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Revenue Recognition | 9 Months Ended
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Sep. 30, 2022
Revenue from Contract with Customer [Abstract] |
Revenue Recognition | Revenue Recognition Product and Service Categories We categorize our products and services revenue among the following categories for the Business segment: •Compute and Application Services, which include our Edge Cloud services, IT solutions, Unified Communications and Collaboration ("UC&C"), data center, content delivery network ("CDN") and managed security services; •IP and Data Services, which include Ethernet, IP, and VPN data networks, including software-defined wide area networks ("SD WAN") based services, Dynamic Connections and Hyper WAN; •Fiber Infrastructure Services, which include dark fiber, optical services and equipment; and •Voice and Other, which include Time Division Multiplexing ("TDM") voice, private line and other legacy services. Since the first quarter of 2022, we have categorized our products and services revenue among the following categories for the Mass Markets segment: •Fiber Broadband, which includes high speed fiber-based broadband services to residential and small business customers; •Other Broadband, which primarily includes lower speed copper-based broadband services to residential and small business customers; and •Voice and Other, which includes revenues from (i) providing local and long-distance services, professional services, and other ancillary services, and (ii) federal broadband and state support payments. Reconciliation of Total Revenue to Revenue from Contracts with Customers The following tables provide total revenue by segment, sales channel and product category. They also provide the amount of revenue that is not subject to ASC 606, "Revenue from Contracts with Customers" ("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)
Business Segment by Sales Channel and Product Category |  |  |  |  |  |  |
International and Global Accounts ("IGAM") |  |  |  |  |  |  |
Compute and Application Services | $ | 154 |  | (47) |  | 107 |  |  | 183 |  | (71) |  | 112 |
IP and Data Services | 350 |  | — |  | 350 |  |  | 431 |  | — |  | 431 |
Fiber Infrastructure | 199 |  | (33) |  | 166 |  |  | 231 |  | (33) |  | 198 |
Voice and Other | 150 |  | — |  | 150 |  |  | 182 |  | — |  | 182 |
Total IGAM Revenue | 853 |  | (80) |  | 773 |  |  | 1,027 |  | (104) |  | 923 |
Large Enterprise |  |  |  |  |  |  |
Compute and Application Services | 148 |  | (16) |  | 132 |  |  | 172 |  | (15) |  | 157 |
IP and Data Services | 378 |  | — |  | 378 |  |  | 394 |  | — |  | 394 |
Fiber Infrastructure | 117 |  | (11) |  | 106 |  |  | 143 |  | (11) |  | 132 |
Voice and Other | 201 |  | — |  | 201 |  |  | 233 |  | — |  | 233 |
Total Large Enterprise Revenue | 844 |  | (27) |  | 817 |  |  | 942 |  | (26) |  | 916 |
Mid-Market Enterprise |  |  |  |  |  |  |
Compute and Application Services | 35 |  | (7) |  | 28 |  |  | 30 |  | (8) |  | 22 |
IP and Data Services | 406 |  | (1) |  | 405 |  |  | 421 |  | (1) |  | 420 |
Fiber Infrastructure | 49 |  | (2) |  | 47 |  |  | 50 |  | (2) |  | 48 |
Voice and Other | 128 |  | — |  | 128 |  |  | 147 |  | — |  | 147 |
Total Mid-Market Enterprise Revenue | 618 |  | (10) |  | 608 |  |  | 648 |  | (11) |  | 637 |
Wholesale |  |  |  |  |  |  |
Compute and Application Services | 62 |  | (39) |  | 23 |  |  | 46 |  | (39) |  | 7 |
IP and Data Services | 283 |  | — |  | 283 |  |  | 297 |  | — |  | 297 |
Fiber Infrastructure | 165 |  | (28) |  | 137 |  |  | 154 |  | (30) |  | 124 |
Voice and Other | 392 |  | (62) |  | 330 |  |  | 394 |  | (63) |  | 331 |
Total Wholesale Revenue | 902 |  | (129) |  | 773 |  |  | 891 |  | (132) |  | 759 |
Business Segment by Product Category |  |  |  |  |  |  |
Compute and Application Services | 399 |  | (109) |  | 290 |  |  | 431 |  | (133) |  | 298 |
IP and Data Services | 1,417 |  | (1) |  | 1,416 |  |  | 1,543 |  | (1) |  | 1,542 |
Fiber Infrastructure | 530 |  | (74) |  | 456 |  |  | 578 |  | (76) |  | 502 |
Voice and Other | 871 |  | (62) |  | 809 |  |  | 956 |  | (63) |  | 893 |
Total Business Segment Revenue | 3,217 |  | (246) |  | 2,971 |  |  | 3,508 |  | (273) |  | 3,235 |
Mass Markets Segment by Product Category |  |  |  |  |  |  |
Fiber Broadband | 160 |  | (4) |  | 156 |  |  | 135 |  | — |  | 135 |
Other Broadband | 580 |  | (55) |  | 525 |  |  | 619 |  | (56) |  | 563 |
Voice and Other | 433 |  | (26) |  | 407 |  |  | 625 |  | (143) |  | 482 |
Total Mass Markets Revenue | 1,173 |  | (85) |  | 1,088 |  |  | 1,379 |  | (199) |  | 1,180 |
Total Revenue | $ | 4,390 |  | (331) |  | 4,059 |  |  | 4,887 |  | (472) |  | 4,415 |
| 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)
Business Segment by Sales Channel and Product Category |  |  |  |  |  |  |
International and Global Accounts ("IGAM") |  |  |  |  |  |  |
Compute and Application Services | $ | 521 |  | (191) |  | 330 |  |  | 547 |  | (210) |  | 337 |
IP and Data Services | 1,190 |  | — |  | 1,190 |  |  | 1,287 |  | — |  | 1,287 |
Fiber Infrastructure | 642 |  | (102) |  | 540 |  |  | 665 |  | (95) |  | 570 |
Voice and Other | 495 |  | — |  | 495 |  |  | 559 |  | — |  | 559 |
Total IGAM Revenue | 2,848 |  | (293) |  | 2,555 |  |  | 3,058 |  | (305) |  | 2,753 |
Large Enterprise |  |  |  |  |  |  |
Compute and Application Services | 473 |  | (45) |  | 428 |  |  | 515 |  | (45) |  | 470 |
IP and Data Services | 1,151 |  | — |  | 1,151 |  |  | 1,192 |  | — |  | 1,192 |
Fiber Infrastructure | 359 |  | (35) |  | 324 |  |  | 403 |  | (38) |  | 365 |
Voice and Other | 622 |  | — |  | 622 |  |  | 730 |  | — |  | 730 |
Total Large Enterprise Revenue | 2,605 |  | (80) |  | 2,525 |  |  | 2,840 |  | (83) |  | 2,757 |
Mid-Market Enterprise |  |  |  |  |  |  |
Compute and Application Services | 102 |  | (21) |  | 81 |  |  | 94 |  | (25) |  | 69 |
IP and Data Services | 1,229 |  | (3) |  | 1,226 |  |  | 1,291 |  | (4) |  | 1,287 |
Fiber Infrastructure | 148 |  | (6) |  | 142 |  |  | 156 |  | (6) |  | 150 |
Voice and Other | 401 |  | — |  | 401 |  |  | 461 |  | — |  | 461 |
Total Mid-Market Enterprise Revenue | 1,880 |  | (30) |  | 1,850 |  |  | 2,002 |  | (35) |  | 1,967 |
Wholesale |  |  |  |  |  |  |
Compute and Application Services | 183 |  | (118) |  | 65 |  |  | 141 |  | (120) |  | 21 |
IP and Data Services | 864 |  | — |  | 864 |  |  | 900 |  | — |  | 900 |
Fiber Infrastructure | 480 |  | (84) |  | 396 |  |  | 463 |  | (89) |  | 374 |
Voice and Other | 1,174 |  | (189) |  | 985 |  |  | 1,221 |  | (188) |  | 1,033 |
Total Wholesale Revenue | 2,701 |  | (391) |  | 2,310 |  |  | 2,725 |  | (397) |  | 2,328 |
Business Segment by Product Category |  |  |  |  |  |  |
Compute and Application Services | 1,279 |  | (375) |  | 904 |  |  | 1,297 |  | (400) |  | 897 |
IP and Data Services | 4,434 |  | (3) |  | 4,431 |  |  | 4,670 |  | (4) |  | 4,666 |
Fiber Infrastructure | 1,629 |  | (227) |  | 1,402 |  |  | 1,687 |  | (228) |  | 1,459 |
Voice and Other | 2,692 |  | (189) |  | 2,503 |  |  | 2,971 |  | (188) |  | 2,783 |
Total Business Segment Revenue | 10,034 |  | (794) |  | 9,240 |  |  | 10,625 |  | (820) |  | 9,805 |
Mass Markets Segment by Product Category |  |  |  |  |  |  |
Fiber Broadband | 456 |  | (14) |  | 442 |  |  | 387 |  | — |  | 387 |
Other Broadband | 1,786 |  | (166) |  | 1,620 |  |  | 1,899 |  | (166) |  | 1,733 |
Voice and Other | 1,402 |  | (125) |  | 1,277 |  |  | 1,929 |  | (431) |  | 1,498 |
Total Mass Markets Revenue | 3,644 |  | (305) |  | 3,339 |  |  | 4,215 |  | (597) |  | 3,618 |
Total Revenue | $ | 13,678 |  | (1,099) |  | 12,579 |  |  | 14,840 |  | (1,417) |  | 13,423 |
_____________________________________________________________________ (1)Includes regulatory revenue and lease revenue not within the scope of ASC 606. Operating Lease Income Lumen Technologies leases various dark fiber, office facilities, colocation facilities, switching facilities, other network sites and service equipment to third parties under operating leases. Lease and sublease income are included in operating revenue in our consolidated statements of operations. For the three months ended September 30, 2022 and 2021, our gross rental income was $307 million and $329 million, respectively, which represents approximately 7% of our operating revenue for both the three months ended September 30, 2022 and 2021. For the nine months ended September 30, 2022, and 2021, our gross rental income was $978 million and $988 million, respectively, which represents approximately 7% of our operating revenue for both the nine months ended September 30, 2022 and 2021. Customer Receivables and Contract Balances The following table provides balances of customer receivables, contract assets and contract liabilities, net of amounts classified 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) | $ | 1,407 |  |  | 1,493 |
Contract assets(2) | 56 |  |  | 73 |
Contract liabilities(3) | 714 |  |  | 680 |
______________________________________________________________________ (1)Reflects gross customer receivables of $1.5 billion and $1.6 billion, net of allowance for credit losses of $84 million and $102 million, at September 30, 2022 and December 31, 2021, respectively. These amounts exclude customer receivables, net, classified as held for sale of $175 million at September 30, 2022 (related to the ILEC business) and $288 million at December 31, 2021 (related to both the Latin American business and the ILEC business). (2)These amounts exclude contract assets classified as held for sale of $7 million at September 30, 2022 (related to the ILEC business) and $9 million at December 31, 2021 (related to both the Latin American business and the ILEC business). (3)These amounts exclude contract liabilities classified as held for sale of $76 million at September 30, 2022 (related to the ILEC business) and $161 million at December 31, 2021 (related to both the Latin American business and the ILEC business). Contract liabilities are consideration we have received from our customers or billed in advance of providing goods or services promised in the future. We defer recognizing this consideration as revenue until we have satisfied the related performance obligation to the customer. Contract liabilities include recurring services billed one month in advance and installation and maintenance charges that are deferred and recognized over the actual or expected contract term, which typically ranges from one to five years depending on the service. Contract liabilities are included within deferred revenue in our consolidated balance sheets. During the three and nine months ended September 30, 2022, we recognized $47 million and $494 million, respectively, of revenue that was included in contract liabilities of $841 million as of January 1, 2022, including contract liabilities that were classified as held for sale. During the three and nine months ended September 30, 2021, we recognized $61 million and $544 million, respectively, of revenue that was included in contract liabilities of $950 million as of January 1, 2021. Performance Obligations As of September 30, 2022, we expect to recognize approximately $5.9 billion of revenue in the future related to performance obligations associated with existing customer contracts that are partially or wholly unsatisfied. We expect to recognize approximately 69% of this revenue through 2024, with the balance recognized thereafter. These amounts exclude (i) the value of unsatisfied performance obligations for contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed (for example, uncommitted usage or non-recurring charges associated with professional or technical services to be completed), (ii) contracts that are classified as leasing arrangements or government assistance that are not subject to ASC 606, and (iii) the value of unsatisfied performance obligations for contracts which relate to our recently completed divestitures. Contract Costs The following tables provide 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 |  | Acquisition Costs |  | Fulfillment Costs
| (Dollars in millions) |  | (Dollars in millions)
Beginning of period balance(1) | $ | 208 |  |  | 188 |  |  | 271 |  |  | 217 |
Costs incurred | 45 |  |  | 38 |  |  | 43 |  |  | 37 |
Amortization | (49) |  |  | (35) |  |  | (51) |  |  | (37) |
Change in contract costs held for sale | 3 |  |  | (2) |  |  | (35) |  |  | (31) |
End of period balance(2) | $ | 207 |  |  | 189 |  |  | 228 |  |  | 186 |
| Nine Months Ended September 30, 2022 |  | Nine Months Ended September 30, 2021
| Acquisition Costs |  | Fulfillment Costs |  | Acquisition Costs |  | Fulfillment Costs
| (Dollars in millions) |  | (Dollars in millions)
Beginning of period balance(3) | $ | 222 |  |  | 186 |  |  | 289 |  |  | 216 |
Costs incurred | 129 |  |  | 119 |  |  | 132 |  |  | 112 |
Amortization | (150) |  |  | (113) |  |  | (158) |  |  | (111) |
Change in contract costs held for sale | 6 |  |  | (3) |  |  | (35) |  |  | (31) |
End of period balance(2) | $ | 207 |  |  | 189 |  |  | 228 |  |  | 186 |
______________________________________________________________________ (1)Beginning of period balance for the three months ended September 30, 2022 excludes acquisition costs and fulfillment costs classified as held for sale of $31 million and $33 million, respectively (related to both the Latin American business and the ILEC business). (2)Ending of period balance for the three and nine months ended September 30, 2022 excludes acquisition costs and fulfillment costs classified as held for sale of $28 million and $35 million, respectively, related to the ILEC business. Ending of period balance for the three and nine months ended September 30, 2021 excludes acquisition costs and fulfillment costs classified as held for sale of $35 million and $31 million, respectively (related to both the Latin American business and the ILEC business). (3)Beginning of period balance for the nine months ended September 30, 2022 excludes acquisition costs and fulfillment costs classified as held for sale of $34 million and $32 million, respectively (related to both the Latin American business and the ILEC business). Acquisition costs include commission fees paid to employees as a result of obtaining contracts. Fulfillment costs include third party and internal costs associated with the provision, installation and activation of services to customers, including labor and materials consumed for these activities. Deferred acquisition and fulfillment costs are amortized based on the transfer of services on a straight-line basis over the average contract life of approximately 32 months for mass markets customers and 30 months for business customers. Amortized fulfillment costs are included in cost of services and products and amortized acquisition costs are included in selling, general and administrative expenses in our consolidated statements of operations. The amount of these deferred costs that are anticipated to be amortized in the next 12 months are included in other current assets on our consolidated balance sheets. The amount of deferred costs expected to be amortized beyond the next twelve months is included in other non-current assets on our consolidated balance sheets. Deferred acquisition and fulfillment costs are assessed for impairment on a quarterly basis.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI https://asc.fasb.org/topic&trid=49130388 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 10 -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130551-203045 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b)(2) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130556-203045 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 9 -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130550-203045 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 15 -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130558-203045 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (c) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 + Details
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