Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

The following table provides disaggregation of revenue from contracts with customers based on service offering for the nine months ended September 30, 2022 and 2021. It also shows the amount of revenue that is not subject to ASC 606, but is instead governed by other accounting standards. The amounts in the tables below include the Latin American business revenues prior to it being sold on August 1, 2022.:


	Three Months Ended September 30, 2022				Three Months Ended September 30, 2021
	Total Revenue		Adjustments for Non-ASC 606 Revenue(1)	Total Revenue from Contracts with Customers	Total Revenue	Adjustments for Non-ASC 606 Revenue(1)	Total Revenue from Contracts with Customers
	(Dollars in millions)
Compute and Application Services	$	235	(100)	135	287	(126)	161
IP and Data Services	831		—	831	890	—	890
Fiber Infrastructure Services	381		(54)	327	412	(56)	356
Voice and Other	315		(3)	312	345	(3)	342
Affiliate Services	57		(57)	—	56	(56)	—
Total revenue	$	1,819	(214)	1,605	1,990	(241)	1,749


	Nine Months Ended September 30, 2022				Nine Months Ended September 30, 2021
	Total Revenue		Adjustments for Non-ASC 606 Revenue (1)	Total Revenue from Contracts with Customers	Total Revenue	Adjustments for Non-ASC 606 Revenue (1)	Total Revenue from Contracts with Customers
	(Dollars in millions)
Compute and Application Services	$	795	(354)	441	850	(380)	470
IP and Data Services	2,600		—	2,600	2,659	—	2,659
Fiber Infrastructure Services	1,175		(165)	1,010	1,210	(164)	1,046
Voice and Other	978		(11)	967	1,078	(8)	1,070
Affiliate Services	170		(170)	—	167	(167)	—
Total revenue	$	5,718	(700)	5,018	5,964	(719)	5,245

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(1) Includes lease revenue which is not within the scope of ASC 606.

Contract with customer, asset and liability

The following table provides balances of customer receivables, contract assets and contract liabilities, net of amounts reclassified as held for sale as of September 30, 2022 and December 31, 2021:


	September 30, 2022		December 31, 2021
	(Dollars in millions)
Customer receivables (1)	$	593	640
Contract assets (2)	30		35
Contract liabilities (3)	287		247

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(1)Reflects gross customer receivables of $620 million and $679 million, net of allowance for credit losses of $27 million and $39 million, at September 30, 2022 and December 31, 2021, respectively. As of December 31, 2021, this amount excludes customer receivables classified as held for sale of $83 million.

(2)As of December 31, 2021, no amounts have been classified as held for sale.

(3)As of December 31, 2021, amount excludes contract liabilities classified as held for sale of $58 million.

Capitalized contract cost

The following table provides changes in our contract acquisition costs and fulfillment costs:


	Three Months Ended September 30, 2022			Three Months Ended September 30, 2021
	Acquisition Costs		Fulfillment Costs (1)	Acquisition Costs	Fulfillment Costs
	(Dollars in millions)
Beginning of period balance	$	78	101	75	124
Costs incurred	16		20	15	22
Amortization	(14)		(17)	(14)	(21)
Change in contract costs held for sale (1)	—		1	—	(27)
End of period balance	$	80	105	76	98


	Nine Months Ended September 30, 2022			Nine Months Ended September 30, 2021
	Acquisition Costs		Fulfillment Costs (1)	Acquisition Costs	Fulfillment Costs
	(Dollars in millions)
Beginning of period balance	$	76	99	78	122
Costs incurred	45		63	44	68
Amortization	(41)		(57)	(46)	(65)
Change in contract costs held for sale (1)	—		—	—	(27)
End of period balance	$	80	105	76	98

(1)The beginning of period balance for the three and nine months ended September 30, 2022 excluded fulfillment costs classified as held for sale of $28 million and $27 million, respectively.