Revenue Recognition

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Note 2 Revenue Recognition

Disaggregation of Revenue

In the following table, TDS' revenues are disaggregated by type of service, which represents the relevant categorization of revenues for TDS' reportable segments, and timing of recognition. Service revenues are recognized over time and Equipment and product sales are recognized at a point in time.

Three Months Ended June 30, 2023	UScellular		TDS Telecom		Corporate, Eliminations and Other		Total
(Dollars in millions)
Revenues from contracts with customers:
Type of service:
Retail service	$	686	$	—	$	—	$	686
Inbound roaming	8		—		—		8
Residential	—		175		—		175
Commercial	—		39		—		39
Wholesale	—		42		—		42
Other service	41		—		18		59
Service revenues from contracts with customers	735		256		18		1,009
Equipment and product sales	197		—		29		226
Total revenues from contracts with customers	932		256		47		1,235
Operating lease income	25		1		6		32
Total operating revenues	$	957	$	257	$	53	$	1,267

Three Months Ended June 30, 2022	UScellular		TDS Telecom		Corporate, Eliminations and Other		Total
(Dollars in millions)
Revenues from contracts with customers:
Type of service:
Retail service	$	700	$	—	$	—	$	700
Inbound roaming	18		—		—		18
Residential	—		168		—		168
Commercial	—		44		—		44
Wholesale	—		44		—		44
Other service	42		—		19		61
Service revenues from contracts with customers	760		255		19		1,035
Equipment and product sales	244		—		41		285
Total revenues from contracts with customers	1,004		255		60		1,320
Operating lease income	23		1		6		29
Total operating revenues	$	1,027	$	256	$	66	$	1,349

Six Months Ended June 30, 2023	UScellular		TDS Telecom		Corporate, Eliminations and Other		Total
(Dollars in millions)
Revenues from contracts with customers:
Type of service:
Retail service	$	1,378	$	—	$	—	$	1,378
Inbound roaming	17		—		—		17
Residential	—		344		—		344
Commercial	—		80		—		80
Wholesale	—		84		—		84
Other service	82		—		37		119
Service revenues from contracts with customers	1,477		508		37		2,022
Equipment and product sales	415		—		71		486
Total revenues from contracts with customers	1,892		508		108		2,508
Operating lease income	50		2		10		62
Total operating revenues	$	1,942	$	510	$	118	$	2,570

Six Months Ended June 30, 2022	UScellular		TDS Telecom		Corporate, Eliminations and Other		Total
(Dollars in millions)
Revenues from contracts with customers:
Type of service:
Retail service	$	1,402	$	—	$	—	$	1,402
Inbound roaming	39		—		—		39
Residential	—		330		—		330
Commercial	—		87		—		87
Wholesale	—		87		—		87
Other service	84		—		36		120
Service revenues from contracts with customers	1,525		505		36		2,065
Equipment and product sales	467		1		71		539
Total revenues from contracts with customers	1,992		506		107		2,604
Operating lease income	45		2		13		60
Total operating revenues	$	2,037	$	507	$	120	$	2,664

Numbers may not foot due to rounding.

Contract Balances

The following table provides balances for contract assets from contracts with customers, which are recorded in Other current assets and Other assets and deferred charges in the Consolidated Balance Sheet, and contract liabilities from contracts with customers, which are recorded in Customer deposits and deferred revenues and Other deferred liabilities and credits in the Consolidated Balance Sheet.

	June 30, 2023		December 31, 2022
(Dollars in millions)
Contract assets	$	13	$	12
Contract liabilities	$	389	$	395

Revenue recognized related to contract liabilities existing at January 1, 2023 was $191 million for the six months ended June 30, 2023.

Transaction price allocated to the remaining performance obligations

The following table includes estimated service revenues expected to be recognized related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. These estimates represent service revenues to be recognized when services are delivered to customers pursuant to service plan contracts and under certain roaming agreements with other carriers. These estimates are based on contracts in place as of June 30, 2023 and may vary from actual results. As practical expedients, revenue related to contracts of less than one year, generally month-to-month contracts, and contracts with a fixed per-unit price and variable quantity, are excluded from these estimates.

	Service Revenues
(Dollars in millions)
Remainder of 2023	$	273
2024	207
Thereafter	161
Total	$	641

Contract Cost Assets

TDS expects that commission fees paid as a result of obtaining contracts are recoverable and therefore TDS defers and amortizes these costs. As a practical expedient, costs with an amortization period of one year or less are expensed as incurred. TDS also incurs fulfillment costs, such as installation costs, where there is an expectation that a future benefit will be realized. Deferred commission fees and fulfillment costs are amortized based on the timing of transfer of the goods or services to which the assets relate, typically the contract term. Contract cost asset balances, which are recorded in Other assets and deferred charges in the Consolidated Balance Sheet, were as follows:

	June 30, 2023		December 31, 2022
(Dollars in millions)
Costs to obtain contracts
Sales commissions	$	141	$	144
Fulfillment costs
Installation costs	6		8
Total contract cost assets	$	147	$	152

Amortization of contract cost assets was $27 million and $55 million for the three and six months ended June 30, 2023, respectively, and $28 million and $57 million for the three and six months ended June 30, 2022, respectively, and was included in Selling, general and administrative expenses and Cost of services expenses.