Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 30, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | CENTURYLINK, INC | |
Entity Central Index Key | 18926 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 563,749,179 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
In Millions, except Share data in Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Statement [Abstract] | ||
OPERATING REVENUES | $4,451 | $4,538 |
OPERATING EXPENSES | ||
Cost of services and products (exclusive of depreciation and amortization) | 1,911 | 1,935 |
Selling, general and administrative | 851 | 843 |
Depreciation and amortization | 1,040 | 1,107 |
Total operating expenses | 3,802 | 3,885 |
OPERATING INCOME | 649 | 653 |
OTHER (EXPENSE) INCOME | ||
Interest expense | -328 | -331 |
Other income, net | 2 | 9 |
Total other expense, net | -326 | -322 |
INCOME BEFORE INCOME TAX EXPENSE | 323 | 331 |
Income tax expense | 131 | 128 |
Net income | $192 | $203 |
BASIC AND DILUTED EARNINGS PER COMMON SHARE | ||
BASIC (in dollars per share) | $0.34 | $0.35 |
DILUTED (in dollars per share) | $0.34 | $0.35 |
DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $0.54 | $0.54 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ||
BASIC (in shares) | 561,969 | 574,535 |
DILUTED (in shares) | 563,505 | 575,456 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Comprehensive Income [Abstract] | ||
Net income | $192 | $203 |
Items related to employee benefit plans: | ||
Change in net actuarial loss, net of $(15) and $(2) tax | 23 | 3 |
Change in net prior service credit, net of $(2) and $(2) tax | 4 | 3 |
Foreign currency translation adjustment and other, net of $- and $- tax | -11 | 1 |
Other comprehensive income | 16 | 7 |
COMPREHENSIVE INCOME | $208 | $210 |
CONSOLIDATED_STATEMENTS_OF_COM1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Comprehensive Income [Abstract] | ||
Change in net actuarial loss, tax | ($15) | ($2) |
Change in net prior service credit, tax | -2 | -2 |
Foreign currency translation adjustment and other, tax | $0 | $0 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
CURRENT ASSETS | ||
Cash and cash equivalents | $155 | $128 |
Accounts receivable, less allowance of $163 and $162 | 1,973 | 1,988 |
Deferred income taxes, net | 718 | 880 |
Other | 622 | 580 |
Total current assets | 3,468 | 3,576 |
NET PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment | 37,100 | 36,718 |
Accumulated depreciation | -18,917 | -18,285 |
Net property, plant and equipment | 18,183 | 18,433 |
GOODWILL AND OTHER ASSETS | ||
Goodwill | 20,753 | 20,755 |
Customer relationships, less accumulated amortization of $4,932 and $4,682 | 4,644 | 4,893 |
Other intangible assets, less accumulated amortization of $1,809 and $1,729 | 1,616 | 1,647 |
Other, net | 856 | 843 |
Total goodwill and other assets | 27,869 | 28,138 |
TOTAL ASSETS | 49,520 | 50,147 |
CURRENT LIABILITIES | ||
Current maturities of long-term debt | 202 | 550 |
Accounts payable | 1,068 | 1,226 |
Accrued expenses and other liabilities | ||
Salaries and benefits | 578 | 641 |
Income and other taxes | 418 | 309 |
Interest | 315 | 256 |
Other | 259 | 210 |
Advance billings and customer deposits | 739 | 726 |
Total current liabilities | 3,579 | 3,918 |
LONG-TERM DEBT | 20,254 | 20,121 |
DEFERRED CREDITS AND OTHER LIABILITIES | ||
Deferred income taxes, net | 3,921 | 4,030 |
Benefit plan obligations, net | 5,755 | 5,808 |
Other | 1,246 | 1,247 |
Total deferred credits and other liabilities | 10,922 | 11,085 |
COMMITMENTS AND CONTINGENCIES (Note 8) | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock—non-redeemable, $25.00 par value, authorized 2,000 shares, issued and outstanding 7 and 7 shares | 0 | 0 |
Common stock, $1.00 par value, authorized 1,600,000 and 1,600,000 shares, issued and outstanding 565,530 and 568,517 shares | 566 | 569 |
Additional paid-in capital | 16,059 | 16,324 |
Accumulated other comprehensive loss | -2,001 | -2,017 |
Retained earnings | 141 | 147 |
Total stockholders' equity | 14,765 | 15,023 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $49,520 | $50,147 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, except Share data in Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ||
Accounts receivable, allowance | $163 | $162 |
Preferred stock-non-redeemable, par value (in dollars per share) | $25 | $25 |
Preferred stock-non-redeemable, authorized shares (shares) | 2,000 | 2,000 |
Preferred stock-non-redeemable, issued shares (shares) | 7 | 7 |
Preferred stock-non-redeemable, outstanding shares (shares) | 7 | 7 |
Common stock, par value (in dollars per share) | $1 | $1 |
Common stock, authorized shares (shares) | 1,600,000 | 1,600,000 |
Common stock, shares, issued (shares) | 565,530 | 568,517 |
Common stock, outstanding shares (shares) | 565,530 | 568,517 |
Customer relationships, accumulated amortization | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, accumulated amortization | 4,932 | 4,682 |
Other intangible assets, accumulated amortization | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, accumulated amortization | $1,809 | $1,729 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
OPERATING ACTIVITIES | ||
Net income | $192 | $203 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 1,040 | 1,107 |
Impairment of assets | 8 | 0 |
Deferred income taxes | 37 | 106 |
Provision for uncollectible accounts | 42 | 30 |
Net long-term debt premium amortization | -4 | -11 |
Share-based compensation | 18 | 19 |
Changes in current assets and liabilities: | ||
Accounts receivable | -27 | 60 |
Accounts payable | -80 | 123 |
Accrued income and other taxes | 136 | 65 |
Other current assets and liabilities, net | -16 | -295 |
Retirement benefits | -9 | -28 |
Changes in other noncurrent assets and liabilities, net | -10 | 3 |
Other, net | 9 | -2 |
Net cash provided by operating activities | 1,336 | 1,380 |
INVESTING ACTIVITIES | ||
Payments for property, plant and equipment and capitalized software | -616 | -670 |
Proceeds from sale of intangible assets or property | 14 | 1 |
Other, net | -8 | -13 |
Net cash used in investing activities | -610 | -682 |
FINANCING ACTIVITIES | ||
Net proceeds from issuance of long-term debt | 594 | 0 |
Payments of long-term debt | -386 | -47 |
Net (payments) borrowings on credit facility | -425 | 30 |
Dividends paid | -304 | -309 |
Net proceeds from issuance of common stock | 8 | 7 |
Repurchase of common stock | -185 | -328 |
Other, net | -1 | 0 |
Net cash used in financing activities | -699 | -647 |
Net increase in cash and cash equivalents | 27 | 51 |
Cash and cash equivalents at beginning of period | 128 | 168 |
Cash and cash equivalents at end of period | 155 | 219 |
Supplemental cash flow information: | ||
Income taxes paid, net | -5 | -10 |
Interest paid (net of capitalized interest of $13 and $10) | ($270) | ($265) |
CONSOLIDATED_STATEMENTS_OF_CAS1
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Cash Flows [Abstract] | ||
Interest paid, capitalized interest | $13 | $10 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Total | COMMON STOCK | ADDITIONAL PAID-IN CAPITAL | ACCUMULATED OTHER COMPREHENSIVE LOSS | RETAINED EARNINGS |
In Millions, unless otherwise specified | |||||
Balance at beginning of period at Dec. 31, 2013 | $584 | $17,343 | ($802) | $66 | |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock through dividend reinvestment, incentive and benefit plans | 1 | 6 | |||
Repurchase of common stock | -10 | -298 | |||
Shares withheld to satisfy tax withholdings | -9 | ||||
Net income | 203 | 203 | |||
Dividends declared | -184 | -125 | |||
Share-based compensation and other, net | 16 | ||||
Other comprehensive income | 7 | 7 | |||
Balance at end of period at Mar. 31, 2014 | 16,798 | 575 | 16,874 | -795 | 144 |
Balance at beginning of period at Dec. 31, 2014 | 15,023 | 569 | 16,324 | -2,017 | 147 |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock through dividend reinvestment, incentive and benefit plans | 2 | 6 | |||
Repurchase of common stock | -5 | -168 | |||
Shares withheld to satisfy tax withholdings | -15 | ||||
Net income | 192 | 192 | |||
Dividends declared | -105 | -198 | |||
Share-based compensation and other, net | 17 | ||||
Other comprehensive income | 16 | 16 | |||
Balance at end of period at Mar. 31, 2015 | $14,765 | $566 | $16,059 | ($2,001) | $141 |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2015 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Basis of Presentation |
General | |
We are an integrated communications company engaged primarily in providing an array of communications services to our residential, business, governmental and wholesale customers. Our communications services include local and long-distance, broadband, private line (including special access), Multi-Protocol Label Switching ("MPLS"), data integration, managed hosting (including cloud hosting), colocation, Ethernet, network access, public access, wireless, video and other ancillary services. | |
Our consolidated balance sheet as of December 31, 2014, which was derived from our audited consolidated financial statements, and our unaudited interim consolidated financial statements provided herein have been prepared in accordance with the instructions for Form 10-Q. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission ("SEC"); however, in our opinion, the disclosures made are adequate to make the information presented not misleading. We believe that these consolidated financial statements include all normal recurring adjustments necessary to fairly present the results for the interim periods. The consolidated results of operations for the first three months of the year are not necessarily indicative of the consolidated results of operations that might be expected for the entire year. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014. | |
The accompanying consolidated financial statements include our accounts and the accounts of our subsidiaries. Intercompany amounts and transactions with our consolidated subsidiaries have been eliminated. | |
To simplify the overall presentation of our consolidated financial statements, we report immaterial amounts attributable to noncontrolling interests in certain of our subsidiaries as follows: (i) income attributable to noncontrolling interests in other income, net, (ii) equity attributable to noncontrolling interests in additional paid-in capital and (iii) cash flows attributable to noncontrolling interests in other, net financing activities. | |
We pay dividends out of retained earnings to the extent we have retained earnings on the date the dividend is declared. If the dividend is in excess of our retained earnings on the declaration date, then the excess is drawn from our additional paid-in capital. | |
We reclassified certain prior period amounts to conform to the current period presentation, including the categorization of our revenues and our segment reporting. See Note 7—Segment Information for additional information. These changes had no impact on total operating revenues, total operating expenses or net income for any period. | |
Change in Estimates | |
During the third quarter of 2014, we developed a plan to migrate customers from one of our networks to another between the fourth quarter of 2014 through the fourth quarter of 2015. As a result, we implemented changes in estimates that reduced the remaining economic lives of certain network assets. Although they are more than fully offset by decreases in depreciation expense resulting from normal aging of our property, plant and equipment, these changes in the estimated remaining economic lives resulted in an increase in depreciation expense of approximately $12 million for the three months ended March 31, 2015, and are expected to increase depreciation expense by approximately $48 million for the year ending December 31, 2015. This increase in depreciation expense, net of tax, reduced consolidated net income by approximately $7 million, or $0.01 per basic and diluted common share, for the three months ended March 31, 2015, and is expected to reduce consolidated net income by approximately $30 million, or $0.05 per basic and diluted common share for the year ending December 31, 2015. | |
Recent Accounting Pronouncements | |
Debt Issuance Costs | |
On April 7, 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-03, “Interest - Imputation of Interest (Subtopic 835-30) Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”). ASU 2015-03 is effective for annual and interim periods beginning after December 15, 2015, and must be adopted by retrospectively applying the new standard to all periods presented in the financial statements. ASU 2015-03 may be adopted early for any financial statements that have not been issued. | |
ASU 2015-03 requires that the deferred costs associated with a debt issuance be recognized as a reduction in the carrying amount of the related debt rather than presented as a deferred charge included in other assets in our financial statements. ASU 2015-03 does not change the pattern of recognition for the deferred debt issuance costs. As of March 31, 2015, we have approximately $172 million of unamortized debt issuance costs that upon adoption of ASU 2015-03 will be reclassified out of other assets and recognized as a reduction in the carrying value of our long-term debt. | |
Revenue Recognition | |
On May 28, 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09” or “new standard”). The new standard is effective for annual and interim periods beginning January 1, 2017, and early adoption is prohibited. On April 1, 2015, the FASB proposed to defer the effective date of ASU 2014-09 by one year until January 1, 2018, but would allow early adoption as of the original January 1, 2017 effective date. ASU 2014-09 may be adopted by applying the provisions of the new standard on a retrospective basis to the periods included in the financial statements or on a modified retrospective basis which would result in the recognition of a cumulative effect of adopting ASU 2014-09 in the first quarter of 2017. We have not yet decided which implementation method we will adopt. | |
The new standard replaces virtually all existing generally accepted accounting principles (“GAAP”) on revenue recognition and replaces them with a principles-based approach for determining revenue recognition using a new five step model. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also includes new accounting principles related to the deferral and amortization of contract acquisition and fulfillment costs. We currently do not defer any contract acquisition costs and defer contract fulfillment costs only up to the extent of any revenue deferred. | |
We are studying the new standard and are in the early stages of assessing the impact the new standard will have on us and our consolidated financial statements. We cannot, however, provide any estimate of the impact of adopting the new standard at this time. |
LongTerm_Debt_and_Credit_Facil
Long-Term Debt and Credit Facilities | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Debt Disclosure [Abstract] | |||||||||||
Long-Term Debt and Credit Facilities | Long-Term Debt and Credit Facilities | ||||||||||
Long-term debt, including unamortized discounts and premiums, consisted of borrowings by CenturyLink, Inc. and certain of its subsidiaries, including Qwest Corporation ("QC"), Qwest Capital Funding, Inc. and Embarq Corporation and subsidiaries ("Embarq"), were as follows: | |||||||||||
Interest Rates | Maturities | As of March 31, 2015 | As of December 31, 2014 | ||||||||
(Dollars in millions) | |||||||||||
CenturyLink, Inc. | |||||||||||
Senior notes | 5.150% - 7.650% | 2017 - 2042 | $ | 7,975 | 7,825 | ||||||
Credit facility (1) | 1.910% - 4.000% | 2019 | 300 | 725 | |||||||
Term loan | 1.93% | 2019 | 374 | 380 | |||||||
Subsidiaries | |||||||||||
Qwest Corporation | |||||||||||
Senior notes | 6.125% - 8.375% | 2015 - 2054 | 7,311 | 7,311 | |||||||
Term Loan | 1.93% | 2025 | 100 | — | |||||||
Qwest Capital Funding, Inc. | |||||||||||
Senior notes | 6.500% - 7.750% | 2018 - 2031 | 981 | 981 | |||||||
Embarq Corporation and subsidiaries | |||||||||||
Senior notes | 7.082% - 7.995% | 2016 - 2036 | 2,669 | 2,669 | |||||||
First mortgage bonds | 7.125% - 8.770% | 2017 - 2025 | 232 | 232 | |||||||
Other | 9.00% | 2019 | 150 | 150 | |||||||
Capital lease and other obligations | Various | Various | 479 | 509 | |||||||
Unamortized discounts, net | (115 | ) | (111 | ) | |||||||
Total long-term debt | 20,456 | 20,671 | |||||||||
Less current maturities | (202 | ) | (550 | ) | |||||||
Long-term debt, excluding current maturities | $ | 20,254 | 20,121 | ||||||||
______________________________________________________________________ | |||||||||||
(1) | The outstanding amount of our credit facility ("Credit Facility") borrowings at March 31, 2015 and December 31, 2014, were $300 million and $725 million, respectively, with weighted average interest rates of 1.930% and 2.270%, respectively. These amounts change on a regular basis. | ||||||||||
New Issuances | |||||||||||
On March 19, 2015, we issued $500 million aggregate principal amount of 5.625% Notes due 2025, in exchange for net proceeds, after deducting underwriting discounts and other expenses, of approximately $494 million. The Notes are senior unsecured obligations and may be redeemed, in whole or in part, at any time before January 1, 2025 at a redemption price equal to the greater of 100% of the principal amount of the Notes or the sum of the present value of the remaining scheduled payments of principal and interest on the Notes, discounted to the redemption date in the manner described in the Notes, plus accrued and unpaid interest to the redemption date. At any time on or after January 1, 2025, we may redeem the Notes at par plus accrued and unpaid interest to the redemption date. In addition, at any time on or prior to April 1, 2018, we may redeem up to 35% of the principal amount of the Notes at a redemption price equal to 105.625% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with net cash proceeds of certain equity offerings. Under certain circumstances, we will be required to make an offer to repurchase the Notes at a price of 101% of the aggregate principal amount plus accrued and unpaid interest to the repurchase date. | |||||||||||
Repayments | |||||||||||
On February 17, 2015, we paid at maturity the $350 million principal and accrued and unpaid interest due under our Series M 5.000% Notes. | |||||||||||
Term Loans and Revolving Line of Credit | |||||||||||
On March 13, 2015, we amended our term loan agreement to reduce the interest rate payable by us thereunder and to modify some covenants to provide additional flexibility. | |||||||||||
On February 20, 2015, QC entered into a term loan in the amount of $100 million with CoBank, ACB. The outstanding unpaid principal amount of this term loan plus any accrued and unpaid interest is due on February 20, 2025, the maturity date of the loan. Interest is paid quarterly based upon either the London Interbank Offered Rate (“LIBOR”) or the base rate (as defined in the credit agreement) plus an applicable margin between 1.50% to 2.50% per annum for LIBOR loans and 0.50% to 1.50% per annum for base rate loans depending on QC's then current senior unsecured long-term debt rating. As of March 31, 2015, the outstanding principle balance on this term loan was $100 million. | |||||||||||
In January 2015, we entered into a $100 million uncommitted revolving line of credit with one of the lenders under the Credit Facility. | |||||||||||
Covenants | |||||||||||
As of March 31, 2015, we believe we were in compliance with the provisions and covenants contained in our Credit Facility and other material debt agreements. |
Severance_and_Leased_Real_Esta
Severance and Leased Real Estate | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Restructuring and Related Activities [Abstract] | |||||||
Severance and Leased Real Estate | Severance and Leased Real Estate | ||||||
Periodically, we have reductions in our workforce and have accrued liabilities for the related severance costs. These workforce reductions resulted primarily from the progression or completion of our post-acquisition integration plans, increased competitive pressures, cost reduction initiatives and reduced workload demands due to the loss of customers purchasing certain legacy services. | |||||||
We report severance liabilities within accrued expenses and other liabilities - salaries and benefits in our consolidated balance sheets and report severance expenses in cost of services and products and selling, general and administrative expenses in our consolidated statements of operations. As noted in Note 7—Segment Information, we do not allocate these severance expenses to our segments. | |||||||
We have recognized liabilities to reflect our estimates of the fair values of the existing lease obligations for real estate which we have ceased using, net of estimated sublease rentals. Our fair value estimates were determined using discounted cash flow methods. We recognize expense to reflect accretion of the discounted liabilities and periodically we adjust the expense when our actual subleasing experience differs from our initial estimates. We report the current portion of liabilities for ceased-use real estate leases in accrued expenses and other liabilities - other and report the noncurrent portion in deferred credits and other liabilities in our consolidated balance sheets. We report the related expenses in selling, general and administrative expenses in our consolidated statements of operations. At March 31, 2015, the current and noncurrent portions of our leased real estate accrual were $12 million and $78 million, respectively. The remaining lease terms range from 0.3 to 10.7 years, with a weighted average of 8.5 years. | |||||||
Changes in our accrued liabilities for severance expenses and leased real estate during the first three months of 2015 were as follows: | |||||||
Severance | Real Estate | ||||||
(Dollars in millions) | |||||||
Balance at December 31, 2014 | $ | 26 | 96 | ||||
Accrued to expense | 13 | — | |||||
Payments, net | (17 | ) | (3 | ) | |||
Reversals and adjustments | — | (3 | ) | ||||
Balance at March 31, 2015 | $ | 22 | 90 | ||||
Employee_Benefits
Employee Benefits | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Compensation and Retirement Disclosure [Abstract] | |||||||
Employee Benefits | Employee Benefits | ||||||
Net periodic (income) expense for our qualified and non-qualified pension plans included the following components: | |||||||
Pension Plans | |||||||
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
(Dollars in millions) | |||||||
Service cost | $ | 22 | 20 | ||||
Interest cost | 141 | 151 | |||||
Expected return on plan assets | (226 | ) | (223 | ) | |||
Recognition of prior service cost | 1 | 1 | |||||
Recognition of actuarial loss | 38 | 5 | |||||
Net periodic pension benefit income | $ | (24 | ) | (46 | ) | ||
Net periodic expense (income) for our post-retirement benefit plans included the following components: | |||||||
Post-Retirement Benefit Plans | |||||||
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
(Dollars in millions) | |||||||
Service cost | $ | 6 | 5 | ||||
Interest cost | 35 | 40 | |||||
Expected return on plan assets | (5 | ) | (8 | ) | |||
Recognition of prior service cost | 5 | 4 | |||||
Net periodic post-retirement benefit expense | $ | 41 | 41 | ||||
We report net periodic benefit (income) expense for our qualified pension, non-qualified pension and post-retirement benefit plans in cost of services and products and selling, general and administrative expenses in our consolidated statements of operations. |
Earnings_per_Common_Share
Earnings per Common Share | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Earnings Per Share [Abstract] | |||||||
Earnings per Common Share | Earnings Per Common Share | ||||||
Basic and diluted earnings per common share for the three months ended March 31, 2015 and 2014 were calculated as follows: | |||||||
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
(Dollars in millions, except per share amounts, shares in thousands) | |||||||
Income (Numerator): | |||||||
Net income | $ | 192 | 203 | ||||
Earnings applicable to non-vested restricted stock | — | — | |||||
Net income applicable to common stock for computing basic earnings per common share | 192 | 203 | |||||
Net income as adjusted for purposes of computing diluted earnings per common share | $ | 192 | 203 | ||||
Shares (Denominator): | |||||||
Weighted average number of shares: | |||||||
Outstanding during period | 566,687 | 578,197 | |||||
Non-vested restricted stock | (4,718 | ) | (3,662 | ) | |||
Weighted average shares outstanding for computing basic earnings per common share | 561,969 | 574,535 | |||||
Incremental common shares attributable to dilutive securities: | |||||||
Shares issuable under convertible securities | 10 | 10 | |||||
Shares issuable under incentive compensation plans | 1,526 | 911 | |||||
Number of shares as adjusted for purposes of computing diluted earnings per common share | 563,505 | 575,456 | |||||
Basic earnings per common share | $ | 0.34 | 0.35 | ||||
Diluted earnings per common share | $ | 0.34 | 0.35 | ||||
Our calculation of diluted earnings per common share excludes shares of common stock that are issuable upon exercise of stock options when the exercise price is greater than the average market price of our common stock during the periods reflected in the table above. Such potentially issuable shares averaged 2.2 million and 3.1 million for the three months ended March 31, 2015 and 2014, respectively. |
Fair_Value_Disclosure
Fair Value Disclosure | 3 Months Ended | ||||||||||||||
Mar. 31, 2015 | |||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||
Fair Value Disclosure | Fair Value Disclosure | ||||||||||||||
Our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and long-term debt, excluding capital lease obligations. Due to their short-term nature, the carrying amounts of our cash and cash equivalents, accounts receivable and accounts payable approximate their fair values. | |||||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between independent and knowledgeable parties who are willing and able to transact for an asset or liability at the measurement date. We use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs when determining fair value and then we rank the estimated values based on the reliability of the inputs used following the fair value hierarchy set forth by the FASB. | |||||||||||||||
We determined the fair values of our long-term debt, including the current portion, based on quoted market prices where available or, if not available, based on discounted future cash flows using current market interest rates. | |||||||||||||||
The three input levels in the hierarchy of fair value measurements are defined by the FASB generally as follows: | |||||||||||||||
Input Level | Description of Input | ||||||||||||||
Level 1 | Observable inputs such as quoted market prices in active markets. | ||||||||||||||
Level 2 | Inputs other than quoted prices in active markets that are either directly or indirectly observable. | ||||||||||||||
Level 3 | Unobservable inputs in which little or no market data exists. | ||||||||||||||
The following table presents the carrying amounts and estimated fair values of our long-term debt, excluding capital lease and other obligations, as well as the input level used to determine the fair values indicated below: | |||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | ||||||||||||||
Input | Carrying | Fair | Carrying | Fair | |||||||||||
Level | Amount | Value | Amount | Value | |||||||||||
(Dollars in millions) | |||||||||||||||
Liabilities—Long-term debt, excluding capital lease and other obligations | 2 | $ | 19,977 | 21,409 | 20,162 | 21,255 | |||||||||
Segment_Information
Segment Information | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Segment Reporting [Abstract] | |||||||
Segment Information | Segment Information | ||||||
Segment Data | |||||||
Effective November 1, 2014, we implemented a new organizational structure designed to strengthen our ability to attain our operational, strategic and financial goals. Prior to this reorganization, we operated and reported as four segments: consumer, business, wholesale and hosting. As a result of this reorganization, we now operate and report the following two segments in our consolidated financial statements: | |||||||
• | Business. Consists generally of providing strategic, legacy and data integration products and services to enterprise, wholesale and governmental customers, including other communication providers. Our strategic products and services offered to these customers include our private line (including special access), broadband, Ethernet, MPLS, Voice over Internet Protocol ("VoIP"), network management services, colocation, managed hosting and cloud hosting services. Our legacy services offered to these customers primarily include switched access, long-distance, and local services, including the sale of unbundled network elements ("UNEs") which allow our wholesale customers to use our network or a combination of our network and their own networks to provide voice and data services to their customers; and | ||||||
• | Consumer. Consists generally of providing strategic and legacy products and services to residential customers. Our strategic products and services offered to these customers include our broadband, wireless and video services, including our Prism TV services. Our legacy services offered to these customers include local and long-distance services. | ||||||
The following table summarizes our segment results for the three months ended March 31, 2015 and 2014, based on the segment categorization we were operating under at March 31, 2015. | |||||||
The results of our business and consumer segments are summarized below: | |||||||
Three Months Ended March 31, | |||||||
2015 | 2014 (1) | ||||||
(Dollars in millions) | |||||||
Total segment revenues | $ | 4,194 | 4,284 | ||||
Total segment expenses | 2,073 | 2,096 | |||||
Total segment income | $ | 2,121 | 2,188 | ||||
Total margin percentage | 51 | % | 51 | % | |||
Business: | |||||||
Revenues | 2,697 | 2,775 | |||||
Expenses | 1,484 | 1,503 | |||||
Income | $ | 1,213 | 1,272 | ||||
Margin percentage | 45 | % | 46 | % | |||
Consumer: | |||||||
Revenues | $ | 1,497 | 1,509 | ||||
Expenses | 589 | 593 | |||||
Income | $ | 908 | 916 | ||||
Margin percentage | 61 | % | 61 | % | |||
______________________________________________________________________ | |||||||
(1) | Reflects the recasting of segment results discussed in the next section entitled "Recent Changes in Segment Reporting." | ||||||
Recent Changes in Segment Reporting | |||||||
We have recast our previously reported segment results due to the reorganization of our management structure on November 1, 2014. Consequently, we have adopted several changes with respect to the assignment of certain expenses to our segments and have restated our previously-reported segment results to conform to the current presentation. The nature of the most significant changes to segment expenses are as follows: | |||||||
• | Certain business segment expenses were reassigned to consumer segment expense; and | ||||||
• | Certain business segment expenses were reassigned to corporate overhead. | ||||||
For the three months ended March 31, 2014, the segment recast resulted in an increase in consumer expenses of $10 million, and a decrease in business expenses of $13 million. | |||||||
Product and Service Categories | |||||||
We currently categorize our products, services and revenues among the following four categories: | |||||||
• | Strategic services, which include primarily broadband, private line (including special access), MPLS (which is a data networking technology that can deliver the quality of service required to support real-time voice and video), hosting (including cloud hosting and managed hosting), colocation, Ethernet, video (including our facilities-based video services, which we now offer in fourteen markets), VoIP and Verizon Wireless services; | ||||||
• | Legacy services, which include primarily local, long-distance, switched access, Integrated Services Digital Network ("ISDN") (which uses regular telephone lines to support voice, video and data applications), and traditional wide area network ("WAN") services (which allow a local communications network to link to networks in remote locations); | ||||||
• | Data integration, which includes the sale of telecommunications equipment located on customers' premises and related professional services, such as network management, installation and maintenance of data equipment and building of proprietary fiber-optic broadband networks for our governmental and business customers; and | ||||||
• | Other revenues, which consist primarily of Universal Service Fund ("USF") support and USF surcharges. We receive both federal and state USF support, which are government subsidies designed to reimburse us for the portion of the cost of providing certain telecommunications services, such as in high-cost rural areas, that we are not able to recover from our customers. USF surcharges are the amounts we collect based on specific items we list on our customers invoices to fund the Federal Communications Commission's ("FCC") universal service programs. We also generate other operating revenues from leasing and subleasing of space in our office buildings, warehouses and other properties. Because we centrally manage the activities that generate these other operating revenues, these revenues are not included in our segment revenues. | ||||||
Our operating revenues for our products and services consisted of the following categories: | |||||||
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
(Dollars in millions) | |||||||
Strategic services | $ | 2,320 | 2,271 | ||||
Legacy services | 1,735 | 1,839 | |||||
Data integration | 139 | 174 | |||||
Other | 257 | 254 | |||||
Total operating revenues | $ | 4,451 | 4,538 | ||||
During the first quarter of 2015, we determined that certain products and services associated with our acquisition of SAVVIS, Inc. are more closely aligned to legacy services than to strategic services. As a result, these operating revenues are now reflected as legacy services. The revision resulted in a reduction of revenue from strategic services of $10 million and a corresponding increase in revenue from legacy services for the three months ended March 31, 2014. | |||||||
We recognize revenues in our consolidated statements of operations for certain USF surcharges and transaction taxes that we bill to our customers. Our consolidated statements of operations also reflects the related expense for the amounts we remit to the government agencies. The total amount of such surcharges that we included in revenues aggregated approximately $135 million and $131 million for the three months ended March 31, 2015 and 2014, respectively. Those USF surcharges, where we record revenue, are included in the "other" operating revenues and transaction tax surcharges are included in "legacy services" revenues. We also act as a collection agent for certain other USF and transaction taxes that we are required by government agencies to include in our bills to customers, for which we do not record any revenue or expense because we only act as a pass-through agent. | |||||||
Allocations of Revenues and Expenses | |||||||
Our segment revenues include all revenues from our strategic, legacy and data integration operations as described in more detail above. Segment revenues are based upon each customer's classification as either business or consumer. We report our segment revenues based upon all services provided to that segment's customers. Our segment expenses for our two segments include specific expenses incurred as a direct result of providing services and products to segment customers, along with selling, general and administrative expenses that are directly associated with specific segment customers or activities; and allocated expenses which include network expenses, facilities expenses and other expenses such as fleet and real estate expenses. We do not assign depreciation and amortization expense or impairments to our segments, as the related assets and capital expenditures are centrally managed and are not monitored by or reported to the chief operating decision maker ("CODM") by segment. Similarly, severance expenses, restructuring expenses and certain centrally managed administrative functions (such as finance, information technology, legal and human resources) are not assigned to our segments. Interest expense is also excluded from segment results because we manage our financing on a total company basis and have not allocated assets or debt to specific segments. Other income (expense) is not monitored as a part of our segment operations and is therefore excluded from our segment results. | |||||||
The following table reconciles segment income to net income: | |||||||
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
(Dollars in millions) | |||||||
Total segment income | $ | 2,121 | 2,188 | ||||
Other operating revenues | 257 | 254 | |||||
Depreciation and amortization | (1,040 | ) | (1,107 | ) | |||
Other unassigned operating expenses | (689 | ) | (682 | ) | |||
Other expense, net | (326 | ) | (322 | ) | |||
Income tax expense | (131 | ) | (128 | ) | |||
Net income | $ | 192 | 203 | ||||
We do not have any single customer that provides more than 10% of our total consolidated operating revenues. Substantially all of our consolidated revenues come from customers located in the United States. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies |
We are vigorously defending against all of the matters described below. As a matter of course, we are prepared both to litigate the matters to judgment, as well as to evaluate and consider all reasonable settlement opportunities. In this Note, when we refer to a class action as "putative" it is because a class has been alleged, but not certified in that matter. We have established accrued liabilities for the matters described below where losses are deemed probable and reasonably estimable. | |
Pending Matters | |
In William Douglas Fulghum, et al. v. Embarq Corporation, et al., filed on December 28, 2007 in the United States District Court for the District of Kansas, a group of retirees filed a class action lawsuit challenging the decision to make certain modifications in retiree benefits programs relating to life insurance, medical insurance and prescription drug benefits, generally effective January 1, 2006 and January 1, 2008 (which, at the time of the modifications, was expected to reduce estimated future expenses for the subject benefits by more than $300 million). Defendants include Embarq, certain of its benefit plans, its Employee Benefits Committee and the individual plan administrator of certain of its benefits plans. Additional defendants include Sprint Nextel and certain of its benefit plans. The Court certified a class on certain of plaintiffs' claims, but rejected class certification as to other claims. On October 14, 2011, the Fulghum lawyers filed a new, related lawsuit, Abbott et al. v. Sprint Nextel et al. In Abbott, approximately 1,500 plaintiffs allege breach of fiduciary duty in connection with the changes in retiree benefits that also are at issue in the Fulghum case. The Abbott plaintiffs are all members of the class that was certified in Fulghum on claims for allegedly vested benefits (Counts I and III), and the Abbott claims are similar to the Fulghum breach of fiduciary duty claim (Count II), on which the Fulghum court denied class certification. The Court has stayed proceedings in Abbott indefinitely, except for limited discovery and motion practice as to approximately 80 of the plaintiffs. On February 14, 2013, the Fulghum court dismissed the majority of the plaintiffs' claims in that case. On July 16, 2013, the Fulghum court granted plaintiffs' request to seek interlocutory review by the United States Court of Appeals for the Tenth Circuit. On February 24, 2015, the Tenth Circuit ruled that the plan documents reviewed do not support any claim for vested benefits, and affirmed the district court's dismissal of claims based on those documents. The Tenth Circuit decision allows a subset of claims for vested benefits to return to the district court for further proceedings. As to the subset, defendants anticipate successful motion practice in the district court. The Tenth Circuit also affirmed the district court's dismissal of all age discrimination claims. The Tenth Circuit reversed the district court's determination that ERISA's statute of repose is a time bar to the breach of fiduciary duty claims of fifteen named plaintiffs. Plaintiffs petitioned for further Tenth Circuit review on their claim for vested benefits. We petitioned for further Tenth Circuit review regarding the ERISA statute of repose. On April 27, 2015, a revised Tenth Circuit panel opinion was issued with no material change in the outcome, and en banc review was denied. As to any further proceedings that may occur in the district court, defendants will continue to vigorously contest any remaining claims in Fulghum and Abbott. We have not accrued a liability for these matters because we believe it is premature (i) to determine whether an accrual is warranted and (ii) if so, to determine a reasonable estimate of probable liability. | |
On July 16, 2013, Comcast MO Group, Inc. ("Comcast") filed a lawsuit in Colorado state court against Qwest Communications International, Inc. ("Qwest"). Comcast alleges Qwest breached the parties' 1998 tax sharing agreement ("TSA") when it refused to partially indemnify Comcast for a tax liability settlement Comcast reached with the Commonwealth of Massachusetts in a dispute to which we were not a party. Comcast seeks approximately $80 million in damages, excluding interest. Qwest and Comcast are parties to the TSA in their capacities as successors to the TSA's original parties, U S WEST, Inc., a telecommunications company, and MediaOne Group, Inc., a cable television company, respectively. In October 2014, the state court granted summary judgment in Qwest's favor. In November 2014, Comcast filed a Notice of Appeal. We have not accrued a liability for this matter because we do not believe that liability is probable. | |
On September 13, 2006, Cargill Financial Markets, Plc ("Cargill") and Citibank, N.A. ("Citibank") filed a lawsuit in the District Court of Amsterdam, the Netherlands, against Qwest, Koninklijke KPN N.V., KPN Telecom B.V., and other former officers, employees or supervisory board members of KPNQwest N.V. ("KPNQwest"), some of whom were formerly affiliated with Qwest. The lawsuit alleges that defendants misrepresented KPNQwest's financial and business condition in connection with the origination of a credit facility and wrongfully allowed KPNQwest to borrow funds under that facility. Plaintiffs allege damages of approximately €219 million (or approximately $238 million based on the exchange rate on March 31, 2015). The value of this claim will be reduced to the degree plaintiffs receive recovery from a distribution of assets from the bankruptcy estate of KPNQwest. The extent of such expected recovery is not yet known. On April 25, 2012, the court issued its judgment denying the claims asserted by Cargill and Citibank in their lawsuit. Cargill and Citibank have appealed that decision. We do not believe that liability is probable in this matter. | |
The terms and conditions of applicable bylaws, certificates or articles of incorporation, agreements or applicable law may obligate Qwest to indemnify its former directors, officers or employees with respect to the Cargill matter described above, and Qwest has been advancing legal fees and costs to certain former directors, officers or employees in connection with that matter. | |
Several putative class actions relating to the installation of fiber optic cable in certain rights-of-way were filed against Qwest on behalf of landowners on various dates and in courts located in 34 states in which Qwest has such cable (Alabama, Arizona, California, Colorado, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, and Wisconsin.) For the most part, the complaints challenge our right to install our fiber optic cable in railroad rights-of-way. The complaints allege that the railroads own the right-of-way as an easement that did not include the right to permit us to install our cable in the right-of-way without the plaintiffs' consent. In general, the complaints seek damages on theories of trespass and unjust enrichment, as well as punitive damages. After previous attempts to enter into a single nationwide settlement in a single court proved unsuccessful, the parties proceeded to seek court approval of settlements on a state-by-state basis. To date, the parties have received final approval of such settlements in 32 states. The settlement administration process, including claim submission and evaluation, is continuing in relation to a number of these settlements. The parties have not yet received final approval in one state (New Mexico). There is one state where an action was at one time, but is not currently, pending (Arizona). We have accrued an amount that we believe is probable for resolving these matters; however, the amount is not material to our consolidated financial statements. | |
CenturyLink and certain of its affiliates are defendants in one consolidated securities and four shareholder derivative actions. The actions are pending in federal court in the Western District of Louisiana. Plaintiffs in these actions have variously alleged, among other things, that CenturyLink and certain of its current and former officers and directors violated federal securities laws and/or breached fiduciary duties owed to the Company and its shareholders. Plaintiffs' complaints focus on alleged material misstatements or omissions concerning CenturyLink's financial condition and changes in CenturyLink's capital allocation strategy in early 2013. On April 21, 2015, the district court dismissed the consolidated securities class actions with prejudice. An appeal is possible. As to any further proceedings that may occur in these actions, we will continue to vigorously defend against the actions. We have not accrued a liability for these matters because we do not believe that liability is probable. | |
The local exchange carrier subsidiaries of CenturyLink are among hundreds of defendants nationwide in dozens of lawsuits filed over the past year by Sprint Communications Company and affiliates of Verizon Communications Inc. The plaintiffs in these suits have challenged the right of local exchange carriers to bill interexchange carriers for switched access charges for certain calls between mobile and wireline devices that are routed through an interexchange carrier. In the lawsuits, the plaintiffs are seeking refunds of access charges previously paid and relief from future access charges. In addition, these and some other interexchange carriers have ceased paying switched access charges on these calls. Recently the lawsuits involving our local exchange carriers and many other carriers have been consolidated for pretrial purposes in the United States District Court for the District of Northern Texas. Some of the defendants, including our affiliated carriers, have petitioned the Federal Communications Commission to address these issues on an industry-wide basis. | |
As both an interexchange carrier and a local exchange carrier, we both pay and assess significant amounts of the access charges in question. The outcome of these disputes and suits, as well as any related regulatory proceedings that could ensue, are currently not predictable. If we are required to stop assessing these charges or to pay refunds of any such charges, our financial results could be negatively affected. | |
Other Proceedings and Disputes | |
From time to time, we are involved in other proceedings incidental to our business, including patent infringement allegations, administrative hearings of state public utility commissions relating primarily to our rates or services, actions relating to employee claims, various tax issues, environmental law issues, grievance hearings before labor regulatory agencies, and miscellaneous third party tort actions. The outcome of these other proceedings is not predictable. However, based on current circumstances, we do not believe that the ultimate resolution of these other proceedings, after considering available defenses and any insurance coverage or indemnification rights, will have a material adverse effect on our financial position, results of operations or cash flows. | |
We are currently defending several patent infringement lawsuits asserted against us by non-practicing entities. These cases have progressed to various stages and one or more may go to trial in the coming 24 months if they are not otherwise resolved. Where applicable, we are seeking full or partial indemnification from our vendors and suppliers. As with all litigation, we are vigorously defending these actions and, as a matter of course, are prepared both to litigate the matters to judgment, as well as to evaluate and consider all reasonable settlement opportunities. |
Other_Financial_Information
Other Financial Information | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Additional Financial Information Disclosure [Abstract] | |||||||
Other financial information | Other Financial Information | ||||||
Other Current Assets | |||||||
The following table presents details of other current assets in our consolidated balance sheets: | |||||||
As of March 31, 2015 | As of December 31, 2014 | ||||||
(Dollars in millions) | |||||||
Prepaid expenses | $ | 293 | 260 | ||||
Materials, supplies and inventory | 137 | 132 | |||||
Assets held for sale | 18 | 14 | |||||
Deferred activation and installation charges | 104 | 103 | |||||
Other | 70 | 71 | |||||
Total other current assets | $ | 622 | 580 | ||||
For the three months ended March 31, 2015, we recorded impairment charges of $8 million in connection with pending negotiations involving several office buildings which we expect to sell within the next twelve months. | |||||||
Selected Current Liabilities | |||||||
The following table presents current liabilities reflected in our consolidated balance sheets, which include accounts payable and other current liabilities: | |||||||
As of March 31, 2015 | As of December 31, 2014 | ||||||
(Dollars in millions) | |||||||
Accounts payable | $ | 1,068 | 1,226 | ||||
Other current liabilities: | |||||||
Accrued rent | $ | 28 | 34 | ||||
Legal reserves | 43 | 27 | |||||
Other | 188 | 149 | |||||
Total other current liabilities | $ | 259 | 210 | ||||
Included in accounts payable at March 31, 2015 and December 31, 2014, were $62 million and $80 million, respectively, representing book overdrafts and $107 million and $185 million, respectively, associated with capital expenditures. |
Repurchase_of_CenturyLink_Comm
Repurchase of CenturyLink Common Stock | 3 Months Ended |
Mar. 31, 2015 | |
Equity [Abstract] | |
Repurchase of CenturyLink Common Stock | Repurchase of CenturyLink Common Stock |
In February 2014, our Board of Directors authorized a 24-month program to repurchase up to an aggregate of $1 billion of our outstanding common stock. This program took effect on May 29, 2014, immediately upon the completion of our predecessor 2013 stock repurchase program. During the three months ended March 31, 2015, we repurchased 4.5 million shares of our outstanding common stock in the open market under our 2014 stock repurchase program. These shares were repurchased for an aggregate market price of $170 million, or an average purchase price of $37.53 per share. The repurchased common stock has been retired. As of March 31, 2015, we had approximately $630 million remaining available for stock repurchases under the 2014 stock repurchase program. As of May 4, 2015, we had repurchased 11.7 million shares for $439 million, or an average price of $37.60 per share, under our 2014 stock repurchase program. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss | ||||||||||||
The tables below summarize changes in accumulated other comprehensive loss recorded on our consolidated balance sheets by component for the three months ended March 31, 2015 and 2014: | |||||||||||||
Pension Plans | Post-Retirement | Foreign Currency | Total | ||||||||||
Benefit Plans | Translation | ||||||||||||
Adjustment | |||||||||||||
and Other | |||||||||||||
(Dollars in millions) | |||||||||||||
Balance at December 31, 2014 | $ | (1,720 | ) | (272 | ) | (25 | ) | (2,017 | ) | ||||
Other comprehensive income (loss) before reclassifications | — | — | (11 | ) | (11 | ) | |||||||
Amounts reclassified from accumulated other comprehensive income | 24 | 3 | — | 27 | |||||||||
Net current-period other comprehensive income | 24 | 3 | (11 | ) | 16 | ||||||||
Balance at March 31, 2015 | $ | (1,696 | ) | (269 | ) | (36 | ) | (2,001 | ) | ||||
Pension Plans | Post-Retirement | Foreign Currency | Total | ||||||||||
Benefit Plans | Translation | ||||||||||||
Adjustment | |||||||||||||
and Other | |||||||||||||
(Dollars in millions) | |||||||||||||
Balance at December 31, 2013 | $ | (669 | ) | (122 | ) | (11 | ) | (802 | ) | ||||
Other comprehensive income (loss) before reclassifications | — | — | 1 | 1 | |||||||||
Amounts reclassified from accumulated other comprehensive income | 3 | 3 | — | 6 | |||||||||
Net current-period other comprehensive income | 3 | 3 | 1 | 7 | |||||||||
Balance at March 31, 2014 | $ | (666 | ) | (119 | ) | (10 | ) | (795 | ) | ||||
The tables below present further information about our reclassifications out of accumulated other comprehensive loss by component for the three months ended March 31, 2015 and 2014: | |||||||||||||
Three Months Ended March 31, 2015 | (Decrease) Increase | Affected Line Item in Consolidated Statement of | |||||||||||
in Net Income | Operations or Footnote Where Additional | ||||||||||||
Information is Presented If The Amount is not | |||||||||||||
Recognized in Net Income in Total | |||||||||||||
(Dollars in millions) | |||||||||||||
Amortization of pension & post-retirement plans | |||||||||||||
Net actuarial loss | $ | (38 | ) | See Note 4-Employee Benefits | |||||||||
Prior service cost | (6 | ) | See Note 4-Employee Benefits | ||||||||||
Total before tax | (44 | ) | |||||||||||
Income tax expense | 17 | Income tax expense | |||||||||||
Net of tax | $ | (27 | ) | ||||||||||
Three Months Ended March 31, 2014 | (Decrease) Increase | Affected Line Item in Consolidated Statement of | |||||||||||
in Net Income | Operations or Footnote Where Additional | ||||||||||||
Information is Presented If The Amount is not | |||||||||||||
Recognized in Net Income in Total | |||||||||||||
(Dollars in millions) | |||||||||||||
Amortization of pension & post-retirement plans | |||||||||||||
Net actuarial loss | $ | (5 | ) | See Note 4-Employee Benefits | |||||||||
Prior service cost | (5 | ) | See Note 4-Employee Benefits | ||||||||||
Total before tax | (10 | ) | |||||||||||
Income tax expense | 4 | Income tax expense | |||||||||||
Net of tax | $ | (6 | ) |
Basis_of_Presentation_Basis_of
Basis of Presentation Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Basis of Presentation [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
Debt Issuance Costs | |
On April 7, 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-03, “Interest - Imputation of Interest (Subtopic 835-30) Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”). ASU 2015-03 is effective for annual and interim periods beginning after December 15, 2015, and must be adopted by retrospectively applying the new standard to all periods presented in the financial statements. ASU 2015-03 may be adopted early for any financial statements that have not been issued. | |
ASU 2015-03 requires that the deferred costs associated with a debt issuance be recognized as a reduction in the carrying amount of the related debt rather than presented as a deferred charge included in other assets in our financial statements. ASU 2015-03 does not change the pattern of recognition for the deferred debt issuance costs. As of March 31, 2015, we have approximately $172 million of unamortized debt issuance costs that upon adoption of ASU 2015-03 will be reclassified out of other assets and recognized as a reduction in the carrying value of our long-term debt. | |
Revenue Recognition | |
On May 28, 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09” or “new standard”). The new standard is effective for annual and interim periods beginning January 1, 2017, and early adoption is prohibited. On April 1, 2015, the FASB proposed to defer the effective date of ASU 2014-09 by one year until January 1, 2018, but would allow early adoption as of the original January 1, 2017 effective date. ASU 2014-09 may be adopted by applying the provisions of the new standard on a retrospective basis to the periods included in the financial statements or on a modified retrospective basis which would result in the recognition of a cumulative effect of adopting ASU 2014-09 in the first quarter of 2017. We have not yet decided which implementation method we will adopt. | |
The new standard replaces virtually all existing generally accepted accounting principles (“GAAP”) on revenue recognition and replaces them with a principles-based approach for determining revenue recognition using a new five step model. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also includes new accounting principles related to the deferral and amortization of contract acquisition and fulfillment costs. We currently do not defer any contract acquisition costs and defer contract fulfillment costs only up to the extent of any revenue deferred. | |
We are studying the new standard and are in the early stages of assessing the impact the new standard will have on us and our consolidated financial statements. We cannot, however, provide any estimate of the impact of adopting the new standard at this time |
LongTerm_Debt_and_Credit_Facil1
Long-Term Debt and Credit Facilities (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Debt Disclosure [Abstract] | |||||||||||
Schedule of long-term debt including unamortized discounts and premiums | Long-term debt, including unamortized discounts and premiums, consisted of borrowings by CenturyLink, Inc. and certain of its subsidiaries, including Qwest Corporation ("QC"), Qwest Capital Funding, Inc. and Embarq Corporation and subsidiaries ("Embarq"), were as follows: | ||||||||||
Interest Rates | Maturities | As of March 31, 2015 | As of December 31, 2014 | ||||||||
(Dollars in millions) | |||||||||||
CenturyLink, Inc. | |||||||||||
Senior notes | 5.150% - 7.650% | 2017 - 2042 | $ | 7,975 | 7,825 | ||||||
Credit facility (1) | 1.910% - 4.000% | 2019 | 300 | 725 | |||||||
Term loan | 1.93% | 2019 | 374 | 380 | |||||||
Subsidiaries | |||||||||||
Qwest Corporation | |||||||||||
Senior notes | 6.125% - 8.375% | 2015 - 2054 | 7,311 | 7,311 | |||||||
Term Loan | 1.93% | 2025 | 100 | — | |||||||
Qwest Capital Funding, Inc. | |||||||||||
Senior notes | 6.500% - 7.750% | 2018 - 2031 | 981 | 981 | |||||||
Embarq Corporation and subsidiaries | |||||||||||
Senior notes | 7.082% - 7.995% | 2016 - 2036 | 2,669 | 2,669 | |||||||
First mortgage bonds | 7.125% - 8.770% | 2017 - 2025 | 232 | 232 | |||||||
Other | 9.00% | 2019 | 150 | 150 | |||||||
Capital lease and other obligations | Various | Various | 479 | 509 | |||||||
Unamortized discounts, net | (115 | ) | (111 | ) | |||||||
Total long-term debt | 20,456 | 20,671 | |||||||||
Less current maturities | (202 | ) | (550 | ) | |||||||
Long-term debt, excluding current maturities | $ | 20,254 | 20,121 | ||||||||
______________________________________________________________________ | |||||||||||
(1) | The outstanding amount of our credit facility ("Credit Facility") borrowings at March 31, 2015 and December 31, 2014, were $300 million and $725 million, respectively, with weighted average interest rates of 1.930% and 2.270%, respectively. These amounts change on a regular basis. |
Severance_and_Leased_Real_Esta1
Severance and Leased Real Estate (Tables) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Restructuring and Related Activities [Abstract] | |||||||
Schedule of changes in accrued liabilities for severance expenses and leased real estate | Changes in our accrued liabilities for severance expenses and leased real estate during the first three months of 2015 were as follows: | ||||||
Severance | Real Estate | ||||||
(Dollars in millions) | |||||||
Balance at December 31, 2014 | $ | 26 | 96 | ||||
Accrued to expense | 13 | — | |||||
Payments, net | (17 | ) | (3 | ) | |||
Reversals and adjustments | — | (3 | ) | ||||
Balance at March 31, 2015 | $ | 22 | 90 | ||||
Employee_Benefits_Tables
Employee Benefits (Tables) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Compensation and Retirement Disclosure [Abstract] | |||||||
Schedule of components of net periodic pension benefit (income) expense and post-retirement benefit expense | Net periodic (income) expense for our qualified and non-qualified pension plans included the following components: | ||||||
Pension Plans | |||||||
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
(Dollars in millions) | |||||||
Service cost | $ | 22 | 20 | ||||
Interest cost | 141 | 151 | |||||
Expected return on plan assets | (226 | ) | (223 | ) | |||
Recognition of prior service cost | 1 | 1 | |||||
Recognition of actuarial loss | 38 | 5 | |||||
Net periodic pension benefit income | $ | (24 | ) | (46 | ) | ||
Net periodic expense (income) for our post-retirement benefit plans included the following components: | |||||||
Post-Retirement Benefit Plans | |||||||
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
(Dollars in millions) | |||||||
Service cost | $ | 6 | 5 | ||||
Interest cost | 35 | 40 | |||||
Expected return on plan assets | (5 | ) | (8 | ) | |||
Recognition of prior service cost | 5 | 4 | |||||
Net periodic post-retirement benefit expense | $ | 41 | 41 | ||||
Earnings_per_Common_Share_Tabl
Earnings per Common Share (Tables) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Earnings Per Share [Abstract] | |||||||
Schedule of basic and diluted earnings per common share | Basic and diluted earnings per common share for the three months ended March 31, 2015 and 2014 were calculated as follows: | ||||||
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
(Dollars in millions, except per share amounts, shares in thousands) | |||||||
Income (Numerator): | |||||||
Net income | $ | 192 | 203 | ||||
Earnings applicable to non-vested restricted stock | — | — | |||||
Net income applicable to common stock for computing basic earnings per common share | 192 | 203 | |||||
Net income as adjusted for purposes of computing diluted earnings per common share | $ | 192 | 203 | ||||
Shares (Denominator): | |||||||
Weighted average number of shares: | |||||||
Outstanding during period | 566,687 | 578,197 | |||||
Non-vested restricted stock | (4,718 | ) | (3,662 | ) | |||
Weighted average shares outstanding for computing basic earnings per common share | 561,969 | 574,535 | |||||
Incremental common shares attributable to dilutive securities: | |||||||
Shares issuable under convertible securities | 10 | 10 | |||||
Shares issuable under incentive compensation plans | 1,526 | 911 | |||||
Number of shares as adjusted for purposes of computing diluted earnings per common share | 563,505 | 575,456 | |||||
Basic earnings per common share | $ | 0.34 | 0.35 | ||||
Diluted earnings per common share | $ | 0.34 | 0.35 | ||||
Fair_Value_Disclosure_Tables
Fair Value Disclosure (Tables) | 3 Months Ended | ||||||||||||||
Mar. 31, 2015 | |||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||
Schedule of the three input levels in the hierarchy of fair value measurements | The three input levels in the hierarchy of fair value measurements are defined by the FASB generally as follows: | ||||||||||||||
Input Level | Description of Input | ||||||||||||||
Level 1 | Observable inputs such as quoted market prices in active markets. | ||||||||||||||
Level 2 | Inputs other than quoted prices in active markets that are either directly or indirectly observable. | ||||||||||||||
Level 3 | Unobservable inputs in which little or no market data exists. | ||||||||||||||
Schedule of carrying amounts and estimated fair values of long-term debt, excluding capital lease obligations, and input level to determine fair values | The following table presents the carrying amounts and estimated fair values of our long-term debt, excluding capital lease and other obligations, as well as the input level used to determine the fair values indicated below: | ||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | ||||||||||||||
Input | Carrying | Fair | Carrying | Fair | |||||||||||
Level | Amount | Value | Amount | Value | |||||||||||
(Dollars in millions) | |||||||||||||||
Liabilities—Long-term debt, excluding capital lease and other obligations | 2 | $ | 19,977 | 21,409 | 20,162 | 21,255 | |||||||||
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Segment Reporting [Abstract] | |||||||
Schedule of segment results | The results of our business and consumer segments are summarized below: | ||||||
Three Months Ended March 31, | |||||||
2015 | 2014 (1) | ||||||
(Dollars in millions) | |||||||
Total segment revenues | $ | 4,194 | 4,284 | ||||
Total segment expenses | 2,073 | 2,096 | |||||
Total segment income | $ | 2,121 | 2,188 | ||||
Total margin percentage | 51 | % | 51 | % | |||
Business: | |||||||
Revenues | 2,697 | 2,775 | |||||
Expenses | 1,484 | 1,503 | |||||
Income | $ | 1,213 | 1,272 | ||||
Margin percentage | 45 | % | 46 | % | |||
Consumer: | |||||||
Revenues | $ | 1,497 | 1,509 | ||||
Expenses | 589 | 593 | |||||
Income | $ | 908 | 916 | ||||
Margin percentage | 61 | % | 61 | % | |||
______________________________________________________________________ | |||||||
(1) | Reflects the recasting of segment results discussed in the next section entitled "Recent Changes in Segment Reporting." | ||||||
Schedule of operating revenues by products and services | Our operating revenues for our products and services consisted of the following categories: | ||||||
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
(Dollars in millions) | |||||||
Strategic services | $ | 2,320 | 2,271 | ||||
Legacy services | 1,735 | 1,839 | |||||
Data integration | 139 | 174 | |||||
Other | 257 | 254 | |||||
Total operating revenues | $ | 4,451 | 4,538 | ||||
Reconciliation of operating profit (loss) from segments to consolidated net income | The following table reconciles segment income to net income: | ||||||
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
(Dollars in millions) | |||||||
Total segment income | $ | 2,121 | 2,188 | ||||
Other operating revenues | 257 | 254 | |||||
Depreciation and amortization | (1,040 | ) | (1,107 | ) | |||
Other unassigned operating expenses | (689 | ) | (682 | ) | |||
Other expense, net | (326 | ) | (322 | ) | |||
Income tax expense | (131 | ) | (128 | ) | |||
Net income | $ | 192 | 203 | ||||
Other_Financial_Information_Ta
Other Financial Information (Tables) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Additional Financial Information Disclosure [Abstract] | |||||||
Schedule of components of other current assets | The following table presents details of other current assets in our consolidated balance sheets: | ||||||
As of March 31, 2015 | As of December 31, 2014 | ||||||
(Dollars in millions) | |||||||
Prepaid expenses | $ | 293 | 260 | ||||
Materials, supplies and inventory | 137 | 132 | |||||
Assets held for sale | 18 | 14 | |||||
Deferred activation and installation charges | 104 | 103 | |||||
Other | 70 | 71 | |||||
Total other current assets | $ | 622 | 580 | ||||
Schedule of current liabilities including accounts payable and other current liabilities | The following table presents current liabilities reflected in our consolidated balance sheets, which include accounts payable and other current liabilities: | ||||||
As of March 31, 2015 | As of December 31, 2014 | ||||||
(Dollars in millions) | |||||||
Accounts payable | $ | 1,068 | 1,226 | ||||
Other current liabilities: | |||||||
Accrued rent | $ | 28 | 34 | ||||
Legal reserves | 43 | 27 | |||||
Other | 188 | 149 | |||||
Total other current liabilities | $ | 259 | 210 | ||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended | |||||||||||||||||||||||||
Mar. 31, 2015 | Mar. 31, 2014 | |||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||||||||||||||||
Summary of the entity's accumulated other comprehensive income (loss) by component | The tables below summarize changes in accumulated other comprehensive loss recorded on our consolidated balance sheets by component for the three months ended March 31, 2015 and 2014: | |||||||||||||||||||||||||
Pension Plans | Post-Retirement | Foreign Currency | Total | |||||||||||||||||||||||
Pension Plans | Post-Retirement | Foreign Currency | Total | Benefit Plans | Translation | |||||||||||||||||||||
Benefit Plans | Translation | Adjustment | ||||||||||||||||||||||||
Adjustment | and Other | |||||||||||||||||||||||||
and Other | (Dollars in millions) | |||||||||||||||||||||||||
(Dollars in millions) | Balance at December 31, 2013 | $ | (669 | ) | (122 | ) | (11 | ) | (802 | ) | ||||||||||||||||
Balance at December 31, 2014 | $ | (1,720 | ) | (272 | ) | (25 | ) | (2,017 | ) | Other comprehensive income (loss) before reclassifications | — | — | 1 | 1 | ||||||||||||
Other comprehensive income (loss) before reclassifications | — | — | (11 | ) | (11 | ) | ||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | 3 | 3 | — | 6 | ||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | 24 | 3 | — | 27 | ||||||||||||||||||||||
Net current-period other comprehensive income | 3 | 3 | 1 | 7 | ||||||||||||||||||||||
Net current-period other comprehensive income | 24 | 3 | (11 | ) | 16 | |||||||||||||||||||||
Balance at March 31, 2014 | $ | (666 | ) | (119 | ) | (10 | ) | (795 | ) | |||||||||||||||||
Balance at March 31, 2015 | $ | (1,696 | ) | (269 | ) | (36 | ) | (2,001 | ) | |||||||||||||||||
Schedule of reclassifications out of accumulated other comprehensive income (loss) by component | The tables below present further information about our reclassifications out of accumulated other comprehensive loss by component for the three months ended March 31, 2015 and 2014: | |||||||||||||||||||||||||
Three Months Ended March 31, 2014 | (Decrease) Increase | Affected Line Item in Consolidated Statement of | ||||||||||||||||||||||||
Three Months Ended March 31, 2015 | (Decrease) Increase | Affected Line Item in Consolidated Statement of | in Net Income | Operations or Footnote Where Additional | ||||||||||||||||||||||
in Net Income | Operations or Footnote Where Additional | Information is Presented If The Amount is not | ||||||||||||||||||||||||
Information is Presented If The Amount is not | Recognized in Net Income in Total | |||||||||||||||||||||||||
Recognized in Net Income in Total | (Dollars in millions) | |||||||||||||||||||||||||
(Dollars in millions) | Amortization of pension & post-retirement plans | |||||||||||||||||||||||||
Amortization of pension & post-retirement plans | Net actuarial loss | $ | (5 | ) | See Note 4-Employee Benefits | |||||||||||||||||||||
Net actuarial loss | $ | (38 | ) | See Note 4-Employee Benefits | Prior service cost | (5 | ) | See Note 4-Employee Benefits | ||||||||||||||||||
Prior service cost | (6 | ) | See Note 4-Employee Benefits | Total before tax | (10 | ) | ||||||||||||||||||||
Total before tax | (44 | ) | Income tax expense | 4 | Income tax expense | |||||||||||||||||||||
Income tax expense | 17 | Income tax expense | ||||||||||||||||||||||||
Net of tax | $ | (6 | ) | |||||||||||||||||||||||
Net of tax | $ | (27 | ) |
Basis_of_Presentation_Basis_of1
Basis of Presentation Basis of Presentation (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2015 |
Change in Accounting Estimate [Line Items] | |||
Change in net income for change in accounting estimate | ($192) | ($203) | |
Unamortized debt issuance costs | 172 | ||
Network assets, future abandonment | Service life | |||
Change in Accounting Estimate [Line Items] | |||
Depreciation | 12 | ||
Change in net income for change in accounting estimate | -7 | ||
Earnings per share, basic and diluted | ($0.01) | ||
Network assets, future abandonment | Forecast | Service life | |||
Change in Accounting Estimate [Line Items] | |||
Depreciation | 48 | ||
Change in net income for change in accounting estimate | ($30) | ||
Earnings per share, basic and diluted | ($0.05) |
LongTerm_Debt_and_Credit_Facil2
Long-Term Debt and Credit Facilities (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Long-term Debt and Credit Facilities | ||
Capital lease and other obligations | $479 | $509 |
Unamortized discounts, net | 115 | 111 |
Total long-term debt | 20,456 | 20,671 |
Less current maturities | -202 | -550 |
Long-term debt, excluding current maturities | 20,254 | 20,121 |
CenturyLink, Inc. | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | 7,975 | 7,825 |
CenturyLink, Inc. | Medium-term notes | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | 374 | 380 |
Interest rate at period end - Term Loan (percent) | 1.93% | |
CenturyLink, Inc. | Minimum | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate (percent) | 5.15% | |
CenturyLink, Inc. | Maximum | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate (percent) | 7.65% | |
Qwest Corporation | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | 7,311 | 7,311 |
Qwest Corporation | Medium-term notes | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | 100 | 0 |
Interest rate at period end - Term Loan (percent) | 1.93% | |
Qwest Corporation | Minimum | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate (percent) | 6.13% | |
Qwest Corporation | Maximum | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate (percent) | 8.38% | |
Qwest Capital Funding, Inc. | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | 981 | 981 |
Qwest Capital Funding, Inc. | Minimum | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate (percent) | 6.50% | |
Qwest Capital Funding, Inc. | Maximum | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate (percent) | 7.75% | |
Embarq | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | 2,669 | 2,669 |
Embarq | First mortgage bonds | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | 232 | 232 |
Embarq | Other | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | 150 | 150 |
Stated interest rate (percent) | 9.00% | |
Embarq | Minimum | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate (percent) | 7.08% | |
Embarq | Minimum | First mortgage bonds | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate (percent) | 7.13% | |
Embarq | Maximum | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate (percent) | 8.00% | |
Embarq | Maximum | First mortgage bonds | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate (percent) | 8.77% | |
Revolving credit facility | CenturyLink, Inc. | Line of credit | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $300 | $725 |
Long-term debt, weighted average interest rate (percent) | 1.93% | 2.27% |
Revolving credit facility | CenturyLink, Inc. | Minimum | Line of credit | ||
Long-term Debt and Credit Facilities | ||
Interest rate at period end - Credit Facility (percent) | 1.91% | |
Revolving credit facility | CenturyLink, Inc. | Maximum | Line of credit | ||
Long-term Debt and Credit Facilities | ||
Interest rate at period end - Credit Facility (percent) | 4.00% |
LongTerm_Debt_and_Credit_Facil3
Long-Term Debt and Credit Facilities Long-Term Debt and Credit Facilities (Details 2) (USD $) | 0 Months Ended | ||||||
In Millions, unless otherwise specified | Feb. 17, 2015 | Mar. 19, 2015 | Feb. 20, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Feb. 15, 2015 | Jan. 31, 2015 |
CenturyLink, Inc. | Senior notes | |||||||
Long-term Debt and Credit Facilities | |||||||
Long-term debt, gross | $7,975 | $7,825 | |||||
CenturyLink, Inc. | Senior notes | Series M 5.00% Notes | |||||||
Long-term Debt and Credit Facilities | |||||||
Repayments of debt | 350 | ||||||
Stated interest rate (percent) | 5.00% | ||||||
CenturyLink, Inc. | Senior notes | Notes, 5.625 percent due 2025 [Member] | |||||||
Long-term Debt and Credit Facilities | |||||||
Debt instrument, face amount | 500 | ||||||
Stated interest rate (percent) | 5.63% | ||||||
Proceeds from debt, net of issuance costs | 494 | ||||||
CenturyLink, Inc. | Medium-term notes | |||||||
Long-term Debt and Credit Facilities | |||||||
Long-term debt, gross | 374 | 380 | |||||
Qwest Corporation | Senior notes | |||||||
Long-term Debt and Credit Facilities | |||||||
Long-term debt, gross | 7,311 | 7,311 | |||||
Qwest Corporation | Medium-term notes | |||||||
Long-term Debt and Credit Facilities | |||||||
Long-term debt, gross | 100 | 0 | |||||
Qwest Corporation | Medium-term notes | Term Loan | |||||||
Long-term Debt and Credit Facilities | |||||||
Debt instrument, face amount | 100 | ||||||
Long-term debt, gross | 100 | ||||||
Minimum | CenturyLink, Inc. | Senior notes | |||||||
Long-term Debt and Credit Facilities | |||||||
Stated interest rate (percent) | 5.15% | ||||||
Minimum | Qwest Corporation | Senior notes | |||||||
Long-term Debt and Credit Facilities | |||||||
Stated interest rate (percent) | 6.13% | ||||||
Minimum | London Interbank Offered Rate (LIBOR) | Qwest Corporation | Medium-term notes | Term Loan | |||||||
Long-term Debt and Credit Facilities | |||||||
Basis spread on variable rate (percent) | 1.50% | ||||||
Minimum | Base Rate | Qwest Corporation | Medium-term notes | Term Loan | |||||||
Long-term Debt and Credit Facilities | |||||||
Basis spread on variable rate (percent) | 0.50% | ||||||
Maximum | CenturyLink, Inc. | Senior notes | |||||||
Long-term Debt and Credit Facilities | |||||||
Stated interest rate (percent) | 7.65% | ||||||
Maximum | Qwest Corporation | Senior notes | |||||||
Long-term Debt and Credit Facilities | |||||||
Stated interest rate (percent) | 8.38% | ||||||
Maximum | London Interbank Offered Rate (LIBOR) | Qwest Corporation | Medium-term notes | Term Loan | |||||||
Long-term Debt and Credit Facilities | |||||||
Basis spread on variable rate (percent) | 2.50% | ||||||
Maximum | Base Rate | Qwest Corporation | Medium-term notes | Term Loan | |||||||
Long-term Debt and Credit Facilities | |||||||
Basis spread on variable rate (percent) | 1.50% | ||||||
Line of credit | CenturyLink, Inc. | Line of credit | |||||||
Long-term Debt and Credit Facilities | |||||||
Line of credit facility, maximum borrowing capacity | $100 | ||||||
Lenders of revolving line of credit, number | 1 |
LongTerm_Debt_and_Credit_Facil4
Long-Term Debt and Credit Facilities Long-Term Debt and Credit Facilities (Details 3) (CenturyLink, Inc., Senior notes, Notes, 5.625 percent due 2025 [Member]) | 0 Months Ended |
Mar. 19, 2015 | |
Debt instrument, redemption, period one | |
Debt Instrument, Redemption [Line Items] | |
Debt Instrument, redemption, description | greater of 100% of the principal amount of the Notes or the sum of the present value of the remaining scheduled payments of principal and interest on the Notes, discounted to the redemption date in the manner described in the Notes |
Debt instrument, redemption, period two | |
Debt Instrument, Redemption [Line Items] | |
Debt Instrument, redemption, description | redeem the Notes at par |
Debt instrument, redemption, period three | |
Debt Instrument, Redemption [Line Items] | |
Debt instrument, redemption price, percentage of principal amount (percent) | 35.00% |
Debt instrument, redemption price, percentage (percent) | 105.63% |
Debt instrument, redemption, period four | |
Debt Instrument, Redemption [Line Items] | |
Debt instrument, redemption price, percentage (percent) | 101.00% |
Severance_and_Leased_Real_Esta2
Severance and Leased Real Estate (Details) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 |
Severance | |
Restructuring reserve | |
Balance at the beginning of the period | $26 |
Accrued to expense | 13 |
Payments, net | -17 |
Reversals and adjustments | 0 |
Balance at the end of the period | 22 |
Qwest Communications International Inc. | Leased real estate | Leased real estate | |
Leased Real Estate | |
Current portion of leased real estate accrual | 12 |
Noncurrent portion of leased real estate accrual | 78 |
Weighted average lease terms | 8 years 6 months |
Restructuring reserve | |
Balance at the beginning of the period | 96 |
Accrued to expense | 0 |
Payments, net | -3 |
Reversals and adjustments | -3 |
Balance at the end of the period | $90 |
Qwest Communications International Inc. | Leased real estate | Leased real estate | Minimum | |
Leased Real Estate | |
Remaining lease terms | 4 months |
Qwest Communications International Inc. | Leased real estate | Leased real estate | Maximum | |
Leased Real Estate | |
Remaining lease terms | 10 years 8 months |
Employee_Benefits_Details
Employee Benefits (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Pension plans | ||
Components of net periodic (benefit) expense | ||
Service cost | $22 | $20 |
Interest cost | 141 | 151 |
Expected return on plan assets | -226 | -223 |
Recognition of prior service cost | 1 | 1 |
Recognition of actuarial loss | 38 | 5 |
Net periodic benefit (income) expense | -24 | -46 |
Post-retirement benefit plans | ||
Components of net periodic (benefit) expense | ||
Service cost | 6 | 5 |
Interest cost | 35 | 40 |
Expected return on plan assets | -5 | -8 |
Recognition of prior service cost | 5 | 4 |
Net periodic benefit (income) expense | $41 | $41 |
Earnings_per_Common_Share_Deta
Earnings per Common Share (Details) (USD $) | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income (Numerator): | ||
Net income | $192 | $203 |
Earnings applicable to non-vested restricted stock | 0 | 0 |
Net income applicable to common stock for computing basic earnings per common share | 192 | 203 |
Net income as adjusted for purposes of computing diluted earnings per common share | $192 | $203 |
Weighted average number of shares: | ||
Outstanding during period (in shares) | 566,687,000 | 578,197,000 |
Non-vested restricted stock (in shares) | -4,718,000 | -3,662,000 |
Weighted average shares outstanding for computing basic earnings per common share (in shares) | 561,969,000 | 574,535,000 |
Incremental common shares attributable to dilutive securities: | ||
Shares issuable under convertible securities (in shares) | 10,000 | 10,000 |
Shares issuable under incentive compensation plans (in shares) | 1,526,000 | 911,000 |
Number of shares as adjusted for purposes of computing diluted earnings per common share (in shares) | 563,505,000 | 575,456,000 |
Basic earnings per common share: | ||
Basic earnings per common share (in dollars per share) | $0.34 | $0.35 |
Diluted earnings per common share: | ||
Diluted earnings per common share (in dollars per share) | $0.34 | $0.35 |
Stock option awards | ||
Diluted earnings per common share: | ||
Number of shares of common stock excluded from the computation of diluted earnings per share (in shares) | 2,200,000 | 3,100,000 |
Fair_Value_Disclosure_Details
Fair Value Disclosure (Details) (Fair value measurements valued on a recurring basis, Fair value inputs, Level 2, USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Carrying amount | ||
Liabilities | ||
Liabilities - Long-term debt, excluding capital lease obligations | $19,977 | $20,162 |
Fair value | ||
Liabilities | ||
Liabilities - Long-term debt, excluding capital lease obligations | $21,409 | $21,255 |
Segment_Information_Details
Segment Information (Details) (USD $) | 0 Months Ended | 3 Months Ended | 10 Months Ended | |
In Millions, unless otherwise specified | Nov. 01, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Oct. 30, 2014 |
segment | segment | |||
Segment information | ||||
Revenues | $4,451 | $4,538 | ||
Expenses | 3,802 | 3,885 | ||
OPERATING INCOME | 649 | 653 | ||
Number of reportable segments (segments) | 2 | 4 | ||
Operating segments (segments) | ||||
Segment information | ||||
Revenues | 4,194 | 4,284 | ||
Expenses | 2,073 | 2,096 | ||
OPERATING INCOME | 2,121 | 2,188 | ||
Margin percentage (percent) | 51.00% | 51.00% | ||
Business | ||||
Segment information | ||||
Revenues | 2,697 | 2,775 | ||
Expenses | 1,484 | 1,503 | ||
OPERATING INCOME | 1,213 | 1,272 | ||
Margin percentage (percent) | 45.00% | 46.00% | ||
Consumer | ||||
Segment information | ||||
Revenues | 1,497 | 1,509 | ||
Expenses | 589 | 593 | ||
OPERATING INCOME | 908 | 916 | ||
Margin percentage (percent) | 61.00% | 61.00% | ||
Structural Reorganization [Member] | Business | ||||
Segment information | ||||
Prior period reclassification adjustment segment expenses | -13 | |||
Structural Reorganization [Member] | Consumer | ||||
Segment information | ||||
Prior period reclassification adjustment segment expenses | $10 |
Segment_Information_Details_2
Segment Information (Details 2) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
category | ||
Operating revenues by products and services | ||
Number of groups of products and services (categories) | 4 | |
OPERATING REVENUES | $4,451 | $4,538 |
Surcharge amount on customers' bills | 135 | 131 |
Strategic services | ||
Operating revenues by products and services | ||
Products and services categories reclassification adjustment | -10 | |
OPERATING REVENUES | 2,320 | 2,271 |
Legacy services | ||
Operating revenues by products and services | ||
Products and services categories reclassification adjustment | 10 | |
OPERATING REVENUES | 1,735 | 1,839 |
Data integration | ||
Operating revenues by products and services | ||
OPERATING REVENUES | 139 | 174 |
Other | ||
Operating revenues by products and services | ||
OPERATING REVENUES | $257 | $254 |
Segment_Information_Details_3
Segment Information (Details 3) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Total segment income | $649 | $653 |
Depreciation and amortization | -1,040 | -1,107 |
Other unassigned operating expenses | -851 | -843 |
Other income (expense), net | -326 | -322 |
Income tax expense | -131 | -128 |
Net income | 192 | 203 |
Operating segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Total segment income | 2,121 | 2,188 |
Segment reconciling items | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Other operating revenues | 257 | 254 |
Depreciation and amortization | 1,040 | -1,107 |
Other unassigned operating expenses | 689 | 682 |
Other income (expense), net | -326 | -322 |
Income tax expense | $131 | $128 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) | 3 Months Ended | 24 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | ||||
In Millions, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2007 | Oct. 14, 2011 | Mar. 31, 2015 | Jul. 17, 2013 | Sep. 13, 2006 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 |
William Douglas Fulghum, et al. v. Embarq Corporation | William Douglas Fulghum, et al. v. Embarq Corporation | Abbott et al. v. Sprint Nextel et al. | Abbott et al. v. Sprint Nextel et al. | Comcast | Cargill Financial Markets, Plc and Citibank, N.A. | Cargill Financial Markets, Plc and Citibank, N.A. | Fiber-optic cable installation | Securities actions | Derivative actions | |
plaintiff | USD ($) | plaintiff | plaintiff | USD ($) | EUR (€) | USD ($) | state | lawsuit | shareholder_derivative_action | |
Loss Contingencies | ||||||||||
Effect of modifications made to Embarq's benefits program, greater than | $300 | |||||||||
Number of plaintiffs have alleged breach of fiduciary duty (plaintiffs) | 1,500 | |||||||||
Number of plaintiffs, limited discovery | 80 | |||||||||
Breach of fiduciary duty claims | 15 | |||||||||
Damages sought by plaintiff | $80 | € 219 | $238 | |||||||
Number of states in which service is provided (states) | 34 | |||||||||
Number of states in which final approval of settlements received (states) | 32 | |||||||||
Number of states where an action is pending | 1 | |||||||||
Number of states in which actions are not currently pending | 1 | |||||||||
Number of securities actions | 1 | |||||||||
Number of shareholder derivative actions | 4 |
Other_Financial_Information_De
Other Financial Information (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Other Current Assets | |||
Prepaid expenses | $293 | $260 | |
Materials, supplies and inventory | 137 | 132 | |
Assets held for sale | 18 | 14 | |
Deferred activation and installation charges | 104 | 103 | |
Other | 70 | 71 | |
Total other current assets | 622 | 580 | |
Impairment of long-lived assets | 8 | 0 | |
Selected Current Liabilities | |||
Accounts payable | 1,068 | 1,226 | |
Other Current Liabilities | |||
Accrued rent | 28 | 34 | |
Legal reserves | 43 | 27 | |
Other | 188 | 149 | |
Total other current liabilities | 259 | 210 | |
Current Liabilities | |||
Book overdraft balance | 62 | 80 | |
Capital expenditures incurred but not yet paid | $107 | $185 |
Repurchase_of_CenturyLink_Comm1
Repurchase of CenturyLink Common Stock (Details) (Share repurchase program authorized February 2014, USD $) | 1 Months Ended | 3 Months Ended | 11 Months Ended | |
Share data in Millions, except Per Share data, unless otherwise specified | Feb. 27, 2014 | Mar. 31, 2015 | 4-May-15 | Feb. 28, 2014 |
Schedule of Stock Repurchases | ||||
Stock repurchase program, period in force | 24 months | |||
Stock repurchases, aggregate authorized amount | $1,000,000,000 | |||
Number of shares repurchased (shares) | 4.5 | |||
Aggregate market price of shares repurchased | 170,000,000 | |||
Average purchase price at which shares were repurchased (in dollars per share) | $37.53 | |||
Stock repurchases, remaining authorized amount | 630,000,000 | |||
Subsequent Event [Member] | ||||
Schedule of Stock Repurchases | ||||
Stock repurchased and retired during program period (shares) | 11.7 | |||
Stock repurchased and retired during program period, Value | $439,000,000 | |||
Stock repurchased and retired during program period, average cost per share (in dollars per share) | $0 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Accumulated other comprehensive income (loss) by component | ||
Balance at the beginning of the period | ($2,017) | ($802) |
Other comprehensive income (loss) before reclassifications | -11 | 1 |
Amounts reclassified from accumulated other comprehensive income | 27 | 6 |
Other comprehensive income | 16 | 7 |
Balance at the end of the period | -2,001 | -795 |
Defined benefit plan | Pension plans | ||
Accumulated other comprehensive income (loss) by component | ||
Balance at the beginning of the period | -1,720 | -669 |
Other comprehensive income (loss) before reclassifications | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income | 24 | 3 |
Other comprehensive income | 24 | 3 |
Balance at the end of the period | -1,696 | -666 |
Defined benefit plan | Post-retirement benefit plans | ||
Accumulated other comprehensive income (loss) by component | ||
Balance at the beginning of the period | -272 | -122 |
Other comprehensive income (loss) before reclassifications | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income | 3 | 3 |
Other comprehensive income | 3 | 3 |
Balance at the end of the period | -269 | -119 |
Foreign currency translation adjustment and other | ||
Accumulated other comprehensive income (loss) by component | ||
Balance at the beginning of the period | -25 | -11 |
Other comprehensive income (loss) before reclassifications | -11 | 1 |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 |
Other comprehensive income | -11 | 1 |
Balance at the end of the period | ($36) | ($10) |
Accumulated_Other_Comprehensiv3
Accumulated Other Comprehensive Loss (Details 2) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Reclassifications out of accumulated other comprehensive income loss by component | ||
INCOME BEFORE INCOME TAX EXPENSE | $323 | $331 |
Income tax expense | -131 | -128 |
Net income | 192 | 203 |
Amount reclassified from accumulated other comprehensive loss | ||
Reclassifications out of accumulated other comprehensive income loss by component | ||
Net actuarial loss | -38 | -5 |
Prior service cost | -6 | -5 |
INCOME BEFORE INCOME TAX EXPENSE | -44 | -10 |
Income tax expense | 17 | 4 |
Net income | ($27) | ($6) |