For the five months		For the four months		For the nine months
	ended September 30,		ended April 30,		ended September 30,
($ in millions)	2021		2021		2020
Data and Internet services	$	1,390	$	1,125	$	2,644
Voice services		694		647		1,595
Video services		254		223		608
Other		161		125		328
Revenue from contracts with customers (1)		2,499		2,120		5,175
Subsidy and other revenue (2)		138		111		285
Total revenue	$	2,637	$	2,231	$	5,460

	Successor		Predecessor
	For the five months		For the four months		For the nine months
	ended September 30,		ended April 30,		ended September 30,
($ in millions)	2021		2021		2020
Consumer (3)	$	1,343	$	1,133	$	2,746
Business and wholesale (3)		1,156		987		2,429
Revenue from contracts with customers (1)		2,499		2,120		5,175
Subsidy and other revenue (2)		138		111		285
Total revenue	$	2,637	$	2,231	$	5,460

⁽¹⁾Lease revenue included in Revenue from contracts with customers was $16 million for the three months ended September 30, 2021, $26 million for the five months ended September 30, 2021, $21 million for the four months ended April 30, 2021, and $16 million and $50 million for the three and nine months ended September 30, 2020, respectively.

⁽²⁾Includes $15 million and $25 million in transition services revenue in connection with the divestiture of the Northwest Operations for the three and nine months ended September 30, 2020, respectively.

⁽³⁾Due to changes in methodology during the second quarter of 2021, historical periods have been updated to reflect the comparable amounts.

The following is a summary of the changes in the contract assets and contract liabilities:

	Contract Assets				Contract Liabilities
($ in millions)	Current		Noncurrent		Current		Noncurrent
Balance at December 31, 2020 (Predecessor)	$	6	$	9	$	58	$	20
Revenue recognized included
in opening contract balance		(4)		-		(23)		(3)
Cash received, excluding amounts
recognized as revenue		-		-		22		2
Balance at April 30, 2021 (Predecessor)	$	2	$	9	$	57	$	19
Fresh start accounting adjustments		(2)		(9)		(42)		(18)
Balance at April 30, 2021 (Predecessor)	$	-	$	-	$	15	$	1
Balance at April 30, 2021 (Successor)	$	-	$	-	$	15	$	1
Revenue recognized included
in opening contract balance		-		-		(13)		(1)
Credits granted, excluding amounts
recognized as revenue		-		-		17		9
Reclassified between current
and concurrent		-		-		1		(1)
Balance at September 30, 2021 (Successor)	$	-	$	-	$	20	$	8

	Contract Assets				Contract Liabilities
($ in millions)	Current		Noncurrent		Current		Noncurrent
Balance at December 31, 2019 (Predecessor)	$	37	$	8	$	41	$	21
Revenue recognized included
in opening contract balance		(27)		-		(47)		(10)
Cash received, excluding amounts
recognized as revenue		-		-		64		9
Credits granted, excluding amounts
recognized as revenue		3		-		-		-
Reclassified between current
and concurrent		-		-		1		(1)
Balance at September 30, 2020 (Predecessor)	$	13	$	8	$	59	$	19

The unsatisfied obligations for retail customers consist of amounts in advance billings, which are expected to be earned within the following monthly billing cycle. Unsatisfied obligations for wholesale customers are based on a point-in-time calculation and determined by the number of circuits provided and the contractual price. These wholesale customer obligations change from period to period based on new circuits added as well as circuits that are terminated.

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period:

	Successor
($ in millions)	Revenue from contracts with customers
2021 (remaining three months)	$	385
2022		512
2023		323
2024		152
2025		81
Thereafter		121
Total	$	1,574