Revenue Recognition

3 Months Ended

Mar. 31, 2022

Revenue Recognition [Abstract]

Revenue Recognition

(3) 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, rents collected for colocation 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. 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:

	Successor		Predecessor
	For the three months ended March 31,		For the three months ended March 31,
($ in millions)	2022		2021 (2)
Data and Internet services	$	836	$	842
Voice services		386		487
Video services		137		169
Other		83		95
Revenue from contracts with customers (1)		1,442		1,593
Subsidy and other revenue (3)		5		83
Total revenue	$	1,447	$	1,676
	Successor		Predecessor
	For the three months ended March 31,		For the three months ended March 31,
($ in millions)	2022		2021 (2)
Consumer	$	776	$	850
Commercial		666		743
Revenue from contracts with customers (1)		1,442		1,593
Subsidy and other revenue (3)		5		83
Total revenue	$	1,447	$	1,676

⁽¹⁾Lease revenue included in Revenue from contracts with customers was $16 million for both the three months ended March 31, 2022 and 2021, respectively.

⁽²⁾Due to changes in methodology during the second quarter of 2021, historical periods have been updated to reflect the comparable amounts.

⁽³⁾Subsidy and other revenue for the three months ended March 31, 2022, does not include revenue from CAF II as the program ended in 2021.

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, 2021 (Successor)	$	-	$	-	$	27	$	11
Revenue recognized included
in opening contract balance		-		-		(9)		(3)
Credits granted, excluding amounts
recognized as revenue		-		-		9		5
Balance at March 31, 2022 (Successor)	$	-	$	-	$	27	$	13
	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)		-		(17)		(2)
Cash received, excluding amounts
recognized as revenue		-		-		17		1
Balance at March 31, 2021 (Predecessor)	$	2	$	9	$	58	$	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:

($ in millions)	Revenue from contracts with customers
2022 (remaining nine months)	$	601
2023		379
2024		221
2025		98
2026		55
Thereafter		84
Total	$	1,438