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Revenue Recognition | 12 Months Ended
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Dec. 31, 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. We categorize our products and services revenue among the following categories for the Mass Markets segment: •Fiber Broadband, under which we provide high speed broadband services to residential and small business customers utilizing our fiber-based network infrastructure; •Other Broadband, under which we provide primarily lower speed broadband services to residential and small business customers utilizing our copper-based network infrastructure; and •Voice and Other, under which we derive 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 and ILEC businesses revenues prior to their sales on August 1, 2022 and October 3, 2022, respectively:
| Year Ended December 31, 2022
| 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 | $ | 667 |  |  | (227) |  |  | 440 |
IP and Data Services | 1,510 |  |  | — |  |  | 1,510 |
Fiber Infrastructure | 830 |  |  | (136) |  |  | 694 |
Voice and Other | 638 |  |  | — |  |  | 638 |
Total IGAM Revenue | 3,645 |  |  | (363) |  |  | 3,282 |
Large Enterprise |  |  |  |  |
Compute and Application Services | 621 |  |  | (60) |  |  | 561 |
IP and Data Services | 1,517 |  |  | — |  |  | 1,517 |
Fiber Infrastructure | 478 |  |  | (46) |  |  | 432 |
Voice and Other | 793 |  |  | — |  |  | 793 |
Total Large Enterprise Revenue | 3,409 |  |  | (106) |  |  | 3,303 |
Mid-Market Enterprise |  |  |  |  |
Compute and Application Services | 135 |  |  | (29) |  |  | 106 |
IP and Data Services | 1,629 |  |  | (4) |  |  | 1,625 |
Fiber Infrastructure | 192 |  |  | (7) |  |  | 185 |
Voice and Other | 509 |  |  | — |  |  | 509 |
Total Mid-Market Enterprise Revenue | 2,465 |  |  | (40) |  |  | 2,425 |
Wholesale |  |  |  |  |
Compute and Application Services | 242 |  |  | (157) |  |  | 85 |
IP and Data Services | 1,115 |  |  | — |  |  | 1,115 |
Fiber Infrastructure | 652 |  |  | (113) |  |  | 539 |
Voice and Other | 1,511 |  |  | (239) |  |  | 1,272 |
Total Wholesale Revenue | 3,520 |  |  | (509) |  |  | 3,011 |
Business Segment by Product Category |  |  |  |  |
Compute and Application Services | 1,665 |  |  | (473) |  |  | 1,192 |
IP and Data Services | 5,771 |  |  | (4) |  |  | 5,767 |
Fiber Infrastructure | 2,152 |  |  | (302) |  |  | 1,850 |
Voice and Other | 3,451 |  |  | (239) |  |  | 3,212 |
Total Business Segment Revenue | 13,039 |  |  | (1,018) |  |  | 12,021 |
Mass Markets Segment by Product Category |  |  |  |  |
Fiber Broadband | 604 |  |  | (18) |  |  | 586 |
Other Broadband | 2,163 |  |  | (200) |  |  | 1,963 |
Voice and Other | 1,672 |  |  | (134) |  |  | 1,538 |
Total Mass Markets Revenue | 4,439 |  |  | (352) |  |  | 4,087 |
Total Revenue | $ | 17,478 |  |  | (1,370) |  |  | 16,108 |
Timing of revenue |  |  |  |  |
Goods and services transferred at a point in time |  |  |  |  | $ | 154 |
Services performed over time |  |  |  |  | 15,954 |
Total revenue from contracts with customers |  |  |  |  | $ | 16,108 |
| Year Ended December 31, 2021
| 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 | $ | 731 |  |  | (279) |  |  | 452 |
IP and Data Services | 1,716 |  |  | (1) |  |  | 1,715 |
Fiber Infrastructure | 889 |  |  | (129) |  |  | 760 |
Voice and Other | 747 |  |  | — |  |  | 747 |
Total IGAM Revenue | 4,083 |  |  | (409) |  |  | 3,674 |
Large Enterprise |  |  |  |  |
Compute and Application Services | 696 |  |  | (62) |  |  | 634 |
IP and Data Services | 1,583 |  |  | — |  |  | 1,583 |
Fiber Infrastructure | 540 |  |  | (50) |  |  | 490 |
Voice and Other | 952 |  |  | (1) |  |  | 951 |
Total Large Enterprise Revenue | 3,771 |  |  | (113) |  |  | 3,658 |
Mid-Market Enterprise |  |  |  |  |
Compute and Application Services | 127 |  |  | (30) |  |  | 97 |
IP and Data Services | 1,710 |  |  | (6) |  |  | 1,704 |
Fiber Infrastructure | 207 |  |  | (8) |  |  | 199 |
Voice and Other | 605 |  |  | — |  |  | 605 |
Total Mid-Market Enterprise Revenue | 2,649 |  |  | (44) |  |  | 2,605 |
Wholesale |  |  |  |  |
Compute and Application Services | 188 |  |  | (159) |  |  | 29 |
IP and Data Services | 1,198 |  |  | — |  |  | 1,198 |
Fiber Infrastructure | 622 |  |  | (118) |  |  | 504 |
Voice and Other | 1,608 |  |  | (252) |  |  | 1,356 |
Total Wholesale Revenue | 3,616 |  |  | (529) |  |  | 3,087 |
Business Segment by Product Category |  |  |  |  |
Compute and Application Services | 1,742 |  |  | (530) |  |  | 1,212 |
IP and Data Services | 6,207 |  |  | (7) |  |  | 6,200 |
Fiber Infrastructure | 2,258 |  |  | (305) |  |  | 1,953 |
Voice and Other | 3,912 |  |  | (253) |  |  | 3,659 |
Total Business Segment Revenue | 14,119 |  |  | (1,095) |  |  | 13,024 |
Mass Markets Segment by Product Category |  |  |  |  |
Fiber Broadband | 524 |  |  | — |  |  | 524 |
Other Broadband | 2,507 |  |  | (227) |  |  | 2,280 |
Voice and Other | 2,537 |  |  | (570) |  |  | 1,967 |
Total Mass Markets Revenue | 5,568 |  |  | (797) |  |  | 4,771 |
Total Revenue | $ | 19,687 |  |  | (1,892) |  |  | 17,795 |
Timing of revenue |  |  |  |  |
Goods and services transferred at a point in time |  |  |  |  | $ | 138 |
Services performed over time |  |  |  |  | 17,657 |
Total revenue from contracts with customers |  |  |  |  | $ | 17,795 |
| Year Ended December 31, 2020
| 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 | $ | 759 |  |  | (265) |  |  | 494 |
IP and Data Services | 1,736 |  |  | — |  |  | 1,736 |
Fiber Infrastructure | 846 |  |  | (110) |  |  | 736 |
Voice and Other | 796 |  |  | — |  |  | 796 |
Total IGAM Revenue | 4,137 |  |  | (375) |  |  | 3,762 |
Large Enterprise |  |  |  |  |
Compute and Application Services | 665 |  |  | (82) |  |  | 583 |
IP and Data Services | 1,628 |  |  | (2) |  |  | 1,626 |
Fiber Infrastructure | 601 |  |  | (46) |  |  | 555 |
Voice and Other | 1,067 |  |  | (2) |  |  | 1,065 |
Total Large Enterprise Revenue | 3,961 |  |  | (132) |  |  | 3,829 |
Mid-Market Enterprise |  |  |  |  |
Compute and Application Services | 127 |  |  | (16) |  |  | 111 |
IP and Data Services | 1,809 |  |  | (6) |  |  | 1,803 |
Fiber Infrastructure | 212 |  |  | (9) |  |  | 203 |
Voice and Other | 753 |  |  | — |  |  | 753 |
Total Mid-Market Enterprise Revenue | 2,901 |  |  | (31) |  |  | 2,870 |
Wholesale |  |  |  |  |
Compute and Application Services | 184 |  |  | (161) |  |  | 23 |
IP and Data Services | 1,249 |  |  | — |  |  | 1,249 |
Fiber Infrastructure | 618 |  |  | (121) |  |  | 497 |
Voice and Other | 1,758 |  |  | (258) |  |  | 1,500 |
Total Wholesale Revenue | 3,809 |  |  | (540) |  |  | 3,269 |
Business Segment by Product Category |  |  |  |  |
Compute and Application Services | 1,735 |  |  | (524) |  |  | 1,211 |
IP and Data Services | 6,422 |  |  | (8) |  |  | 6,414 |
Fiber Infrastructure | 2,277 |  |  | (286) |  |  | 1,991 |
Voice and Other | 4,374 |  |  | (260) |  |  | 4,114 |
Total Business Segment Revenue | 14,808 |  |  | (1,078) |  |  | 13,730 |
Mass Markets Segment by Product Category |  |  |  |  |
Fiber Broadband | 427 |  |  | — |  |  | 427 |
Other Broadband | 2,639 |  |  | (236) |  |  | 2,403 |
Voice and Other | 2,838 |  |  | (601) |  |  | 2,237 |
Total Mass Markets Revenue | 5,904 |  |  | (837) |  |  | 5,067 |
Total Revenue | $ | 20,712 |  |  | (1,915) |  |  | 18,797 |
Timing of revenue |  |  |  |  |
Goods and services transferred at a point in time |  |  |  |  | $ | 250 |
Services performed over time |  |  |  |  | 18,547 |
Total revenue from contracts with customers |  |  |  |  | $ | 18,797 |
______________________________________________________________________ (1)Includes regulatory revenue and lease revenue not within the scope of ASC 606. 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 December 31, 2022 and 2021:
| December 31, 2022 |  | December 31, 2021
| (Dollars in millions)
Customer receivables(1) | $ | 1,424 |  |  | 1,493 |
Contract assets(2) | 34 |  |  | 73 |
Contract liabilities(3) | 656 |  |  | 680 |
______________________________________________________________________ (1)Reflects gross customer receivables of $1.5 billion and $1.6 billion, net of allowance for credit losses of $73 million and $102 million, at December 31, 2022 and December 31, 2021, respectively. These amounts exclude customer receivables, net, classified as held for sale of $76 million at December 31, 2022 (related to the EMEA 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 $16 million at December 31, 2022 (related to the EMEA 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 $59 million at December 31, 2022 (related to the EMEA 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 years ended December 31, 2022 and December 31, 2021, we recognized $539 million and $605 million, respectively, of revenue that was included in contract liabilities of $841 million and $950 million as of January 1, 2022 and 2021, respectively, including contract liabilities that were classified as held for sale. Performance Obligations As of December 31, 2022, we expect to recognize approximately $7.4 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 75% of this revenue through 2025, 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 planned divestiture of the EMEA business. Contract Costs The following tables provide changes in our contract acquisition costs and fulfillment costs:
| Year Ended December 31, 2022
| Acquisition Costs |  | Fulfillment Costs
| (Dollars in millions)
Beginning of period balance | $ | 222 |  |  | 186 |
Costs incurred | 172 |  |  | 158 |
Amortization | (192) |  |  | (149) |
Classified as held for sale(1) | — |  |  | (3) |
End of period balance | $ | 202 |  |  | 192 |
| Year Ended December 31, 2021
| Acquisition Costs |  | Fulfillment Costs
| (Dollars in millions)
Beginning of period balance | $ | 289 |  |  | 216 |
Costs incurred | 176 |  |  | 151 |
Amortization | (209) |  |  | (149) |
Classified as held for sale(2) | (34) |  |  | (32) |
End of period balance | $ | 222 |  |  | $ | 186 |
______________________________________________________________________ (1)Represents changes in amounts classified as held for sale related to the divestitures of our Latin American and ILEC businesses on August 1, 2022 and October 3, 2022, respectively, and $6 million acquisition costs and no fulfillment costs classified as held for sale as of December 31, 2022 related to the planned divestiture of the EMEA business. See Note 2—Divestitures of the Latin American and ILEC Businesses and Planned Divestiture of the EMEA Business. (2)Represents the amounts classified as held for sale related to the divestitures of our Latin American and ILEC businesses on August 1, 2022 and October 3, 2022, respectively. See Note 2—Divestitures of the Latin American and ILEC Businesses and Planned Divestiture of the EMEA 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. Governmental Funding Lumen participates in various U.S. federal and state programs under which government support payments are received to offset costs associated with providing services in targeted locations such as unserved or underserved high-cost or rural areas, or for certain types of customers, including non-profit organizations, educational institutions and local governmental bodies. Support payments may be conditioned on specified infrastructure buildouts by milestone deadlines or provision of services at specified locations and speed requirements. Commitments may be made annually, on a multi-year basis ranging from one to ten years or be on-going subject to periodic change or termination. Consistent with customary practice and as referenced in ASC 832 Government Assistance, Lumen applies a grant model of accounting by which it accounts for these transactions as non-ASC 606 revenue over the periods in which the costs for which the funding is intended to compensate are incurred. This non-ASC 606 revenue is included in operating revenue in our consolidated statements of operations. Corresponding receivables are recorded when services have been provided to the customers and costs incurred, but the cash has not been received. These amounts are included in our accounts receivable, less allowance in our consolidated balance sheets. Certain programs are subject to audits of compliance with program commitments and, subject to the outcomes of those assessments, Lumen may be required to reimburse the government entity for cash previously received, or, in some cases, pay a penalty. Lumen evaluates each program and establishes a liability under the principles of ASC 450 if it is probable support payments will be recaptured or a penalty will be imposed. For the year ended December 31, 2022, Lumen recorded non-customer revenue of $190 million under government assistance programs, of which 31% was associated with state universal service fund support programs. Between 2015 and 2021, we received approximately $500 million annually through the FCC's Connect America Fund II ("CAF II"), a federal multi-year recurring subsidy program for more extensive broadband deployment in price-cap ILEC territories. For this program, which ended on December 31, 2021, we were required to meet certain specified infrastructure buildout requirements in 33 states by the end of 2021, which required substantial capital expenditures. In the first quarter of 2022, we recognized $59 million of previously deferred revenue related to the conclusion of the CAF II program based upon our final buildout and filing submissions. The government has the right to audit our compliance with the CAF II program and the ultimate outcome of any remaining examinations is unknown, but could result in a liability to us in excess of our reserve accruals established for these matters. In early 2020, the FCC created the Rural Digital Opportunity Fund (the “RDOF”), which is a federal support program designed to replace the CAF II program. On December 7, 2020, the FCC allocated in its RDOF Phase I auction $9.2 billion in support payments over 10 years to deploy high speed broadband to over 5.2 million unserved locations. We won bids to receive approximately $26 million of annual RDOF Phase I support payments approximately 36% of which is attributable to the ILEC business we divested on October 3, 2022. Our support payments under the RDOF Phase I program commenced during the second quarter of 2022. Lumen participates in multiple state sponsored programs for broadband deployment in unserved and underserved areas for which the states have state universal service funds sourced from fees levied on telecommunications providers and passed on to consumers. During the year ending December 31, 2022, Lumen participated in these types of programs primarily in the states of Arkansas, California, Colorado, Maine, Nebraska, New Mexico, Oregon, Utah, Vermont, and Wisconsin.

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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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