Revenue Recognition

9 Months Ended

Sep. 30, 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 include revenues generated from cost subsidies from state and federal authorities, including CAF II and RDOF.

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The following tables provide a summary of revenues, by category:

	Successor
	For the three months ended September 30,		For the three months ended September 30,
($ in millions)	2022		2021
Data and Internet services	$	848	$	834
Voice services		369		411
Video services		127		149
Other		82		99
Revenue from contracts with customers (1)		1,426		1,493
Subsidy and other revenue (2)		18		83
Total revenue	$	1,444	$	1,576
	Successor
	For the three months ended September 30,		For the three months ended September 30,
($ in millions)	2022		2021
Consumer	$	785	$	800
Business and wholesale		641		693
Revenue from contracts with customers (1)		1,426		1,493
Subsidy and other revenue (2)		18		83
Total revenue	$	1,444	$	1,576

	Successor				Predecessor
	For the nine months ended September 30,		For the five months ended September 30,		For the four months ended April 30,
($ in millions)	2022		2021		2021
Data and Internet services	$	2,531	$	1,390	$	1,125
Voice services		1,136		694		647
Video services		398		254		223
Other		245		161		125
Revenue from contracts with customers (1)		4,310		2,499		2,120
Subsidy and other revenue (2)		40		138		111
Total revenue	$	4,350	$	2,637	$	2,231
	Successor				Predecessor
	For the nine months ended September 30,		For the five months ended September 30,		For the four months ended April 30,
($ in millions)	2022		2021		2021
Consumer	$	2,352	$	1,343	$	1,133
Business and wholesale		1,958		1,156		987
Revenue from contracts with customers (1)		4,310		2,499		2,120
Subsidy and other revenue (2)		40		138		111
Total revenue	$	4,350	$	2,637	$	2,231

⁽¹⁾Includes lease revenue of $15 million and $16 million for the three months ended September 30, 2022 and 2021, respectively; and $48 million for the nine months ended September 30, 2022. Lease revenue was $26 million for the five months ended September 30, 2021, and $26 million for the four months ended April 30, 2021.

⁽²⁾Subsidy and other revenue for the three and nine months ended September 30, 2022, does not include revenue from CAF II as the program ended in 2021. We began to receive funding for RDOF in the second quarter of 2022.

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		-		-		(21)		(8)
Credits granted, excluding amounts
recognized as revenue		-		-		17		17
Reclassified between current
and noncurrent		-		-		4		(4)
Balance at September 30, 2022 (Successor)	$	-	$	-	$	27	$	16
	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)
Cash received, excluding amounts
recognized as revenue		-		-		17		9
Reclassified between current
and noncurrent		-		-		1		(1)
Balance at September 30, 2021 (Successor)	$	-	$	-	$	20	$	8

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.

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

($ in millions)	Revenue from contracts with customers
2022 (remaining three months)	$	320
2023		410
2024		273
2025		137
2026		80
Thereafter		87
Total	$	1,307