Revenue Recognition

12 Months Ended

Dec. 31, 2022

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 various satellite providers, 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. We have 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 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 CAF II and RDOF.

The following tables provide a summary of revenues, by category. Revenues in the following tables include revenues for the Northwest Operations for the four months ended April 30, 2020 (prior to its disposal):

	Successor				Predecessor
	For the year ended		For the eight months		For the four months		For the year ended
	December 31,		ended December 31,		ended April 30,		December 31,
($ in millions)	2022		2021		2021		2020
Data and Internet services	$	3,390	$	2,224	$	1,125	$	3,478
Voice services		1,498		1,091		647		2,085
Video services		520		397		223		789
Other		325		246		125		429
Revenue from contracts
with customers (1)		5,733		3,958		2,120		6,781
Subsidy and other regulatory revenue (2)		54		222		111		374
Total revenue	$	5,787	$	4,180	$	2,231	$	7,155
	Successor				Predecessor
	For the year ended		For the eight months		For the four months		For the year ended
	December 31,		ended December 31,		ended April 30,		December 31,
($ in millions)	2022		2021		2021		2020
Consumer (3)	$	3,116	$	2,125	$	1,133	$	3,609
Business and Wholesale		2,617		1,833		987		3,172
Revenue from contracts
with customers (1)		5,733		3,958		2,120		6,781
Subsidy and other regulatory revenue (2)		54		222		111		374
Total revenue	$	5,787	$	4,180	$	2,231	$	7,155

⁽¹⁾Includes $63 million of lease revenue for the year ended December 31, 2022, $21 million for the four months ended April 30, 2021, $42 million for the eight months ended December 31, 2021 and $67 million for the year ended December 31, 2020.

⁽²⁾Includes $30 million in transition services provided to the purchaser in connection with the divestiture of the Northwest Operations for the year ended December 31, 2020.

⁽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 January 1, 2022 (Successor)	$	-	$	-	$	27	$	11
Revenue recognized included
in opening contract balance		-		-		(30)		(11)
Credits granted, excluding amounts
recognized as revenue		-		-		26		22
Reclassified between current
and noncurrent		-		-		5		(5)
Balance at December 31, 2022 (Successor)	$	-	$	-	$	28	$	17
	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		-		-		(20)		(2)
Credits granted, excluding amounts
recognized as revenue		-		-		30		14
Reclassified between current
and noncurrent		-		-		2		(2)
Balance at December 31, 2021 (Successor)	$	-	$	-	$	27	$	11

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
2023	$	633
2024		302
2025		157
2026		87
2027		37
Thereafter		63
Total	$	1,279