Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 16, 2017 | Jun. 30, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | CENTURYLINK, INC | ||
Entity Central Index Key | 18,926 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 15.7 | ||
Entity Common Stock, Shares Outstanding (shares) | 546,575,404 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
OPERATING REVENUES | $ 17,470 | $ 17,900 | $ 18,031 |
OPERATING EXPENSES | |||
Cost of services and products (exclusive of depreciation and amortization) | 7,774 | 7,778 | 7,846 |
Selling, general and administrative | 3,449 | 3,328 | 3,347 |
Depreciation and amortization | 3,916 | 4,189 | 4,428 |
Total operating expenses | 15,139 | 15,295 | 15,621 |
OPERATING INCOME | 2,331 | 2,605 | 2,410 |
OTHER (EXPENSE) INCOME | |||
Interest expense | (1,318) | (1,312) | (1,311) |
Other income, net | 7 | 23 | 11 |
Total other expense, net | (1,311) | (1,289) | (1,300) |
INCOME BEFORE INCOME TAX EXPENSE | 1,020 | 1,316 | 1,110 |
Income tax expense | 394 | 438 | 338 |
NET INCOME | $ 626 | $ 878 | $ 772 |
BASIC AND DILUTED EARNINGS PER COMMON SHARE | |||
BASIC (in dollars per share) | $ 1.16 | $ 1.58 | $ 1.36 |
DILUTED (in dollars per share) | $ 1.16 | $ 1.58 | $ 1.36 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | |||
BASIC (in shares) | 539,549 | 554,278 | 568,435 |
DILUTED (in shares) | 540,679 | 555,093 | 569,739 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 626 | $ 878 | $ 772 |
Items related to employee benefit plans: | |||
Change in net actuarial (loss) gain, net of $113, $(12) and $742 tax | (168) | 21 | (1,200) |
Change in net prior service credit (costs), net of $(4), $(47) and $1 tax | 6 | 76 | (1) |
Foreign currency translation adjustment and other, net of $—, $— and $1 tax | (21) | (14) | (14) |
Other comprehensive (loss) income | (183) | 83 | (1,215) |
COMPREHENSIVE INCOME (LOSS) | $ 443 | $ 961 | $ (443) |
CONSOLIDATED STATEMENTS OF COM4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Change in net actuarial (loss) gain, tax benefit (expense) | $ 113 | $ (12) | $ 742 |
Change in net prior service credit (costs), tax (expense) benefit | (4) | (47) | 1 |
Foreign currency translation adjustment and other, tax benefit | $ 0 | $ 0 | $ 1 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 222 | $ 126 |
Accounts receivable, less allowance of $178 and $152 | 2,017 | 1,943 |
Assets held for sale | 2,376 | 8 |
Other | 547 | 573 |
Total current assets | 5,162 | 2,650 |
NET PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment | 39,194 | 38,785 |
Accumulated depreciation | (22,155) | (20,716) |
Net property, plant and equipment | 17,039 | 18,069 |
GOODWILL AND OTHER ASSETS | ||
Goodwill | 19,650 | 20,742 |
Other intangible assets, net | 1,531 | 1,555 |
Other, net | 838 | 660 |
Total goodwill and other assets | 24,816 | 26,885 |
TOTAL ASSETS | 47,017 | 47,604 |
CURRENT LIABILITIES | ||
Current maturities of long-term debt | 1,503 | 1,503 |
Accounts payable | 1,179 | 968 |
Accrued expenses and other liabilities | ||
Salaries and benefits | 802 | 602 |
Income and other taxes | 301 | 318 |
Interest | 260 | 250 |
Other | 213 | 220 |
Current liabilities associated with assets held for sale | 419 | 0 |
Advance billings and customer deposits | 672 | 743 |
Total current liabilities | 5,349 | 4,604 |
LONG-TERM DEBT | 18,185 | 18,722 |
DEFERRED CREDITS AND OTHER LIABILITIES | ||
Deferred income taxes, net | 3,471 | 3,569 |
Benefit plan obligations, net | 5,527 | 5,511 |
Other | 1,086 | 1,138 |
Total deferred credits and other liabilities | 10,084 | 10,218 |
COMMITMENTS AND CONTINGENCIES (Note 16) | ||
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 546,545 and 543,800 shares | 547 | 544 |
Additional paid-in capital | 14,970 | 15,178 |
Accumulated other comprehensive loss | (2,117) | (1,934) |
(Accumulated deficit) retained earnings | (1) | 272 |
Total stockholders' equity | 13,399 | 14,060 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 47,017 | 47,604 |
Customer relationships | ||
Customer relationships, net | $ 2,797 | $ 3,928 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 178 | $ 152 |
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, issued shares (shares) | 546,545 | 543,800 |
Common stock, outstanding shares (shares) | 546,545 | 543,800 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
OPERATING ACTIVITIES | |||
Net income | $ 626 | $ 878 | $ 772 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 3,916 | 4,189 | 4,428 |
Impairment of assets | 13 | 9 | 32 |
Deferred income taxes | 6 | 350 | 291 |
Provision for uncollectible accounts | 192 | 177 | 159 |
Net long-term debt issuance costs and premium amortization | 2 | (3) | (21) |
Net loss on early retirement of debt | 27 | 0 | 0 |
Share-based compensation | 80 | 73 | 79 |
Changes in current assets and liabilities: | |||
Accounts receivable | (266) | (132) | (163) |
Accounts payable | 109 | (168) | 70 |
Accrued income and other taxes | (43) | 32 | (84) |
Other current assets and liabilities, net | 92 | (53) | (270) |
Retirement benefits | (152) | (141) | (184) |
Changes in other noncurrent assets and liabilities, net | (18) | (78) | 99 |
Other, net | 24 | 19 | (20) |
Net cash provided by operating activities | 4,608 | 5,152 | 5,188 |
INVESTING ACTIVITIES | |||
Payments for property, plant and equipment and capitalized software | (2,981) | (2,872) | (3,047) |
Cash paid for acquisitions | (39) | (4) | (93) |
Proceeds from sale of property and intangible assets | 30 | 31 | 63 |
Other, net | (4) | (8) | 0 |
Net cash used in investing activities | (2,994) | (2,853) | (3,077) |
FINANCING ACTIVITIES | |||
Net proceeds from issuance of long-term debt | 2,161 | 989 | 483 |
Payments of long-term debt | (2,462) | (966) | (800) |
Net payments on credit facility and revolving line of credit | (40) | (315) | (4) |
Early retirement of debt costs | 0 | (1) | 0 |
Dividends paid | (1,167) | (1,198) | (1,228) |
Proceeds from issuance of common stock | 6 | 11 | 50 |
Repurchase of common stock and shares withheld to satisfy tax withholdings | (16) | (819) | (650) |
Other, net | 0 | (2) | (2) |
Net cash used in financing activities | (1,518) | (2,301) | (2,151) |
Net increase (decrease) in cash and cash equivalents | 96 | (2) | (40) |
Cash and cash equivalents at beginning of period | 126 | 128 | 168 |
Cash and cash equivalents at end of period | 222 | 126 | 128 |
Supplemental cash flow information: | |||
Income taxes paid, net | (397) | (63) | (27) |
Interest paid (net of capitalized interest of $54, $52 and $47) | $ (1,301) | $ (1,310) | $ (1,338) |
CONSOLIDATED STATEMENTS OF CAS8
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Cash Flows [Abstract] | |||
Interest paid capitalized interest | $ 54 | $ 52 | $ 47 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Total | COMMON STOCK (represents dollars and shares) | ADDITIONAL PAID-IN CAPITAL | ACCUMULATED OTHER COMPREHENSIVE LOSS | (ACCUMULATED DEFICIT) RETAINED EARNINGS |
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 | 4 | 46 | |||
Repurchase of common stock | (19) | (591) | |||
Shares withheld to satisfy tax withholdings | (16) | ||||
Share-based compensation and other, net | 82 | ||||
Dividends declared | (540) | (691) | |||
Other comprehensive (loss) income | $ (1,215) | (1,215) | |||
Net income | 772 | 772 | |||
Balance at end 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 | 9 | |||
Repurchase of common stock | (27) | (767) | |||
Shares withheld to satisfy tax withholdings | (19) | ||||
Share-based compensation and other, net | 77 | ||||
Dividends declared | (446) | (753) | |||
Other comprehensive (loss) income | 83 | 83 | |||
Net income | 878 | 878 | |||
Balance at end of period at Dec. 31, 2015 | 14,060 | 544 | 15,178 | (1,934) | 272 |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock through dividend reinvestment, incentive and benefit plans | 3 | 7 | |||
Repurchase of common stock | 0 | 0 | |||
Shares withheld to satisfy tax withholdings | (15) | ||||
Share-based compensation and other, net | 79 | ||||
Dividends declared | (279) | (899) | |||
Other comprehensive (loss) income | (183) | (183) | |||
Net income | 626 | 626 | |||
Balance at end of period at Dec. 31, 2016 | $ 13,399 | $ 547 | $ 14,970 | $ (2,117) | $ (1) |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Background and Summary of Significant Accounting Policies General We are an integrated communications company engaged primarily in providing an array of services to our residential and business customers. Our communications services include local and long-distance voice, broadband, Multi-Protocol Label Switching ("MPLS"), private line (including special access), Ethernet, colocation, hosting (including cloud hosting and managed hosting), data integration, video, network, public access, Voice over Internet Protocol ("VoIP"), information technology and other ancillary services. On October 31, 2016, we entered into a definitive merger agreement under which we agreed to acquire Level 3 Communications, Inc. ("Level 3") in a cash and stock transaction. See Note 2—Pending Acquisition of Level 3 for additional information. On November 3, 2016, we entered into a definitive stock purchase agreement with a consortium led by BC Partners, Inc. and Medina Capital under which we propose to sell our data centers and colocation business for a combination of cash and equity. See Note 3—Pending Sale of Colocation Business and Data Centers for additional information. Basis of Presentation 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 reclassified certain prior period amounts to conform to the current period presentation, including the categorization of our revenues and our segment reporting. See Note 14—Segment Information for additional information. These changes had no impact on total operating revenues, total operating expenses or net income for any period presented. Connect America Fund In 2015, we accepted Connect America Fund ("CAF") funding from the Federal Communications Commission ("FCC") of approximately $500 million per year for six years to fund the deployment of voice and broadband capable infrastructure for approximately 1.2 million rural households and businesses in 33 states under the CAF Phase 2 high-cost support program. The funding from the CAF Phase 2 support program has substantially replaced the funding from the interstate Universal Service Fund ("USF") program that we previously utilized to support voice services in high-cost rural markets in these 33 states. In late 2015, we began receiving these monthly support payments from the FCC under the new CAF Phase 2 support program, which included (i) monthly support payments at a higher rate than under the interstate USF support program and (ii) a substantial one-time transitional payment, designed to align the prior USF payments with the new CAF Phase 2 payments for the full year 2015. For 2016, we continued to receive the monthly support payments at the higher rate than under the interstate USF support program. We recorded $201 million and $215 million more revenue from the CAF Phase 2 program for the years ended December 31, 2016 and 2015 , respectively, than the projected amounts we would have otherwise recorded during the same periods under the interstate USF support program. Changes in Estimates In 2016, we changed the method we use to estimate the service and interest components of net periodic benefit expense for pension and other postretirement benefit obligations. This change resulted in a decrease in the service and interest components in 2016. Beginning in 2016, we utilized a full yield curve approach in connection with estimating these components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows, as opposed to the single weighted-average discount rate derived from the yield curve that we have used in the past. We believe this change more precisely measures service and interest costs by improving the correlation between projected benefit cash flows to the corresponding spot yield curve rates. This change did not affect the measurement of our total benefit obligations but lowered our annual net periodic benefit cost by approximately $149 million in 2016. This change was treated as a change in accounting estimate and accordingly, we did not adjust the amounts recorded in 2015 or 2014. The reduction in expense described above, net of tax, increased net income by $91 million , or $0.17 per basic and diluted common share, for the year ended December 31, 2016. Summary of Significant Accounting Policies Use of Estimates Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles. These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions we make when accounting for specific items and matters, including, but not limited to, investments, long-term contracts, customer retention patterns, allowance for doubtful accounts, depreciation, amortization, asset valuations, internal labor capitalization rates, recoverability of assets (including deferred tax assets), impairment assessments, pension, post-retirement and other post-employment benefits, taxes, certain liabilities and other provisions and contingencies, are reasonable, based on information available at the time they are made. These estimates, judgments and assumptions can materially affect the reported amounts of assets, liabilities and components of stockholders' equity as of the dates of the consolidated balance sheets, as well as the reported amounts of revenues, expenses and components of cash flows during the periods presented in our other consolidated financial statements. We also make estimates in our assessments of potential losses in relation to threatened or pending tax and legal matters. See Note 13—Income Taxes and Note 16—Commitments and Contingencies for additional information. For matters not related to income taxes, if a loss is considered probable and the amount can be reasonably estimated, we recognize an expense for the estimated loss. If we have the potential to recover a portion of the estimated loss from a third party, we make a separate assessment of recoverability and reduce the estimated loss if recovery is also deemed probable. For matters related to income taxes, if we determine that the impact of an uncertain tax position is more likely than not to be sustained upon audit by the relevant taxing authority, then we recognize a benefit for the largest amount that is more likely than not to be sustained. No portion of an uncertain tax position will be recognized if the position has less than a 50% likelihood of being sustained. Interest is recognized on the amount of unrecognized benefit from uncertain tax positions. For all of these and other matters, actual results could differ materially from our estimates. Revenue Recognition We recognize revenue for services when the related services are provided. Recognition of certain payments received in advance of services being provided is deferred until the service is provided. These advance payments include activation and installation charges, which we recognize as revenue over the expected customer relationship period, which ranges from three years to over seven years depending on the service. We also defer costs for customer activations and installations. The deferral of customer activation and installation costs is limited to the amount of revenue deferred on advance payments. Costs in excess of advance payments are recorded as expense in the period such costs are incurred. Expected customer relationship periods are estimated using historical experience. In most cases, termination fees or other fees on existing contracts that are negotiated in conjunction with new contracts are deferred and recognized over the new contract term. We offer bundle discounts to our customers who receive certain groupings of services. These bundle discounts are recognized concurrently with the associated revenue and are allocated to the various services in the bundled offering based on the estimated selling price of services included in each bundled combination. Customer arrangements that include both equipment and services are evaluated to determine whether the elements are separable. If the elements are deemed separable and separate earnings processes exist, the revenue associated with the customer arrangement is allocated to each element based on the relative estimated selling price of the separate elements. We have estimated the selling prices of each element by reference to vendor-specific objective evidence of selling prices when the elements are sold separately. The revenue associated with each element is then recognized as earned. For example, if we receive an advance payment when we sell equipment and continuing service together, we immediately recognize as revenue the amount allocated to the equipment as long as all the conditions for revenue recognition have been satisfied. The portion of the advance payment allocated to the service based upon its relative selling price is recognized ratably over the longer of the contractual period or the expected customer relationship period. We periodically transfer optical capacity assets on our network to other telecommunications service carriers. These transactions are structured as indefeasible rights of use, commonly referred to as IRUs, which are the exclusive right to use a specified amount of capacity or fiber for a specified term, typically 20 years. We account for the cash consideration received on transfers of optical capacity assets and on all of the other elements deliverable under an IRU, as revenue ratably over the term of the agreement. We do not recognize revenue on any contemporaneous exchanges of our optical capacity assets for other optical capacity assets. In connection with offering products and services provided by third-party vendors, we review the relationship between us, the vendor and the end customer to assess whether revenue should be reported on a gross or net basis. In assessing whether revenue should be reported on a gross or net basis, we consider whether we act as a principal in the transaction, take title to the products, have risk and rewards of ownership or act as an agent or broker. Based on our agreements with DIRECTV and Verizon Wireless, we offer these services through sales agency relationships which are reported on a net basis. We have service level commitments pursuant to contracts with certain of our customers. To the extent that such service levels are not achieved or are otherwise disputed due to performance or service issues or other service interruptions or conditions, we will estimate the amount of credits to be issued and record a reduction to revenues, with a corresponding increase in the credit reserve. USF Surcharges, Gross Receipts Taxes and Other Surcharges In determining whether to include in our revenues and expenses the taxes and surcharges collected from customers and remitted to government authorities, including USF surcharges, sales, use, value added and some excise taxes, we assess, among other things, whether we are the primary obligor or principal taxpayer for the taxes assessed in each jurisdiction where we do business. In jurisdictions where we determine that we are the principal taxpayer, we record the surcharges on a gross basis and include them in our revenues and costs of services and products. In jurisdictions where we determine that we are merely a collection agent for the government authority, we record the taxes on a net basis and do not include them in our revenues and costs of services and products. Advertising Costs Costs related to advertising are expensed as incurred and included in selling, general and administrative expenses in our consolidated statements of operations. Our advertising expense was $216 million , $210 million and $214 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. Legal Costs In the normal course of our business, we incur costs to hire and retain external legal counsel to advise us on regulatory, litigation and other matters. We expense these costs as the related services are received. Income Taxes We file a consolidated federal income tax return with our eligible subsidiaries. The provision for income taxes consists of an amount for taxes currently payable, an amount for tax consequences deferred to future periods and adjustments to our liabilities for uncertain tax positions. We record deferred income tax assets and liabilities reflecting future tax consequences attributable to tax net operating loss carryforwards ("NOLs"), tax credit carryforwards and differences between the financial statement carrying value of assets and liabilities and the tax bases of those assets and liabilities. Deferred taxes are computed using enacted tax rates expected to apply in the year in which the differences are expected to affect taxable income. The effect on deferred income tax assets and liabilities of a change in tax rate is recognized in earnings in the period that includes the enactment date. We establish valuation allowances when necessary to reduce deferred income tax assets to the amounts that we believe are more likely than not to be recovered. Each quarter we evaluate the need to retain all or a portion of the valuation allowance on our deferred tax assets. See Note 13—Income Taxes for additional information. Cash and Cash Equivalents Cash and cash equivalents include highly liquid investments that are readily convertible into cash and are not subject to significant risk from fluctuations in interest rates. As a result, the value at which cash and cash equivalents are reported in our consolidated financial statements approximates their fair value. In evaluating investments for classification as cash equivalents, we require that individual securities have original maturities of ninety days or less and that individual investment funds have dollar-weighted average maturities of ninety days or less. To preserve capital and maintain liquidity, we invest with financial institutions we deem to be of sound financial condition and in high quality and relatively risk-free investment products. Our cash investment policy limits the concentration of investments with specific financial institutions or among certain products and includes criteria related to credit worthiness of any particular financial institution. Book overdrafts occur when checks have been issued but have not been presented to our controlled disbursement bank accounts for payment. Disbursement bank accounts allow us to delay funding of issued checks until the checks are presented for payment. Until the issued checks are presented for payment, the book overdrafts are included in accounts payable on our consolidated balance sheet. This activity is included in the operating activities section in our consolidated statements of cash flows. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recognized based upon the amount due from customers for the services provided or at cost for purchased and other receivables less an allowance for doubtful accounts. The allowance for doubtful accounts receivable reflects our best estimate of probable losses inherent in our receivable portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available evidence. We generally consider our accounts past due if they are outstanding over 30 days . Our collection process varies by the customer segment, amount of the receivable, and our evaluation of the customer's credit risk. Our past due accounts are written off against our allowance for doubtful accounts when collection is considered to be not probable. Any recoveries of accounts previously written off are generally recognized as a reduction in bad debt expense in the period received. The carrying value of accounts receivable net of the allowance for doubtful accounts approximates fair value. Property, Plant and Equipment We record property, plant and equipment acquired in connection with our acquisitions based on its estimated fair value as of its acquisition date plus the estimated value of any associated legally or contractually required retirement obligations. We record purchased and constructed property, plant and equipment at cost, plus the estimated value of any associated legally or contractually required retirement obligations. Property, plant and equipment is depreciated primarily using the straight-line group method. Under the straight-line group method, assets dedicated to providing telecommunications services (which comprise the majority of our property, plant and equipment) that have similar physical characteristics, use and expected useful lives are pooled for purposes of depreciation and tracking. The equal life group procedure is used to establish each pool's average remaining useful life. Generally, under the straight-line group method, when an asset is sold or retired in the course of normal business activities, the cost is deducted from property, plant and equipment and charged to accumulated depreciation without recognition of a gain or loss. A gain or loss is recognized in our consolidated statements of operations only if a disposal is unusual. Leasehold improvements are amortized over the shorter of the useful lives of the assets or the expected lease term. Expenditures for maintenance and repairs are expensed as incurred. Interest is capitalized during the construction phase of network and other internal-use capital projects. Employee-related costs for construction of network and other internal use assets are also capitalized during the construction phase. Property, plant and equipment supplies used internally are carried at average cost, except for significant individual items for which cost is based on specific identification. We perform annual internal reviews to evaluate the reasonableness of the depreciable lives for our property, plant and equipment. Our reviews utilize models that take into account actual usage, physical wear and tear, replacement history, assumptions about technology evolution and, in certain instances, actuarially determined probabilities to estimate the remaining useful life of our asset base. Our remaining useful life assessments anticipate the loss in service value of assets that may precede the physical retirement. Assets shared among many customers may lose service value as those customers leave the network. However, the asset is not retired until all customers no longer utilize the asset and we determine there is no alternative use for the asset. We have asset retirement obligations associated with the legally or contractually required removal of a limited group of property, plant and equipment assets from leased properties and the disposal of certain hazardous materials present in our owned properties. When an asset retirement obligation is identified, usually in association with the acquisition of the asset, we record the fair value of the obligation as a liability. The fair value of the obligation is also capitalized as property, plant and equipment and then amortized over the estimated remaining useful life of the associated asset. Where the removal obligation is not legally binding, the net cost to remove assets is expensed in the period in which the costs are actually incurred. We review long-lived tangible assets for impairment whenever facts and circumstances indicate that the carrying amounts of the assets may not be recoverable. For assessment purposes, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities, absent a material change in operations. An impairment loss is recognized only if the carrying amount of the asset group is not recoverable and exceeds its fair value. Recoverability of the asset group to be held and used is assessed by comparing the carrying amount of the asset group to the estimated undiscounted future net cash flows expected to be generated by the asset group. If the asset group's carrying value is not recoverable, an impairment charge is recognized for the amount by which the carrying amount of the asset group exceeds its fair value. We determine fair values by using a combination of comparable market values and discounted cash flows, as appropriate. Goodwill, Customer Relationships and Other Intangible Assets Intangible assets arising from business combinations, such as goodwill, customer relationships, capitalized software, trademarks and trade names, are initially recorded at estimated fair value. We amortize customer relationships primarily over an estimated life of 10 to 15 years , using either the sum-of-the-years-digits or the straight-line methods, depending on the type of customer. We amortize capitalized software using the straight-line method over estimated lives ranging up to 7 years , except for approximately $237 million of our capitalized software costs, which represents costs to develop an integrated billing and customer care system which is amortized using the straight-line method over a 20 year period. We amortize our other intangible assets predominantly using the sum-of-the-years-digits method over an estimated life of 4 to 20 years. Other intangible assets not arising from business combinations are initially recorded at cost. Where there are no legal, regulatory, contractual or other factors that would reasonably limit the useful life of an intangible asset, we classify the intangible asset as indefinite-lived and such intangible assets are not amortized. Internally used software, whether purchased or developed by us, is capitalized and amortized using the straight-line method over its estimated useful life. We have capitalized certain costs associated with software such as costs of employees devoting time to the projects and external direct costs for materials and services. Costs associated with software to be used for internal purposes are expensed until the point at which the project has reached the development stage. Subsequent additions, modifications or upgrades to internal-use software are capitalized only to the extent that they allow the software to perform a task it previously did not perform. Software maintenance, data conversion and training costs are expensed in the period in which they are incurred. We review the remaining economic lives of our capitalized software annually. Capitalized software is included in other intangible assets, net, in our consolidated balance sheets. Our long-lived intangible assets, other than goodwill, with indefinite lives are assessed for impairment annually, or, under certain circumstances, more frequently, such as when events or changes in circumstances indicate there may be an impairment. These assets are carried at the estimated fair value at the time of acquisition and assets not acquired in acquisitions are recorded at historical cost. However, if their estimated fair value is less than the carrying amount, other indefinite-lived intangible assets are reduced to their estimated fair value through an impairment charge to our consolidated statements of operations. We are required to assess goodwill for impairment at least annually, or more frequently, if an event occurs or circumstances change that would indicate an impairment may have occurred. We are required to write-down the value of goodwill in periods in which the recorded amount of goodwill exceeds the implied fair value of goodwill. Our reporting units are not discrete legal entities with discrete financial statements. Therefore, the equity carrying value and future cash flows must be estimated each time a goodwill impairment assessment is performed on a reporting unit. As a result, our assets, liabilities and cash flows are assigned to reporting units using reasonable and consistent allocation methodologies. Certain estimates, judgments and assumptions are required to perform these assignments. We believe these estimates, judgments and assumptions to be reasonable, but changes in many of these can significantly affect each reporting unit's equity carrying value and future cash flows utilized for our goodwill impairment assessment. We are required to reassign goodwill to reporting units each time we reorganize our internal reporting structure which causes a change in the composition of our reporting units. Goodwill is reassigned to the reporting units using a relative fair value approach. We utilize the earnings before interest, taxes, depreciation and amortization of each reporting unit as our allocation methodology as it represents a reasonable proxy for the fair value of the operations being reorganized. See Note 4—Goodwill, Customer Relationships and Other Intangible Assets for additional information. Pension and Post-Retirement Benefits We recognize the funded status of our defined benefit and post-retirement plans as an asset or a liability on our consolidated balance sheet. Each year's actuarial gains or losses are a component of our other comprehensive (loss) income, which is then included in our accumulated other comprehensive loss. Pension and post-retirement benefit expenses are recognized over the period in which the employee renders service and becomes eligible to receive benefits. We make significant assumptions (including the discount rate, expected rate of return on plan assets, mortality and health care trend rates) in computing the pension and post-retirement benefits expense and obligations. See Note 9—Employee Benefits for additional information. Foreign Currency Our results of operations include foreign subsidiaries, which are translated from the applicable functional currency to the United States Dollar using the average exchange rates during the reporting period, while assets and liabilities are translated at the reporting date. We include gains or losses from foreign currency remeasurement in other income, net in our consolidated statements of operations. Certain non-U.S. subsidiaries designate the local currency as their functional currency, and we record the translation of their assets and liabilities into U.S. Dollars at the balance sheet date as translation adjustments and include them as a component of accumulated other comprehensive loss in our consolidated balance sheets. Common Stock At December 31, 2016 , we had 4 million unissued shares of CenturyLink, Inc. common stock reserved for acquisitions, substantially all of which are reserved for issuance in connection with our pending acquisition of Level 3. In addition, we had 21 million shares authorized for future issuance under our equity incentive plans. Preferred stock Holders of outstanding CenturyLink, Inc. preferred stock are entitled to receive cumulative dividends, receive preferential distributions equal to $25 per share plus unpaid dividends upon CenturyLink, Inc.'s liquidation and vote as a single class with the holders of common stock. Dividends 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. Recent Accounting Pronouncements Income Taxes On October 24, 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-16, “Intra-Entity Transfers of Assets Other Than Inventory” ("ASU 2016-16"). ASU 2016-16 eliminates the current prohibition on the recognition of the income tax effects on the transfer of assets among our subsidiaries. After adoption of this ASU, the income tax effects associated with these asset transfers, except for the transfer of inventory, will be recognized in the period the asset is transferred versus the current deferral and recognition upon either the sale of the asset to a third party or over the remaining useful life of the asset. We are currently reviewing the requirements of this ASU and evaluating the impact on our consolidated financial statements. We are required to adopt the provisions of ASU 2016-16 on January 1, 2018, but have the option to early adopt as of January 1, 2017. We plan to adopt the provision of ASU 2016-16 on January 1, 2018. The impact of adopting ASU 2016-16, if any, will be recognized through a cumulative adjustment to retained earnings as of the date of adoption. Financial Instruments On June 16, 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"). The primary impact of ASU 2016-13 for us is a change in the model for the recognition of credit losses related to our financial instruments from an incurred loss model, which recognized credit losses only if it was probable that a loss had been incurred, to an expected loss model, which requires our management team to estimate the total credit losses expected on the portfolio of financial instruments. We are currently reviewing the requirements of the standard and evaluating the impact on our consolidated financial statements. We are required to adopt the provisions of ASU 2016-13 effective January 1, 2020, but could elect to early adopt the provisions as of January 1, 2019. We expect to recognize any impacts of adopting ASU 2016-13 through a cumulative adjustment to retained earnings as of the date of adoption. As of the date of this annual report, we have not yet determined the date we will adopt ASU 2016-13. Share-based Compensation On March 30, 2016, the FASB issued ASU 2016-09, “Improvement to Employee Share-Based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 modifies the accounting and associated income tax accounting for share-based compensation in order to reduce the cost and complexity associated with current generally accepted accounting principles. ASU 2016-09 became effective as of January 1, 2017. ASU 2016-09 includes different transition requirements for the different changes implemented, including some provisions which allow retrospective application. We will implement this new standard on its effective date. The primary provisions of ASU 2016-09 that we expect will affect our financial statements are: (1) a reclassification of the tax effect associated with the difference between the expense recognized for share-based payments and the associated tax deduction from additional paid-in capital to income tax expense; (2) a reclassification of the tax effect associated with the difference between compensation expense and associated deduction from financing cash flow to operating cash flow; and (3) a change in our accounting policy to account for forfeitures of share-based payment grants as they occur as opposed to our current policy of estimating the forfeitures on the grant date. The adoption of this accounting policy change will result in an immaterial increase in our retained earnings as of January 1, 2017. Although the provisions would not have had a material impact on our previously-issued financial statements, we cannot provide any assurance regarding their future impacts. Adoption of ASU 2016-09 may increase the volatility of income tax expense and cash flow from operating activities. Leases On February 25, 2016, the FASB issued ASU 2016-02, “Leases” (“ASU 2016-02”). The core principle of ASU 2016-02 will require lessees to present right-of-use assets and lease liabilities on their balance sheets for operating leases, which are currently not reflected on their balance sheets. ASU 2016-02 is effective for annual and interim periods beginning January 1, 2019. Early adoption of ASU 2016-02 is permitted. Upon adoption of ASU 2016-02, we are required to recognize and measure leases at the beginning of the earliest period presented in our consolidated financial statements using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that we may elect to apply. We will implement this new standard on its effective date, but we have not yet decided which practical expedient options w |
Pending Acquisition of Level 3
Pending Acquisition of Level 3 | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Business Combination Disclosure | Pending Acquisition of Level 3 On October 31, 2016, we entered into a definitive merger agreement under which we propose to acquire Level 3 Communications, Inc. ("Level 3") in a cash and stock transaction. Under the terms of the agreement, Level 3 shareholders will receive $26.50 per share in cash and 1.4286 of CenturyLink shares for each share of Level 3 common stock they own at closing. CenturyLink shareholders are expected to own approximately 51% and Level 3 shareholders are expected to own approximately 49% of the combined company at closing. On December 31, 2016, Level 3 had outstanding $ 10.9 billion of long-term debt. Completion of the transaction is subject to the receipt of regulatory approvals, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, as well as approvals from the FCC and certain state regulatory authorities. The transaction is also subject to the approval of CenturyLink and Level 3 shareholders at meetings scheduled for March 16, 2017, as well as other customary closing conditions. Subject to these conditions, we anticipate closing this transaction by the end of the third quarter 2017. If the merger is terminated under certain circumstances, we may be obligated to pay Level 3 a termination fee of $ 472 million , or Level 3 may be obligated to pay CenturyLink a termination fee of $ 738 million . |
Pending Sale of Colocation Busi
Pending Sale of Colocation Business and Data Centers | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations, Disclosure | Pending Sale of Colocation Business and Data Centers On November 3, 2016, we entered into a definitive stock purchase agreement to sell our data centers and colocation business to a consortium led by BC Partners, Inc. and Medina Capital in exchange for cash and a minority stake in the consortium's newly-formed global secure infrastructure company. The sale is subject to regulatory approvals, including a review by the Committee of Foreign Investments in the United States, as well as other customary closing conditions. Based on certain estimates and assumptions regarding the closing date and various tax matters, we currently project that the net cash proceeds from the divestiture will be approximately $1.5 billion to $1.7 billion . We plan to use a portion of these net cash proceeds to partly fund our acquisition of Level 3. As a result of the pending sale of our colocation business and data centers, we reclassified the following assets and liabilities, which are now reflected as assets held for sale and current liabilities associated with the assets held for sale on our consolidated balance sheet, respectively, as of December 31, 2016: Dollars in millions Goodwill $ 1,141 Property, plant and equipment 1,071 Other intangible assets 258 Other assets 45 Total amount reclassified to assets held for sale (1) $ 2,515 Capital lease obligations 305 Other liabilities 114 Total liabilities associated with assets held for sale $ 419 ________________________________________________________________________ (1) A portion of the assets equivalent to our anticipated minority stake, which was based on an estimated fair value, in the consortium's newly-formed global secure infrastructure company is reflected in non-current other assets on our consolidated balance sheet. The colocation business has resided in our business reporting unit. The amount of goodwill allocated to the colocation business being sold was determined using a relative-fair-value approach. The amount of goodwill included in the carrying amount of assets held for sale was based on the relative fair value of the colocation business we agreed to sell and the portion of the business reporting unit to be retained by us. We used the sale price as the fair value of the colocation business and the relative business fair value for the portion of the business reporting unit we will retain. As of November 3, 2016, we performed a quantitative assessment of the goodwill remaining in the business reporting unit after the allocation to the colocation business and concluded the remaining goodwill was not impaired as of that date. Effective with the date we entered into the agreement to sell the colocation business we ceased recording depreciation of the property, plant and equipment to be sold and amortization of the intangible assets. We estimate that we would have recorded $36 million of depreciation and amortization expense in the two months subsequent to entering into the agreement to sell the colocation business if we had not met the held-for-sale criteria. We have estimated that after factoring in the costs to sell the colocation business the net carrying value of the assets and liabilities being sold closely approximates the estimated value of the proceeds we will receive upon closing. We further estimate, due to corporate actions we plan to take in the first quarter of 2017 regarding certain subsidiaries involved in the colocation business, that we will trigger tax expense relating to the sale of approximately $100 million to $200 million . For additional information on our goodwill, see Note 4—Goodwill, Customer Relationships and Other Intangible Assets. |
Goodwill, Customer Relationship
Goodwill, Customer Relationships and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill, Customer Relationships and Other Intangible Assets | Goodwill, Customer Relationships and Other Intangible Assets Goodwill, customer relationships and other intangible assets consisted of the following: As of December 31, 2016 2015 (Dollars in millions) Goodwill $ 19,650 20,742 Customer relationships, less accumulated amortization of $6,318 and $5,648 2,797 3,928 Indefinite-life intangible assets 269 269 Other intangible assets subject to amortization: Capitalized software, less accumulated amortization of $2,019 and $1,778 1,227 1,248 Trade names and patents, less accumulated amortization of $23 and $20 35 38 Total other intangible assets, net $ 1,531 1,555 Total amortization expense for intangible assets for the years ended December 31, 2016 , 2015 and 2014 was $1.225 billion , $1.353 billion and $1.470 billion , respectively. As of December 31, 2016 , the gross carrying amount of goodwill, customer relationships, indefinite-life and other intangible assets was $32.338 billion . We estimate that total amortization expense for intangible assets for the years ending December 31, 2017 through 2021 will be as follows: (Dollars in millions) 2017 $ 1,044 2018 925 2019 808 2020 703 2021 268 Our goodwill was derived from numerous acquisitions where the purchase price exceeded the fair value of the net assets acquired. We assess our goodwill and other indefinite-lived intangible assets for impairment annually, or, under certain circumstances, more frequently, such as when events or changes in circumstances indicate there may be impairment. We are required to write down the value of goodwill only when our assessment determines the recorded amount of goodwill exceeds the fair value. Our annual impairment assessment date for goodwill is October 31, at which date we assessed our reporting units, which are business (excluding wholesale), consumer and wholesale. Our annual impairment assessment date for indefinite-lived intangible assets other than goodwill is December 31. Our reporting units are not discrete legal entities with discrete financial statements. Our assets and liabilities are employed in and relate to the operations of multiple reporting units. For each reporting unit, we compare its estimated fair value of equity to its carrying value of equity that we assign to the reporting unit. If the estimated fair value of the reporting unit is greater than the carrying value, we conclude that no impairment exists. If the estimated fair value of the reporting unit is less than the carrying value, a second calculation is required in which the implied fair value of goodwill is compared to the carrying value of goodwill that we assigned to the reporting unit. If the implied fair value of goodwill is less than its carrying value, goodwill must be written down to its implied fair value. At October 31, 2016, we utilized a level 3 valuation technique to estimate the fair value of our business (excluding wholesale), consumer and wholesale reporting units by considering both a market approach and a discounted cash flow method. The market approach method includes the use of comparable multiples of publicly traded companies whose services are comparable to ours. The discounted cash flow method is based on the present value of projected cash flows and a terminal value, which represents the expected normalized cash flows of the reporting units beyond the cash flows from the discrete projection period. We discounted the estimated cash flows for our consumer and wholesale reporting units using a rate that represents their estimated weighted average cost of capital, which we determined to be approximately 6.0% as of the assessment date (which was comprised of an after-tax cost of debt of 2.8% and a cost of equity of 6.2% ). We discounted the estimated cash flows of our business (excluding wholesale) reporting unit using a rate that represents its estimated weighted average cost of capital, which we determined to be approximately 7.0% as of the assessment date (which was comprised of an after-tax cost of debt of 2.8% and a cost of equity of 6.8% ). We also reconciled the estimated fair values of the reporting units to our market capitalization as of October 31, 2016 and concluded that the indicated implied control premium of approximately 33.8% was reasonable based on recent transactions in the market place. As of October 31, 2016, based on our assessment performed with respect to these reporting units as described above, we concluded that our goodwill for our three reporting units was not impaired as of that date. The following table shows the rollforward of goodwill assigned to our reportable segments from December 31, 2014 through December 31, 2016 . Business Consumer Total (Dollars in millions) As of December 31, 2014 (1) $ 10,477 10,278 20,755 Purchase accounting and other adjustments (13 ) — (13 ) As of December 31, 2015 (1) 10,464 10,278 20,742 Purchase accounting and other adjustments 49 — 49 Goodwill attributable to the colocation business and data centers reclassified to assets held for sale (1,141 ) — (1,141 ) As of December 31, 2016 (1) $ 9,372 $ 10,278 $ 19,650 _____________________________________________________________________________ (1) Goodwill is net of accumulated impairment losses of $1.1 billion that related to our former hosting segment now included in our business segment. During 2016, we acquired all of the outstanding stock of three companies for total consideration of $53 million , including future deferred or contingent cash payments of $14 million , of which $49 million has initially been attributed to goodwill. The valuation for these three acquisitions is preliminary and subject to change during the measurement period, which will end one year from the date of each acquisition. These acquisitions were consummated to expand the product offerings of our business segment and therefore the goodwill has been assigned to that segment. The majority of the goodwill is attributed primarily to expected future increases in business segment revenue from the sale of new products. The majority of the goodwill from these acquisitions is expected to be deductible for tax purposes. None of the above-described acquisitions materially impacted the consolidated results of operations from the dates of the acquisitions and would not materially impact pro forma results of operations. For additional information on our segments, see Note 14—Segment Information. We completed our qualitative assessment of our indefinite-lived intangible assets other than goodwill as of December 31, 2016 and concluded it is more likely than not that our indefinite-lived intangible assets are not impaired; thus, no impairment charge was recorded in 2016. As of October 31, 2015, based on our assessment performed, we concluded that our goodwill for our then three reporting units was not impaired as of that date. As of October 31, 2014, based on our assessment performed, we concluded that our goodwill for our then four reporting units was not impaired as of that date. |
Long-Term Debt and Credit Facil
Long-Term Debt and Credit Facilities | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Credit Facilities | Long-Term Debt and Credit Facilities Long-term debt, including unamortized discounts and premiums and unamortized debt issuance costs, consisting of borrowings by CenturyLink, Inc. and certain of its subsidiaries, including Qwest Corporation, Qwest Capital Funding, Inc. and Embarq Corporation and its subsidiaries ("Embarq"), were as follows: As of December 31, Interest Rates Maturities 2016 2015 (Dollars in millions) CenturyLink, Inc. Senior notes 5.150% - 7.650% 2017 - 2042 $ 8,975 7,975 Credit facility and revolving line of credit (1) 4.500% 2019 370 410 Term loan 2.520% 2019 336 358 Subsidiaries Qwest Corporation Senior notes 6.125% - 7.750% 2017 - 2056 7,259 7,229 Term loan 2.520% 2025 100 100 Qwest Capital Funding, Inc. Senior notes 6.500% - 7.750% 2018 - 2031 981 981 Embarq Corporation and subsidiaries Senior note 7.995% 2036 1,485 2,669 First mortgage bonds 7.125% - 8.770% 2017 - 2025 223 232 Other 9.000% 2019 150 150 Capital lease and other obligations Various Various 440 425 Unamortized discounts, net (133 ) (125 ) Unamortized debt issuance costs (193 ) (179 ) Total long-term debt 19,993 20,225 Less current maturities not associated with assets held for sale (1,503 ) (1,503 ) Less capital lease obligations associated with assets held for sale (2) (305 ) — Long-term debt, excluding current maturities and capital leases obligations associated with assets held for sale $ 18,185 18,722 _______________________________________________________________________________ (1) The aggregate amount outstanding on our Credit Facility and revolving line of credit borrowings at December 31, 2016 and 2015 was $370 million and $410 million , respectively, with weighted-average interest rates of 4.500% and 2.756% , respectively. These amounts change on a regular basis. (2) If, as anticipated, we sell our colocation business and data centers in the manner discussed in Note 3—Pending Sale of Colocation Business and Data Centers, $305 million of the capital lease obligations as of December 31, 2016 will be assumed by the Purchaser. See Note 3—Pending Sale of Colocation Business and Data Centers for additional information. New Issuances 2016 On August 22, 2016, Qwest Corporation issued $978 million aggregate principal amount of 6.5% Notes due 2056, including $128 million principal amount that was sold pursuant to an over-allotment option, in exchange for net proceeds, after deducting underwriting discounts and other expenses, of $946 million . All of the 6.5% Notes are unsecured obligations and may be redeemed by Qwest Corporation, in whole or in part, on or after September 1, 2021, at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest to the redemption date. On April 6, 2016, CenturyLink, Inc. issued $1 billion aggregate principal amount of 7.5% Notes due 2024, in exchange for net proceeds, after deducting underwriting discounts and other expenses, of $988 million . All of the 7.5% Notes are unsecured obligations and may be redeemed by CenturyLink, Inc., in whole or in part, on or after January 1, 2024, at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest to the redemption date. At any time before January 1, 2024, the Notes are redeemable, in whole or in part, at CenturyLink, Inc.'s option, at a redemption price equal to the greater of 100% of the principal amount of the Notes to be redeemed or the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed, discounted to the redemption date in the manner described in the Notes , plus accrued and unpaid interest to the redemption date. In addition, at any time on or prior to April 1, 2019, CenturyLink, Inc. may redeem up to 35% of the aggregate principal amount of the Notes at a redemption price of 107.5% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the net proceeds of certain equity offerings. Under certain circumstances, CenturyLink, Inc. 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. On January 29, 2016, Qwest Corporation issued $235 million aggregate principal amount of 7% Notes due 2056, in exchange for net proceeds, after deducting underwriting discounts and other expenses, of $227 million . All of the 7% Notes are unsecured obligations and may be redeemed by Qwest Corporation, in whole or in part, on or after February 1, 2021, at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest to the redemption date. 2015 On September 21, 2015 , Qwest Corporation issued $400 million aggregate principal amount of 6.625% Notes due 2055, in exchange for net proceeds, after deducting underwriting discounts and other expenses, of approximately $386 million . On September 30, 2015 , Qwest Corporation issued an additional $10 million aggregate principal amount of the 6.625% Notes under an over-allotment option granted to the underwriter for this offering. All of the 6.625% Notes are unsecured obligations and may be redeemed by Qwest Corporation, in whole or in part, on or after September 15, 2020 , at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest to the redemption date. On March 19, 2015 , CenturyLink, Inc. issued in a private offering $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, CenturyLink, Inc. 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 , CenturyLink, Inc. 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, CenturyLink, Inc. 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. In October 2015, CenturyLink, Inc. exchanged all of the unregistered Notes issued on March 19, 2015 for fully-registered Notes. Repayments 2016 On December 23, 2016, a subsidiary of Embarq Corporation redeemed $5 million of its 8.375% Notes due 2025, which resulted in an immaterial loss. On September 19, 2016, a subsidiary of Embarq Corporation redeemed all of its 8.77% Notes due 2017, which was less than $4 million and resulted in an immaterial loss. On September 15, 2016, Qwest Corporation redeemed $287 million of its 7.5% Notes due 2051, which resulted in a loss of $9 million . On August 29, 2016, Qwest Corporation redeemed all $661 million of its 7.375% Notes due 2051, which resulted in a loss of $18 million . On June 1, 2016, Embarq Corporation paid at maturity the $1.184 billion principal amount and accrued and unpaid interest due under its 7.082% Notes. On May 2, 2016, Qwest Corporation paid at maturity the $235 million principal amount and accrued and unpaid interest due under its 8.375% Notes. 2015 On October 13, 2015 , Qwest Corporation redeemed all $250 million of its 7.2% Notes due 2026, which resulted in an immaterial gain, and redeemed $150 million of its 6.875% Notes due 2033, which resulted in an immaterial loss. On June 15, 2015 , Qwest Corporation paid at maturity the $92 million principal amount of its 7.625% Notes. On February 17, 2015 , CenturyLink, Inc. paid at maturity the $350 million principal and accrued and unpaid interest due under its Series M 5.00% Notes. Credit Facility Our $2 billion revolving credit facility (as amended, the "Credit Facility") matures on December 3, 2019 and has 16 lenders, each with commitments ranging from $3.5 million to $198.5 million . The Credit Facility allows us to obtain revolving loans and to issue up to $400 million of letters of credit, which upon issuance reduce the amount available for other extensions of credit. Interest is assessed on borrowings using either the LIBOR or the base rate (each as defined in the Credit Facility) plus an applicable margin between 1.00% and 2.25% per annum for LIBOR loans and 0.00% and 1.25% per annum for base rate loans depending on our then current senior unsecured long-term debt rating. Our obligations under the Credit Facility are guaranteed by nine of our subsidiaries. Term Loans, Revolving Line of Credit and Revolving Letter of Credit The CenturyLink, Inc. term loan matures on April 18, 2019. In 2015, CenturyLink amended its term loan agreement to reduce the interest rate payable by it thereunder and to modify some covenants to provide additional flexibility. In 2015, Qwest Corporation 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. Interest is paid monthly 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 Qwest Corporation's then current senior unsecured long-term debt rating. At both December 31, 2016 and 2015, the outstanding principal balance on this term loan was $100 million . In 2016, our $85 million uncommitted revolving line of credit with one of the lenders under the Credit Facility was suspended as a result of this lender's additional borrowing commitment towards the pending acquisition of Level 3. Interest is paid monthly based upon the LIBOR plus an applicable margin between 1.00% and 2.25% per annum. At December 31, 2016 , CenturyLink, Inc. had no borrowings outstanding under this uncommitted revolving line of credit and at December 31, 2015, CenturyLink, Inc. had $80 million borrowings outstanding under this uncommitted revolving line of credit. In April 2011, we entered into a $160 million uncommitted revolving letter of credit facility which enables us to provide letters of credit under terms that may be more favorable than those under the Credit Facility. At December 31, 2016 and 2015 , our outstanding letters of credit totaled $105 million and $109 million , respectively, under this facility. Aggregate Maturities of Long-Term Debt Set forth below is the aggregate principal amount of our long-term debt (excluding unamortized discounts, net and unamortized debt issuance costs) maturing during the following years: (Dollars in millions) (1) 2017 $ 1,544 2018 280 2019 1,131 2020 1,032 2021 2,329 2022 and thereafter 14,003 Total long-term debt $ 20,319 _______________________________________________________________________________ (1) Actual principal paid in any year may differ due to the possible future refinancing of outstanding debt or the issuance of new debt. The projected amounts in the table also exclude any impacts from the sale of our colocation business or any further acquisitions. Interest Expense Interest expense includes interest on total long-term debt. The following table presents the amount of gross interest expense, net of capitalized interest: Years Ended December 31, 2016 2015 2014 (Dollars in millions) Interest expense: Gross interest expense $ 1,372 1,364 1,358 Capitalized interest (54 ) (52 ) (47 ) Total interest expense $ 1,318 1,312 1,311 Covenants Certain of our loan agreements contain various restrictions, as described more fully below. Under current circumstances, we believe the covenants currently in effect place no significant restriction on the transfer of funds from our consolidated subsidiaries to CenturyLink. The senior notes of CenturyLink, Inc. were issued under an indenture dated March 31, 1994. This indenture restricts our ability to (i) incur, issue or create liens upon the property of CenturyLink, Inc. and (ii) consolidate with or merge into, or transfer or lease all or substantially all of our assets to any other party. The indenture does not contain any provisions that are impacted by our credit ratings or that restrict the issuance of new securities in the event of a material adverse change to us. However, if the credit ratings relating to certain of our long-term debt securities issued under this indenture are downgraded in the manner specified thereunder in connection with a "change of control" of CenturyLink, Inc., then we will be required to offer to repurchase such debt securities. The senior notes of Qwest Corporation were issued under indentures dated April 15, 1990 and October 15, 1999. These indentures contain restrictions on the incurrence of liens and the consummation of certain transactions substantially similar to the above-described covenants in CenturyLink, Inc.'s March 31, 1994 indenture. The senior notes of Qwest Capital Funding, Inc. were issued under an indenture dated June 29, 1998 containing terms substantially similar to those set forth in Qwest Corporation's indentures. Embarq's senior note was issued pursuant to an indenture dated as of May 17, 2006. While Embarq is generally prohibited from creating liens on its property unless its senior notes are secured equally and ratably, Embarq can create liens on its property without equally and ratably securing its senior notes so long as the sum of all indebtedness so secured does not exceed 15% of Embarq's consolidated net tangible assets. The indenture contains customary events of default, none of which are impacted by Embarq's credit rating. None of the above-listed indentures of CenturyLink, Inc., Qwest Corporation, Qwest Capital Funding, Inc. and Embarq contain any financial covenants or restrictions on the ability to issue new securities in accordance with the terms of the indenture. Several of our Embarq subsidiaries have outstanding first mortgage bonds. Each issue of these first mortgage bonds is secured by substantially all of the property, plant and equipment of the issuing subsidiary. Approximately 10% of our net property, plant and equipment is pledged to secure the long-term debt of subsidiaries. Under the Credit Facility, we, and our indirect subsidiary, Qwest Corporation, must maintain a debt to EBITDA (earnings before interest, taxes, depreciation and amortization, as defined in our Credit Facility) ratio of not more than 4.0 :1.0 and 2.85 :1.0, respectively, as of the last day of each fiscal quarter for the four quarters then ended. The Credit Facility also contains a negative pledge covenant, which generally requires us to secure equally and ratably any advances under the Credit Facility if we pledge assets or permit liens on our property for the benefit of other debtholders. The Credit Facility also has a cross payment default provision, and the Credit Facility and certain of our debt securities also have cross acceleration provisions. When present, these provisions could have a wider impact on liquidity than might otherwise arise from a default or acceleration of a single debt instrument. Our debt to EBITDA ratios could be adversely affected by a wide variety of events, including unforeseen expenses or contingencies. This could reduce our financing flexibility due to potential restrictions on incurring additional debt under certain provisions of our debt agreements or, in certain circumstances, could result in a default under certain provisions of such agreements. CenturyLink, Inc. and Qwest Corporation are both indebted under term loans, each of which includes covenants substantially similar to those set forth in the Credit Facility. At December 31, 2016 , we believe we were in compliance with all of the provisions and covenants contained in our Credit Facility and other material debt agreements. Guarantees We do not guarantee the debt of any unaffiliated parties, but certain of our subsidiaries guarantee the outstanding senior notes issued by other subsidiaries. In addition, nine of our largest wholly owned subsidiaries guarantee the obligations of CenturyLink, Inc. under the Credit Facility and its term loan. Level 3 Financing Commitment Letter In connection with entering into our merger agreement with Level 3 (discussed further in Note 2), on October 31, 2016, we obtained a debt commitment letter, which was amended and restated on November 13, 2016, and further amended on November 15, 2016 (the “Debt Commitment Letter”), from Bank of America, N.A., Morgan Stanley Senior Funding, Inc., The Bank of Tokyo-Mitsubishi UFJ, Ltd., Barclays Bank PLC, JPMorgan Chase Bank, N.A., Wells Fargo Bank, National Association, Royal Bank of Canada, Goldman Sachs Bank USA, SunTrust Bank, Mizuho Bank, Ltd., Regions Bank, Fifth Third Bank, Credit Suisse AG, Cayman Islands Branch, and U.S. Bank, National Association (collectively the “Commitment Parties”), pursuant to which the Commitment Parties or certain of their affiliates agreed to provide a $2.0 billion senior secured revolving credit facility, a $1.5 billion senior secured term loan “A” credit facility, a $4.5 billion senior secured term loan “B” credit facility and a $2.225 billion senior secured bridge loan facility (collectively, the “Commitment Facilities”), together with certain backstop commitments designed to provide additional acquisition-related financing in certain limited instances. The secured bridge loan facility will only be drawn to the extent we are unable to raise such amounts by issuing senior secured notes or other debt securities at or prior to the closing of the Level 3 acquisition. The senior secured revolving credit facility is designed to replace the Credit Facility. Bank of America, N.A. and Morgan Stanley Senior Funding, Inc., affiliates of BofA Merrill Lynch and Morgan Stanley, will be entitled to receive financing fees in connection with the debt commitment letter, the amount of which will vary based on, among other things, when the debt financing is incurred, whether the previously-announced divestiture of our data centers and colocation business closes prior to the Level 3 acquisition and whether the bridge loan facility is drawn. The financing fees to be payable to Bank of America, N.A. and Morgan Stanley Senior Funding, Inc. are expected to be quite substantial. Each Commitment Party’s commitments to provide the Commitment Facilities and each Commitment Party’s agreements to perform the services described in the Commitment Letter will automatically terminate on the earliest of (i) the date of termination of our merger agreement with Level 3 in accordance with its terms, (ii) the closing of the Level 3 acquisition with or without the use of such Commitment Facilities and (iii) 11:59 p.m. on October 31, 2017 (or, if the “Termination Date” as defined in the merger agreement is extended in certain circumstances, the date to which it is extended that is not later than 11:59 p.m. on January 31, 2018). The definitive documentation governing the Level 3 debt financing has not been finalized and, accordingly, the actual terms of the debt financing may differ from those described above. Although the debt financing described above is not subject to due diligence or a “market out,” such financing may not be considered assured. The obligation of the Commitment Parties to provide debt financing under the debt commitment letter is subject to a number of conditions, and it is anticipated that the definitive debt financing documentation will also include certain funding conditions. There is a risk that these conditions will not be satisfied and the debt financing may not be available when required. In addition, we have the right to substitute the proceeds of other debt financing, or commitments for other debt financing, for all or any portion of the Commitment Facilities. As of the date of this annual report, no such other debt financing has been arranged. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable The following table presents details of our accounts receivable balances: As of December 31, 2016 2015 (Dollars in millions) Trade and purchased receivables $ 1,882 1,789 Earned and unbilled receivables 299 288 Other 14 18 Total accounts receivable 2,195 2,095 Less: allowance for doubtful accounts (178 ) (152 ) Accounts receivable, less allowance $ 2,017 1,943 We are exposed to concentrations of credit risk from residential and business customers within our local service area, business customers outside of our local service area and from other telecommunications service providers. We generally do not require collateral to secure our receivable balances. We have agreements with other telecommunications service providers whereby we agree to bill and collect on their behalf for services rendered by those providers to our customers within our local service area. We purchase accounts receivable from other telecommunications service providers primarily on a recourse basis and include these amounts in our accounts receivable balance. We have not experienced any significant loss associated with these purchased receivables. The following table presents details of our allowance for doubtful accounts: Beginning Balance Additions Deductions Ending Balance (Dollars in millions) 2016 $ 152 192 (166 ) 178 2015 $ 162 177 (187 ) 152 2014 $ 155 159 (152 ) 162 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Net property, plant and equipment is composed of the following: Depreciable Lives As of December 31, 2016 2015 (Dollars in millions) Land N/A $ 563 571 Fiber, conduit and other outside plant (1) 15-45 years 16,996 16,166 Central office and other network electronics (2) 3-10 years 13,768 14,144 Support assets (3) 3-30 years 6,623 7,000 Construction in progress (4) N/A 1,244 904 Gross property, plant and equipment 39,194 38,785 Accumulated depreciation (22,155 ) (20,716 ) Net property, plant and equipment $ 17,039 18,069 _______________________________________________________________________________ (1) Fiber, conduit and other outside plant consists of fiber and metallic cable, conduit, poles and other supporting structures. (2) Central office and other network electronics consists of circuit and packet switches, routers, transmission electronics and electronics providing service to customers. (3) Support assets consist of buildings, data centers, computers and other administrative and support equipment. (4) Construction in progress includes inventory held for construction and property of the aforementioned categories that has not been placed in service as it is still under construction. See Note 3—Pending Sale of Colocation Business and Data Centers for additional information on our colocation assets and data centers reclassified to assets held for sale. We recorded depreciation expense of $2.691 billion , $2.836 billion and $2.958 billion for the years ended December 31, 2016 , 2015 and 2014 , respectively. In 2014, we recorded an impairment charge of $17 million in connection with a sale-leaseback transaction involving an office building that we closed in the fourth quarter of 2014. This impairment charge is included in selling, general and administrative expense in our consolidated statement of operations for the year ended December 31, 2014. Additionally, in 2014 we sold an office building for $12 million . Asset Retirement Obligations At December 31, 2016 , our asset retirement obligations balance was primarily related to estimated future costs of removing equipment from leased properties and estimated future costs of properly disposing of asbestos and other hazardous materials upon remodeling or demolishing buildings. Asset retirement obligations are included in other long-term liabilities on our consolidated balance sheets. The following table provides asset retirement obligation activity: Years Ended December 31, 2016 2015 2014 (Dollars in millions) Balance at beginning of year $ 91 107 106 Accretion expense 6 7 7 Liabilities incurred — — 6 Liabilities settled (2 ) (2 ) (2 ) Change in estimate — (21 ) (10 ) Balance at end of year $ 95 91 107 If, as anticipated, we sell our colocation business and data centers in the manner discussed in Note 3, $19 million of the asset retirement obligation as of December 31, 2016 will be assumed by the Purchaser. Our estimates for the cost of removal of network equipment, asbestos remediation and other obligations remained unchanged for the year ended December 31, 2016 . During 2015 and 2014 , we revised our estimates for the cost of removal of network equipment, asbestos remediation, and other obligations by $21 million and $10 million , respectively. These revisions resulted in a reduction of the asset retirement obligation and offsetting reduction to gross property, plant and equipment, and revisions to assets specifically identified are recorded as a reduction to accretion expense. |
Severance and Leased Real Estat
Severance and Leased Real Estate | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Severance and Leased Real Estate | Severance and Leased Real Estate Periodically, we reduce our workforce and accrue 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, process improvements through automation and reduced workload demands due to the loss of customers purchasing certain services. We report severance liabilities within accrued expenses and other liabilities - salaries and benefits in our consolidated balance sheets and report severance expenses in selling, general and administrative expenses in our consolidated statements of operations. As noted in Note 14—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 December 31, 2016 , the current and noncurrent portions of our leased real estate accrual were $8 million and $59 million , respectively. The remaining lease terms range from 1.2 years to 9.0 years, with a weighted average of 7.8 years. Changes in our accrued liabilities for severance expenses and leased real estate were as follows: Severance Real Estate (Dollars in millions) Balance at December 31, 2014 $ 26 96 Accrued to expense 96 — Payments, net (108 ) (13 ) Reversals and adjustments — (3 ) Balance at December 31, 2015 14 80 Accrued to expense 173 4 Payments, net (89 ) (20 ) Reversals and adjustments — 3 Balance at December 31, 2016 $ 98 67 |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefits | Employee Benefits Pension, Post-Retirement and Other Post-Employment Benefits We sponsor various defined benefit pension plans (qualified and non-qualified), which in the aggregate cover a substantial portion of our employees including legacy CenturyLink, legacy Qwest Communications International, Inc. ("Qwest") and legacy Embarq employees. On December 31, 2014 , we merged our existing qualified pension plans, which included merging the Qwest Pension Plan and Embarq Retirement Pension Plan into the CenturyLink Retirement Plan. The CenturyLink Retirement Plan was renamed the CenturyLink Combined Pension Plan ("Combined Plan"). Pension benefits for participants of the new Combined Plan who are represented by a collective bargaining agreement are based on negotiated schedules. All other participants' pension benefits are based on each individual participant's years of service and compensation. We also maintain non-qualified pension plans for certain current and former highly compensated employees. We maintain post-retirement benefit plans that provide health care and life insurance benefits for certain eligible retirees. We also provide other post-employment benefits for certain eligible former employees. We use a December 31 measurement date for all our plans. Pension Benefits Current funding laws require a company with a pension shortfall to fund the annual cost of benefits earned in addition to a seven -year amortization of the shortfall. Our funding policy for our Combined Plan is to make contributions with the objective of accumulating sufficient assets to pay all qualified pension benefits when due under the terms of the plan. The accounting unfunded status of our qualified pension plan was $2.352 billion and $2.215 billion as of December 31, 2016 and 2015 , respectively. We made a voluntary cash contribution of $100 million in both 2016 and 2015 to our qualified pension plan and paid $7 million and $6 million of benefits directly to participants of our non-qualified pension plans in 2016 and 2015, respectively. Based on current laws and circumstances, we are not required to make any contributions to our qualified pension plan in 2017 , but we estimate that we will pay $6 million of benefits directly to participants of our non-qualified pension plans. We currently expect to make a voluntary contribution of $100 million to the trust for our qualified pension plan in 2017. Our pension plans contain provisions that allow us, from time to time, to offer lump sum payment options to certain former employees in settlement of their future retirement benefits. Additionally, eligible employees who terminate employment may elect to receive a lump sum payout. We record these payments as a settlement only if, in the aggregate, they exceed the sum of the annual service and interest costs for the plan's net periodic pension benefit costs, which represents the settlement threshold. There were no pension lump sum offerings in 2016, other than those to eligible employees who terminated during 2016. In 2015, we made cash settlement payments of $356 million through a lump sum offering to a group of former employees. The total amount of the lump sum settlement payments for the year ended December 31, 2015, which included the lump sum offer and lump sum elections from employees who terminated employment during the year, was less than the settlement threshold, therefore settlement accounting was not triggered in 2015. In 2014, lump sum pension settlement payments to terminated, but not-yet-retired legacy Qwest participants was $460 million , which exceeded the settlement threshold of $418 million . As a result, we were required to recognize a settlement charge of $63 million in 2014 to accelerate the recognition of a portion of the previously unrecognized actuarial losses in the qualified pension plan, which has been allocated and reflected in cost of services and products (exclusive of depreciation and amortization) and selling, general and administrative in our consolidated statement of operations for the year ended December 31, 2014. This charge reduced our recorded net income and retained earnings, with an offset to accumulated other comprehensive loss in shareholders’ equity. The amount of any future non-cash settlement charges will depend on the level of lump sum benefit payments made in 2017 and beyond. Post-Retirement Benefits Our post-retirement benefit plans provide post-retirement benefits to qualified retirees and allow (i) eligible employees retiring before certain dates to receive benefits at no or reduced cost and (ii) eligible employees retiring after certain dates to receive benefits on a shared cost basis. The post-retirement benefits not paid by the trust are funded by us and we expect to continue funding these post-retirement obligations as benefits are paid. The accounting unfunded status of our qualified post-retirement benefit plan was $3.360 billion and $3.374 billion as of December 31, 2016 and 2015 , respectively. Assets in the post-retirement trusts have been substantially depleted as of December 31, 2016; however we will continue to pay certain post-retirement benefits through the trusts. No contributions were made to the post-retirement trusts in 2016 , and we do not expect to make a contribution in 2017 . In 2016 , we paid $129 million of post-retirement benefits, net of participant contributions and direct subsidies. In 2017 , we expect to pay $275 million of post-retirement benefits, net of participant contributions and direct subsidies. The increase in anticipated post-retirement benefit payments is the result of substantially depleting the plan assets held in the trust. We expect our health care cost trend rate to range from 5.0% to 5.5% in 2017 to 5.0% to 6.0% in 2018 and 2019 and grading to 4.50% by 2025 . Our post-retirement benefit expense, for certain eligible legacy Qwest retirees and certain eligible legacy CenturyLink retirees, is capped at a set dollar amount. Therefore, those health care benefit obligations are not subject to increasing health care trends after the effective date of the caps. A change of 100 basis points in the assumed initial health care cost trend rate would have had the following effects in 2016 : 100 Basis Points Change Increase (Decrease) (Dollars in millions) Effect on the aggregate of the service and interest cost components of net periodic post-retirement benefit expense (consolidated statement of operations) $ 2 (2 ) Effect on benefit obligation (consolidated balance sheet) 66 (61 ) Expected Cash Flows The qualified pension, non-qualified pension and post-retirement health care benefit payments and premiums and life insurance premium payments are paid by us or distributed from plan assets. The estimated benefit payments provided below are based on actuarial assumptions using the demographics of the employee and retiree populations and have been reduced by estimated participant contributions. Pension Plans Post-Retirement Benefit Plans Medicare Part D Subsidy Receipts (Dollars in millions) Estimated future benefit payments: 2017 $ 1,277 295 (6 ) 2018 987 284 (6 ) 2019 968 275 (6 ) 2020 948 267 (6 ) 2021 928 259 (6 ) 2022 - 2026 4,280 1,160 (26 ) Net Periodic Benefit Expense In 2016, we changed the method we use to estimate the service and interest components of net periodic benefit expense for pension and other postretirement benefit obligations. This change resulted in a decrease in the service and interest components in 2016. Beginning in 2016, we utilized a full yield curve approach in connection with estimating these components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows, as opposed to the single weighted-average discount rate derived from the yield curve that we have used in the past. We believe this change more precisely measures service and interest costs by improving the correlation between projected benefit cash flows to the corresponding spot yield curve rates. This change did not affect the measurement of our total benefit obligations but lowered our annual net periodic benefit cost by approximately $149 million in 2016. This change was treated as a change in accounting estimate and accordingly, we did not adjust the amounts recorded in 2015 or 2014. The actuarial assumptions used to compute the net periodic benefit expense for our qualified pension, non-qualified pension and post-retirement benefit plans are based upon information available as of the beginning of the year, as presented in the following table. Pension Plans Post-Retirement Benefit Plans 2016 2015 2014 2016 2015 2014 Actuarial assumptions at beginning of year: Discount rate 3.50% - 4.50% 3.50% - 4.10% 4.20% - 5.10% 4.15 % 3.80 % 4.50 % Rate of compensation increase 3.25 % 3.25 % 3.25 % N/A N/A N/A Expected long-term rate of return on plan assets 7.00 % 7.50 % 7.50 % 7.00 % 7.50 % 6.00% - 7.50% Initial health care cost trend rate N/A N/A N/A 5.00% / 5.25% 6.00% / 6.50% 6.00% / 6.50% Ultimate health care cost trend rate N/A N/A N/A 4.50 % 4.50 % 4.50 % Year ultimate trend rate is reached N/A N/A N/A 2025 2025 2024 _______________________________________________________________________________ N/A-Not applicable Net periodic benefit (income) expense for our qualified and non-qualified pension plans includes the following components: Pension Plans Years Ended December 31, 2016 2015 2014 (Dollars in millions) Service cost $ 64 83 77 Interest cost 427 568 602 Expected return on plan assets (732 ) (898 ) (891 ) Settlements — — 63 Special termination benefits charge 13 — — Recognition of prior service (credit) cost (8 ) 5 5 Recognition of actuarial loss 175 161 22 Net periodic pension benefit income $ (61 ) (81 ) (122 ) Net periodic benefit expense (income) for our post-retirement benefit plans includes the following components: Post-Retirement Plans Years Ended December 31, 2016 2015 2014 (Dollars in millions) Service cost $ 19 24 22 Interest cost 111 140 159 Expected return on plan assets (7 ) (21 ) (33 ) Special termination benefits charge 3 — — Recognition of prior service cost 20 19 20 Net periodic post-retirement benefit expense $ 146 162 168 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 for the years ended December 31, 2016 , 2015 and 2014 . In the third quarter of 2016, we announced plans to reduce our workforce, initially through voluntary severance packages and the balance through involuntary reductions. We recognized in the fourth quarter of 2016, a one-time charge of $16 million for special termination benefit enhancements paid to certain eligible employees upon voluntary retirement. Benefit Obligations The actuarial assumptions used to compute the funded status for the plans are based upon information available as of December 31, 2016 and 2015 and are as follows: Pension Plans Post-Retirement Benefit Plans December 31, December 31, 2016 2015 2016 2015 Actuarial assumptions at end of year: Discount rate 3.50% - 4.10% 3.50% - 4.50% 3.90 % 4.15 % Rate of compensation increase 3.25 % 3.25 % N/A N/A Initial health care cost trend rate N/A N/A 5.00% / 5.50% 5.00% / 5.25% Ultimate health care cost trend rate N/A N/A 4.50 % 4.50 % Year ultimate trend rate is reached N/A N/A 2025 2025 _______________________________________________________________________________ N/A-Not applicable In 2016, we adopted the revised mortality table and projection scale released by the Society of Actuaries ("SOA"), which decreased the projected benefit obligation of our benefit plans by $268 million . The 2015 revised mortality table and projection scale decreased the 2015 projected benefit obligation of our benefit plans by $379 million . In 2014 , to better reflect the expected lifetimes of our plan participants, we adopted a new mortality table for our defined benefit plan. The table used was based on SOA tables and increased the projected benefit obligation of our benefit plans by approximately $1.3 billion . The change in the projected benefit obligation of our benefit plans was recognized as part of the net actuarial loss and is included in accumulated other comprehensive loss, a portion of which is subject to amortization over the remaining estimated life of plan participants, which was approximately 9 to 10 years as of December 31, 2016 . The following tables summarize the change in the benefit obligations for the pension and post-retirement benefit plans: Pension Plans Years Ended December 31, 2016 2015 2014 (Dollars in millions) Change in benefit obligation Benefit obligation at beginning of year $ 13,349 15,042 13,401 Service cost 64 83 77 Interest cost 427 568 602 Plan amendments 2 (100 ) 4 Special termination benefits charge 13 — — Actuarial loss (gain) 487 (800 ) 2,269 Settlements — — (460 ) Benefits paid by company (7 ) (6 ) (6 ) Benefits paid from plan assets (1,034 ) (1,438 ) (845 ) Benefit obligation at end of year $ 13,301 13,349 15,042 Post-Retirement Benefit Plans Years Ended December 31, 2016 2015 2014 (Dollars in millions) Change in benefit obligation Benefit obligation at beginning of year $ 3,567 3,830 3,688 Service cost 19 24 22 Interest cost 111 140 159 Participant contributions 57 57 69 Plan amendments — — 23 Direct subsidy receipts 5 8 9 Special termination benefits charge 3 — — Actuarial (gain) loss (13 ) (148 ) 245 Benefits paid by company (191 ) (181 ) (166 ) Benefits paid from plan assets (145 ) (163 ) (219 ) Benefit obligation at end of year $ 3,413 3,567 3,830 Our aggregate benefit obligation as of December 31, 2016 , 2015 and 2014 was $16.714 billion , $16.916 billion and $18.872 billion , respectively. Plan Assets We maintain plan assets for our qualified pension plan and certain post-retirement benefit plans. The qualified pension plan's assets are used for the payment of pension benefits and certain eligible plan expenses. The post-retirement benefit plan's assets are used to pay health care benefits and premiums on behalf of eligible retirees and to pay certain eligible plan expenses. As discussed further above, the liquid plan assets in our post-retirement trust have been substantially depleted as of December 31, 2016 . The expected rate of return on plan assets is the long-term rate of return we expect to earn on the plans' assets, net of administrative expenses paid from plan assets. The rate of return is determined by the strategic allocation of plan assets and the long-term risk and return forecast for each asset class. The forecasts for each asset class are generated primarily from an analysis of the long-term expectations of various third party investment management organizations. The expected rate of return on plan assets is reviewed annually and revised, as necessary, to reflect changes in the financial markets and our investment strategy. The following tables summarize the change in the fair value of plan assets for the pension and post-retirement benefit plans: Pension Plans Years Ended December 31, 2016 2015 2014 (Dollars in millions) Change in plan assets Fair value of plan assets at beginning of year $ 11,072 12,571 12,346 Return on plan assets 754 (161 ) 1,373 Employer contributions 100 100 157 Settlements — — (460 ) Benefits paid from plan assets (1,034 ) (1,438 ) (845 ) Fair value of plan assets at end of year $ 10,892 11,072 12,571 Post-Retirement Benefit Plans Years Ended December 31, 2016 2015 2014 (Dollars in millions) Change in plan assets Fair value of plan assets at beginning of year $ 193 353 535 Return on plan assets 5 3 37 Benefits paid from plan assets (145 ) (163 ) (219 ) Fair value of plan assets at end of year $ 53 193 353 Pension Plans: Our investment objective for the qualified pension plan assets is to achieve an attractive risk-adjusted return over time that will provide for the payment of benefits and minimize the risk of large losses. Our pension plan investment strategy is designed to meet this objective by broadly diversifying plan assets across numerous strategies with differing expected returns, volatilities and correlations. The pension plan assets have target allocations of 45% to interest rate sensitive investments and 55% to investments designed to provide higher expected returns than the interest rate sensitive investments. Interest rate sensitive investments include 30% of plan assets targeted primarily to long-duration investment grade bonds, 10% targeted to high yield and emerging market bonds and 5% targeted to diversified strategies, which primarily have exposures to global bonds, as well as some exposures to global stocks and commodities. Assets expected to provide higher returns than the interest rate sensitive assets include broadly diversified equity investments with targets of approximately 15% to U.S. equity markets and 15% to non-U.S. developed and emerging markets. Approximately 7% is targeted to broadly diversified multi-asset class strategies that have the flexibility to adjust exposures to different asset classes. Approximately 10% is allocated to private markets investments including funds primarily invested in private equity, private debt and hedge funds. Real estate investments are targeted at 8% of plan assets. At the beginning of 2017 , our expected annual long-term rate of return on pension assets before consideration of administrative expenses is assumed to be 7.0% . However, projected increases in PBGC (Pension Benefit Guaranty Corporation) premium rates have now become large enough to reduce the annual long-term expected return net of administrative expenses to 6.5% . Our non-qualified pension plans are not funded. We pay benefits directly to the participants of these plans. Post-Retirement Benefit Plans: Our investment objective for the post-retirement benefit plans' assets is to achieve an attractive risk-adjusted return and minimize the risk of large losses over the expected life of the assets. At the beginning of 2017 , our expected annual long-term rate of return on post-retirement benefit plan assets is assumed to be 5.0% . Permitted investments: Plan assets are managed consistent with the restrictions set forth by the Employee Retirement Income Security Act of 1974, as amended, which requires diversification of assets and also generally prohibits defined benefit and welfare plans from investing more than 10% of their assets in securities issued by the sponsor company. At December 31, 2016 and 2015 , the pension and post-retirement benefit plans did not directly own any shares of our common stock and less than 1% of the assets were held in CenturyLink debt. Derivative instruments: Derivative instruments are used to reduce risk as well as provide return. The pension and post-retirement benefit plans use exchange traded futures and swaps to gain exposure to equity and interest rate markets consistent with target asset allocations and to reduce risk relative to measurement of the benefit obligation, which is sensitive to interest rate changes. Foreign exchange forward contracts are used to manage currency exposures. Credit default swaps are used to manage credit risk exposures in a cost effective and targeted manner relative to transacting with physical corporate fixed income securities. Options are currently used to manage interest rate exposure taking into account the implied volatility and current pricing of the specific underlying market instrument. Some derivative instruments subject the plans to counterparty risk. The external investment managers, along with Plan Management, monitor counterparty exposure and mitigate this risk by diversifying the exposure among multiple high credit quality counterparties, requiring collateral and limiting exposure by periodically settling contracts. The gross notional exposure of the derivative instruments directly held by the pension benefit plan is shown below. The notional amount of the derivatives corresponds to market exposure but does not represent an actual cash investment. Our post-retirement plans were not invested in derivative instruments for the years ended December 31, 2016 or 2015. Gross Notional Exposure Pension Plans Years Ended December 31, 2016 2015 (Dollars in millions) Derivative instruments: Exchange-traded U.S. equity futures $ 104 79 Exchange-traded Treasury and other interest rate futures 1,813 1,767 Interest rate swaps 260 550 Credit default swaps 240 189 Foreign exchange forwards 778 992 Options 206 285 Fair Value Measurements: 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. For additional information on the fair value hierarchy, see Note 12—Fair Value Disclosure. At December 31, 2016 , we used the following valuation techniques to measure fair value for assets. There were no changes to these methodologies during 2016 : • Level 1—Assets were valued using the closing price reported in the active market in which the individual security was traded. • Level 2—Assets were valued using quoted prices in markets that are not active, broker dealer quotations, net asset value of shares held by the plans and other methods by which all significant inputs were observable at the measurement date. • Level 3—Assets were valued using unobservable inputs in which little or no market data exists as reported by the respective institutions at the measurement date. The tables below present the fair value of plan assets by category and the input levels used to determine those fair values at December 31, 2016 . It is important to note that the asset allocations do not include market exposures that are gained with derivatives. Investments include dividend and interest receivables, pending trades and accrued expenses. Fair Value of Pension Plan Assets at December 31, 2016 Level 1 Level 2 Level 3 Total (Dollars in millions) Investment grade bonds (a) $ 420 1,404 — $ 1,824 High yield bonds (b) 7 597 11 615 Emerging market bonds (c) 212 212 — 424 Convertible bonds (d) 2 — — 2 U.S. stocks (f) 1,144 1 — 1,145 Non-U.S. stocks (g) 721 1 — 722 Multi-asset strategies (m) 389 — — 389 Cash equivalents and short-term investments (o) — 207 — 207 Total investments, excluding investments valued at NAV $ 2,895 2,422 11 5,328 Investments valued at NAV 5,564 Total pension plan assets $ 10,892 Fair Value of Post-Retirement Plan Assets Level 1 Level 2 Level 3 Total (Dollars in millions) Investment grade bonds (a) $ 1 2 — $ 3 High yield bonds (b) — 1 — 1 U.S. stocks (f) 2 — — 2 Non-U.S. stocks (g) 1 — — 1 Cash equivalents and short-term investments (o) — 5 — 5 Total investments, excluding investments valued at NAV $ 4 8 — 12 Investments valued at NAV 41 Total post-retirement plan assets $ 53 The tables below present the fair value of plan assets by category and the input levels used to determine those fair values at December 31, 2015 . It is important to note that the asset allocations do not include market exposures that are gained with derivatives. Investments include dividend and interest receivable, pending trades and accrued expenses. Fair Value of Pension Plan Assets at December 31, 2015 Level 1 Level 2 Level 3 Total (Dollars in millions) Investment grade bonds (a) $ 841 1,045 — $ 1,886 High yield bonds (b) — 544 13 557 Emerging market bonds (c) 208 232 1 441 Convertible bonds (d) — 2 — 2 U.S. stocks (f) 1,201 — — 1,201 Non-U.S. stocks (g) 1,127 1 — 1,128 Multi-asset strategies (m) 376 — — 376 Derivatives (n) 2 (6 ) — (4 ) Cash equivalents and short-term investments (o) — 192 — 192 Total investments, excluding investments valued at NAV $ 3,755 2,010 14 5,779 Investments valued at NAV 5,293 Total pension plan assets $ 11,072 Fair Value of Post-Retirement Plan Assets Level 1 Level 2 Level 3 Total (Dollars in millions) Investment grade bonds (a) $ 2 1 — $ 3 High yield bonds (b) — 1 — 1 U.S. stocks (f) 16 — — 16 Non-U.S. stocks (g) 12 — — 12 Emerging market stocks (h) 4 — — 4 Cash equivalents and short-term investments (o) — 4 — 4 Total investments, excluding investments valued at NAV $ 34 6 — 40 Investments valued at NAV 153 Total post-retirement plan assets $ 193 In 2015, we adopted Accounting Standards Update 2015-07 (“ASU 2015-07”), which retrospectively changed the disclosure requirements for certain investments that are valued based upon net asset value (“NAV”) as a practical expedient. ASU 2015-07 was issued to eliminate diversity among entities on what level in the fair value hierarchy such investments were assigned. Under ASU 2015-07, investments valued using NAV as a practical expedient are no longer assigned to a level in the fair value hierarchy. The value associated with these investments is disclosed in the reconciliation of the total investments measured at fair value shown below. The table below presents the fair value of plan assets valued at NAV by category for our pension and post-retirement plans at December 31, 2016 and 2015. Fair Value of Plan Assets Valued at NAV Pension Plans at December 31, Post-Retirement Benefit Plans at December 31, 2016 2015 2016 2015 (Dollars in millions) Investment grade bonds (a) $ 106 115 — 35 High yield bonds (b) 521 512 1 1 Emerging market bonds (c) 6 9 — — Diversified strategies (e) 522 516 1 54 U.S. stocks (f) 58 70 — — Non-U.S. stocks (g) 560 289 1 — Emerging market stocks (h) 76 64 — — Private equity (i) 506 526 14 21 Private debt (j) 369 371 1 2 Market neutral hedge funds (k) 739 825 1 17 Directional hedge funds (k) 657 594 1 1 Real estate (l) 926 968 8 20 Multi-asset strategies (m) 412 386 — — Cash equivalents and short-term investments (o) 106 48 13 2 Total investments valued at NAV $ 5,564 5,293 41 153 The plans' assets are invested in various asset categories utilizing multiple strategies and investment managers. Interests in commingled funds are valued using the net asset value ("NAV") per unit of each fund. The NAV reported by the fund manager is based on the market value of the underlying investments owned by each fund, minus its liabilities, divided by the number of shares outstanding. Commingled funds can be redeemed at NAV, generally within a year of the financial statement date. Investments in private funds, primarily limited partnerships, represent long-term commitments with a fixed maturity date and are also valued at NAV. Valuation inputs for these private fund interests are generally based on assumptions and other information not observable in the market. The assumptions and valuation methodologies of the pricing vendors, account managers, fund managers and partnerships are monitored and evaluated for reasonableness. Below is an overview of the asset categories, the underlying strategies and valuation inputs used to value the assets in the preceding tables: (a) Investment grade bonds represent investments in fixed income securities as well as commingled bond funds comprised of U.S. Treasury securities, agencies, corporate bonds, mortgage-backed securities, asset-backed securities and commercial mortgage-backed securities. Treasury securities are valued at the bid price reported in the active market in which the security is traded and are classified as Level 1. The valuation inputs of other investment grade bonds primarily utilize observable market information and are based on a spread to U.S. Treasury securities and consider yields available on comparable securities of issuers with similar credit ratings. The primary observable inputs include references to the new issue market for similar securities, the secondary trading markets and dealer quotes. Option adjusted spread models are utilized to evaluate securities such as asset backed securities that have early redemption features. These securities are classified as Level 2. The commingled funds are valued at NAV based on the market value of the underlying fixed income securities using the same valuation inputs previously described. (b) High yield bonds represent investments in below investment grade fixed income securities as well as commingled high yield bond funds. The valuation inputs for the securities primarily utilize observable market information and are based on a spread to U.S. Treasury securities and consider yields available on comparable securities of issuers with similar credit ratings. These securities are primarily classified as Level 2. The commingled funds are valued at NAV based on the market value of the underlying high yield instruments using the same valuation inputs previously described. (c) Emerging market bonds represent investments in securities issued by governments and other entities located in developing countries as well as registered mutual funds and commingled emerging market bond funds. The valuation inputs for the securities utilize observable market information and are primarily based on dealer quotes or a spread relative to the local government bonds. The registered mutual fund is classified as Level 1 while individual securities are classified as Level 2. The commingled funds are valued at NAV based on the market value of the underlying emerging market bonds using the same valuation inputs previously described. (d) Convertible bonds primarily represent investments in corporate debt securities that have features that allow the debt to be converted into equity securities under certain circumstances. The valuation inputs for the individual convertible bonds primarily utilize observable market information including a spread to U.S. Treasuries and the value and volatility of the underlying equity security. Convertible bonds are classified as Level 1. (e) Diversified strategies represent an investment in a commingled fund that primarily has exposures to global government, corporate and inflation linked bonds, global stocks and commodities. The commingled fund is valued at NAV based on the market value of the underlying investments. The valuation inputs utilize observable market information including published prices for exchange traded securities, bid prices for government bonds, and spreads and yields available for comparable fixed income securities with similar credit ratings. (f) U.S. stocks represent investments in stocks of U.S. based companies as well as commingled U.S. stock funds. The valuation inputs for U.S. stocks are based on the last published price reported on the major stock market on which the securities are traded and are primarily classified as Level 1. The commingled funds are valued at NAV based on the market value of the underlying investments using the same valuation inputs described above. (g) Non-U.S. stocks represent investments in stocks of companies based in developed countries outside the U.S. as well as commingled funds. The valuation inputs for non-U.S. stocks are based on the last published price reported on the major stock market on which the securities are traded and are primarily classified as Level 1. The commingled funds are valued at NAV based on the market value of the underlying investments using the same valuation inputs described above. (h) Emerging market stocks represent investments in an exchange traded fund and commingled funds comprised of stocks of companies located in developing markets. Exchange traded funds are based on the last published price reported on the major stock market on which the securities are traded and are classified as Level 1. The commingled funds are valued at NAV based on the market value of the underlying investments using the same valuation inputs described previously for individual stocks. (i) Private equity represents non-public investments in domestic and foreign buy out and venture capital funds. Private equity funds are primarily structured as limited partnerships and are valued according to the valuation policy of each partnership, subject to prevailing accounting and other regulatory guidelines. The partnerships are valued at NAV using valuation methodologies that give consideration to a range of factors, including but not limited to the price at which investments were acquired, the nature of the investments, market conditions, trading values on comparable public securi |
Share-based Compensation
Share-based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation | Share-based Compensation We maintain equity programs that allow our Board of Directors (through its Compensation Committee or our Chief Executive Officer as its delegate) to grant incentives to certain employees and our outside directors in any one or a combination of several forms, including incentive and non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock units and market and performance shares. Stock options generally expire ten years from the date of grant. Until June 30, 2014, we offered an employee stock purchase plan, which allowed eligible employees to purchase our common stock at a 15% discount based on the lower of the beginning or ending stock price during recurring six month offering periods. Stock Options The following table summarizes activity involving stock option awards for the year ended December 31, 2016 : Number of Options Weighted- Average Exercise Price (in thousands) Outstanding and Exercisable at December 31, 2015 3,525 $ 39.67 Exercised (31 ) 26.34 Forfeited/Expired (486 ) 37.96 Outstanding and Exercisable at December 31, 2016 3,008 40.08 The aggregate intrinsic value of our options outstanding and exercisable at December 31, 2016 was approximately $1 million . The weighted-average remaining contractual term for such options was 1.0 years. During 2016 , we received net cash proceeds of approximately $1 million in connection with our option exercises. The tax benefit realized from these exercises was less than $1 million . The total intrinsic value of options exercised for the years ended December 31, 2015 and 2014 , was $4 million and $9 million , respectively. The total intrinsic value of options exercised for the year ended December 31, 2016 was less than $1 million . Restricted Stock Awards For equity based awards that contain only service conditions for vesting, we calculate the award fair value based on the closing stock price on the accounting grant date. We also grant equity based restricted stock awards which contain market conditions or performance conditions, in addition to service conditions. For equity based restricted stock awards that contain market conditions, the award fair value is calculated through Monte-Carlo simulations. These awards, with service and market or performance conditions, represent the number of target shares for the award, as each recipient has the opportunity to ultimately receive a number of shares between 0% and 200% of the target restricted stock award. For the awards with market conditions, the percentage received depends on our total shareholder return versus that of selected peer companies during the three -year term of the award and for the awards with performance conditions, the percentage received depends upon the attainment of two financial performance targets during the three -year term of the award. During the first quarter of 2016, we granted approximately 766 thousand shares of restricted stock to certain executive level employees as part of our long-term incentive program, of which approximately 306 thousand contained only service conditions and will vest on a straight-line basis on February 23, 2017, 2018 and 2019. The remaining awards contain service conditions and either market or performance conditions and are scheduled to vest on February 23, 2019. During the first quarter of 2016, we also granted approximately 1.9 million shares to certain key employees as part of our annual equity compensation program, of which approximately 1.7 million contained only service conditions and will vest on a straight-line basis on February 25, 2017, 2018 and 2019. The remaining awards contain service conditions and either market or performance conditions and are scheduled to vest on February 25, 2019. During the first and third quarter of 2016, we granted shares to certain key employees as part of our long-term equity retention program. These awards will vest over a three to seven year period with approximately 113 thousand , 322 thousand and 209 thousand shares vesting on August 16, 2019, 2021 and 2023, respectively, and 22 thousand shares vesting on January 13, 2021 and 22 thousand shares vesting on January 13, 2023. The remaining awards granted throughout 2016 to certain other key employees and our outside directors were made as part of our equity compensation and retention programs. These awards require only service conditions for vesting and typically vest equally over a three year period. During the first quarter of 2015, we granted approximately 496 thousand shares of restricted stock to certain executive-level employees as part of our long-term incentive program, of which approximately 198 thousand contained only service conditions and will vest on a straight-line basis on February 23, 2016, 2017 and 2018. The remaining awards contain service conditions and market or performance conditions and are scheduled to vest on February 23, 2018. At the end of the first quarter of 2015, we granted approximately 1.2 million shares to certain key employees as part of our annual equity compensation program. These awards contained only service conditions and will vest on a straight-line basis on March 12, 2016, 2017 and 2018. During the third quarter of 2015 we granted shares to certain key employees as part of our long-term equity retention program. These awards will vest over a three to seven year period with approximately 193 thousand , 423 thousand and 230 thousand shares vesting on August 14, 2018, 2020 and 2022, respectively, and 55 thousand shares vesting equally on August 14, 2017, 2019, and 2021. The remaining awards granted throughout 2015 to certain other key employees and our outside directors were made as part of our equity compensation and retention programs. These awards require only service conditions for vesting and typically vest equally over a three year period. During the first quarter of 2014, we granted approximately 440 thousand shares of restricted stock to certain executive-level employees as part of our long-term incentive program, of which approximately 250 thousand contained only service conditions and will vest on a straight-line basis on February 20, 2015, 2016 and 2017. The remaining awards contain service conditions and market or performance conditions and are scheduled to vest on February 20, 2017. During the second quarter of 2014, we granted approximately 1.5 million shares to certain key employees as part of our annual equity compensation program. These awards contained only service conditions and will vest on a straight-line basis on March 26, 2015, 2016 and 2017. During the third quarter of 2014 we granted shares to certain key employees as part of our long-term equity retention program. These awards will vest over a three to seven year period with approximately 105 thousand , 325 thousand and 220 thousand vesting on August 4, 2017, 2019 and 2021, respectively. The remaining awards granted throughout 2014 to certain other key employees and our outside directors were made as part of our equity compensation and retention programs. These awards require only service conditions for vesting and typically vest equally over a three year period. The following table summarizes activity involving restricted stock and restricted stock unit awards for the year ended December 31, 2016 : Number of Shares Weighted- Average Grant Date Fair Value (in thousands) Non-vested at December 31, 2015 4,902 33.86 Granted 3,564 30.83 Vested (1,547 ) 34.82 Forfeited (971 ) 33.23 Non-vested at December 31, 2016 5,948 31.89 During 2015 , we granted 2.9 million shares of restricted stock and restricted stock unit awards at a weighted-average price of $31.83 . The total fair value of restricted stock that vested during 2016 , 2015 and 2014 , was $47 million , $59 million and $53 million , respectively. Compensation Expense and Tax Benefit We recognize compensation expense related to our market and performance share-based awards with graded vesting that only have a service condition on a straight-line basis over the requisite service period for the entire award. Total compensation expense for all share-based payment arrangements for the years ended December 31, 2016 , 2015 and 2014 , was $80 million , $73 million and $75 million , respectively. Our tax benefit recognized in the consolidated statements of operations for our share-based payment arrangements for the years ended December 31, 2016 , 2015 and 2014 , was $31 million , $28 million and $29 million , respectively. At December 31, 2016 , there was $137 million of total unrecognized compensation expense related to our share-based payment arrangements, which we expect to recognize over a weighted-average period of 2.6 years. |
Earnings (Loss) Per Common Shar
Earnings (Loss) Per Common Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Common Share | Earnings Per Common Share Basic and diluted earnings per common share for the years ended December 31, 2016 , 2015 and 2014 were calculated as follows: Years Ended December 31, 2016 2015 2014 (Dollars in millions, except per share amounts, shares in thousands) Income (Numerator): Net income $ 626 878 772 Earnings applicable to non-vested restricted stock — — — Net income applicable to common stock for computing basic earnings per common share 626 878 772 Net income as adjusted for purposes of computing diluted earnings per common share $ 626 878 772 Shares (Denominator): Weighted average number of shares: Outstanding during period 545,946 559,260 572,748 Non-vested restricted stock (6,397 ) (4,982 ) (4,313 ) Weighted average shares outstanding for computing basic earnings per common share 539,549 554,278 568,435 Incremental common shares attributable to dilutive securities: Shares issuable under convertible securities 10 10 10 Shares issuable under incentive compensation plans 1,120 805 1,294 Number of shares as adjusted for purposes of computing diluted earnings per common share 540,679 555,093 569,739 Basic earnings per common share $ 1.16 1.58 1.36 Diluted earnings per common share $ 1.16 1.58 1.36 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. We also exclude unvested restricted stock awards that are antidilutive as a result of unrecognized compensation cost. Such shares averaged 3.3 million , 3.1 million and 2.5 million for 2016 , 2015 and 2014 , respectively. |
Fair Value Disclosure
Fair Value Disclosure | 12 Months Ended |
Dec. 31, 2016 | |
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 and other 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 December 31, 2016 As of December 31, 2015 Input Level Carrying Amount Fair Value Carrying Amount Fair Value (Dollars in millions) Liabilities-Long-term debt, excluding capital lease and other obligations 2 $ 19,553 19,639 19,800 19,473 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Years Ended December 31, 2016 2015 2014 (Dollars in millions) Income tax expense was as follows: Federal Current $ 335 28 18 Deferred 5 329 305 State Current 27 40 26 Deferred 8 21 (14 ) Foreign Current 26 16 3 Deferred (7 ) 4 — Total income tax expense $ 394 438 338 Years Ended December 31, 2016 2015 2014 (Dollars in millions) Income tax expense was allocated as follows: Income tax expense in the consolidated statements of operations: Attributable to income $ 394 438 338 Stockholders' equity: Compensation expense for tax purposes in excess of amounts recognized for financial reporting purposes (2 ) (5 ) (5 ) Tax effect of the change in accumulated other comprehensive loss (109 ) 59 (744 ) The following is a reconciliation from the statutory federal income tax rate to our effective income tax rate: Years Ended December 31, 2016 2015 2014 (Percentage of pre-tax income) Statutory federal income tax rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal income tax benefit 2.3 % 2.6 % 2.7 % Change in liability for unrecognized tax position 0.2 % 0.4 % 0.4 % Net foreign income taxes 0.1 % 0.7 % 0.4 % Foreign dividend paid to a domestic parent company 1.8 % — % — % Affiliate debt rationalization — % (2.6 )% — % Research and development credits (0.6 )% (2.1 )% — % Loss on worthless investment in foreign subsidiary — % — % (5.4 )% Other, net (0.2 )% (0.7 )% (2.6 )% Effective income tax rate 38.6 % 33.3 % 30.5 % The 2016 effective tax rate is 38.6% compared to 33.3% for 2015 . The effective tax rate for the year ended December 31, 2016 reflects a tax impact of $18 million from an intercompany dividend payment from one of our foreign subsidiaries to its domestic parent company that was made as part of our corporate restructuring in preparation for the sale of our colocation business. The 2015 rate reflects a tax benefit of approximately $34 million related to affiliate debt rationalization, research and development tax credits of $28 million for 2011 through 2015 and a $16 million tax decrease due to changes in state taxes caused by apportionment changes, state tax rate changes and the changes in the expected utilization of net operating loss carryforwards ("NOLs"). The 2014 rate reflects a $60 million tax benefit associated with a deduction for tax basis for worthless stock in a wholly-owned foreign subsidiary as a result of developments in bankruptcy proceedings involving its sole asset and a $13 million tax decrease due to changes in the state taxes caused by apportionment changes, state tax rate changes and the changes in the expected utilization of NOLs. The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows: As of December 31, 2016 2015 (Dollars in millions) Deferred tax assets Post-retirement and pension benefit costs $ 2,175 2,154 Net operating loss carryforwards 473 487 Other employee benefits 125 182 Other 342 458 Gross deferred tax assets 3,115 3,281 Less valuation allowance (375 ) (380 ) Net deferred tax assets 2,740 2,901 Deferred tax liabilities Property, plant and equipment, primarily due to depreciation differences (3,626 ) (3,841 ) Goodwill and other intangible assets (2,577 ) (2,588 ) Other — (38 ) Gross deferred tax liabilities (6,203 ) (6,467 ) Net deferred tax liability $ (3,463 ) (3,566 ) Of the $3.463 billion and $3.566 billion net deferred tax liability at December 31, 2016 and 2015 , respectively, $3.471 billion and $3.569 billion is reflected as a long-term liability and $8 million and $3 million is reflected as a net noncurrent deferred tax asset at December 31, 2016 and 2015 , respectively. At December 31, 2016 , we had federal NOLs of $61 million and state NOLs of $11.9 billion . If unused, the NOLs will expire between 2017 and 2032 ; however, no significant amounts expire until 2021 . At December 31, 2016 , we had an immaterial amount of federal tax credits. Additionally, we had $39 million ( $25 million net of federal income tax) of state investment tax credit carryforwards that will expire between 2017 and 2026 if not utilized. In addition, at December 31, 2016 , we have fully utilized all remaining federal alternative minimum tax, or AMT, credits. Our acquisitions of Qwest and SAVVIS, Inc. ("Savvis") caused "ownership changes" within the meaning of Section 382 of the Internal Revenue Code ("Section 382"). As a result, our ability to use these NOLs and AMT credits are subject to annual limits imposed by Section 382. Despite this, we expect to use substantially all of these tax attributes to reduce our future federal tax liabilities, although the timing of that use will depend upon our future earnings and future tax circumstances. We establish valuation allowances when necessary to reduce the deferred tax assets to amounts we expect to realize. As of December 31, 2016 , a valuation allowance of $375 million was established as it is more likely than not that this amount of net operating loss and tax credit carryforwards will not be utilized prior to expiration. Our valuation allowance at December 31, 2016 and 2015 is primarily related to state NOL carryforwards. This valuation allowance decreased by $5 million during 2016 . A reconciliation of the change in our gross unrecognized tax benefits (excluding both interest and any related federal benefit) from January 1 to December 31 for 2016 and 2015 is as follows: 2016 2015 (Dollars in millions) Unrecognized tax benefits at beginning of year $ 15 17 Increase in tax positions taken in the current year 1 1 Increase in tax positions taken in the prior year — 7 Decrease due to the reversal of tax positions taken in a prior year — (9 ) Decrease from the lapse of statute of limitations — (1 ) Unrecognized tax benefits at end of year $ 16 15 The total amount of unrecognized tax benefits that, if recognized, would impact the effective income tax rate was $34 million and $32 million at December 31, 2016 and 2015 , respectively. Our policy is to reflect interest expense associated with unrecognized tax benefits in income tax expense. We had accrued interest (presented before related tax benefits) of approximately $35 million and $33 million at December 31, 2016 and 2015 , respectively. We file income tax returns, including returns for our subsidiaries, with federal, state and local jurisdictions. Our uncertain income tax positions are related to tax years that are currently under or remain subject to examination by the relevant taxing authorities. Beginning with the 2013 tax year, our federal consolidated returns are subject to annual examination by the IRS. Our open income tax years by major jurisdiction are as follows at December 31, 2016 : Jurisdiction Open Tax Years Federal 2013—current State Arizona 2010—current Other states 2012—current Since the period for assessing additional liability typically begins upon the filing of a return, it is possible that certain jurisdictions could assess tax for years prior to the open tax years disclosed above. Additionally, it is possible that certain jurisdictions in which we do not believe we have an income tax filing responsibility, and accordingly did not file a return, may attempt to assess a liability, or that other jurisdictions to which we pay taxes may attempt to assert that we owe additional taxes. Based on our current assessment of various factors, including (i) the potential outcomes of these ongoing examinations, (ii) the expiration of statute of limitations for specific jurisdictions, (iii) the negotiated settlement of certain disputed issues, and (iv) the administrative practices of applicable taxing jurisdictions, it is reasonably possible that the related unrecognized tax benefits for uncertain tax positions previously taken may decrease by up to $11 million within the next 12 months. The actual amount of such decrease, if any, will depend on several future developments and events, many of which are outside our control. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We are organized into operating segments based on customer type, business and consumer. These operating segments are our two reportable segments in our consolidated financial statements: • Business Segment. Consists generally of providing strategic, legacy and data integration products and services to small, medium and enterprise business, wholesale and governmental customers, including other communication providers. Our strategic products and services offered to these customers include our MPLS, Ethernet, colocation, hosting (including cloud hosting and managed hosting), broadband, VoIP, information technology ("IT") and other ancillary services. Our legacy services offered to these customers primarily include local and long-distance voice, including the sale of unbundled network elements ("UNEs"), private line (including special access), switched access and other ancillary services. Our data integration offerings include the sale of telecommunications equipment located on customers' premises and related products and professional services, all of which are described further below under the heading "Products and Services Categories"; and • Consumer Segment. 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, video (including our Prism TV services) and other ancillary services. Our legacy services offered to these customers include local and long-distance voice and other ancillary services. The following table summarizes our segment results for 2016 , 2015 and 2014 based on the segment categorization we were operating under at December 31, 2016 . Years Ended December 31, 2016 2015 2014 (Dollars in millions) Total segment revenues $ 16,255 16,668 17,028 Total segment expenses 8,492 8,461 8,502 Total segment income $ 7,763 8,207 8,526 Total margin percentage 48 % 49 % 50 % Business segment: Revenues $ 10,352 10,646 11,030 Expenses 5,930 5,967 6,019 Income $ 4,422 4,679 5,011 Margin percentage 43 % 44 % 45 % Consumer segment: Revenues $ 5,903 6,022 5,998 Expenses 2,562 2,494 2,483 Income $ 3,341 3,528 3,515 Margin percentage 57 % 59 % 59 % Changes in Segment Reporting We continually review, evaluate and refine our expense allocations to better reflect how we view and manage our operations, and as a result, during the first half of 2016, we implemented several changes with respect to the assignment of certain expenses to our reportable segments. We have recast our previously-reported segment results for the years ended December 31, 2015 and 2014, to conform to the current presentation. The nature of the most significant changes to segment expenses are as follows: • Certain marketing and advertising expenses were reassigned from the business segment to the consumer segment; • Certain service delivery costs were reassigned from the consumer segment to the business segment; • Centralized human resources training costs were reassigned from the business and consumer segments to corporate overhead; and • Marketing direct mail costs and certain printing expenses were reassigned from corporate overhead to the business and consumer segments. For the year ended December 31, 2015 , the segment expense recast resulted in an increase in consumer expenses of $69 million and a decrease in business expenses of $67 million . For the year ended December 31, 2014 , the segment expense recast resulted in an increase in consumer expenses of $63 million and a decrease in business expenses of $70 million . Product and Service Categories From time to time, we change the categorization of our products and services, and we may make similar changes in the future. During the second quarter of 2016, we determined that because of declines due to customer migration to other strategic products and services, certain of our business low-bandwidth data services, specifically our private line (including special access) services in our business segment, are more closely aligned with our legacy services than with our strategic services. As a result, we reflect these operating revenues as legacy services, and we have reclassified certain prior period amounts to conform to this change. The revision resulted in a reduction of revenue from strategic services and a corresponding increase in revenue from legacy services of $1.586 billion and $1.861 billion (net of $9 million and $33 million of deferred revenue included in other business legacy services) for the years ended December 31, 2015 and 2014 , respectively. In addition, our business broadband services remain a strategic service and are now included in our other business strategic services. We categorize our products, services and revenues among the following four categories: • Strategic services , which include primarily broadband, MPLS, Ethernet, colocation, hosting (including cloud hosting and managed hosting), video (including our facilities-based video services, which we offer in 16 markets), VoIP, information technology and other ancillary services; • Legacy services , which include primarily local and long-distance voice, including the sale of UNEs, private line (including special access), Integrated Services Digital Network ("ISDN") (which use regular telephone lines to support voice, video and data applications), switched access and other ancillary services; • Data integration , which includes the sale of telecommunications equipment located on customers' premises and related products and 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 operating revenues, which consist primarily of CAF support payments, USF support payments and USF surcharges. We receive federal support payments from both Phase 1 and Phase 2 of the CAF program, and support payments from both federal and state USF programs. These support payments are government subsidies designed to reimburse us for various costs related to certain telecommunications services, including the costs of deploying, maintaining and operating voice and broadband infrastructure in high-cost rural areas where we are not able to fully recover our costs from our customers. We also collect USF surcharges based on specific items we list on our customers' invoices to fund the FCC's universal service programs. We also generate other operating revenues from the 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 for the years ended December 31, 2016 , 2015 and 2014 : Years Ended December 31, 2016 2015 2014 (Dollars in millions) Strategic services Business high-bandwidth data services (1) $ 2,990 2,816 2,579 Business hosting services (2) 1,210 1,281 1,316 Other business strategic services (3) 703 624 558 Consumer broadband services (4) 2,689 2,611 2,469 Other consumer strategic services (5) 458 421 381 Total strategic services revenues 8,050 7,753 7,303 Legacy services Business voice services (6) 2,413 2,588 2,777 Business low-bandwidth data services (7) 1,382 1,594 1,893 Other business legacy services (8) 1,123 1,168 1,219 Consumer voice services (6) 2,442 2,676 2,865 Other consumer legacy services (9) 312 312 279 Total legacy services revenues 7,672 8,338 9,033 Data integration Business data integration 531 575 688 Consumer data integration 2 2 4 Total data integration revenues 533 577 692 Other revenues High-cost support revenue (10) 688 732 528 Other revenue (11) 527 500 475 Total other revenues 1,215 1,232 1,003 Total revenues $ 17,470 17,900 18,031 ______________________________________________________________________ (1) Includes MPLS and Ethernet revenue (2) Includes colocation, hosting (including cloud hosting and managed hosting) and hosting area network revenue (3) Includes primarily broadband, VoIP, video and IT services revenue (4) Includes broadband and related services revenue (5) Includes video and other revenue (6) Includes local and long-distance voice revenue (7) Includes private line (including special access) revenue (8) Includes UNEs, public access, switched access and other ancillary revenue (9) Includes other ancillary revenue (10) Includes CAF Phase 1, CAF Phase 2 and federal and state USF support revenue (11) Includes USF surcharges 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 reflect the offsetting expense for the amounts we remit to the government agencies. The total amount of such surcharges and transaction taxes that we included in revenues aggregated to $572 million , $544 million and $526 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. These USF surcharges, where we record revenue, are included in "other" operating revenues and transaction taxes 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 bill our 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 (i) directly associated with specific segment customers or activities, and (ii) 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. Generally speaking, 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 consolidated basis and have not allocated assets or debt to specific segments. Other income and expense items are not monitored as a part of our segment operations and are therefore excluded from our segment results. The following table reconciles segment income to net income for the years ended December 31, 2016 , 2015 and 2014 : Years Ended December 31, 2016 2015 2014 (Dollars in millions) Total segment income $ 7,763 8,207 8,526 Other operating revenues 1,215 1,232 1,003 Depreciation and amortization (3,916 ) (4,189 ) (4,428 ) Other unassigned operating expenses (2,731 ) (2,645 ) (2,691 ) Other expenses, net (1,311 ) (1,289 ) (1,300 ) Income before income tax expense 1,020 1,316 1,110 Income tax expense (394 ) (438 ) (338 ) Net income $ 626 878 772 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. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | Quarterly Financial Data (Unaudited) First Quarter Second Quarter Third Quarter Fourth Quarter Total (Dollars in millions, except per share amounts) 2016 Operating revenues $ 4,401 4,398 4,382 4,289 17,470 Operating income 694 650 595 392 2,331 Net income 236 196 152 42 626 Basic earnings per common share 0.44 0.36 0.28 0.08 1.16 Diluted earnings per common share 0.44 0.36 0.28 0.08 1.16 2015 Operating revenues $ 4,451 4,419 4,554 4,476 17,900 Operating income 649 549 656 751 2,605 Net income 192 143 205 338 878 Basic earnings per common share 0.34 0.26 0.37 0.62 1.58 Diluted earnings per common share 0.34 0.26 0.37 0.62 1.58 During the fourth quarter of 2016, we recognized $164 million of severance expenses and other one-time termination benefits associated with our workforce reductions and $52 million of expenses related to our pending acquisition of Level 3. During the third quarter of 2015, we recognized an incremental $158 million of revenue associated with the FCC's CAF Phase 2 high-cost support program (primarily impacted by the one-time transitional payment), and an additional incremental $57 million in the fourth quarter of 2015. During the fourth quarter of 2015, we also recognized a tax benefit of approximately $34 million related to affiliate debt rationalization, research and development tax credits of $28 million for 2011 through 2015, and a $16 million tax decrease due to changes in state taxes caused by apportionment changes, state tax rate changes and the changes in the expected utilization of net operating loss carryforwards ("NOLs"). |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We are vigorously defending against all of the matters described below under the headings "Pending Matters" and "Other Proceedings and Disputes." As a matter of course, we are prepared both to litigate these 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 these matters described below where losses are deemed probable and reasonably estimable. Pending Matters CenturyLink and the members of the CenturyLink Board have been named as defendants in a putative shareholder class action lawsuit filed on January 11, 2017 in the 4th Judicial District Court of the State of Louisiana, Ouachita Parish, captioned Jeffery Tomasulo v. CenturyLink, Inc., et al., Docket No. C-20170110. The complaint asserts, among other things, that the members of CenturyLink’s Board allegedly breached their fiduciary duties to the CenturyLink shareholders in approving the Level 3 merger agreement and, more particularly, that: the consideration that CenturyLink agreed to pay to Level 3 stockholders in the transaction is allegedly unfairly high; the CenturyLink directors allegedly had conflicts of interest in negotiating and approving the transaction; and the disclosures set forth in our preliminary joint proxy statement/prospectus filed in December 2016 are insufficient in that they allegedly fail to contain material information concerning the transaction. The complaint seeks, among other things, a declaration that the members of the CenturyLink Board have breached their fiduciary duties, corrective disclosure, rescissory or other damages and equitable relief, including rescission of the transaction. On February 13, 2017, the parties entered into a memorandum of understanding providing for the settlement of the lawsuit. The proposed settlement is subject to court approval, among other conditions. 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 classes on the claims for vested benefits and age discrimination, but rejected class certification on the claims for breach of fiduciary duty. 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 alleged breach of fiduciary duty in connection with the changes in retiree benefits that were at issue in Fulghum. After extensive district court proceedings in Fulghum, and an interlocutory appeal to the United States Court of Appeals for the Tenth Circuit, defendants prevailed in 2015 on all age discrimination claims and on the majority of claims for vested benefits. The district court in Fulghum subsequently granted judgment in favor of defendants on all remaining vested benefits claims, and in July 2016 ordered that any affected class members could appeal this ruling. No appeal was taken, and all claims for vested benefits thus have lapsed. On August 31, 2016, the parties reached a settlement in principle on all remaining claims in Fulghum and Abbott. Assuming its terms are successfully implemented, we believe the settlement is likely to be final in mid 2017. We have accrued a liability that we believe is probable for these matters; the amount is not material to our consolidated financial statements. Subsidiaries of CenturyLink, Inc. are among hundreds of companies in an industry-wide dispute, raised in nearly 100 federal lawsuits (filed between 2014 and 2016) that have been consolidated in the United States District Court for the District of Northern Texas for pretrial procedures. The disputes relate to switched access charges that local exchange carriers ("LECs") collect from interexchange carriers ("IXCs") for IXCs' use of LEC's access services. In the lawsuits, three IXCs, Sprint Communications Company L.P. ("Sprint"), affiliates of Verizon Communications Inc. ("Verizon") and affiliates of Level 3 Communications LLC ("Level 3"), assert that federal and state laws bar LECs from collecting access charges when IXCs exchange certain types of calls between mobile and wireline devices that are routed through an IXC. Some of these IXCs have asserted claims seeking refunds of payments for access charges previously paid and relief from future access charges. In addition, Level 3 has ceased paying switched access charges on these calls. In November 2015, the federal court agreed with the LECs and rejected the IXCs' contention that federal law prohibits these particular access charges, and also allowed the IXCs to refile state-law claims. Since then, many of the LECs and IXCs have filed revised pleadings and additional motions, which remain pending. Separately, some of the defendants, including CenturyLink, Inc.'s LECs, have petitioned the FCC to address these issues on an industry-wide basis. As both an IXC and a LEC, we both pay and assess significant amounts of the charges in question. The outcome of these disputes and lawsuits, 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. CenturyLink, Inc. and several of its subsidiaries are defendants in lawsuits filed over the past few years in the Circuit Court of St. Louis County, Missouri by numerous Missouri municipalities alleging underpayment of taxes. These municipalities are seeking, among other things, (i) a declaratory judgment regarding the extent of our obligations to pay certain business license and gross receipts taxes and (ii) a monetary award of back taxes covering 2007 to the present, plus penalties and interest. In an April 2016 ruling in connection with one of these pending cases, the court made findings which, if not overturned, will result in a tax liability to us well in excess of the contingent liability we have established. Following further proceedings at the district court, we plan to file an appeal and continue to vigorously defend against these claims. For a variety of reasons, we expect the outcome of our appeal to significantly reduce our ultimate exposure, although we can provide no assurances to this effect. 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. We are currently defending several patent infringement lawsuits asserted against us by non-practicing entities, many of which are seeking substantial recoveries. 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 to litigate these matters to judgment, as well as to evaluate and consider all reasonable settlement opportunities. We are subject to various foreign, federal, state and local environmental protection and health and safety laws. From time to time, we are subject to judicial and administrative proceedings brought by various governmental authorities under these laws. Several such proceedings are currently pending, but none is reasonably expected to exceed $100,000 in fines and penalties. 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. Capital Leases We lease certain facilities and equipment under various capital lease arrangements. Depreciation of assets under capital leases is included in depreciation and amortization expense in our consolidated statements of operations. Payments on capital leases are included in repayments of long-term debt, including current maturities in our consolidated statements of cash flows. The tables below summarize our capital lease activity: Years Ended December 31, 2016 2015 2014 (Dollars in millions) Assets acquired through capital leases 45 17 37 Depreciation expense 70 96 126 Cash payments towards capital leases 58 89 118 As of December 31, 2016 2015 (Dollars in millions) Assets included in property, plant and equipment 705 722 Accumulated depreciation 351 352 The future annual minimum payments under capital lease arrangements as of December 31, 2016 were as follows: Future Minimum Payments (Dollars in millions) Capital lease obligations: 2017 $ 94 2018 91 2019 70 2020 46 2021 43 2022 and thereafter 170 Total minimum payments 514 Less: amount representing interest and executory costs (123 ) Present value of minimum payments 391 Less: current portion (69 ) Long-term portion $ 322 If, as anticipated, we sell our colocation business and data centers in the manner discussed in Note 3—Pending Sale of Colocation Business and Data Centers, $305 million of the capital lease obligations as of December 31, 2016 will be assumed by the Purchaser. The future annual minimum payments under capital lease arrangements for the colocation operations as of December 31, 2016 were as follows: Future Minimum (Dollars in millions) Capital lease obligations: 2017 $ 60 2018 62 2019 52 2020 39 2021 40 2022 and thereafter 145 Total minimum payments 398 Less: amount representing interest and executory costs (93 ) Present value of minimum payments $ 305 The present value of the minimum payments under capital lease arrangements for the colocation operations is included in "Current liabilities associated with assets held for sale" on our consolidated balance sheets. See Note 3—Pending Sale of Colocation Business and Data Centers for additional information. Operating Leases CenturyLink leases various equipment, office facilities, retail outlets, switching facilities and other network sites. These leases, with few exceptions, provide for renewal options and escalations that are either fixed or based on the consumer price index. Any rent abatements, along with rent escalations, are included in the computation of rent expense calculated on a straight-line basis over the lease term. The lease term for most leases includes the initial non-cancelable term plus any term under renewal options that are reasonably assured. For the years ended December 31, 2016 , 2015 and 2014 , our gross rental expense was $482 million , $467 million and $446 million , respectively. We also received sublease rental income for the years ended December 31, 2016 , 2015 and 2014 of $12 million , $12 million and $14 million , respectively. At December 31, 2016 , our future rental commitments for operating leases were as follows: Future Minimum Payments (Dollars in millions) 2017 $ 295 2018 276 2019 249 2020 226 2021 162 2022 and thereafter 1,049 Total future minimum payments (1) $ 2,257 _______________________________________________________________________________ (1) Minimum payments have not been reduced by minimum sublease rentals of $77 million due in the future under non-cancelable subleases. If, as anticipated, we sell our colocation business and data centers in the manner discussed in Note 3—Pending Sale of Colocation Business and Data Centers, $750 million of the operating leases future rental commitments as of December 31, 2016 will be assumed by the Purchaser. The future rental commitments under operating leases for the colocation operations as of December 31, 2016 were as follows: Future Minimum Payments (Dollars in millions) 2017 $ 89 2018 84 2019 71 2020 68 2021 68 2022 and thereafter 370 Total future minimum payments $ 750 Purchase Commitments We have several commitments primarily for marketing activities and support services from a variety of vendors to be used in the ordinary course of business totaling $427 million at December 31, 2016 . Of this amount, we expect to purchase $166 million in 2017 , $153 million in 2018 through 2019 , $41 million in 2020 through 2021 and $67 million in 2022 and thereafter . These amounts do not represent our entire anticipated purchases in the future, but represent only those items for which we were contractually committed as of December 31, 2016 . If, as anticipated, we sell our colocation business and data centers in the manner discussed in Note 3—Pending Sale of Colocation Business and Data Centers, $80 million of the purchase commitments as of December 31, 2016 will be assumed by the Purchaser. |
Other Financial Information
Other Financial Information | 12 Months Ended |
Dec. 31, 2016 | |
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 December 31, 2016 2015 (Dollars in millions) Prepaid expenses $ 206 238 Materials, supplies and inventory 134 144 Deferred activation and installation charges 101 105 Other 106 86 Total other current assets $ 547 573 Selected Current Liabilities Current liabilities reflected in our consolidated balance sheets include accounts payable and other current liabilities as follows: As of December 31, 2016 2015 (Dollars in millions) Accounts payable $ 1,179 968 Other current liabilities: Accrued rent $ 31 32 Legal reserves 30 20 Other 152 168 Total other current liabilities $ 213 220 Included in accounts payable at December 31, 2016 and 2015 , were (i) $56 million and $68 million , respectively, representing book overdrafts and (ii) $196 million and $94 million , respectively, associated with capital expenditures. |
Labor Union Contracts
Labor Union Contracts | 12 Months Ended |
Dec. 31, 2016 | |
Labor Union Contracts | |
Concentration Risk Disclosure | Labor Union Contracts Approximately 38% of our employees are members of various bargaining units represented by the Communication Workers of America and the International Brotherhood of Electrical Workers. We believe that relations with our employees continue to be generally good. Approximately 12,000 , or 30% , of our employees are subject to collective bargaining agreements that are scheduled to expire in 2017, including approximately 11,000 , or 28% , of our employees that are subject to collective bargaining agreements that are scheduled to expire October 7, 2017. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Dec. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Other Comprehensive Earnings | Accumulated Other Comprehensive Loss The table below summarizes changes in accumulated other comprehensive loss recorded on our consolidated balance sheet by component for the year ended December 31, 2016 : Pension Plans Post-Retirement Benefit Plans Foreign Currency Translation Adjustment and Other Total (Dollars in millions) Balance at December 31, 2015 $ (1,715 ) (180 ) (39 ) (1,934 ) Other comprehensive income (loss) before reclassifications (280 ) 6 (22 ) (296 ) Amounts reclassified from accumulated other comprehensive income 100 12 1 113 Net current-period other comprehensive income (loss) (180 ) 18 (21 ) (183 ) Balance at December 31, 2016 $ (1,895 ) (162 ) (60 ) (2,117 ) The table below presents further information about our reclassifications out of accumulated other comprehensive loss by component for the year ended December 31, 2016 : Year Ended December 31, 2016 Decrease (Increase) in Net Income Affected Line Item in Consolidated Statement of 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 $ 175 See Note 9—Employee Benefits Prior service cost 12 See Note 9—Employee Benefits Total before tax 187 Income tax expense (benefit) (75 ) Income tax expense Insignificant items 1 Net of tax $ 113 The table below summarizes changes in accumulated other comprehensive loss recorded on our consolidated balance sheet by component for the year ended December 31, 2015 : Pension Plans Post-Retirement Benefit Plans Foreign Currency Translation Adjustment and Other Total (Dollars in millions) Balance at December 31, 2014 $ (1,720 ) (272 ) (25 ) (2,017 ) Other comprehensive income (loss) before reclassifications (98 ) 80 (14 ) (32 ) Amounts reclassified from accumulated other comprehensive income 103 12 — 115 Net current-period other comprehensive income (loss) 5 92 (14 ) 83 Balance at December 31, 2015 $ (1,715 ) (180 ) (39 ) (1,934 ) The table below presents further information about our reclassifications out of accumulated other comprehensive loss by component for the year ended December 31, 2015 : Year Ended December 31, 2015 Decrease (Increase) in Net Loss Affected Line Item in Consolidated Statement of 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 $ 161 See Note 9—Employee Benefits Prior service cost 24 See Note 9—Employee Benefits Total before tax 185 Income tax expense (benefit) (70 ) Income tax expense Net of tax $ 115 |
Dividends
Dividends | 12 Months Ended |
Dec. 31, 2016 | |
Dividends, Common Stock [Abstract] | |
Dividends | Dividends Our Board of Directors declared the following dividends payable in 2016 and 2015 : Date Declared Record Date Dividend Per Share Total Amount Payment Date (in millions) November 15, 2016 11/28/2016 $ 0.540 $ 294 12/12/2016 August 23, 2016 9/2/2016 0.540 295 9/16/2016 May 18, 2016 5/31/2016 0.540 294 6/14/2016 February 23, 2016 3/4/2016 0.540 295 3/18/2016 November 10, 2015 11/24/2015 0.540 293 12/8/2015 August 25, 2015 9/8/2015 0.540 300 9/22/2015 May 20, 2015 6/2/2015 0.540 303 6/16/2015 February 23, 2015 3/6/2015 0.540 303 3/20/2015 The declaration of dividends is solely at the discretion of our Board of Directors, which may change or terminate our dividend practice at any time for any reason without prior notice. |
Basis of Presentation and Sum30
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
General and Basis of Presentation | General We are an integrated communications company engaged primarily in providing an array of services to our residential and business customers. Our communications services include local and long-distance voice, broadband, Multi-Protocol Label Switching ("MPLS"), private line (including special access), Ethernet, colocation, hosting (including cloud hosting and managed hosting), data integration, video, network, public access, Voice over Internet Protocol ("VoIP"), information technology and other ancillary services. On October 31, 2016, we entered into a definitive merger agreement under which we agreed to acquire Level 3 Communications, Inc. ("Level 3") in a cash and stock transaction. See Note 2—Pending Acquisition of Level 3 for additional information. On November 3, 2016, we entered into a definitive stock purchase agreement with a consortium led by BC Partners, Inc. and Medina Capital under which we propose to sell our data centers and colocation business for a combination of cash and equity. See Note 3—Pending Sale of Colocation Business and Data Centers for additional information. Basis of Presentation 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 reclassified certain prior period amounts to conform to the current period presentation, including the categorization of our revenues and our segment reporting. See Note 14—Segment Information for additional information. These changes had no impact on total operating revenues, total operating expenses or net income for any period presented. |
Consolidation | 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. |
Reclassification | 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 14—Segment Information for additional information. These changes had no impact on total operating revenues, total operating expenses or net income for any period presented. |
Net Periodic Benefit Expense, Estimating Service and Interest Components | Changes in Estimates In 2016, we changed the method we use to estimate the service and interest components of net periodic benefit expense for pension and other postretirement benefit obligations. This change resulted in a decrease in the service and interest components in 2016. Beginning in 2016, we utilized a full yield curve approach in connection with estimating these components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows, as opposed to the single weighted-average discount rate derived from the yield curve that we have used in the past. We believe this change more precisely measures service and interest costs by improving the correlation between projected benefit cash flows to the corresponding spot yield curve rates. This change did not affect the measurement of our total benefit obligations but lowered our annual net periodic benefit cost by approximately $149 million in 2016. This change was treated as a change in accounting estimate and accordingly, we did not adjust the amounts recorded in 2015 or 2014. The reduction in expense described above, net of tax, increased net income by $91 million , or $0.17 per basic and diluted common share, for the year ended December 31, 2016. |
Use of Estimates | Use of Estimates Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles. These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions we make when accounting for specific items and matters, including, but not limited to, investments, long-term contracts, customer retention patterns, allowance for doubtful accounts, depreciation, amortization, asset valuations, internal labor capitalization rates, recoverability of assets (including deferred tax assets), impairment assessments, pension, post-retirement and other post-employment benefits, taxes, certain liabilities and other provisions and contingencies, are reasonable, based on information available at the time they are made. These estimates, judgments and assumptions can materially affect the reported amounts of assets, liabilities and components of stockholders' equity as of the dates of the consolidated balance sheets, as well as the reported amounts of revenues, expenses and components of cash flows during the periods presented in our other consolidated financial statements. We also make estimates in our assessments of potential losses in relation to threatened or pending tax and legal matters. See Note 13—Income Taxes and Note 16—Commitments and Contingencies for additional information. For matters not related to income taxes, if a loss is considered probable and the amount can be reasonably estimated, we recognize an expense for the estimated loss. If we have the potential to recover a portion of the estimated loss from a third party, we make a separate assessment of recoverability and reduce the estimated loss if recovery is also deemed probable. For matters related to income taxes, if we determine that the impact of an uncertain tax position is more likely than not to be sustained upon audit by the relevant taxing authority, then we recognize a benefit for the largest amount that is more likely than not to be sustained. No portion of an uncertain tax position will be recognized if the position has less than a 50% likelihood of being sustained. Interest is recognized on the amount of unrecognized benefit from uncertain tax positions. For all of these and other matters, actual results could differ materially from our estimates. |
Revenue Recognition | Revenue Recognition We recognize revenue for services when the related services are provided. Recognition of certain payments received in advance of services being provided is deferred until the service is provided. These advance payments include activation and installation charges, which we recognize as revenue over the expected customer relationship period, which ranges from three years to over seven years depending on the service. We also defer costs for customer activations and installations. The deferral of customer activation and installation costs is limited to the amount of revenue deferred on advance payments. Costs in excess of advance payments are recorded as expense in the period such costs are incurred. Expected customer relationship periods are estimated using historical experience. In most cases, termination fees or other fees on existing contracts that are negotiated in conjunction with new contracts are deferred and recognized over the new contract term. We offer bundle discounts to our customers who receive certain groupings of services. These bundle discounts are recognized concurrently with the associated revenue and are allocated to the various services in the bundled offering based on the estimated selling price of services included in each bundled combination. Customer arrangements that include both equipment and services are evaluated to determine whether the elements are separable. If the elements are deemed separable and separate earnings processes exist, the revenue associated with the customer arrangement is allocated to each element based on the relative estimated selling price of the separate elements. We have estimated the selling prices of each element by reference to vendor-specific objective evidence of selling prices when the elements are sold separately. The revenue associated with each element is then recognized as earned. For example, if we receive an advance payment when we sell equipment and continuing service together, we immediately recognize as revenue the amount allocated to the equipment as long as all the conditions for revenue recognition have been satisfied. The portion of the advance payment allocated to the service based upon its relative selling price is recognized ratably over the longer of the contractual period or the expected customer relationship period. We periodically transfer optical capacity assets on our network to other telecommunications service carriers. These transactions are structured as indefeasible rights of use, commonly referred to as IRUs, which are the exclusive right to use a specified amount of capacity or fiber for a specified term, typically 20 years. We account for the cash consideration received on transfers of optical capacity assets and on all of the other elements deliverable under an IRU, as revenue ratably over the term of the agreement. We do not recognize revenue on any contemporaneous exchanges of our optical capacity assets for other optical capacity assets. In connection with offering products and services provided by third-party vendors, we review the relationship between us, the vendor and the end customer to assess whether revenue should be reported on a gross or net basis. In assessing whether revenue should be reported on a gross or net basis, we consider whether we act as a principal in the transaction, take title to the products, have risk and rewards of ownership or act as an agent or broker. Based on our agreements with DIRECTV and Verizon Wireless, we offer these services through sales agency relationships which are reported on a net basis. We have service level commitments pursuant to contracts with certain of our customers. To the extent that such service levels are not achieved or are otherwise disputed due to performance or service issues or other service interruptions or conditions, we will estimate the amount of credits to be issued and record a reduction to revenues, with a corresponding increase in the credit reserve. |
USF Surcharges, Gross Receipts Taxes and Other Surcharges | USF Surcharges, Gross Receipts Taxes and Other Surcharges In determining whether to include in our revenues and expenses the taxes and surcharges collected from customers and remitted to government authorities, including USF surcharges, sales, use, value added and some excise taxes, we assess, among other things, whether we are the primary obligor or principal taxpayer for the taxes assessed in each jurisdiction where we do business. In jurisdictions where we determine that we are the principal taxpayer, we record the surcharges on a gross basis and include them in our revenues and costs of services and products. In jurisdictions where we determine that we are merely a collection agent for the government authority, we record the taxes on a net basis and do not include them in our revenues and costs of services and products. |
Advertising Costs | Advertising Costs Costs related to advertising are expensed as incurred and included in selling, general and administrative expenses in our consolidated statements of operations. Our advertising expense was $216 million , $210 million and $214 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. |
Legal Costs | Legal Costs In the normal course of our business, we incur costs to hire and retain external legal counsel to advise us on regulatory, litigation and other matters. We expense these costs as the related services are received. |
Income Taxes | Income Taxes We file a consolidated federal income tax return with our eligible subsidiaries. The provision for income taxes consists of an amount for taxes currently payable, an amount for tax consequences deferred to future periods and adjustments to our liabilities for uncertain tax positions. We record deferred income tax assets and liabilities reflecting future tax consequences attributable to tax net operating loss carryforwards ("NOLs"), tax credit carryforwards and differences between the financial statement carrying value of assets and liabilities and the tax bases of those assets and liabilities. Deferred taxes are computed using enacted tax rates expected to apply in the year in which the differences are expected to affect taxable income. The effect on deferred income tax assets and liabilities of a change in tax rate is recognized in earnings in the period that includes the enactment date. We establish valuation allowances when necessary to reduce deferred income tax assets to the amounts that we believe are more likely than not to be recovered. Each quarter we evaluate the need to retain all or a portion of the valuation allowance on our deferred tax assets. See Note 13—Income Taxes for additional information. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include highly liquid investments that are readily convertible into cash and are not subject to significant risk from fluctuations in interest rates. As a result, the value at which cash and cash equivalents are reported in our consolidated financial statements approximates their fair value. In evaluating investments for classification as cash equivalents, we require that individual securities have original maturities of ninety days or less and that individual investment funds have dollar-weighted average maturities of ninety days or less. To preserve capital and maintain liquidity, we invest with financial institutions we deem to be of sound financial condition and in high quality and relatively risk-free investment products. Our cash investment policy limits the concentration of investments with specific financial institutions or among certain products and includes criteria related to credit worthiness of any particular financial institution. Book overdrafts occur when checks have been issued but have not been presented to our controlled disbursement bank accounts for payment. Disbursement bank accounts allow us to delay funding of issued checks until the checks are presented for payment. Until the issued checks are presented for payment, the book overdrafts are included in accounts payable on our consolidated balance sheet. This activity is included in the operating activities section in our consolidated statements of cash flows. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recognized based upon the amount due from customers for the services provided or at cost for purchased and other receivables less an allowance for doubtful accounts. The allowance for doubtful accounts receivable reflects our best estimate of probable losses inherent in our receivable portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available evidence. We generally consider our accounts past due if they are outstanding over 30 days . Our collection process varies by the customer segment, amount of the receivable, and our evaluation of the customer's credit risk. Our past due accounts are written off against our allowance for doubtful accounts when collection is considered to be not probable. Any recoveries of accounts previously written off are generally recognized as a reduction in bad debt expense in the period received. The carrying value of accounts receivable net of the allowance for doubtful accounts approximates fair value. |
Property, Plant and Equipment | Property, Plant and Equipment We record property, plant and equipment acquired in connection with our acquisitions based on its estimated fair value as of its acquisition date plus the estimated value of any associated legally or contractually required retirement obligations. We record purchased and constructed property, plant and equipment at cost, plus the estimated value of any associated legally or contractually required retirement obligations. Property, plant and equipment is depreciated primarily using the straight-line group method. Under the straight-line group method, assets dedicated to providing telecommunications services (which comprise the majority of our property, plant and equipment) that have similar physical characteristics, use and expected useful lives are pooled for purposes of depreciation and tracking. The equal life group procedure is used to establish each pool's average remaining useful life. Generally, under the straight-line group method, when an asset is sold or retired in the course of normal business activities, the cost is deducted from property, plant and equipment and charged to accumulated depreciation without recognition of a gain or loss. A gain or loss is recognized in our consolidated statements of operations only if a disposal is unusual. Leasehold improvements are amortized over the shorter of the useful lives of the assets or the expected lease term. Expenditures for maintenance and repairs are expensed as incurred. Interest is capitalized during the construction phase of network and other internal-use capital projects. Employee-related costs for construction of network and other internal use assets are also capitalized during the construction phase. Property, plant and equipment supplies used internally are carried at average cost, except for significant individual items for which cost is based on specific identification. We perform annual internal reviews to evaluate the reasonableness of the depreciable lives for our property, plant and equipment. Our reviews utilize models that take into account actual usage, physical wear and tear, replacement history, assumptions about technology evolution and, in certain instances, actuarially determined probabilities to estimate the remaining useful life of our asset base. Our remaining useful life assessments anticipate the loss in service value of assets that may precede the physical retirement. Assets shared among many customers may lose service value as those customers leave the network. However, the asset is not retired until all customers no longer utilize the asset and we determine there is no alternative use for the asset. We have asset retirement obligations associated with the legally or contractually required removal of a limited group of property, plant and equipment assets from leased properties and the disposal of certain hazardous materials present in our owned properties. When an asset retirement obligation is identified, usually in association with the acquisition of the asset, we record the fair value of the obligation as a liability. The fair value of the obligation is also capitalized as property, plant and equipment and then amortized over the estimated remaining useful life of the associated asset. Where the removal obligation is not legally binding, the net cost to remove assets is expensed in the period in which the costs are actually incurred. We review long-lived tangible assets for impairment whenever facts and circumstances indicate that the carrying amounts of the assets may not be recoverable. For assessment purposes, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities, absent a material change in operations. An impairment loss is recognized only if the carrying amount of the asset group is not recoverable and exceeds its fair value. Recoverability of the asset group to be held and used is assessed by comparing the carrying amount of the asset group to the estimated undiscounted future net cash flows expected to be generated by the asset group. If the asset group's carrying value is not recoverable, an impairment charge is recognized for the amount by which the carrying amount of the asset group exceeds its fair value. We determine fair values by using a combination of comparable market values and discounted cash flows, as appropriate. |
Goodwill, Customer Relationships and Other Intangible Assets | Goodwill, Customer Relationships and Other Intangible Assets Intangible assets arising from business combinations, such as goodwill, customer relationships, capitalized software, trademarks and trade names, are initially recorded at estimated fair value. We amortize customer relationships primarily over an estimated life of 10 to 15 years , using either the sum-of-the-years-digits or the straight-line methods, depending on the type of customer. We amortize capitalized software using the straight-line method over estimated lives ranging up to 7 years , except for approximately $237 million of our capitalized software costs, which represents costs to develop an integrated billing and customer care system which is amortized using the straight-line method over a 20 year period. We amortize our other intangible assets predominantly using the sum-of-the-years-digits method over an estimated life of 4 to 20 years. Other intangible assets not arising from business combinations are initially recorded at cost. Where there are no legal, regulatory, contractual or other factors that would reasonably limit the useful life of an intangible asset, we classify the intangible asset as indefinite-lived and such intangible assets are not amortized. Internally used software, whether purchased or developed by us, is capitalized and amortized using the straight-line method over its estimated useful life. We have capitalized certain costs associated with software such as costs of employees devoting time to the projects and external direct costs for materials and services. Costs associated with software to be used for internal purposes are expensed until the point at which the project has reached the development stage. Subsequent additions, modifications or upgrades to internal-use software are capitalized only to the extent that they allow the software to perform a task it previously did not perform. Software maintenance, data conversion and training costs are expensed in the period in which they are incurred. We review the remaining economic lives of our capitalized software annually. Capitalized software is included in other intangible assets, net, in our consolidated balance sheets. Our long-lived intangible assets, other than goodwill, with indefinite lives are assessed for impairment annually, or, under certain circumstances, more frequently, such as when events or changes in circumstances indicate there may be an impairment. These assets are carried at the estimated fair value at the time of acquisition and assets not acquired in acquisitions are recorded at historical cost. However, if their estimated fair value is less than the carrying amount, other indefinite-lived intangible assets are reduced to their estimated fair value through an impairment charge to our consolidated statements of operations. We are required to assess goodwill for impairment at least annually, or more frequently, if an event occurs or circumstances change that would indicate an impairment may have occurred. We are required to write-down the value of goodwill in periods in which the recorded amount of goodwill exceeds the implied fair value of goodwill. Our reporting units are not discrete legal entities with discrete financial statements. Therefore, the equity carrying value and future cash flows must be estimated each time a goodwill impairment assessment is performed on a reporting unit. As a result, our assets, liabilities and cash flows are assigned to reporting units using reasonable and consistent allocation methodologies. Certain estimates, judgments and assumptions are required to perform these assignments. We believe these estimates, judgments and assumptions to be reasonable, but changes in many of these can significantly affect each reporting unit's equity carrying value and future cash flows utilized for our goodwill impairment assessment. We are required to reassign goodwill to reporting units each time we reorganize our internal reporting structure which causes a change in the composition of our reporting units. Goodwill is reassigned to the reporting units using a relative fair value approach. We utilize the earnings before interest, taxes, depreciation and amortization of each reporting unit as our allocation methodology as it represents a reasonable proxy for the fair value of the operations being reorganized. See Note 4—Goodwill, Customer Relationships and Other Intangible Assets for additional information. |
Pension and Post-Retirement Benefits | Pension and Post-Retirement Benefits We recognize the funded status of our defined benefit and post-retirement plans as an asset or a liability on our consolidated balance sheet. Each year's actuarial gains or losses are a component of our other comprehensive (loss) income, which is then included in our accumulated other comprehensive loss. Pension and post-retirement benefit expenses are recognized over the period in which the employee renders service and becomes eligible to receive benefits. We make significant assumptions (including the discount rate, expected rate of return on plan assets, mortality and health care trend rates) in computing the pension and post-retirement benefits expense and obligations. See Note 9—Employee Benefits for additional information. |
Foreign Currency | Foreign Currency Our results of operations include foreign subsidiaries, which are translated from the applicable functional currency to the United States Dollar using the average exchange rates during the reporting period, while assets and liabilities are translated at the reporting date. We include gains or losses from foreign currency remeasurement in other income, net in our consolidated statements of operations. Certain non-U.S. subsidiaries designate the local currency as their functional currency, and we record the translation of their assets and liabilities into U.S. Dollars at the balance sheet date as translation adjustments and include them as a component of accumulated other comprehensive loss in our consolidated balance sheets. |
Common Stock, Preferred Stock and Dividends | Common Stock At December 31, 2016 , we had 4 million unissued shares of CenturyLink, Inc. common stock reserved for acquisitions, substantially all of which are reserved for issuance in connection with our pending acquisition of Level 3. In addition, we had 21 million shares authorized for future issuance under our equity incentive plans. Preferred stock Holders of outstanding CenturyLink, Inc. preferred stock are entitled to receive cumulative dividends, receive preferential distributions equal to $25 per share plus unpaid dividends upon CenturyLink, Inc.'s liquidation and vote as a single class with the holders of common stock. Dividends 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Income Taxes On October 24, 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-16, “Intra-Entity Transfers of Assets Other Than Inventory” ("ASU 2016-16"). ASU 2016-16 eliminates the current prohibition on the recognition of the income tax effects on the transfer of assets among our subsidiaries. After adoption of this ASU, the income tax effects associated with these asset transfers, except for the transfer of inventory, will be recognized in the period the asset is transferred versus the current deferral and recognition upon either the sale of the asset to a third party or over the remaining useful life of the asset. We are currently reviewing the requirements of this ASU and evaluating the impact on our consolidated financial statements. We are required to adopt the provisions of ASU 2016-16 on January 1, 2018, but have the option to early adopt as of January 1, 2017. We plan to adopt the provision of ASU 2016-16 on January 1, 2018. The impact of adopting ASU 2016-16, if any, will be recognized through a cumulative adjustment to retained earnings as of the date of adoption. Financial Instruments On June 16, 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"). The primary impact of ASU 2016-13 for us is a change in the model for the recognition of credit losses related to our financial instruments from an incurred loss model, which recognized credit losses only if it was probable that a loss had been incurred, to an expected loss model, which requires our management team to estimate the total credit losses expected on the portfolio of financial instruments. We are currently reviewing the requirements of the standard and evaluating the impact on our consolidated financial statements. We are required to adopt the provisions of ASU 2016-13 effective January 1, 2020, but could elect to early adopt the provisions as of January 1, 2019. We expect to recognize any impacts of adopting ASU 2016-13 through a cumulative adjustment to retained earnings as of the date of adoption. As of the date of this annual report, we have not yet determined the date we will adopt ASU 2016-13. Share-based Compensation On March 30, 2016, the FASB issued ASU 2016-09, “Improvement to Employee Share-Based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 modifies the accounting and associated income tax accounting for share-based compensation in order to reduce the cost and complexity associated with current generally accepted accounting principles. ASU 2016-09 became effective as of January 1, 2017. ASU 2016-09 includes different transition requirements for the different changes implemented, including some provisions which allow retrospective application. We will implement this new standard on its effective date. The primary provisions of ASU 2016-09 that we expect will affect our financial statements are: (1) a reclassification of the tax effect associated with the difference between the expense recognized for share-based payments and the associated tax deduction from additional paid-in capital to income tax expense; (2) a reclassification of the tax effect associated with the difference between compensation expense and associated deduction from financing cash flow to operating cash flow; and (3) a change in our accounting policy to account for forfeitures of share-based payment grants as they occur as opposed to our current policy of estimating the forfeitures on the grant date. The adoption of this accounting policy change will result in an immaterial increase in our retained earnings as of January 1, 2017. Although the provisions would not have had a material impact on our previously-issued financial statements, we cannot provide any assurance regarding their future impacts. Adoption of ASU 2016-09 may increase the volatility of income tax expense and cash flow from operating activities. Leases On February 25, 2016, the FASB issued ASU 2016-02, “Leases” (“ASU 2016-02”). The core principle of ASU 2016-02 will require lessees to present right-of-use assets and lease liabilities on their balance sheets for operating leases, which are currently not reflected on their balance sheets. ASU 2016-02 is effective for annual and interim periods beginning January 1, 2019. Early adoption of ASU 2016-02 is permitted. Upon adoption of ASU 2016-02, we are required to recognize and measure leases at the beginning of the earliest period presented in our consolidated financial statements using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that we may elect to apply. We will implement this new standard on its effective date, but we have not yet decided which practical expedient options we will elect. We are currently evaluating our existing lease accounting systems to determine whether our current systems will support the new accounting requirements or if upgrades or new systems will be required, and we are in the process of developing an implementation plan. We are also currently evaluating and assessing the impact ASU 2016-02 will have on us and our consolidated financial statements. As of the date of this annual report, we cannot provide any estimate of the impact of adopting ASU 2016-02. Revenue Recognition On May 28, 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”). ASU 2014-09 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, but we expect we will defer certain contract acquisition costs in the future which could have the impact of lowering our operating expenses. We currently defer contract fulfillment costs only up to the extent of any revenue deferred. Under ASU 2014-09, in certain transactions our deferred contract fulfillment costs could exceed our deferred revenues, which could result in an increase in deferred costs and could also have the impact of lowering our operating expenses. On July 9, 2015, the FASB approved the deferral of the effective date of ASU 2014-09 by one year until January 1, 2018, which is the date we plan to adopt this standard. ASU 2014-09 may be adopted by applying the provisions of this 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 2018. We have completed our initial assessment of our business and systems requirements and we are currently developing and implementing a new revenue recognition system to comply with the requirements of ASU 2014-09. Based on this initial assessment, we currently plan to adopt the new revenue recognition standard under the modified retrospective transition method. Until we are further along in implementing our new revenue recognition system, we do not anticipate being able to provide reasonably accurate estimates of the impact of ASU 2014-09 on the timing of our revenue recognition. |
Pending Sale of Colocation Bu31
Pending Sale of Colocation Business and Data Centers (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of disposal assets held-for-sale and liabilities attributable to disposal assets held-for-sale | As a result of the pending sale of our colocation business and data centers, we reclassified the following assets and liabilities, which are now reflected as assets held for sale and current liabilities associated with the assets held for sale on our consolidated balance sheet, respectively, as of December 31, 2016: Dollars in millions Goodwill $ 1,141 Property, plant and equipment 1,071 Other intangible assets 258 Other assets 45 Total amount reclassified to assets held for sale (1) $ 2,515 Capital lease obligations 305 Other liabilities 114 Total liabilities associated with assets held for sale $ 419 ________________________________________________________________________ (1) A portion of the assets equivalent to our anticipated minority stake, which was based on an estimated fair value, in the consortium's newly-formed global secure infrastructure company is reflected in non-current other assets on our consolidated balance sheet. |
Goodwill, Customer Relationsh32
Goodwill, Customer Relationships and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill and other intangible assets | Goodwill, customer relationships and other intangible assets consisted of the following: As of December 31, 2016 2015 (Dollars in millions) Goodwill $ 19,650 20,742 Customer relationships, less accumulated amortization of $6,318 and $5,648 2,797 3,928 Indefinite-life intangible assets 269 269 Other intangible assets subject to amortization: Capitalized software, less accumulated amortization of $2,019 and $1,778 1,227 1,248 Trade names and patents, less accumulated amortization of $23 and $20 35 38 Total other intangible assets, net $ 1,531 1,555 |
Schedule of estimated amortization expense for intangible assets | We estimate that total amortization expense for intangible assets for the years ending December 31, 2017 through 2021 will be as follows: (Dollars in millions) 2017 $ 1,044 2018 925 2019 808 2020 703 2021 268 |
Schedule of goodwill attributable to segments | The following table shows the rollforward of goodwill assigned to our reportable segments from December 31, 2014 through December 31, 2016 . Business Consumer Total (Dollars in millions) As of December 31, 2014 (1) $ 10,477 10,278 20,755 Purchase accounting and other adjustments (13 ) — (13 ) As of December 31, 2015 (1) 10,464 10,278 20,742 Purchase accounting and other adjustments 49 — 49 Goodwill attributable to the colocation business and data centers reclassified to assets held for sale (1,141 ) — (1,141 ) As of December 31, 2016 (1) $ 9,372 $ 10,278 $ 19,650 _____________________________________________________________________________ (1) Goodwill is net of accumulated impairment losses of $1.1 billion that related to our former hosting segment now included in our business segment. |
Long-Term Debt and Credit Fac33
Long-Term Debt and Credit Facilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt including unamortized discounts and premiums | Long-term debt, including unamortized discounts and premiums and unamortized debt issuance costs, consisting of borrowings by CenturyLink, Inc. and certain of its subsidiaries, including Qwest Corporation, Qwest Capital Funding, Inc. and Embarq Corporation and its subsidiaries ("Embarq"), were as follows: As of December 31, Interest Rates Maturities 2016 2015 (Dollars in millions) CenturyLink, Inc. Senior notes 5.150% - 7.650% 2017 - 2042 $ 8,975 7,975 Credit facility and revolving line of credit (1) 4.500% 2019 370 410 Term loan 2.520% 2019 336 358 Subsidiaries Qwest Corporation Senior notes 6.125% - 7.750% 2017 - 2056 7,259 7,229 Term loan 2.520% 2025 100 100 Qwest Capital Funding, Inc. Senior notes 6.500% - 7.750% 2018 - 2031 981 981 Embarq Corporation and subsidiaries Senior note 7.995% 2036 1,485 2,669 First mortgage bonds 7.125% - 8.770% 2017 - 2025 223 232 Other 9.000% 2019 150 150 Capital lease and other obligations Various Various 440 425 Unamortized discounts, net (133 ) (125 ) Unamortized debt issuance costs (193 ) (179 ) Total long-term debt 19,993 20,225 Less current maturities not associated with assets held for sale (1,503 ) (1,503 ) Less capital lease obligations associated with assets held for sale (2) (305 ) — Long-term debt, excluding current maturities and capital leases obligations associated with assets held for sale $ 18,185 18,722 _______________________________________________________________________________ (1) The aggregate amount outstanding on our Credit Facility and revolving line of credit borrowings at December 31, 2016 and 2015 was $370 million and $410 million , respectively, with weighted-average interest rates of 4.500% and 2.756% , respectively. These amounts change on a regular basis. (2) If, as anticipated, we sell our colocation business and data centers in the manner discussed in Note 3—Pending Sale of Colocation Business and Data Centers, $305 million of the capital lease obligations as of December 31, 2016 will be assumed by the Purchaser. See Note 3—Pending Sale of Colocation Business and Data Centers for additional information. |
Schedule of maturities of long-term debt | Set forth below is the aggregate principal amount of our long-term debt (excluding unamortized discounts, net and unamortized debt issuance costs) maturing during the following years: (Dollars in millions) (1) 2017 $ 1,544 2018 280 2019 1,131 2020 1,032 2021 2,329 2022 and thereafter 14,003 Total long-term debt $ 20,319 _______________________________________________________________________________ (1) Actual principal paid in any year may differ due to the possible future refinancing of outstanding debt or the issuance of new debt. The projected amounts in the table also exclude any impacts from the sale of our colocation business or any further acquisitions. |
Schedule of amount of gross interest expense, net of capitalized interest | Interest expense includes interest on total long-term debt. The following table presents the amount of gross interest expense, net of capitalized interest: Years Ended December 31, 2016 2015 2014 (Dollars in millions) Interest expense: Gross interest expense $ 1,372 1,364 1,358 Capitalized interest (54 ) (52 ) (47 ) Total interest expense $ 1,318 1,312 1,311 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Schedule of components of accounts receivable | The following table presents details of our accounts receivable balances: As of December 31, 2016 2015 (Dollars in millions) Trade and purchased receivables $ 1,882 1,789 Earned and unbilled receivables 299 288 Other 14 18 Total accounts receivable 2,195 2,095 Less: allowance for doubtful accounts (178 ) (152 ) Accounts receivable, less allowance $ 2,017 1,943 |
Schedule of details of allowance for doubtful accounts | The following table presents details of our allowance for doubtful accounts: Beginning Balance Additions Deductions Ending Balance (Dollars in millions) 2016 $ 152 192 (166 ) 178 2015 $ 162 177 (187 ) 152 2014 $ 155 159 (152 ) 162 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of net property, plant and equipment | Net property, plant and equipment is composed of the following: Depreciable Lives As of December 31, 2016 2015 (Dollars in millions) Land N/A $ 563 571 Fiber, conduit and other outside plant (1) 15-45 years 16,996 16,166 Central office and other network electronics (2) 3-10 years 13,768 14,144 Support assets (3) 3-30 years 6,623 7,000 Construction in progress (4) N/A 1,244 904 Gross property, plant and equipment 39,194 38,785 Accumulated depreciation (22,155 ) (20,716 ) Net property, plant and equipment $ 17,039 18,069 _______________________________________________________________________________ (1) Fiber, conduit and other outside plant consists of fiber and metallic cable, conduit, poles and other supporting structures. (2) Central office and other network electronics consists of circuit and packet switches, routers, transmission electronics and electronics providing service to customers. (3) Support assets consist of buildings, data centers, computers and other administrative and support equipment. (4) Construction in progress includes inventory held for construction and property of the aforementioned categories that has not been placed in service as it is still under construction. |
Schedule of changes to asset retirement obligations | The following table provides asset retirement obligation activity: Years Ended December 31, 2016 2015 2014 (Dollars in millions) Balance at beginning of year $ 91 107 106 Accretion expense 6 7 7 Liabilities incurred — — 6 Liabilities settled (2 ) (2 ) (2 ) Change in estimate — (21 ) (10 ) Balance at end of year $ 95 91 107 |
Severance and Leased Real Est36
Severance and Leased Real Estate (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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 were as follows: Severance Real Estate (Dollars in millions) Balance at December 31, 2014 $ 26 96 Accrued to expense 96 — Payments, net (108 ) (13 ) Reversals and adjustments — (3 ) Balance at December 31, 2015 14 80 Accrued to expense 173 4 Payments, net (89 ) (20 ) Reversals and adjustments — 3 Balance at December 31, 2016 $ 98 67 |
Employee Benefits (Tables)
Employee Benefits (Tables) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Employee Benefits | ||
Schedule of estimated future benefit payments | The qualified pension, non-qualified pension and post-retirement health care benefit payments and premiums and life insurance premium payments are paid by us or distributed from plan assets. The estimated benefit payments provided below are based on actuarial assumptions using the demographics of the employee and retiree populations and have been reduced by estimated participant contributions. Pension Plans Post-Retirement Benefit Plans Medicare Part D Subsidy Receipts (Dollars in millions) Estimated future benefit payments: 2017 $ 1,277 295 (6 ) 2018 987 284 (6 ) 2019 968 275 (6 ) 2020 948 267 (6 ) 2021 928 259 (6 ) 2022 - 2026 4,280 1,160 (26 ) | |
Schedule of actuarial assumptions used to compute net periodic benefit expense | The actuarial assumptions used to compute the net periodic benefit expense for our qualified pension, non-qualified pension and post-retirement benefit plans are based upon information available as of the beginning of the year, as presented in the following table. Pension Plans Post-Retirement Benefit Plans 2016 2015 2014 2016 2015 2014 Actuarial assumptions at beginning of year: Discount rate 3.50% - 4.50% 3.50% - 4.10% 4.20% - 5.10% 4.15 % 3.80 % 4.50 % Rate of compensation increase 3.25 % 3.25 % 3.25 % N/A N/A N/A Expected long-term rate of return on plan assets 7.00 % 7.50 % 7.50 % 7.00 % 7.50 % 6.00% - 7.50% Initial health care cost trend rate N/A N/A N/A 5.00% / 5.25% 6.00% / 6.50% 6.00% / 6.50% Ultimate health care cost trend rate N/A N/A N/A 4.50 % 4.50 % 4.50 % Year ultimate trend rate is reached N/A N/A N/A 2025 2025 2024 _______________________________________________________________________________ N/A-Not applicable | |
Schedule of actuarial assumptions used to compute the funded status for the plans | The actuarial assumptions used to compute the funded status for the plans are based upon information available as of December 31, 2016 and 2015 and are as follows: Pension Plans Post-Retirement Benefit Plans December 31, December 31, 2016 2015 2016 2015 Actuarial assumptions at end of year: Discount rate 3.50% - 4.10% 3.50% - 4.50% 3.90 % 4.15 % Rate of compensation increase 3.25 % 3.25 % N/A N/A Initial health care cost trend rate N/A N/A 5.00% / 5.50% 5.00% / 5.25% Ultimate health care cost trend rate N/A N/A 4.50 % 4.50 % Year ultimate trend rate is reached N/A N/A 2025 2025 _______________________________________________________________________________ N/A-Not applicable | |
Schedule of change in plan assets | The following tables summarize the change in the fair value of plan assets for the pension and post-retirement benefit plans: Pension Plans Years Ended December 31, 2016 2015 2014 (Dollars in millions) Change in plan assets Fair value of plan assets at beginning of year $ 11,072 12,571 12,346 Return on plan assets 754 (161 ) 1,373 Employer contributions 100 100 157 Settlements — — (460 ) Benefits paid from plan assets (1,034 ) (1,438 ) (845 ) Fair value of plan assets at end of year $ 10,892 11,072 12,571 | |
Schedule of gross notional exposure of the derivative instruments directly held by the plans | The gross notional exposure of the derivative instruments directly held by the pension benefit plan is shown below. The notional amount of the derivatives corresponds to market exposure but does not represent an actual cash investment. Our post-retirement plans were not invested in derivative instruments for the years ended December 31, 2016 or 2015. Gross Notional Exposure Pension Plans Years Ended December 31, 2016 2015 (Dollars in millions) Derivative instruments: Exchange-traded U.S. equity futures $ 104 79 Exchange-traded Treasury and other interest rate futures 1,813 1,767 Interest rate swaps 260 550 Credit default swaps 240 189 Foreign exchange forwards 778 992 Options 206 285 | |
Schedule of the unfunded status of the benefit plans | The following table presents the unfunded status of the pensions and post-retirement benefit plans: Pension Plans Post-Retirement Benefit Plans Years Ended December 31, Years Ended December 31, 2016 2015 2016 2015 (Dollars in millions) Benefit obligation $ (13,301 ) (13,349 ) (3,413 ) (3,567 ) Fair value of plan assets 10,892 11,072 53 193 Unfunded status (2,409 ) (2,277 ) (3,360 ) (3,374 ) Current portion of unfunded status $ (6 ) (5 ) (236 ) (135 ) Non-current portion of unfunded status $ (2,403 ) (2,272 ) (3,124 ) (3,239 ) | |
Schedule of items not recognized as a component of net periodic benefits expense | The following table presents cumulative items not recognized as a component of net periodic benefits expense as of December 31, 2015, items recognized as a component of net periodic benefits expense in 2016 , additional items deferred during 2016 and cumulative items not recognized as a component of net periodic benefits expense as of December 31, 2016 . The items not recognized as a component of net periodic benefits expense have been recorded on our consolidated balance sheets in accumulated other comprehensive loss: As of and for the Years Ended December 31, 2015 Recognition of Net Periodic Benefits Expense Deferrals Net Change in AOCL 2016 (Dollars in millions) Accumulated other comprehensive loss: Pension plans: Net actuarial (loss) gain $ (2,857 ) 175 (466 ) (291 ) (3,148 ) Prior service benefit (cost) 72 (8 ) (2 ) (10 ) 62 Deferred income tax benefit (expense) 1,070 (67 ) 188 121 1,191 Total pension plans (1,715 ) 100 (280 ) (180 ) (1,895 ) Post-retirement benefit plans: Net actuarial (loss) gain (147 ) — 10 10 (137 ) Prior service (cost) benefit (147 ) 20 — 20 (127 ) Deferred income tax benefit (expense) 114 (8 ) (4 ) (12 ) 102 Total post-retirement benefit plans (180 ) 12 6 18 (162 ) Total accumulated other comprehensive loss $ (1,895 ) 112 (274 ) (162 ) (2,057 ) | The following table presents cumulative items not recognized as a component of net periodic benefits expense as of December 31, 2014, items recognized as a component of net periodic benefits expense in 2015 , additional items deferred during 2015 and cumulative items not recognized as a component of net periodic benefits expense as of December 31, 2015. The items not recognized as a component of net periodic benefits expense have been recorded on our consolidated balance sheets in accumulated other comprehensive loss: As of and for the Years Ended December 31, 2014 Recognition Deferrals Net 2015 (Dollars in millions) Accumulated other comprehensive loss: Pension plans: Net actuarial (loss) gain $ (2,760 ) 161 (258 ) (97 ) (2,857 ) Prior service (cost) benefit (32 ) 5 99 104 72 Deferred income tax benefit (expense) 1,072 (63 ) 61 (2 ) 1,070 Total pension plans (1,720 ) 103 (98 ) 5 (1,715 ) Post-retirement benefit plans: Net actuarial (loss) gain (277 ) — 130 130 (147 ) Prior service (cost) benefit (166 ) 19 — 19 (147 ) Deferred income tax benefit (expense) 171 (7 ) (50 ) (57 ) 114 Total post-retirement benefit plans (272 ) 12 80 92 (180 ) Total accumulated other comprehensive loss $ (1,992 ) 115 (18 ) 97 (1,895 ) |
Schedule of estimated items to be recognized in 2013 as a component of net periodic benefit expense | The following table presents estimated items to be recognized in 2017 as a component of net periodic benefit expense of the pension, non-qualified pension and post-retirement benefit plans: Pension Plans Post-Retirement Plans (Dollars in millions) Estimated recognition of net periodic (cost) benefit income in 2017: Net actuarial loss $ (202 ) — Prior service income (cost) 8 (20 ) Deferred income tax benefit 74 8 Estimated net periodic benefit expense to be recorded in 2017 as a component of other comprehensive (loss) income $ (120 ) (12 ) | |
Pension Plans | ||
Employee Benefits | ||
Schedule of components of net periodic pension income and post-retirement benefit expense | Net periodic benefit (income) expense for our qualified and non-qualified pension plans includes the following components: Pension Plans Years Ended December 31, 2016 2015 2014 (Dollars in millions) Service cost $ 64 83 77 Interest cost 427 568 602 Expected return on plan assets (732 ) (898 ) (891 ) Settlements — — 63 Special termination benefits charge 13 — — Recognition of prior service (credit) cost (8 ) 5 5 Recognition of actuarial loss 175 161 22 Net periodic pension benefit income $ (61 ) (81 ) (122 ) | |
Schedule of change in benefit obligation | The following tables summarize the change in the benefit obligations for the pension and post-retirement benefit plans: Pension Plans Years Ended December 31, 2016 2015 2014 (Dollars in millions) Change in benefit obligation Benefit obligation at beginning of year $ 13,349 15,042 13,401 Service cost 64 83 77 Interest cost 427 568 602 Plan amendments 2 (100 ) 4 Special termination benefits charge 13 — — Actuarial loss (gain) 487 (800 ) 2,269 Settlements — — (460 ) Benefits paid by company (7 ) (6 ) (6 ) Benefits paid from plan assets (1,034 ) (1,438 ) (845 ) Benefit obligation at end of year $ 13,301 13,349 15,042 | |
Schedule of change in plan assets | Post-Retirement Benefit Plans Years Ended December 31, 2016 2015 2014 (Dollars in millions) Change in plan assets Fair value of plan assets at beginning of year $ 193 353 535 Return on plan assets 5 3 37 Benefits paid from plan assets (145 ) (163 ) (219 ) Fair value of plan assets at end of year $ 53 193 353 | |
Schedule of fair value of the plans' assets by asset category | The tables below present the fair value of plan assets by category and the input levels used to determine those fair values at December 31, 2016 . It is important to note that the asset allocations do not include market exposures that are gained with derivatives. Investments include dividend and interest receivables, pending trades and accrued expenses. Fair Value of Pension Plan Assets at December 31, 2016 Level 1 Level 2 Level 3 Total (Dollars in millions) Investment grade bonds (a) $ 420 1,404 — $ 1,824 High yield bonds (b) 7 597 11 615 Emerging market bonds (c) 212 212 — 424 Convertible bonds (d) 2 — — 2 U.S. stocks (f) 1,144 1 — 1,145 Non-U.S. stocks (g) 721 1 — 722 Multi-asset strategies (m) 389 — — 389 Cash equivalents and short-term investments (o) — 207 — 207 Total investments, excluding investments valued at NAV $ 2,895 2,422 11 5,328 Investments valued at NAV 5,564 Total pension plan assets $ 10,892 | The tables below present the fair value of plan assets by category and the input levels used to determine those fair values at December 31, 2015 . It is important to note that the asset allocations do not include market exposures that are gained with derivatives. Investments include dividend and interest receivable, pending trades and accrued expenses. Fair Value of Pension Plan Assets at December 31, 2015 Level 1 Level 2 Level 3 Total (Dollars in millions) Investment grade bonds (a) $ 841 1,045 — $ 1,886 High yield bonds (b) — 544 13 557 Emerging market bonds (c) 208 232 1 441 Convertible bonds (d) — 2 — 2 U.S. stocks (f) 1,201 — — 1,201 Non-U.S. stocks (g) 1,127 1 — 1,128 Multi-asset strategies (m) 376 — — 376 Derivatives (n) 2 (6 ) — (4 ) Cash equivalents and short-term investments (o) — 192 — 192 Total investments, excluding investments valued at NAV $ 3,755 2,010 14 5,779 Investments valued at NAV 5,293 Total pension plan assets $ 11,072 |
Summary of changes in fair value of defined benefit plans' Level 3 assets | The table below presents a rollforward of the pension plan assets valued using Level 3 inputs: Pension Plan Assets Valued Using Level 3 Inputs High Yield Bonds Emerging Market Bonds Total (Dollars in millions) Balance at December 31, 2014 $ 7 — 7 Net transfers 4 1 5 Acquisitions 4 — 4 Dispositions (2 ) — (2 ) Balance at December 31, 2015 13 1 14 Net transfers (2 ) — (2 ) Acquisitions 1 — 1 Dispositions (1 ) (1 ) (2 ) Balance at December 31, 2016 $ 11 — 11 | |
Post-Retirement Benefit Plans | ||
Employee Benefits | ||
Schedule of effects of a 100 basis point change in assumed health care cost rates | A change of 100 basis points in the assumed initial health care cost trend rate would have had the following effects in 2016 : 100 Basis Points Change Increase (Decrease) (Dollars in millions) Effect on the aggregate of the service and interest cost components of net periodic post-retirement benefit expense (consolidated statement of operations) $ 2 (2 ) Effect on benefit obligation (consolidated balance sheet) 66 (61 ) | |
Schedule of components of net periodic pension income and post-retirement benefit expense | Net periodic benefit expense (income) for our post-retirement benefit plans includes the following components: Post-Retirement Plans Years Ended December 31, 2016 2015 2014 (Dollars in millions) Service cost $ 19 24 22 Interest cost 111 140 159 Expected return on plan assets (7 ) (21 ) (33 ) Special termination benefits charge 3 — — Recognition of prior service cost 20 19 20 Net periodic post-retirement benefit expense $ 146 162 168 | |
Schedule of change in benefit obligation | Post-Retirement Benefit Plans Years Ended December 31, 2016 2015 2014 (Dollars in millions) Change in benefit obligation Benefit obligation at beginning of year $ 3,567 3,830 3,688 Service cost 19 24 22 Interest cost 111 140 159 Participant contributions 57 57 69 Plan amendments — — 23 Direct subsidy receipts 5 8 9 Special termination benefits charge 3 — — Actuarial (gain) loss (13 ) (148 ) 245 Benefits paid by company (191 ) (181 ) (166 ) Benefits paid from plan assets (145 ) (163 ) (219 ) Benefit obligation at end of year $ 3,413 3,567 3,830 | |
Schedule of fair value of the plans' assets by asset category | Fair Value of Post-Retirement Plan Assets Level 1 Level 2 Level 3 Total (Dollars in millions) Investment grade bonds (a) $ 1 2 — $ 3 High yield bonds (b) — 1 — 1 U.S. stocks (f) 2 — — 2 Non-U.S. stocks (g) 1 — — 1 Cash equivalents and short-term investments (o) — 5 — 5 Total investments, excluding investments valued at NAV $ 4 8 — 12 Investments valued at NAV 41 Total post-retirement plan assets $ 53 | Fair Value of Post-Retirement Plan Assets Level 1 Level 2 Level 3 Total (Dollars in millions) Investment grade bonds (a) $ 2 1 — $ 3 High yield bonds (b) — 1 — 1 U.S. stocks (f) 16 — — 16 Non-U.S. stocks (g) 12 — — 12 Emerging market stocks (h) 4 — — 4 Cash equivalents and short-term investments (o) — 4 — 4 Total investments, excluding investments valued at NAV $ 34 6 — 40 Investments valued at NAV 153 Total post-retirement plan assets $ 193 |
Pension, Supplemental And Other Postretirement Benefit Plans | ||
Employee Benefits | ||
Schedule of fair value of the plans' assets by asset category | The table below presents the fair value of plan assets valued at NAV by category for our pension and post-retirement plans at December 31, 2016 and 2015. Fair Value of Plan Assets Valued at NAV Pension Plans at December 31, Post-Retirement Benefit Plans at December 31, 2016 2015 2016 2015 (Dollars in millions) Investment grade bonds (a) $ 106 115 — 35 High yield bonds (b) 521 512 1 1 Emerging market bonds (c) 6 9 — — Diversified strategies (e) 522 516 1 54 U.S. stocks (f) 58 70 — — Non-U.S. stocks (g) 560 289 1 — Emerging market stocks (h) 76 64 — — Private equity (i) 506 526 14 21 Private debt (j) 369 371 1 2 Market neutral hedge funds (k) 739 825 1 17 Directional hedge funds (k) 657 594 1 1 Real estate (l) 926 968 8 20 Multi-asset strategies (m) 412 386 — — Cash equivalents and short-term investments (o) 106 48 13 2 Total investments valued at NAV $ 5,564 5,293 41 153 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock option awards activity | The following table summarizes activity involving stock option awards for the year ended December 31, 2016 : Number of Options Weighted- Average Exercise Price (in thousands) Outstanding and Exercisable at December 31, 2015 3,525 $ 39.67 Exercised (31 ) 26.34 Forfeited/Expired (486 ) 37.96 Outstanding and Exercisable at December 31, 2016 3,008 40.08 |
Restricted stock and restricted stock unit awards activity | The following table summarizes activity involving restricted stock and restricted stock unit awards for the year ended December 31, 2016 : Number of Shares Weighted- Average Grant Date Fair Value (in thousands) Non-vested at December 31, 2015 4,902 33.86 Granted 3,564 30.83 Vested (1,547 ) 34.82 Forfeited (971 ) 33.23 Non-vested at December 31, 2016 5,948 31.89 During 2015 , we granted 2.9 million shares of restricted stock and restricted stock unit awards at a weighted-average price of $31.83 . The total fair value of restricted stock that vested during 2016 , 2015 and 2014 , was $47 million , $59 million and $53 million , respectively. |
Earnings (Loss) Per Common Sh39
Earnings (Loss) Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per common share | Basic and diluted earnings per common share for the years ended December 31, 2016 , 2015 and 2014 were calculated as follows: Years Ended December 31, 2016 2015 2014 (Dollars in millions, except per share amounts, shares in thousands) Income (Numerator): Net income $ 626 878 772 Earnings applicable to non-vested restricted stock — — — Net income applicable to common stock for computing basic earnings per common share 626 878 772 Net income as adjusted for purposes of computing diluted earnings per common share $ 626 878 772 Shares (Denominator): Weighted average number of shares: Outstanding during period 545,946 559,260 572,748 Non-vested restricted stock (6,397 ) (4,982 ) (4,313 ) Weighted average shares outstanding for computing basic earnings per common share 539,549 554,278 568,435 Incremental common shares attributable to dilutive securities: Shares issuable under convertible securities 10 10 10 Shares issuable under incentive compensation plans 1,120 805 1,294 Number of shares as adjusted for purposes of computing diluted earnings per common share 540,679 555,093 569,739 Basic earnings per common share $ 1.16 1.58 1.36 Diluted earnings per common share $ 1.16 1.58 1.36 |
Fair Value Disclosure (Tables)
Fair Value Disclosure (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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 levels 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 December 31, 2016 As of December 31, 2015 Input Level Carrying Amount Fair Value Carrying Amount Fair Value (Dollars in millions) Liabilities-Long-term debt, excluding capital lease and other obligations 2 $ 19,553 19,639 19,800 19,473 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of provision for income tax | Years Ended December 31, 2016 2015 2014 (Dollars in millions) Income tax expense was as follows: Federal Current $ 335 28 18 Deferred 5 329 305 State Current 27 40 26 Deferred 8 21 (14 ) Foreign Current 26 16 3 Deferred (7 ) 4 — Total income tax expense $ 394 438 338 |
Schedule of income tax expense allocation | Years Ended December 31, 2016 2015 2014 (Dollars in millions) Income tax expense was allocated as follows: Income tax expense in the consolidated statements of operations: Attributable to income $ 394 438 338 Stockholders' equity: Compensation expense for tax purposes in excess of amounts recognized for financial reporting purposes (2 ) (5 ) (5 ) Tax effect of the change in accumulated other comprehensive loss (109 ) 59 (744 ) |
Schedule of reconciliation of the statutory federal income tax rate to effective income tax rate | The following is a reconciliation from the statutory federal income tax rate to our effective income tax rate: Years Ended December 31, 2016 2015 2014 (Percentage of pre-tax income) Statutory federal income tax rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal income tax benefit 2.3 % 2.6 % 2.7 % Change in liability for unrecognized tax position 0.2 % 0.4 % 0.4 % Net foreign income taxes 0.1 % 0.7 % 0.4 % Foreign dividend paid to a domestic parent company 1.8 % — % — % Affiliate debt rationalization — % (2.6 )% — % Research and development credits (0.6 )% (2.1 )% — % Loss on worthless investment in foreign subsidiary — % — % (5.4 )% Other, net (0.2 )% (0.7 )% (2.6 )% Effective income tax rate 38.6 % 33.3 % 30.5 % |
Schedule of components of deferred tax assets and deferred tax liabilities | The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows: As of December 31, 2016 2015 (Dollars in millions) Deferred tax assets Post-retirement and pension benefit costs $ 2,175 2,154 Net operating loss carryforwards 473 487 Other employee benefits 125 182 Other 342 458 Gross deferred tax assets 3,115 3,281 Less valuation allowance (375 ) (380 ) Net deferred tax assets 2,740 2,901 Deferred tax liabilities Property, plant and equipment, primarily due to depreciation differences (3,626 ) (3,841 ) Goodwill and other intangible assets (2,577 ) (2,588 ) Other — (38 ) Gross deferred tax liabilities (6,203 ) (6,467 ) Net deferred tax liability $ (3,463 ) (3,566 ) |
Summary of the reconciliation of the change in gross unrecognized tax benefits | A reconciliation of the change in our gross unrecognized tax benefits (excluding both interest and any related federal benefit) from January 1 to December 31 for 2016 and 2015 is as follows: 2016 2015 (Dollars in millions) Unrecognized tax benefits at beginning of year $ 15 17 Increase in tax positions taken in the current year 1 1 Increase in tax positions taken in the prior year — 7 Decrease due to the reversal of tax positions taken in a prior year — (9 ) Decrease from the lapse of statute of limitations — (1 ) Unrecognized tax benefits at end of year $ 16 15 |
Schedule of open income tax years by major jurisdiction | Our open income tax years by major jurisdiction are as follows at December 31, 2016 : Jurisdiction Open Tax Years Federal 2013—current State Arizona 2010—current Other states 2012—current |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of segment information | The following table summarizes our segment results for 2016 , 2015 and 2014 based on the segment categorization we were operating under at December 31, 2016 . Years Ended December 31, 2016 2015 2014 (Dollars in millions) Total segment revenues $ 16,255 16,668 17,028 Total segment expenses 8,492 8,461 8,502 Total segment income $ 7,763 8,207 8,526 Total margin percentage 48 % 49 % 50 % Business segment: Revenues $ 10,352 10,646 11,030 Expenses 5,930 5,967 6,019 Income $ 4,422 4,679 5,011 Margin percentage 43 % 44 % 45 % Consumer segment: Revenues $ 5,903 6,022 5,998 Expenses 2,562 2,494 2,483 Income $ 3,341 3,528 3,515 Margin percentage 57 % 59 % 59 % |
Schedule of operating revenues by products and services | Our operating revenues for our products and services consisted of the following categories for the years ended December 31, 2016 , 2015 and 2014 : Years Ended December 31, 2016 2015 2014 (Dollars in millions) Strategic services Business high-bandwidth data services (1) $ 2,990 2,816 2,579 Business hosting services (2) 1,210 1,281 1,316 Other business strategic services (3) 703 624 558 Consumer broadband services (4) 2,689 2,611 2,469 Other consumer strategic services (5) 458 421 381 Total strategic services revenues 8,050 7,753 7,303 Legacy services Business voice services (6) 2,413 2,588 2,777 Business low-bandwidth data services (7) 1,382 1,594 1,893 Other business legacy services (8) 1,123 1,168 1,219 Consumer voice services (6) 2,442 2,676 2,865 Other consumer legacy services (9) 312 312 279 Total legacy services revenues 7,672 8,338 9,033 Data integration Business data integration 531 575 688 Consumer data integration 2 2 4 Total data integration revenues 533 577 692 Other revenues High-cost support revenue (10) 688 732 528 Other revenue (11) 527 500 475 Total other revenues 1,215 1,232 1,003 Total revenues $ 17,470 17,900 18,031 |
Schedule of reconciliation from segment income to consolidated net income | The following table reconciles segment income to net income for the years ended December 31, 2016 , 2015 and 2014 : Years Ended December 31, 2016 2015 2014 (Dollars in millions) Total segment income $ 7,763 8,207 8,526 Other operating revenues 1,215 1,232 1,003 Depreciation and amortization (3,916 ) (4,189 ) (4,428 ) Other unassigned operating expenses (2,731 ) (2,645 ) (2,691 ) Other expenses, net (1,311 ) (1,289 ) (1,300 ) Income before income tax expense 1,020 1,316 1,110 Income tax expense (394 ) (438 ) (338 ) Net income $ 626 878 772 |
Quarterly Financial Data (Una43
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial information | First Quarter Second Quarter Third Quarter Fourth Quarter Total (Dollars in millions, except per share amounts) 2016 Operating revenues $ 4,401 4,398 4,382 4,289 17,470 Operating income 694 650 595 392 2,331 Net income 236 196 152 42 626 Basic earnings per common share 0.44 0.36 0.28 0.08 1.16 Diluted earnings per common share 0.44 0.36 0.28 0.08 1.16 2015 Operating revenues $ 4,451 4,419 4,554 4,476 17,900 Operating income 649 549 656 751 2,605 Net income 192 143 205 338 878 Basic earnings per common share 0.34 0.26 0.37 0.62 1.58 Diluted earnings per common share 0.34 0.26 0.37 0.62 1.58 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of capital lease activity | The tables below summarize our capital lease activity: Years Ended December 31, 2016 2015 2014 (Dollars in millions) Assets acquired through capital leases 45 17 37 Depreciation expense 70 96 126 Cash payments towards capital leases 58 89 118 As of December 31, 2016 2015 (Dollars in millions) Assets included in property, plant and equipment 705 722 Accumulated depreciation 351 352 |
Schedule of future annual minimum payments under capital lease arrangements | The future annual minimum payments under capital lease arrangements as of December 31, 2016 were as follows: Future Minimum Payments (Dollars in millions) Capital lease obligations: 2017 $ 94 2018 91 2019 70 2020 46 2021 43 2022 and thereafter 170 Total minimum payments 514 Less: amount representing interest and executory costs (123 ) Present value of minimum payments 391 Less: current portion (69 ) Long-term portion $ 322 |
Schedule of future annual minimum payments under capital lease arrangements - Colocation Business | If, as anticipated, we sell our colocation business and data centers in the manner discussed in Note 3—Pending Sale of Colocation Business and Data Centers, $305 million of the capital lease obligations as of December 31, 2016 will be assumed by the Purchaser. The future annual minimum payments under capital lease arrangements for the colocation operations as of December 31, 2016 were as follows: Future Minimum (Dollars in millions) Capital lease obligations: 2017 $ 60 2018 62 2019 52 2020 39 2021 40 2022 and thereafter 145 Total minimum payments 398 Less: amount representing interest and executory costs (93 ) Present value of minimum payments $ 305 |
Schedule of future rental commitments for operating leases | At December 31, 2016 , our future rental commitments for operating leases were as follows: Future Minimum Payments (Dollars in millions) 2017 $ 295 2018 276 2019 249 2020 226 2021 162 2022 and thereafter 1,049 Total future minimum payments (1) $ 2,257 _______________________________________________________________________________ (1) Minimum payments have not been reduced by minimum sublease rentals of $77 million due in the future under non-cancelable subleases. |
Schedule of future rental commitments for operating leases - Colocation Business | If, as anticipated, we sell our colocation business and data centers in the manner discussed in Note 3—Pending Sale of Colocation Business and Data Centers, $750 million of the operating leases future rental commitments as of December 31, 2016 will be assumed by the Purchaser. The future rental commitments under operating leases for the colocation operations as of December 31, 2016 were as follows: Future Minimum Payments (Dollars in millions) 2017 $ 89 2018 84 2019 71 2020 68 2021 68 2022 and thereafter 370 Total future minimum payments $ 750 |
Other Financial Information (Ta
Other Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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 December 31, 2016 2015 (Dollars in millions) Prepaid expenses $ 206 238 Materials, supplies and inventory 134 144 Deferred activation and installation charges 101 105 Other 106 86 Total other current assets $ 547 573 |
Schedule of current liabilities including accounts payable and other current liabiities | Current liabilities reflected in our consolidated balance sheets include accounts payable and other current liabilities as follows: As of December 31, 2016 2015 (Dollars in millions) Accounts payable $ 1,179 968 Other current liabilities: Accrued rent $ 31 32 Legal reserves 30 20 Other 152 168 Total other current liabilities $ 213 220 |
Accumulated Other Comprehensi46
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Summary of the entity's accumulated other comprehensive income (loss) by component | The table below summarizes changes in accumulated other comprehensive loss recorded on our consolidated balance sheet by component for the year ended December 31, 2016 : Pension Plans Post-Retirement Benefit Plans Foreign Currency Translation Adjustment and Other Total (Dollars in millions) Balance at December 31, 2015 $ (1,715 ) (180 ) (39 ) (1,934 ) Other comprehensive income (loss) before reclassifications (280 ) 6 (22 ) (296 ) Amounts reclassified from accumulated other comprehensive income 100 12 1 113 Net current-period other comprehensive income (loss) (180 ) 18 (21 ) (183 ) Balance at December 31, 2016 $ (1,895 ) (162 ) (60 ) (2,117 ) | The table below summarizes changes in accumulated other comprehensive loss recorded on our consolidated balance sheet by component for the year ended December 31, 2015 : Pension Plans Post-Retirement Benefit Plans Foreign Currency Translation Adjustment and Other Total (Dollars in millions) Balance at December 31, 2014 $ (1,720 ) (272 ) (25 ) (2,017 ) Other comprehensive income (loss) before reclassifications (98 ) 80 (14 ) (32 ) Amounts reclassified from accumulated other comprehensive income 103 12 — 115 Net current-period other comprehensive income (loss) 5 92 (14 ) 83 Balance at December 31, 2015 $ (1,715 ) (180 ) (39 ) (1,934 ) |
Schedule of reclassifications out of accumulated other comprehensive income (loss) by component | The table below presents further information about our reclassifications out of accumulated other comprehensive loss by component for the year ended December 31, 2016 : Year Ended December 31, 2016 Decrease (Increase) in Net Income Affected Line Item in Consolidated Statement of 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 $ 175 See Note 9—Employee Benefits Prior service cost 12 See Note 9—Employee Benefits Total before tax 187 Income tax expense (benefit) (75 ) Income tax expense Insignificant items 1 Net of tax $ 113 | The table below presents further information about our reclassifications out of accumulated other comprehensive loss by component for the year ended December 31, 2015 : Year Ended December 31, 2015 Decrease (Increase) in Net Loss Affected Line Item in Consolidated Statement of 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 $ 161 See Note 9—Employee Benefits Prior service cost 24 See Note 9—Employee Benefits Total before tax 185 Income tax expense (benefit) (70 ) Income tax expense Net of tax $ 115 |
Dividends (Tables)
Dividends (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Dividends, Common Stock [Abstract] | |
Schedule of dividends declared | Our Board of Directors declared the following dividends payable in 2016 and 2015 : Date Declared Record Date Dividend Per Share Total Amount Payment Date (in millions) November 15, 2016 11/28/2016 $ 0.540 $ 294 12/12/2016 August 23, 2016 9/2/2016 0.540 295 9/16/2016 May 18, 2016 5/31/2016 0.540 294 6/14/2016 February 23, 2016 3/4/2016 0.540 295 3/18/2016 November 10, 2015 11/24/2015 0.540 293 12/8/2015 August 25, 2015 9/8/2015 0.540 300 9/22/2015 May 20, 2015 6/2/2015 0.540 303 6/16/2015 February 23, 2015 3/6/2015 0.540 303 3/20/2015 |
Basis of Presentation and Sum48
Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Summary of Significant Accounting Policies (Details) - CAF Phase 2 Support $ in Millions | Aug. 27, 2015USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Operating revenues by products and services | |||||
Federal support, total amount per agreement | $ 500 | ||||
Contract or agreement term | 6 | ||||
Number of rural households and businesses | 1,200,000 | ||||
Number of states in which service is provided (states) | 33 | ||||
Incremental increase in other operating revenues | $ 57 | $ 158 | $ 201 | $ 215 |
Basis of Presentation and Sum49
Basis of Presentation and Summary of Significant Accounting Policies (Details 2) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Change in accounting estimates | |||||||||||
Net income | $ 42 | $ 152 | $ 196 | $ 236 | $ 338 | $ 205 | $ 143 | $ 192 | $ 626 | $ 878 | $ 772 |
Change in accounting method accounted for as a change in estimate | |||||||||||
Change in accounting estimates | |||||||||||
Combined decrease in pension and post-retirement cost | (149) | ||||||||||
Net income | $ 91 | ||||||||||
Earnings per share, basic and diluted | $ 0.17 |
Basis of Presentation and Sum50
Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue Recognition | |||
Term of indefeasible rights of use (in years) | 20 years | ||
Advertising Costs | |||
Advertising expense | $ 216 | $ 210 | $ 214 |
Accounts Receivable and Allowance for Doubtful Accounts | |||
Accounts receivable, past due threshold (in days) | 30 days | ||
Activation and installation charges | Minimum | |||
Revenue Recognition | |||
Customer relationship period for revenue recognition (from eighteen months to over ten years) | 3 years | ||
Activation and installation charges | Maximum | |||
Revenue Recognition | |||
Customer relationship period for revenue recognition (from eighteen months to over ten years) | 7 years |
Basis of Presentation and Sum51
Basis of Presentation and Summary of Significant Accounting Policies (Details 4) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Customer relationships | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 10 years |
Customer relationships | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 15 years |
Capitalized software | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 7 years |
Integrated billing and customer care system | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 20 years |
Finite-lived intangible assets, gross | $ 237 |
Other | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 4 years |
Other | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 20 years |
Basis of Presentation and Sum52
Basis of Presentation and Summary of Significant Accounting Policies (Details 5) shares in Millions | Dec. 31, 2016$ / sharesshares |
Common Stock | |
Class of Stock [Line Items] | |
Unissued shares of CenturyLink common stock | 4 |
Common Stock | Stock compensation plan | |
Class of Stock [Line Items] | |
Unissued shares of CenturyLink common stock | 21 |
Preferred Stock | |
Class of Stock [Line Items] | |
Preferential preferred stock distribution (in dollars per share) | $ / shares | $ 25 |
Pending Acquisition of Level 3
Pending Acquisition of Level 3 (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Business acquisition | |||
Total long-term debt | $ 19,993 | $ 20,225 | |
Level 3 Communications, Inc. | Level 3 Communications, Inc. | |||
Business acquisition | |||
Total long-term debt | $ 10,900 | ||
Scenario, Forecast | Level 3 Communications, Inc. | |||
Business acquisition | |||
Price per share of stock in business acquisition (per share) | $ 26.50 | ||
Scenario, Forecast | Level 3 Communications, Inc. | CenturyLink, Inc. | |||
Business acquisition | |||
Business acquisition, ownership control (in percent) | 51.00% | ||
Contract termination fees for contractual default | $ 472 | ||
Scenario, Forecast | Level 3 Communications, Inc. | Level 3 Communications, Inc. | |||
Business acquisition | |||
Business acquisition, ownership control (in percent) | 49.00% | ||
Contract termination fees for contractual default | $ 738 | ||
COMMON STOCK (represents dollars and shares) | Scenario, Forecast | Level 3 Communications, Inc. | |||
Business acquisition | |||
Stock per share issuable in business acquisition, Description | 1.4286 of CenturyLink shares for each share of Level 3 common stock |
Pending Sale of Colocation Bu54
Pending Sale of Colocation Business and Data Centers (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Total amount reclassified to assets held for sale(1) | $ 2,376 | $ 2,376 | $ 8 | ||
Capital lease obligations | 305 | 305 | 0 | ||
Total liabilities associated with assets held for sale | 419 | 419 | 0 | ||
Income tax expense | 394 | $ 438 | $ 338 | ||
Colocation Business and Data Centers | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Goodwill | 1,141 | 1,141 | |||
Property, plant and equipment | 1,071 | 1,071 | |||
Other intangible assets | 258 | 258 | |||
Other assets | 45 | 45 | |||
Total amount reclassified to assets held for sale(1) | 2,515 | 2,515 | |||
Capital lease obligations | 305 | 305 | |||
Other liabilities | 114 | 114 | |||
Total liabilities associated with assets held for sale | 419 | $ 419 | |||
Depreciation and amortization | $ 36 | ||||
Minimum | Scenario, Forecast | Colocation Business and Data Centers | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Net proceeds from sales of colocation business and data centers | $ 1,500 | ||||
Income tax expense | 100 | ||||
Maximum | Scenario, Forecast | Colocation Business and Data Centers | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Net proceeds from sales of colocation business and data centers | 1,700 | ||||
Income tax expense | $ 200 |
Goodwill, Customer Relationsh55
Goodwill, Customer Relationships and Other Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | |||
Other intangible assets, net | $ 1,531 | $ 1,555 | |
Goodwill | 19,650 | 20,742 | $ 20,755 |
Indefinite-life intangible assets | 269 | 269 | |
Amortization expense for intangible assets | 1,225 | 1,353 | $ 1,470 |
Gross carrying amount of intangible assets | 32,338 | ||
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, net | 2,797 | 3,928 | |
Accumulated amortization | 6,318 | 5,648 | |
Capitalized software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, net | 1,227 | 1,248 | |
Accumulated amortization | 2,019 | 1,778 | |
Tradenames and patents | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, net | 35 | 38 | |
Accumulated amortization | $ 23 | $ 20 |
Goodwill, Customer Relationsh56
Goodwill, Customer Relationships and Other Intangible Assets (Details 2) $ in Millions | Dec. 31, 2016USD ($) |
Expected amortization expense | |
2,017 | $ 1,044 |
2,018 | 925 |
2,019 | 808 |
2,020 | 703 |
2,021 | $ 268 |
Goodwill, Customer Relationsh57
Goodwill, Customer Relationships and Other Intangible Assets (Details 3) | Oct. 31, 2016 | Oct. 31, 2015 | Oct. 31, 2014 |
Goodwill [Line Items] | |||
Implied control premium (percent) | 33.80% | ||
Number of reporting units | 3 | 3 | 4 |
Consumer and Wholesale reporting units | |||
Goodwill [Line Items] | |||
Discount rate (percent) | 6.00% | ||
Fair value inputs after tax cost of debt rate (percent) | 2.80% | ||
Fair value inputs cost of equity rate (percent) | 6.20% | ||
Business reporting unit, excluding Wholesale reporting unit | |||
Goodwill [Line Items] | |||
Discount rate (percent) | 7.00% | ||
Fair value inputs after tax cost of debt rate (percent) | 2.80% | ||
Fair value inputs cost of equity rate (percent) | 6.80% |
Goodwill, Customer Relationsh58
Goodwill, Customer Relationships and Other Intangible Assets (Details 4) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill [rollforward] | ||
Goodwill at the beginning of the period | $ 20,742 | $ 20,755 |
Purchase accounting adjustments | (13) | |
Goodwill acquired during period | 49 | |
Goodwill at the end of the period | 19,650 | 20,742 |
Business | ||
Goodwill [rollforward] | ||
Goodwill at the beginning of the period | 10,464 | 10,477 |
Purchase accounting adjustments | (13) | |
Goodwill acquired during period | 49 | |
Goodwill at the end of the period | 9,372 | 10,464 |
Goodwill accumulated impairment loss | 1,100 | |
Consumer | ||
Goodwill [rollforward] | ||
Goodwill at the beginning of the period | 10,278 | 10,278 |
Purchase accounting adjustments | 0 | |
Goodwill acquired during period | 0 | |
Goodwill at the end of the period | 10,278 | $ 10,278 |
Colocation Business and Data Centers | ||
Goodwill [rollforward] | ||
Goodwill transfered to assets-held-for sale | (1,141) | |
Colocation Business and Data Centers | Business | ||
Goodwill [rollforward] | ||
Goodwill transfered to assets-held-for sale | (1,141) | |
Colocation Business and Data Centers | Consumer | ||
Goodwill [rollforward] | ||
Goodwill transfered to assets-held-for sale | $ 0 |
Goodwill, Customer Relationsh59
Goodwill, Customer Relationships and Other Intangible Assets (Details 5) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Business acquisition | |||
Total consideration to acquire businesses | $ 39 | $ 4 | $ 93 |
Goodwill acquired during period | $ 49 | ||
Various business acquisitions | |||
Business acquisition | |||
Number of businesses acquired | 3 | ||
Total consideration to acquire businesses | $ 53 | ||
Total consideration, deferred or contingent cash payments | future deferred or contingent cash payments of $14 million | ||
Goodwill acquired during period | $ 49 |
Long-Term Debt and Credit Fac60
Long-Term Debt and Credit Facilities (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Long-term Debt and Credit Facilities | ||
Capital lease and other obligations | $ 440 | $ 425 |
Total long-term debt | 20,319 | |
Unamortized discounts, net | (133) | (125) |
Unamortized debt issuance costs | (193) | (179) |
Total long-term debt | 19,993 | 20,225 |
Less current maturities not associated with assets held for sale | (1,503) | (1,503) |
Less capital lease obligations associated with assets held for sale(2) | (305) | 0 |
Long-term debt, excluding current maturities and capital leases obligations associated with assets held for sale | 18,185 | 18,722 |
CenturyLink, Inc. | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Total long-term debt | 8,975 | 7,975 |
CenturyLink, Inc. | Credit facility | ||
Long-term Debt and Credit Facilities | ||
Total long-term debt | $ 370 | $ 410 |
Credit facility interest rate at period end (as a percent) | 4.50% | |
Weighted average interest rate (as a percent) | 4.50% | 2.756% |
CenturyLink, Inc. | Medium-term notes | ||
Long-term Debt and Credit Facilities | ||
Total long-term debt | $ 336 | $ 358 |
Interest rate, stated percentage (as a percent) | 2.52% | |
Qwest Corporation | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Total long-term debt | $ 7,259 | 7,229 |
Qwest Corporation | Medium-term notes | ||
Long-term Debt and Credit Facilities | ||
Total long-term debt | $ 100 | 100 |
Interest rate, stated percentage (as a percent) | 2.52% | |
Qwest Capital Funding, Inc | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Total long-term debt | $ 981 | 981 |
Embarq Corporation | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Total long-term debt | $ 1,485 | 2,669 |
Interest rate, stated percentage (as a percent) | 7.995% | |
Embarq Corporation | First mortgage bonds | ||
Long-term Debt and Credit Facilities | ||
Total long-term debt | $ 223 | 232 |
Embarq Corporation | Other | ||
Long-term Debt and Credit Facilities | ||
Total long-term debt | $ 150 | $ 150 |
Interest rate, stated percentage (as a percent) | 9.00% | |
Minimum | CenturyLink, Inc. | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Interest rate, stated percentage (as a percent) | 5.15% | |
Minimum | Qwest Corporation | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Interest rate, stated percentage (as a percent) | 6.125% | |
Minimum | Qwest Capital Funding, Inc | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Interest rate, stated percentage (as a percent) | 6.50% | |
Minimum | Embarq Corporation | First mortgage bonds | ||
Long-term Debt and Credit Facilities | ||
Interest rate, stated percentage (as a percent) | 7.125% | |
Maximum | CenturyLink, Inc. | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Interest rate, stated percentage (as a percent) | 7.65% | |
Maximum | Qwest Corporation | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Interest rate, stated percentage (as a percent) | 7.75% | |
Maximum | Qwest Capital Funding, Inc | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Interest rate, stated percentage (as a percent) | 7.75% | |
Maximum | Embarq Corporation | First mortgage bonds | ||
Long-term Debt and Credit Facilities | ||
Interest rate, stated percentage (as a percent) | 8.77% | |
Colocation Business and Data Centers | ||
Long-term Debt and Credit Facilities | ||
Less capital lease obligations associated with assets held for sale(2) | $ (305) |
Long-Term Debt and Credit Fac61
Long-Term Debt and Credit Facilities (Details 2) | Aug. 22, 2016USD ($) | Apr. 06, 2016USD ($) | Jan. 29, 2016USD ($) | Sep. 21, 2015USD ($) | Mar. 19, 2015USD ($) | Feb. 20, 2015USD ($) | Dec. 03, 2014USD ($)lender | Jan. 31, 2015USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 23, 2016USD ($) | Nov. 15, 2016USD ($) | Sep. 19, 2016USD ($) | Sep. 15, 2016USD ($) | Aug. 29, 2016USD ($) | Jun. 01, 2016USD ($) | May 02, 2016USD ($) | Oct. 13, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 15, 2015USD ($) | Feb. 15, 2015USD ($) | Apr. 30, 2011USD ($) |
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Total long-term debt | $ 20,319,000,000 | ||||||||||||||||||||||
Interest expense: | |||||||||||||||||||||||
Gross interest expense | 1,372,000,000 | $ 1,364,000,000 | $ 1,358,000,000 | ||||||||||||||||||||
Capitalized interest | (54,000,000) | (52,000,000) | (47,000,000) | ||||||||||||||||||||
Total interest expense | $ 1,318,000,000 | 1,312,000,000 | $ 1,311,000,000 | ||||||||||||||||||||
Qwest Corporation | Revolving credit facility | |||||||||||||||||||||||
Interest expense: | |||||||||||||||||||||||
Debt to EBITDA ratio to be maintained under the Credit Facility | 2.85 | ||||||||||||||||||||||
CenturyLink, Inc. | Revolving credit facility | |||||||||||||||||||||||
Interest expense: | |||||||||||||||||||||||
Debt to EBITDA ratio to be maintained under the Credit Facility | 4 | ||||||||||||||||||||||
Senior notes | Qwest Corporation | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Total long-term debt | $ 7,259,000,000 | 7,229,000,000 | |||||||||||||||||||||
Senior notes | Qwest Corporation | Minimum | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate, stated percentage (as a percent) | 6.125% | ||||||||||||||||||||||
Senior notes | Qwest Corporation | Maximum | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate, stated percentage (as a percent) | 7.75% | ||||||||||||||||||||||
Senior notes | Qwest Corporation | 6.5% Notes due 2056 | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Aggregate principal amount of debt issuance | $ 978,000,000 | ||||||||||||||||||||||
Interest rate, stated percentage (as a percent) | 6.50% | ||||||||||||||||||||||
Principal amount of over-allotment | $ 128,000,000 | ||||||||||||||||||||||
Net proceeds from issuance of debt | $ 946,000,000 | ||||||||||||||||||||||
Senior notes | Qwest Corporation | 7.00% Notes due 2056 | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Aggregate principal amount of debt issuance | $ 235,000,000 | ||||||||||||||||||||||
Interest rate, stated percentage (as a percent) | 7.00% | ||||||||||||||||||||||
Net proceeds from issuance of debt | $ 227,000,000 | ||||||||||||||||||||||
Senior notes | Qwest Corporation | 6.625% Notes due 2055 | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Aggregate principal amount of debt issuance | $ 400,000,000 | ||||||||||||||||||||||
Interest rate, stated percentage (as a percent) | 6.625% | ||||||||||||||||||||||
Principal amount of over-allotment | $ 10,000,000 | ||||||||||||||||||||||
Net proceeds from issuance of debt | $ 386,000,000 | ||||||||||||||||||||||
Senior notes | Qwest Corporation | 7.5% Notes due 2051 | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate, stated percentage (as a percent) | 7.50% | ||||||||||||||||||||||
Repurchased face amount of Senior notes | $ 287,000,000 | ||||||||||||||||||||||
Senior notes | Qwest Corporation | 7.375% Notes Due 2051 | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate, stated percentage (as a percent) | 7.375% | ||||||||||||||||||||||
Repurchased face amount of Senior notes | $ 661,000,000 | ||||||||||||||||||||||
Senior notes | Qwest Corporation | 8.375% Notes due 2016 | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate, stated percentage (as a percent) | 8.375% | ||||||||||||||||||||||
Repurchased face amount of Senior notes | $ 235,000,000 | ||||||||||||||||||||||
Senior notes | Qwest Corporation | 7.200% Note due 2026 | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate, stated percentage (as a percent) | 7.20% | ||||||||||||||||||||||
Repurchased face amount of Senior notes | $ 250,000,000 | ||||||||||||||||||||||
Senior notes | Qwest Corporation | 6.875% Noted due 2033 | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate, stated percentage (as a percent) | 6.875% | ||||||||||||||||||||||
Repurchased face amount of Senior notes | $ 150,000,000 | ||||||||||||||||||||||
Senior notes | Qwest Corporation | 7.625 % Notes due 2015 | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate, stated percentage (as a percent) | 7.625% | ||||||||||||||||||||||
Repurchased face amount of Senior notes | $ 92,000,000 | ||||||||||||||||||||||
Senior notes | CenturyLink, Inc. | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Total long-term debt | $ 8,975,000,000 | 7,975,000,000 | |||||||||||||||||||||
Senior notes | CenturyLink, Inc. | Minimum | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate, stated percentage (as a percent) | 5.15% | ||||||||||||||||||||||
Senior notes | CenturyLink, Inc. | Maximum | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate, stated percentage (as a percent) | 7.65% | ||||||||||||||||||||||
Senior notes | CenturyLink, Inc. | 7.5% Notes due 2024 | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Aggregate principal amount of debt issuance | $ 1,000,000,000 | ||||||||||||||||||||||
Interest rate, stated percentage (as a percent) | 7.50% | ||||||||||||||||||||||
Net proceeds from issuance of debt | $ 988,000,000 | ||||||||||||||||||||||
Senior notes | CenturyLink, Inc. | 5.625% Notes due 2025 | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Aggregate principal amount of debt issuance | $ 500,000,000 | ||||||||||||||||||||||
Interest rate, stated percentage (as a percent) | 5.625% | ||||||||||||||||||||||
Net proceeds from issuance of debt | $ 494,000,000 | ||||||||||||||||||||||
Senior notes | CenturyLink, Inc. | Series M 5.00% Notes | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate, stated percentage (as a percent) | 5.00% | ||||||||||||||||||||||
Repurchased face amount of Senior notes | $ 350,000,000 | ||||||||||||||||||||||
Senior notes | Embarq Corporation | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate, stated percentage (as a percent) | 7.995% | ||||||||||||||||||||||
Total long-term debt | $ 1,485,000,000 | 2,669,000,000 | |||||||||||||||||||||
Interest expense: | |||||||||||||||||||||||
Percentage of net tangible assets allowed to secure senior notes (percent) | 15.00% | ||||||||||||||||||||||
Senior notes | Embarq Corporation | 7.082% Notes due 2016 | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate, stated percentage (as a percent) | 7.082% | ||||||||||||||||||||||
Repurchased face amount of Senior notes | $ 1,184,000,000 | ||||||||||||||||||||||
First mortgage bonds | Embarq Corporation | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Total long-term debt | $ 223,000,000 | 232,000,000 | |||||||||||||||||||||
Interest expense: | |||||||||||||||||||||||
Percentage of subsidiary property, plant and equipment securing debt, (percent) | 10.00% | ||||||||||||||||||||||
First mortgage bonds | Embarq Corporation | Minimum | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate, stated percentage (as a percent) | 7.125% | ||||||||||||||||||||||
First mortgage bonds | Embarq Corporation | Maximum | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate, stated percentage (as a percent) | 8.77% | ||||||||||||||||||||||
First mortgage bonds | Embarq Corporation | 8.375% Notes due 2025 | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate, stated percentage (as a percent) | 8.375% | ||||||||||||||||||||||
Repurchased face amount of Senior notes | $ 5,000,000 | ||||||||||||||||||||||
First mortgage bonds | Embarq Corporation | 8.77% Notes due 2017 | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate, stated percentage (as a percent) | 8.77% | ||||||||||||||||||||||
Repurchased face amount of Senior notes | $ 4,000,000 | ||||||||||||||||||||||
Line of credit | CenturyLink, Inc. | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Total long-term debt | $ 370,000,000 | 410,000,000 | |||||||||||||||||||||
Line of credit | CenturyLink, Inc. | Credit Facility | Revolving credit facility | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Maximum borrowing capacity | $ 2,000,000,000 | ||||||||||||||||||||||
Number of lenders of Credit Facility | lender | 16 | ||||||||||||||||||||||
Number of subsidiary Guarantors for Credit Facility | 9 | ||||||||||||||||||||||
Line of credit | CenturyLink, Inc. | Credit Facility | Revolving credit facility | Minimum | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Lending commitment per lender | $ 3,500,000 | ||||||||||||||||||||||
Line of credit | CenturyLink, Inc. | Credit Facility | Revolving credit facility | Minimum | London Interbank Offered Rate (LIBOR) | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate margin (as a percent) | 1.00% | ||||||||||||||||||||||
Line of credit | CenturyLink, Inc. | Credit Facility | Revolving credit facility | Minimum | Base Rate | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate margin (as a percent) | 0.00% | ||||||||||||||||||||||
Line of credit | CenturyLink, Inc. | Credit Facility | Revolving credit facility | Maximum | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Lending commitment per lender | $ 198,500,000 | ||||||||||||||||||||||
Line of credit | CenturyLink, Inc. | Credit Facility | Revolving credit facility | Maximum | London Interbank Offered Rate (LIBOR) | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate margin (as a percent) | 2.25% | ||||||||||||||||||||||
Line of credit | CenturyLink, Inc. | Credit Facility | Revolving credit facility | Maximum | Base Rate | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate margin (as a percent) | 1.25% | ||||||||||||||||||||||
Line of credit | CenturyLink, Inc. | Credit Facility | Letter of credit | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Maximum borrowing capacity | $ 400,000,000 | ||||||||||||||||||||||
Line of credit | CenturyLink, Inc. | Uncommitted revolving line of credit | Line of credit | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Maximum borrowing capacity | $ 85,000,000 | ||||||||||||||||||||||
Total long-term debt | $ 0 | 80,000,000 | |||||||||||||||||||||
Number of lenders of revolving line of credit | 1 | ||||||||||||||||||||||
Line of credit | CenturyLink, Inc. | Uncommitted revolving line of credit | Line of credit | Minimum | London Interbank Offered Rate (LIBOR) | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate margin (as a percent) | 1.00% | ||||||||||||||||||||||
Line of credit | CenturyLink, Inc. | Uncommitted revolving line of credit | Line of credit | Maximum | London Interbank Offered Rate (LIBOR) | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate margin (as a percent) | 2.25% | ||||||||||||||||||||||
Medium-term notes | Qwest Corporation | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate, stated percentage (as a percent) | 2.52% | ||||||||||||||||||||||
Total long-term debt | $ 100,000,000 | 100,000,000 | |||||||||||||||||||||
Medium-term notes | Qwest Corporation | Term loan | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Aggregate principal amount of debt issuance | $ 100,000,000 | ||||||||||||||||||||||
Total long-term debt | $ 100,000,000 | 100,000,000 | |||||||||||||||||||||
Medium-term notes | Qwest Corporation | Term loan | Minimum | London Interbank Offered Rate (LIBOR) | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate margin (as a percent) | 1.50% | ||||||||||||||||||||||
Medium-term notes | Qwest Corporation | Term loan | Minimum | Base Rate | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate margin (as a percent) | 0.50% | ||||||||||||||||||||||
Medium-term notes | Qwest Corporation | Term loan | Maximum | London Interbank Offered Rate (LIBOR) | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate margin (as a percent) | 2.50% | ||||||||||||||||||||||
Medium-term notes | Qwest Corporation | Term loan | Maximum | Base Rate | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate margin (as a percent) | 1.50% | ||||||||||||||||||||||
Medium-term notes | CenturyLink, Inc. | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Interest rate, stated percentage (as a percent) | 2.52% | ||||||||||||||||||||||
Total long-term debt | $ 336,000,000 | 358,000,000 | |||||||||||||||||||||
Letter of credit | CenturyLink, Inc. | Uncommitted revolving letter of credit facility | Letter of credit | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Maximum borrowing capacity | $ 160,000,000 | ||||||||||||||||||||||
Letters of credit outstanding | $ 105,000,000 | $ 109,000,000 | |||||||||||||||||||||
Level 3 Communications, Inc. | Debt commitment letter | CenturyLink, Inc. | Revolving credit facility | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Maximum borrowing capacity | $ 2,000,000,000 | ||||||||||||||||||||||
Level 3 Communications, Inc. | Debt commitment letter | CenturyLink, Inc. | Term Loan A | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Aggregate principal amount of debt issuance | 1,500,000,000 | ||||||||||||||||||||||
Level 3 Communications, Inc. | Debt commitment letter | CenturyLink, Inc. | Term Loan B | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Aggregate principal amount of debt issuance | 4,500,000,000 | ||||||||||||||||||||||
Level 3 Communications, Inc. | Debt commitment letter | CenturyLink, Inc. | Bridge loan | |||||||||||||||||||||||
Long-term Debt and Credit Facilities | |||||||||||||||||||||||
Aggregate principal amount of debt issuance | $ 2,225,000,000 |
Long-Term Debt and Credit Fac62
Long-Term Debt and Credit Facilities Long-Term Debt and Credit Facilities (Details 3) - Senior notes | Aug. 22, 2016 | Apr. 06, 2016 | Jan. 29, 2016 | Sep. 21, 2015 | Mar. 19, 2015 |
6.5% Notes due 2056 | Debt Instrument, Redemption, Period One [Member] | Qwest Corporation | |||||
Debt Instrument, Redemption [Line Items] | |||||
Debt Instrument, Redemption, Description | on or after September 1, 2021, at a redemption price equal to 100% of the principal amount redeemed | ||||
7.5% Notes due 2024 | Debt Instrument, Redemption, Period One [Member] | CenturyLink, Inc. | |||||
Debt Instrument, Redemption [Line Items] | |||||
Debt Instrument, Redemption, Description | on or after January 1, 2024, at a redemption price equal to 100% of the principal amount redeemed | ||||
7.5% Notes due 2024 | Debt Instrument, Redemption, Period Two [Member] | CenturyLink, Inc. | |||||
Debt Instrument, Redemption [Line Items] | |||||
Debt Instrument, Redemption, Description | before January 1, 2024, the Notes are redeemable, in whole or in part, at CenturyLink, Inc.'s option, at a redemption price equal to the greater of 100% of the principal amount of the Notes to be redeemed or the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed, discounted to the redemption date in the manner described in the Notes | ||||
7.5% Notes due 2024 | Debt Instrument, Redemption, Period Three [Member] | CenturyLink, Inc. | |||||
Debt Instrument, Redemption [Line Items] | |||||
Debt Instrument, Redemption, Description | on or prior to April 1, 2019, CenturyLink, Inc. may redeem up to 35% of the aggregate principal amount of the Notes at a redemption price of 107.5% of the principal amount | ||||
7.5% Notes due 2024 | Debt Instrument, Redemption, Period Four [Member] | CenturyLink, Inc. | |||||
Debt Instrument, Redemption [Line Items] | |||||
Debt Instrument, Redemption, Description | Under certain circumstances, CenturyLink, Inc. will be required to make an offer to repurchase the Notes at a price of 101% of the aggregate principal amount | ||||
7.00% Notes due 2056 | Debt Instrument, Redemption, Period One [Member] | Qwest Corporation | |||||
Debt Instrument, Redemption [Line Items] | |||||
Debt Instrument, Redemption, Description | on or after February 1, 2021, at a redemption price equal to 100% of the principal amount redeemed | ||||
6.625% Notes due 2055 | Debt Instrument, Redemption, Period One [Member] | Qwest Corporation | |||||
Debt Instrument, Redemption [Line Items] | |||||
Debt Instrument, Redemption Price, Percentage | 100.00% | ||||
5.625% Notes due 2025 | Debt Instrument, Redemption, Period One [Member] | CenturyLink, Inc. | |||||
Debt Instrument, Redemption [Line Items] | |||||
Debt Instrument, Redemption, Description | 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 | ||||
5.625% Notes due 2025 | Debt Instrument, Redemption, Period Two [Member] | CenturyLink, Inc. | |||||
Debt Instrument, Redemption [Line Items] | |||||
Debt Instrument, Redemption, Description | At any time on or after January 1, 2025, CenturyLink, Inc. may redeem the Notes at par | ||||
5.625% Notes due 2025 | Debt Instrument, Redemption, Period Three [Member] | CenturyLink, Inc. | |||||
Debt Instrument, Redemption [Line Items] | |||||
Debt Instrument, Redemption Price, Percentage | 105.625% | ||||
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemable | 35.00% | ||||
5.625% Notes due 2025 | Debt Instrument, Redemption, Period Four [Member] | CenturyLink, Inc. | |||||
Debt Instrument, Redemption [Line Items] | |||||
Debt Instrument, Redemption Price, Percentage | 101.00% |
Long-Term Debt and Credit Fac63
Long-Term Debt and Credit Facilities (Details 4) $ in Millions | Dec. 31, 2016USD ($) | |
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
2,017 | $ 1,544 | [1] |
2,018 | 280 | [1] |
2,019 | 1,131 | [1] |
2,020 | 1,032 | [1] |
2,021 | 2,329 | [1] |
2022 and thereafter | 14,003 | [1] |
Total long-term debt | $ 20,319 | |
[1] | Actual principal paid in any year may differ due to the possible future refinancing of outstanding debt or the issuance of new debt. The projected amounts in the table also exclude any impacts from the sale of our colocation business or any further acquisitions. |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Other receivables | $ 14 | $ 18 | |
Total accounts receivable | 2,195 | 2,095 | |
Less: allowance for doubtful accounts | (178) | (152) | |
Accounts receivable, less allowance | 2,017 | 1,943 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Beginning balance | 152 | 162 | $ 155 |
Additions | 192 | 177 | 159 |
Deductions | (166) | (187) | (152) |
Ending balance | 178 | 152 | $ 162 |
Earned and unbilled receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total accounts receivable | 299 | 288 | |
Trade and purchased receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total accounts receivable | $ 1,882 | $ 1,789 |
Property, Plant and Equipment65
Property, Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, plant and equipment | ||||
Asset Retirement Obligation | $ 95 | $ 91 | $ 107 | $ 106 |
Gross property, plant and equipment | 39,194 | 38,785 | ||
Accumulated depreciation | (22,155) | (20,716) | ||
Net property, plant and equipment | 17,039 | 18,069 | ||
Depreciation, Depletion and Amortization [Abstract] | ||||
Depreciation expense | 2,691 | 2,836 | 2,958 | |
Land | ||||
Property, plant and equipment | ||||
Gross property, plant and equipment | 563 | 571 | ||
Fiber, conduit and other outside plant | ||||
Property, plant and equipment | ||||
Gross property, plant and equipment | $ 16,996 | 16,166 | ||
Fiber, conduit and other outside plant | Minimum | ||||
Depreciation, Depletion and Amortization [Abstract] | ||||
Depreciable Lives | 15 years | |||
Fiber, conduit and other outside plant | Maximum | ||||
Depreciation, Depletion and Amortization [Abstract] | ||||
Depreciable Lives | 45 years | |||
Central office and other network electronics | ||||
Property, plant and equipment | ||||
Gross property, plant and equipment | $ 13,768 | 14,144 | ||
Central office and other network electronics | Minimum | ||||
Depreciation, Depletion and Amortization [Abstract] | ||||
Depreciable Lives | 3 years | |||
Central office and other network electronics | Maximum | ||||
Depreciation, Depletion and Amortization [Abstract] | ||||
Depreciable Lives | 10 years | |||
Support assets | ||||
Property, plant and equipment | ||||
Gross property, plant and equipment | $ 6,623 | 7,000 | ||
Support assets | Minimum | ||||
Depreciation, Depletion and Amortization [Abstract] | ||||
Depreciable Lives | 3 years | |||
Support assets | Maximum | ||||
Depreciation, Depletion and Amortization [Abstract] | ||||
Depreciable Lives | 30 years | |||
Construction in progress | ||||
Property, plant and equipment | ||||
Gross property, plant and equipment | $ 1,244 | $ 904 | ||
Qwest Corporation | Office building | ||||
Depreciation, Depletion and Amortization [Abstract] | ||||
Impairment of office building | 17 | |||
CenturyLink, Inc. | Office building | ||||
Depreciation, Depletion and Amortization [Abstract] | ||||
Proceeds from sale of office building | $ 12 | |||
Colocation Business and Data Centers | ||||
Property, plant and equipment | ||||
Asset Retirement Obligation | $ 19 |
Property, Plant and Equipment66
Property, Plant and Equipment (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Asset Retirement Obligation | |||
Balance at beginning of year | $ 91 | $ 107 | $ 106 |
Accretion expense | 6 | 7 | 7 |
Liabilities incurred | 0 | 0 | 6 |
Liabilities settled | (2) | (2) | (2) |
Change in estimate | 0 | (21) | (10) |
Balance at end of year | $ 95 | $ 91 | $ 107 |
Severance and Leased Real Est67
Severance and Leased Real Estate (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Severance | ||
Restructuring reserve | ||
Balance at the beginning of the period | $ 14 | $ 26 |
Accrued to expense | 173 | 96 |
Payments, net | (89) | (108) |
Reversals and adjustments | 0 | 0 |
Balance at the end of the period | 98 | 14 |
Qwest Communications International Inc | Leased real estate | ||
Severance and Leased Real Estate | ||
Current portion of leased real estate accrual | 8 | |
Noncurrent portion of leased real estate accrual | $ 59 | |
Weighted average lease terms (in years) | 7 years 10 months | |
Restructuring reserve | ||
Balance at the beginning of the period | $ 80 | 96 |
Accrued to expense | 4 | 0 |
Payments, net | (20) | (13) |
Reversals and adjustments | 3 | (3) |
Balance at the end of the period | $ 67 | $ 80 |
Qwest Communications International Inc | Leased real estate | Minimum | ||
Severance and Leased Real Estate | ||
Remaining lease terms (in years) | 1 year 2 months | |
Qwest Communications International Inc | Leased real estate | Maximum | ||
Severance and Leased Real Estate | ||
Remaining lease terms (in years) | 9 years |
Employee Benefits (Details)
Employee Benefits (Details) - USD ($) $ in Millions | Jan. 02, 2017 | Dec. 08, 2014 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||||
Employee Benefits | ||||||||||||||
Lump sum pension settlements | $ 356 | |||||||||||||
Pension settlement charge | $ 16 | |||||||||||||
Benefit obligation | $ 16,714 | 16,714 | $ 16,714 | $ 16,916 | 18,872 | $ 18,872 | $ 16,714 | $ 16,916 | $ 18,872 | |||||
Remaining estimated life of pension plan participants, | approximately 9 to 10 years as of December 31, 2016 | |||||||||||||
Defined Benefit Plan, assumed health care cost trend rates | ||||||||||||||
Health care cost trend rate per year description | range from 5.0% to 5.5% in 2017 to 5.0% to 6.0% in 2018 and 2019 | |||||||||||||
Ultimate health care cost trend rate (as a percent) | 4.50% | |||||||||||||
Effect of change of 100 basis points in the assumed initial health care cost trend rate | ||||||||||||||
Effect on the aggregate of the service and interest cost components of net periodic post-retirement benefit expense (statements of operations) - Increase | $ 2 | |||||||||||||
Effect on the aggregate of the service and interest cost components of net periodic post-retirement benefit expense (statements of operations) - Decrease | (2) | |||||||||||||
Effect of one-percentage point increase on postretirement benefit obligation | 66 | |||||||||||||
Effect of one-percentage point decrease on postretirement benefit obligation | $ (61) | |||||||||||||
Actuarial assumptions at beginning of year: | ||||||||||||||
Ultimate health care cost trend rate (as a percent) | 4.50% | |||||||||||||
Year that health care cost rate reaches ultimate trend rate | 2,025 | |||||||||||||
Components of net periodic benefit (income) expense | ||||||||||||||
Expected return on plan assets | $ (739) | (919) | ||||||||||||
Actuarial assumptions at end of year: | ||||||||||||||
Ultimate health care cost trend rate (as a percent) | 4.50% | |||||||||||||
Year that health care cost rate reaches ultimate trend rate | 2,025 | |||||||||||||
Change in benefit obligation | ||||||||||||||
Benefit obligation at beginning of year | 16,714 | 16,714 | $ 16,916 | 18,872 | ||||||||||
Benefit obligation at end of year | 16,714 | 16,714 | 16,916 | 18,872 | ||||||||||
Projected benefit obligation increase due to adoption of new mortality table | (268) | $ (379) | 1,300 | |||||||||||
Change in plan assets | ||||||||||||||
Return on plan assets | 759 | (158) | ||||||||||||
Settlements | $ 0 | 0 | 460 | |||||||||||
Pension Plans | ||||||||||||||
Employee Benefits | ||||||||||||||
Amortization period of the plan shortfall | 7 years | |||||||||||||
Unfunded status | (2,409) | (2,277) | ||||||||||||
Employer contributions | $ 100 | 100 | 157 | |||||||||||
Benefits paid by company | 7 | 6 | 6 | |||||||||||
Lump sum pension settlements | $ 460 | 0 | 0 | 460 | ||||||||||
Termination pension settlement threshold | $ 418 | |||||||||||||
Pension settlement charge | 13 | 0 | 0 | |||||||||||
Fair value of plan assets | 10,892 | 10,892 | 10,892 | 11,072 | 12,571 | 12,346 | 10,892 | 11,072 | 12,571 | |||||
Benefit obligation | 13,301 | 13,301 | 13,301 | $ 13,349 | $ 15,042 | $ 13,401 | 13,301 | $ 13,349 | 15,042 | |||||
Estimated future benefit payments: | ||||||||||||||
2,017 | 1,277 | |||||||||||||
2,018 | 987 | |||||||||||||
2,019 | 968 | |||||||||||||
2,020 | 948 | |||||||||||||
2,021 | 928 | |||||||||||||
2022 - 2026 | $ 4,280 | |||||||||||||
Actuarial assumptions at beginning of year: | ||||||||||||||
Rate of compensation increase (as a percent) | 3.25% | 3.25% | 3.25% | |||||||||||
Expected long-term rate of return on plan assets (as a percent) | 7.00% | 7.50% | 7.50% | |||||||||||
Components of net periodic benefit (income) expense | ||||||||||||||
Service cost | $ 64 | $ 83 | $ 77 | |||||||||||
Interest cost | 427 | 568 | 602 | |||||||||||
Expected return on plan assets | (732) | (898) | (891) | |||||||||||
Settlements | 0 | 0 | 63 | |||||||||||
Recognition of prior service (credit) cost | (8) | 5 | 5 | |||||||||||
Recognition of actuarial loss | 175 | 161 | 22 | |||||||||||
Net periodic pension benefit income | (61) | (81) | (122) | |||||||||||
Actuarial assumptions at end of year: | ||||||||||||||
Rate of compensation increase (as a percent) | 3.25% | 3.25% | ||||||||||||
Change in benefit obligation | ||||||||||||||
Benefit obligation at beginning of year | 13,301 | 13,301 | 13,349 | 15,042 | 13,401 | |||||||||
Service cost | 64 | 83 | 77 | |||||||||||
Interest cost | 427 | 568 | 602 | |||||||||||
Plan amendments | 2 | (100) | 4 | |||||||||||
Actuarial loss (gain) | 487 | (800) | 2,269 | |||||||||||
Benefits paid by company | (7) | (6) | (6) | |||||||||||
Benefits paid from plan assets | [1] | (1,034) | (1,438) | (845) | ||||||||||
Benefit obligation at end of year | 13,301 | 13,301 | 13,349 | 15,042 | ||||||||||
Change in plan assets | ||||||||||||||
Fair value of plan assets at beginning of year | 10,892 | 10,892 | 11,072 | 12,571 | 12,346 | |||||||||
Return on plan assets | 754 | (161) | 1,373 | |||||||||||
Employer contributions | 100 | 100 | 157 | |||||||||||
Benefits paid from plan assets | [1] | 1,034 | 1,438 | 845 | ||||||||||
Fair value of plan assets at end of year | 10,892 | $ 10,892 | $ 11,072 | $ 12,571 | ||||||||||
Target allocation of plan assets | ||||||||||||||
Expected long-term rate of return on plan assets (as a percent) | 7.00% | 7.50% | 7.50% | |||||||||||
Pension Plans | Interest rate sensitive investments | ||||||||||||||
Target allocation of plan assets | ||||||||||||||
Target asset allocation percentage (as a percent) | 45.00% | |||||||||||||
Pension Plans | Investment grade bonds | ||||||||||||||
Target allocation of plan assets | ||||||||||||||
Target asset allocation percentage (as a percent) | 30.00% | |||||||||||||
Pension Plans | High yield and emerging market bonds | ||||||||||||||
Target allocation of plan assets | ||||||||||||||
Target asset allocation percentage (as a percent) | 10.00% | |||||||||||||
Pension Plans | Diversified strategies | ||||||||||||||
Target allocation of plan assets | ||||||||||||||
Target asset allocation percentage (as a percent) | 5.00% | |||||||||||||
Pension Plans | Interest rate investments with higher returns | ||||||||||||||
Target allocation of plan assets | ||||||||||||||
Target asset allocation percentage (as a percent) | 55.00% | |||||||||||||
Pension Plans | U.S. stocks | ||||||||||||||
Employee Benefits | ||||||||||||||
Fair value of plan assets | 1,145 | 1,145 | 1,145 | $ 1,201 | [2] | $ 1,201 | [2] | $ 1,145 | $ 1,201 | [2] | ||||
Change in plan assets | ||||||||||||||
Fair value of plan assets at beginning of year | 1,145 | 1,145 | 1,201 | [2] | ||||||||||
Fair value of plan assets at end of year | 1,145 | $ 1,145 | 1,201 | [2] | ||||||||||
Target allocation of plan assets | ||||||||||||||
Target asset allocation percentage (as a percent) | 15.00% | |||||||||||||
Pension Plans | Developed market Non-U.S. stocks | ||||||||||||||
Employee Benefits | ||||||||||||||
Fair value of plan assets | 722 | 722 | 722 | $ 1,128 | [1] | 1,128 | [1] | $ 722 | $ 1,128 | [1] | ||||
Change in plan assets | ||||||||||||||
Fair value of plan assets at beginning of year | 722 | 722 | 1,128 | [1] | ||||||||||
Fair value of plan assets at end of year | 722 | $ 722 | $ 1,128 | [1] | ||||||||||
Target allocation of plan assets | ||||||||||||||
Target asset allocation percentage (as a percent) | 15.00% | |||||||||||||
Pension Plans | Diversified multi-asset classes | ||||||||||||||
Target allocation of plan assets | ||||||||||||||
Target asset allocation percentage (as a percent) | 7.00% | |||||||||||||
Pension Plans | Other | ||||||||||||||
Target allocation of plan assets | ||||||||||||||
Target asset allocation percentage (as a percent) | 10.00% | |||||||||||||
Pension Plans | Real estate | ||||||||||||||
Target allocation of plan assets | ||||||||||||||
Target asset allocation percentage (as a percent) | 8.00% | |||||||||||||
Pension Plans | Minimum | ||||||||||||||
Actuarial assumptions at beginning of year: | ||||||||||||||
Discount rate (as a percent) | 3.50% | 3.50% | 4.20% | |||||||||||
Actuarial assumptions at end of year: | ||||||||||||||
Discount rate (as a percent) | 3.50% | 3.50% | ||||||||||||
Pension Plans | Maximum | ||||||||||||||
Actuarial assumptions at beginning of year: | ||||||||||||||
Discount rate (as a percent) | 4.50% | 4.10% | 5.10% | |||||||||||
Actuarial assumptions at end of year: | ||||||||||||||
Discount rate (as a percent) | 4.10% | 4.50% | ||||||||||||
Qualified Pension Plan | ||||||||||||||
Employee Benefits | ||||||||||||||
Unfunded status | $ (2,352) | $ (2,215) | ||||||||||||
Employer contributions | $ 100 | |||||||||||||
Pension settlement charge | $ 63 | |||||||||||||
Change in plan assets | ||||||||||||||
Employer contributions | 100 | |||||||||||||
Non-qualified Pension Plan | ||||||||||||||
Employee Benefits | ||||||||||||||
Benefits paid by company | 7 | $ 6 | ||||||||||||
Estimated future benefit payments: | ||||||||||||||
2,017 | 6 | |||||||||||||
Change in benefit obligation | ||||||||||||||
Benefits paid by company | (7) | (6) | ||||||||||||
Post-Retirement Benefit Plans | ||||||||||||||
Employee Benefits | ||||||||||||||
Unfunded status | (3,360) | (3,374) | ||||||||||||
Employer contributions | 0 | |||||||||||||
Benefits paid by company | 191 | 181 | 166 | |||||||||||
Pension settlement charge | 3 | 0 | 0 | |||||||||||
Fair value of plan assets | 53 | 53 | 53 | 193 | 353 | 535 | 53 | 193 | 353 | |||||
Benefits paid, net of participant contributions and direct subsidy receipts | 129 | |||||||||||||
Benefit obligation | 3,413 | 3,413 | 3,413 | $ 3,567 | $ 3,830 | $ 3,688 | 3,413 | $ 3,567 | $ 3,830 | |||||
Defined Benefit Plan, assumed health care cost trend rates | ||||||||||||||
Ultimate health care cost trend rate (as a percent) | 4.50% | 4.50% | 4.50% | |||||||||||
Estimated future benefit payments: | ||||||||||||||
2,017 | 295 | |||||||||||||
2,018 | 284 | |||||||||||||
2,019 | 275 | |||||||||||||
2,020 | 267 | |||||||||||||
2,021 | 259 | |||||||||||||
2022 - 2026 | 1,160 | |||||||||||||
Medicare Part D Subsidy Receipts | ||||||||||||||
2,017 | (6) | |||||||||||||
2,018 | (6) | |||||||||||||
2,019 | (6) | |||||||||||||
2,020 | (6) | |||||||||||||
2,021 | (6) | |||||||||||||
2022 - 2026 | $ (26) | |||||||||||||
Actuarial assumptions at beginning of year: | ||||||||||||||
Discount rate (as a percent) | 4.15% | 3.80% | 4.50% | |||||||||||
Expected long-term rate of return on plan assets (as a percent) | 7.00% | 7.50% | ||||||||||||
Ultimate health care cost trend rate (as a percent) | 4.50% | 4.50% | 4.50% | |||||||||||
Year that health care cost rate reaches ultimate trend rate | 2,025 | 2,025 | 2,024 | |||||||||||
Components of net periodic benefit (income) expense | ||||||||||||||
Service cost | $ 19 | $ 24 | $ 22 | |||||||||||
Interest cost | 111 | 140 | 159 | |||||||||||
Expected return on plan assets | (7) | (21) | (33) | |||||||||||
Recognition of prior service (credit) cost | 20 | 19 | 20 | |||||||||||
Net periodic pension benefit income | $ 146 | $ 162 | $ 168 | |||||||||||
Actuarial assumptions at end of year: | ||||||||||||||
Discount rate (as a percent) | 3.90% | 4.15% | ||||||||||||
Ultimate health care cost trend rate (as a percent) | 4.50% | 4.50% | 4.50% | |||||||||||
Year that health care cost rate reaches ultimate trend rate | 2,025 | 2,025 | 2,024 | |||||||||||
Change in benefit obligation | ||||||||||||||
Benefit obligation at beginning of year | 3,413 | 3,413 | $ 3,567 | $ 3,830 | $ 3,688 | |||||||||
Service cost | 19 | 24 | 22 | |||||||||||
Interest cost | 111 | 140 | 159 | |||||||||||
Participant contributions | 57 | 57 | 69 | |||||||||||
Plan amendments | 0 | 0 | 23 | |||||||||||
Direct subsidy receipts | 5 | 8 | 9 | |||||||||||
Actuarial loss (gain) | (13) | (148) | 245 | |||||||||||
Benefits paid by company | (191) | (181) | (166) | |||||||||||
Benefits paid from plan assets | (145) | (163) | (219) | |||||||||||
Benefit obligation at end of year | 3,413 | 3,413 | 3,567 | 3,830 | ||||||||||
Change in plan assets | ||||||||||||||
Fair value of plan assets at beginning of year | 53 | 53 | 193 | 353 | 535 | |||||||||
Return on plan assets | 5 | 3 | 37 | |||||||||||
Employer contributions | 0 | |||||||||||||
Benefits paid from plan assets | 145 | 163 | 219 | |||||||||||
Fair value of plan assets at end of year | 53 | $ 53 | $ 193 | $ 353 | ||||||||||
Target allocation of plan assets | ||||||||||||||
Expected long-term rate of return on plan assets (as a percent) | 7.00% | 7.50% | ||||||||||||
Post-Retirement Benefit Plans | U.S. stocks | ||||||||||||||
Employee Benefits | ||||||||||||||
Fair value of plan assets | 2 | 2 | 2 | $ 16 | $ 16 | $ 2 | $ 16 | |||||||
Change in plan assets | ||||||||||||||
Fair value of plan assets at beginning of year | 2 | 2 | 16 | |||||||||||
Fair value of plan assets at end of year | 2 | 2 | 16 | |||||||||||
Post-Retirement Benefit Plans | Developed market Non-U.S. stocks | ||||||||||||||
Employee Benefits | ||||||||||||||
Fair value of plan assets | 1 | 1 | 1 | 12 | 12 | $ 1 | $ 12 | |||||||
Change in plan assets | ||||||||||||||
Fair value of plan assets at beginning of year | $ 1 | 1 | 12 | |||||||||||
Fair value of plan assets at end of year | $ 1 | $ 1 | $ 12 | |||||||||||
Post-Retirement Benefit Plans | Minimum | ||||||||||||||
Actuarial assumptions at beginning of year: | ||||||||||||||
Expected long-term rate of return on plan assets (as a percent) | 6.00% | |||||||||||||
Initial health care cost trend rate | 5.00% | 6.00% | 6.00% | |||||||||||
Actuarial assumptions at end of year: | ||||||||||||||
Health care cost trend rate | 5.00% | 5.00% | ||||||||||||
Target allocation of plan assets | ||||||||||||||
Expected long-term rate of return on plan assets (as a percent) | 6.00% | |||||||||||||
Post-Retirement Benefit Plans | Maximum | ||||||||||||||
Actuarial assumptions at beginning of year: | ||||||||||||||
Expected long-term rate of return on plan assets (as a percent) | 7.50% | |||||||||||||
Initial health care cost trend rate | 5.25% | 6.50% | 6.50% | |||||||||||
Actuarial assumptions at end of year: | ||||||||||||||
Health care cost trend rate | 5.50% | 5.25% | ||||||||||||
Target allocation of plan assets | ||||||||||||||
Expected long-term rate of return on plan assets (as a percent) | 7.50% | |||||||||||||
Scenario, Forecast | Pension Plans | ||||||||||||||
Actuarial assumptions at beginning of year: | ||||||||||||||
Expected long-term rate of return on plan assets (as a percent) | 7.00% | |||||||||||||
Target allocation of plan assets | ||||||||||||||
Expected long-term rate of return on plan assets (as a percent) | 7.00% | |||||||||||||
Expected long-term return on assets, net of administrative expenses | 6.50% | |||||||||||||
Scenario, Forecast | Qualified Pension Plan | ||||||||||||||
Employee Benefits | ||||||||||||||
Employer contributions | 100 | |||||||||||||
Change in plan assets | ||||||||||||||
Employer contributions | 100 | |||||||||||||
Scenario, Forecast | Post-Retirement Benefit Plans | ||||||||||||||
Employee Benefits | ||||||||||||||
Benefits paid, net of participant contributions and direct subsidy receipts | $ 275 | |||||||||||||
Actuarial assumptions at beginning of year: | ||||||||||||||
Expected long-term rate of return on plan assets (as a percent) | 5.00% | |||||||||||||
Target allocation of plan assets | ||||||||||||||
Expected long-term rate of return on plan assets (as a percent) | 5.00% | |||||||||||||
Change in accounting method accounted for as a change in estimate | ||||||||||||||
Employee Benefits | ||||||||||||||
Combined decrease in pension and post-retirement cost | $ (149) | |||||||||||||
[1] | Non-U.S. stocks represent investments in stocks of companies based in developed countries outside the U.S. as well as commingled funds. The valuation inputs for non-U.S. stocks are based on the last published price reported on the major stock market on which the securities are traded and are primarily classified as Level 1. The commingled funds are valued at NAV based on the market value of the underlying investments using the same valuation inputs described above. | |||||||||||||
[2] | U.S. stocks represent investments in stocks of U.S. based companies as well as commingled U.S. stock funds. The valuation inputs for U.S. stocks are based on the last published price reported on the major stock market on which the securities are traded and are primarily classified as Level 1. The commingled funds are valued at NAV based on the market value of the underlying investments using the same valuation inputs described above. |
Employee Benefits (Details 2)
Employee Benefits (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||||||||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||||
Change in plan assets | |||||||||||
Actual gains (losses) on pension and post retirement plan assets | $ 759 | $ (158) | |||||||||
Expected return | 739 | 919 | |||||||||
Difference between the actual and expected returns on pension and post-retirement plan assets | 20 | 1,077 | |||||||||
Unfunded Status | |||||||||||
Benefit obligation | $ (16,714) | $ (16,916) | $ (18,872) | ||||||||
Non-current portion of unfunded status | (5,527) | (5,511) | |||||||||
Accumulated other comprehensive (loss) income | |||||||||||
Total | (2,057) | (1,895) | (1,992) | ||||||||
Recognition of Net Periodic Benefits Expense | |||||||||||
Net periodic (income) expense | 112 | 115 | |||||||||
Deferrals | |||||||||||
Total | (274) | (18) | |||||||||
Net Change in AOCI | |||||||||||
Total | (162) | 97 | |||||||||
Health Care and Life Insurance | |||||||||||
Active health care benefit expenses | 399 | 381 | $ 381 | ||||||||
Participating employees' contribution to health care plan | 127 | 125 | 136 | ||||||||
Pension Plans | |||||||||||
Employee Benefits | |||||||||||
Other Comprehensive (Income) Loss, Amortization Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Prior Service Cost (Credit), before Tax | (8) | 5 | |||||||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Gain (Loss), before Tax | 175 | 161 | |||||||||
Fair value of plan assets valued at NAV | 5,564 | 5,293 | |||||||||
Total investments, excluding investments valued at NAV | 5,328 | 5,779 | |||||||||
Fair value of plan assets | 11,072 | 12,571 | 12,346 | 10,892 | 11,072 | 12,571 | $ 12,346 | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | 11,072 | 12,571 | 12,346 | ||||||||
Fair value of plan assets at end of year | 10,892 | 11,072 | 12,571 | ||||||||
Actual gains (losses) on pension and post retirement plan assets | 754 | (161) | 1,373 | ||||||||
Expected return | 732 | 898 | 891 | ||||||||
Unfunded Status | |||||||||||
Benefit obligation | (13,301) | (13,349) | (15,042) | (13,401) | |||||||
Fair value of plan assets | 11,072 | 12,571 | 12,346 | 10,892 | 11,072 | 12,571 | 12,346 | ||||
Unfunded status | (2,409) | (2,277) | |||||||||
Current portion of unfunded status | (6) | (5) | |||||||||
Non-current portion of unfunded status | (2,403) | (2,272) | |||||||||
Accumulated other comprehensive (loss) income | |||||||||||
Net actuarial (loss) gain | (3,148) | (2,857) | (2,760) | ||||||||
Prior service benefit (cost) | 62 | 72 | (32) | ||||||||
Deferred income tax benefit (expense) | 1,191 | 1,070 | 1,072 | ||||||||
Total | (1,895) | (1,715) | (1,720) | ||||||||
Recognition of Net Periodic Benefits Expense | |||||||||||
Deferred income tax benefit (expense) | (67) | (63) | |||||||||
Net periodic (income) expense | 100 | 103 | |||||||||
Deferrals | |||||||||||
Net actuarial (loss) gain | (466) | (258) | |||||||||
Prior service benefit (cost) | (2) | 99 | |||||||||
Deferred income tax benefit (expense) | 188 | 61 | |||||||||
Total | (280) | (98) | |||||||||
Net Change in AOCI | |||||||||||
Total | (180) | 5 | |||||||||
Estimated recognition of net periodic benefit expense in 2016: | |||||||||||
Net actuarial loss | (202) | ||||||||||
Prior service income (cost) | 8 | ||||||||||
Deferred income tax benefit | 74 | ||||||||||
Estimated ner periodic benefit expense to be recorded in 2016 as a component of other comprehensive income (loss) | (120) | ||||||||||
Health Care and Life Insurance | |||||||||||
Effective Income Tax Rate Reconciliation, Deduction, Dividend, Percent | (291) | (97) | |||||||||
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss), Net Prior Service Cost (Credit), before Tax | (10) | 104 | |||||||||
Income tax expense (benefit) | 121 | (2) | |||||||||
Pension Plans | Level 1 | |||||||||||
Employee Benefits | |||||||||||
Total investments, excluding investments valued at NAV | 2,895 | 3,755 | |||||||||
Pension Plans | Level 2 | |||||||||||
Employee Benefits | |||||||||||
Total investments, excluding investments valued at NAV | 2,422 | 2,010 | |||||||||
Pension Plans | Level 3 | |||||||||||
Employee Benefits | |||||||||||
Total investments, excluding investments valued at NAV | 11 | 14 | |||||||||
Fair value of plan assets | 14 | 7 | 7 | 11 | 14 | 7 | |||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | 14 | 7 | |||||||||
Net transfers | (2) | 5 | |||||||||
Acquisitions | 1 | 4 | |||||||||
Dispositions | (2) | (2) | |||||||||
Fair value of plan assets at end of year | 11 | 14 | 7 | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 14 | 7 | 7 | 11 | 14 | 7 | |||||
Pension Plans | Exchange-traded U.S. equity futures | |||||||||||
Employee Benefits | |||||||||||
Gross notional exposure | 104 | 79 | |||||||||
Pension Plans | Exchange-traded Treasury and other interest rate futures | |||||||||||
Employee Benefits | |||||||||||
Gross notional exposure | 1,813 | 1,767 | |||||||||
Pension Plans | Interest rate swaps | |||||||||||
Employee Benefits | |||||||||||
Gross notional exposure | 260 | 550 | |||||||||
Pension Plans | Credit default swaps | |||||||||||
Employee Benefits | |||||||||||
Gross notional exposure | 240 | 189 | |||||||||
Pension Plans | Foreign exchange forwards | |||||||||||
Employee Benefits | |||||||||||
Gross notional exposure | 778 | 992 | |||||||||
Pension Plans | Options | |||||||||||
Employee Benefits | |||||||||||
Gross notional exposure | 206 | 285 | |||||||||
Pension Plans | Investment grade bonds | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 106 | 115 | |||||||||
Fair value of plan assets | 1,886 | [1] | 1,886 | [1] | 1,824 | 1,886 | [1] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [1] | 1,886 | |||||||||
Fair value of plan assets at end of year | 1,824 | 1,886 | [1] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 1,886 | [1] | 1,886 | [1] | 1,824 | 1,886 | [1] | ||||
Pension Plans | Investment grade bonds | Level 1 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 841 | [1] | 841 | [1] | 420 | 841 | [1] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [1] | 841 | |||||||||
Fair value of plan assets at end of year | 420 | 841 | [1] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 841 | [1] | 841 | [1] | 420 | 841 | [1] | ||||
Pension Plans | Investment grade bonds | Level 2 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 1,045 | [1] | 1,045 | [1] | 1,404 | 1,045 | [1] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [1] | 1,045 | |||||||||
Fair value of plan assets at end of year | 1,404 | 1,045 | [1] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 1,045 | [1] | 1,045 | [1] | 1,404 | 1,045 | [1] | ||||
Pension Plans | Investment grade bonds | Level 3 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 0 | [1] | 0 | [1] | 0 | 0 | [1] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [1] | 0 | |||||||||
Fair value of plan assets at end of year | 0 | 0 | [1] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 0 | [1] | 0 | [1] | 0 | 0 | [1] | ||||
Pension Plans | High yield bonds | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 521 | 512 | |||||||||
Fair value of plan assets | 557 | [2] | 557 | [2] | 615 | 557 | [2] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [2] | 557 | |||||||||
Fair value of plan assets at end of year | 615 | 557 | [2] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 557 | [2] | 557 | [2] | 615 | 557 | [2] | ||||
Pension Plans | High yield bonds | Level 1 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 0 | [2] | 0 | [2] | 7 | 0 | [2] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [2] | 0 | |||||||||
Fair value of plan assets at end of year | 7 | 0 | [2] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 0 | [2] | 0 | [2] | 7 | 0 | [2] | ||||
Pension Plans | High yield bonds | Level 2 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 544 | [2] | 544 | [2] | 597 | 544 | [2] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [2] | 544 | |||||||||
Fair value of plan assets at end of year | 597 | 544 | [2] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 544 | [2] | 544 | [2] | 597 | 544 | [2] | ||||
Pension Plans | High yield bonds | Level 3 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 13 | [2] | 7 | 7 | 11 | 13 | [2] | 7 | |||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | 13 | [2] | 7 | ||||||||
Net transfers | (2) | 4 | |||||||||
Acquisitions | 1 | 4 | |||||||||
Dispositions | (1) | (2) | |||||||||
Fair value of plan assets at end of year | 11 | 13 | [2] | 7 | |||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 13 | [2] | 7 | 7 | 11 | 13 | [2] | 7 | |||
Pension Plans | Emerging market bonds | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 6 | 9 | |||||||||
Fair value of plan assets | 441 | [3] | 441 | [3] | 424 | 441 | [3] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [3] | 441 | |||||||||
Fair value of plan assets at end of year | 424 | 441 | [3] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 441 | [3] | 441 | [3] | 424 | 441 | [3] | ||||
Pension Plans | Emerging market bonds | Level 1 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 208 | [3] | 208 | [3] | 212 | 208 | [3] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [3] | 208 | |||||||||
Fair value of plan assets at end of year | 212 | 208 | [3] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 208 | [3] | 208 | [3] | 212 | 208 | [3] | ||||
Pension Plans | Emerging market bonds | Level 2 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 232 | [3] | 232 | [3] | 212 | 232 | [3] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [3] | 232 | |||||||||
Fair value of plan assets at end of year | 212 | 232 | [3] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 232 | [3] | 232 | [3] | 212 | 232 | [3] | ||||
Pension Plans | Emerging market bonds | Level 3 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 1 | [3] | 0 | 0 | 0 | 1 | [3] | 0 | |||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | 1 | [3] | 0 | ||||||||
Net transfers | 0 | 1 | |||||||||
Acquisitions | 0 | 0 | |||||||||
Dispositions | (1) | 0 | |||||||||
Fair value of plan assets at end of year | 0 | 1 | [3] | 0 | |||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 1 | [3] | 0 | 0 | 0 | 1 | [3] | 0 | |||
Pension Plans | Convertible bonds | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 2 | [4] | 2 | [4] | 2 | 2 | [4] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [4] | 2 | |||||||||
Fair value of plan assets at end of year | 2 | 2 | [4] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 2 | [4] | 2 | [4] | 2 | 2 | [4] | ||||
Pension Plans | Convertible bonds | Level 1 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 0 | [4] | 0 | [4] | 2 | 0 | [4] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [4] | 0 | |||||||||
Fair value of plan assets at end of year | 2 | 0 | [4] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 0 | [4] | 0 | [4] | 2 | 0 | [4] | ||||
Pension Plans | Convertible bonds | Level 2 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 2 | [4] | 2 | [4] | 0 | 2 | [4] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [4] | 2 | |||||||||
Fair value of plan assets at end of year | 0 | 2 | [4] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 2 | [4] | 2 | [4] | 0 | 2 | [4] | ||||
Pension Plans | Convertible bonds | Level 3 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 0 | [4] | 0 | [4] | 0 | 0 | [4] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [4] | 0 | |||||||||
Fair value of plan assets at end of year | 0 | 0 | [4] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 0 | [4] | 0 | [4] | 0 | 0 | [4] | ||||
Pension Plans | Diversified strategies | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 522 | 516 | |||||||||
Pension Plans | U.S. stocks | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 58 | 70 | |||||||||
Fair value of plan assets | 1,201 | [5] | 1,201 | [5] | 1,145 | 1,201 | [5] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [5] | 1,201 | |||||||||
Fair value of plan assets at end of year | 1,145 | 1,201 | [5] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 1,201 | [5] | 1,201 | [5] | 1,145 | 1,201 | [5] | ||||
Pension Plans | U.S. stocks | Level 1 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 1,201 | [5] | 1,201 | [5] | 1,144 | 1,201 | [5] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [5] | 1,201 | |||||||||
Fair value of plan assets at end of year | 1,144 | 1,201 | [5] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 1,201 | [5] | 1,201 | [5] | 1,144 | 1,201 | [5] | ||||
Pension Plans | U.S. stocks | Level 2 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 0 | [5] | 0 | [5] | 1 | 0 | [5] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [5] | 0 | |||||||||
Fair value of plan assets at end of year | 1 | 0 | [5] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 0 | [5] | 0 | [5] | 1 | 0 | [5] | ||||
Pension Plans | U.S. stocks | Level 3 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 0 | [5] | 0 | [5] | 0 | 0 | [5] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [5] | 0 | |||||||||
Fair value of plan assets at end of year | 0 | 0 | [5] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 0 | [5] | 0 | [5] | 0 | 0 | [5] | ||||
Pension Plans | Non-U.S. stocks | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 560 | 289 | |||||||||
Fair value of plan assets | 1,128 | [6] | 1,128 | [6] | 722 | 1,128 | [6] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [6] | 1,128 | |||||||||
Fair value of plan assets at end of year | 722 | 1,128 | [6] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 1,128 | [6] | 1,128 | [6] | 722 | 1,128 | [6] | ||||
Pension Plans | Non-U.S. stocks | Level 1 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 1,127 | [6] | 1,127 | [6] | 721 | 1,127 | [6] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [6] | 1,127 | |||||||||
Fair value of plan assets at end of year | 721 | 1,127 | [6] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 1,127 | [6] | 1,127 | [6] | 721 | 1,127 | [6] | ||||
Pension Plans | Non-U.S. stocks | Level 2 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 1 | [6] | 1 | [6] | 1 | 1 | [6] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [6] | 1 | |||||||||
Fair value of plan assets at end of year | 1 | 1 | [6] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 1 | [6] | 1 | [6] | 1 | 1 | [6] | ||||
Pension Plans | Non-U.S. stocks | Level 3 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 0 | [6] | 0 | [6] | 0 | 0 | [6] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [6] | 0 | |||||||||
Fair value of plan assets at end of year | 0 | 0 | [6] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 0 | [6] | 0 | [6] | 0 | 0 | [6] | ||||
Pension Plans | Multi-asset strategies | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 412 | 386 | |||||||||
Fair value of plan assets | 389 | 389 | |||||||||
Change in plan assets | |||||||||||
Fair value of plan assets at end of year | 389 | ||||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 389 | 389 | |||||||||
Pension Plans | Multi-asset strategies | Level 1 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 376 | [6] | 376 | [6] | 389 | 376 | [6] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [6] | 376 | |||||||||
Fair value of plan assets at end of year | 389 | 376 | [6] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 376 | [6] | 376 | [6] | 389 | 376 | [6] | ||||
Pension Plans | Multi-asset strategies | Level 2 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 0 | [6] | 0 | [6] | 0 | 0 | [6] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [6] | 0 | |||||||||
Fair value of plan assets at end of year | 0 | 0 | [6] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 0 | [6] | 0 | [6] | 0 | 0 | [6] | ||||
Pension Plans | Multi-asset strategies | Level 3 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 0 | [6] | 0 | [6] | 0 | 0 | [6] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [6] | 0 | |||||||||
Fair value of plan assets at end of year | 0 | 0 | [6] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 0 | [6] | 0 | [6] | 0 | 0 | [6] | ||||
Pension Plans | Emerging market stocks | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 76 | 64 | |||||||||
Pension Plans | Private equity | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 506 | 526 | |||||||||
Pension Plans | Private debt | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 369 | 371 | |||||||||
Pension Plans | Market Neutral Hedge Funds | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 739 | 825 | |||||||||
Pension Plans | Directional Hedge Funds | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 657 | 594 | |||||||||
Pension Plans | Real Estate | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 926 | 968 | |||||||||
Pension Plans | Derivatives | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | [7] | (4) | (4) | (4) | |||||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [7] | (4) | |||||||||
Fair value of plan assets at end of year | [7] | (4) | |||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | [7] | (4) | (4) | (4) | |||||||
Pension Plans | Derivatives | Level 1 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | [7] | 2 | 2 | 2 | |||||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [7] | 2 | |||||||||
Fair value of plan assets at end of year | [7] | 2 | |||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | [7] | 2 | 2 | 2 | |||||||
Pension Plans | Derivatives | Level 2 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | [7] | (6) | (6) | (6) | |||||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [7] | (6) | |||||||||
Fair value of plan assets at end of year | [7] | (6) | |||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | [7] | (6) | (6) | (6) | |||||||
Pension Plans | Derivatives | Level 3 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | [7] | 0 | 0 | 0 | |||||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [7] | 0 | |||||||||
Fair value of plan assets at end of year | [7] | 0 | |||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | [7] | 0 | 0 | 0 | |||||||
Pension Plans | Cash equivalents and short-term investment funds | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 106 | 48 | |||||||||
Fair value of plan assets | 192 | [8] | 192 | [8] | 207 | 192 | [8] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [8] | 192 | |||||||||
Fair value of plan assets at end of year | 207 | 192 | [8] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 192 | [8] | 192 | [8] | 207 | 192 | [8] | ||||
Pension Plans | Cash equivalents and short-term investment funds | Level 1 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 0 | [8] | 0 | [8] | 0 | 0 | [8] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [8] | 0 | |||||||||
Fair value of plan assets at end of year | 0 | 0 | [8] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 0 | [8] | 0 | [8] | 0 | 0 | [8] | ||||
Pension Plans | Cash equivalents and short-term investment funds | Level 2 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 192 | [8] | 192 | [8] | 207 | 192 | [8] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [8] | 192 | |||||||||
Fair value of plan assets at end of year | 207 | 192 | [8] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 192 | [8] | 192 | [8] | 207 | 192 | [8] | ||||
Pension Plans | Cash equivalents and short-term investment funds | Level 3 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 0 | [8] | 0 | [8] | 0 | 0 | [8] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [8] | 0 | |||||||||
Fair value of plan assets at end of year | 0 | 0 | [8] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 0 | [8] | 0 | [8] | 0 | 0 | [8] | ||||
Post-Retirement Benefit Plans | |||||||||||
Employee Benefits | |||||||||||
Other Comprehensive (Income) Loss, Amortization Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Prior Service Cost (Credit), before Tax | 20 | 19 | |||||||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Gain (Loss), before Tax | 0 | 0 | |||||||||
Fair value of plan assets valued at NAV | 41 | 153 | |||||||||
Total investments, excluding investments valued at NAV | 12 | 40 | |||||||||
Fair value of plan assets | 193 | 353 | 535 | 53 | 193 | 353 | 535 | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | 193 | 353 | 535 | ||||||||
Fair value of plan assets at end of year | 53 | 193 | 353 | ||||||||
Actual gains (losses) on pension and post retirement plan assets | 5 | 3 | 37 | ||||||||
Expected return | 7 | 21 | 33 | ||||||||
Unfunded Status | |||||||||||
Benefit obligation | (3,413) | (3,567) | (3,830) | (3,688) | |||||||
Fair value of plan assets | 193 | 353 | $ 535 | 53 | 193 | 353 | $ 535 | ||||
Unfunded status | (3,360) | (3,374) | |||||||||
Current portion of unfunded status | (236) | (135) | |||||||||
Non-current portion of unfunded status | (3,124) | (3,239) | |||||||||
Accumulated other comprehensive (loss) income | |||||||||||
Net actuarial (loss) gain | (137) | (147) | (277) | ||||||||
Prior service benefit (cost) | (127) | (147) | (166) | ||||||||
Deferred income tax benefit (expense) | 102 | 114 | 171 | ||||||||
Total | (162) | (180) | $ (272) | ||||||||
Recognition of Net Periodic Benefits Expense | |||||||||||
Deferred income tax benefit (expense) | (8) | (7) | |||||||||
Net periodic (income) expense | 12 | 12 | |||||||||
Deferrals | |||||||||||
Net actuarial (loss) gain | 10 | 130 | |||||||||
Prior service benefit (cost) | 0 | 0 | |||||||||
Deferred income tax benefit (expense) | (4) | (50) | |||||||||
Total | 6 | 80 | |||||||||
Net Change in AOCI | |||||||||||
Total | 18 | 92 | |||||||||
Estimated recognition of net periodic benefit expense in 2016: | |||||||||||
Net actuarial loss | 0 | ||||||||||
Prior service income (cost) | (20) | ||||||||||
Deferred income tax benefit | 8 | ||||||||||
Estimated ner periodic benefit expense to be recorded in 2016 as a component of other comprehensive income (loss) | (12) | ||||||||||
Health Care and Life Insurance | |||||||||||
Effective Income Tax Rate Reconciliation, Deduction, Dividend, Percent | 10 | 130 | |||||||||
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss), Net Prior Service Cost (Credit), before Tax | 20 | 19 | |||||||||
Income tax expense (benefit) | (12) | (57) | |||||||||
Post-Retirement Benefit Plans | Level 1 | |||||||||||
Employee Benefits | |||||||||||
Total investments, excluding investments valued at NAV | 4 | 34 | |||||||||
Post-Retirement Benefit Plans | Level 2 | |||||||||||
Employee Benefits | |||||||||||
Total investments, excluding investments valued at NAV | 8 | 6 | |||||||||
Post-Retirement Benefit Plans | Level 3 | |||||||||||
Employee Benefits | |||||||||||
Total investments, excluding investments valued at NAV | 0 | 0 | |||||||||
Post-Retirement Benefit Plans | Investment grade bonds | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 0 | 35 | |||||||||
Fair value of plan assets | 3 | 3 | 3 | 3 | |||||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | 3 | ||||||||||
Fair value of plan assets at end of year | 3 | 3 | |||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 3 | 3 | 3 | 3 | |||||||
Post-Retirement Benefit Plans | Investment grade bonds | Level 1 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 2 | [1] | 2 | [1] | 1 | 2 | [1] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [1] | 2 | |||||||||
Fair value of plan assets at end of year | 1 | 2 | [1] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 2 | [1] | 2 | [1] | 1 | 2 | [1] | ||||
Post-Retirement Benefit Plans | Investment grade bonds | Level 2 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 1 | [1] | 1 | [1] | 2 | 1 | [1] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [1] | 1 | |||||||||
Fair value of plan assets at end of year | 2 | 1 | [1] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 1 | [1] | 1 | [1] | 2 | 1 | [1] | ||||
Post-Retirement Benefit Plans | Investment grade bonds | Level 3 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 0 | [1] | 0 | [1] | 0 | 0 | [1] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [1] | 0 | |||||||||
Fair value of plan assets at end of year | 0 | 0 | [1] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 0 | [1] | 0 | [1] | 0 | 0 | [1] | ||||
Post-Retirement Benefit Plans | High yield bonds | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 1 | 1 | |||||||||
Fair value of plan assets | 1 | 1 | 1 | 1 | |||||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | 1 | ||||||||||
Fair value of plan assets at end of year | 1 | 1 | |||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 1 | 1 | 1 | 1 | |||||||
Post-Retirement Benefit Plans | High yield bonds | Level 1 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 0 | [2] | 0 | [2] | 0 | 0 | [2] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [2] | 0 | |||||||||
Fair value of plan assets at end of year | 0 | 0 | [2] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 0 | [2] | 0 | [2] | 0 | 0 | [2] | ||||
Post-Retirement Benefit Plans | High yield bonds | Level 2 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 1 | [2] | 1 | [2] | 1 | 1 | [2] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [2] | 1 | |||||||||
Fair value of plan assets at end of year | 1 | 1 | [2] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 1 | [2] | 1 | [2] | 1 | 1 | [2] | ||||
Post-Retirement Benefit Plans | High yield bonds | Level 3 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 0 | [2] | 0 | [2] | 0 | 0 | [2] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [2] | 0 | |||||||||
Fair value of plan assets at end of year | 0 | 0 | [2] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 0 | [2] | 0 | [2] | 0 | 0 | [2] | ||||
Post-Retirement Benefit Plans | Emerging market bonds | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 0 | 0 | |||||||||
Post-Retirement Benefit Plans | Diversified strategies | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 1 | 54 | |||||||||
Post-Retirement Benefit Plans | U.S. stocks | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 0 | 0 | |||||||||
Fair value of plan assets | 16 | 16 | 2 | 16 | |||||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | 16 | ||||||||||
Fair value of plan assets at end of year | 2 | 16 | |||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 16 | 16 | 2 | 16 | |||||||
Post-Retirement Benefit Plans | U.S. stocks | Level 1 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 16 | [5] | 16 | [5] | 2 | 16 | [5] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [5] | 16 | |||||||||
Fair value of plan assets at end of year | 2 | 16 | [5] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 16 | [5] | 16 | [5] | 2 | 16 | [5] | ||||
Post-Retirement Benefit Plans | U.S. stocks | Level 2 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 0 | [5] | 0 | [5] | 0 | 0 | [5] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [5] | 0 | |||||||||
Fair value of plan assets at end of year | 0 | 0 | [5] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 0 | [5] | 0 | [5] | 0 | 0 | [5] | ||||
Post-Retirement Benefit Plans | U.S. stocks | Level 3 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 0 | [5] | 0 | [5] | 0 | 0 | [5] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [5] | 0 | |||||||||
Fair value of plan assets at end of year | 0 | 0 | [5] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 0 | [5] | 0 | [5] | 0 | 0 | [5] | ||||
Post-Retirement Benefit Plans | Non-U.S. stocks | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 1 | 0 | |||||||||
Fair value of plan assets | 12 | 12 | 1 | 12 | |||||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | 12 | ||||||||||
Fair value of plan assets at end of year | 1 | 12 | |||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 12 | 12 | 1 | 12 | |||||||
Post-Retirement Benefit Plans | Non-U.S. stocks | Level 1 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 12 | [6] | 12 | [6] | 1 | 12 | [6] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [6] | 12 | |||||||||
Fair value of plan assets at end of year | 1 | 12 | [6] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 12 | [6] | 12 | [6] | 1 | 12 | [6] | ||||
Post-Retirement Benefit Plans | Non-U.S. stocks | Level 2 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 0 | [6] | 0 | [6] | 0 | 0 | [6] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [6] | 0 | |||||||||
Fair value of plan assets at end of year | 0 | 0 | [6] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 0 | [6] | 0 | [6] | 0 | 0 | [6] | ||||
Post-Retirement Benefit Plans | Non-U.S. stocks | Level 3 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 0 | [6] | 0 | [6] | 0 | 0 | [6] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [6] | 0 | |||||||||
Fair value of plan assets at end of year | 0 | 0 | [6] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 0 | [6] | 0 | [6] | 0 | 0 | [6] | ||||
Post-Retirement Benefit Plans | Multi-asset strategies | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 0 | 0 | |||||||||
Post-Retirement Benefit Plans | Emerging market stocks | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 0 | 0 | |||||||||
Fair value of plan assets | 4 | 4 | 4 | ||||||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | 4 | ||||||||||
Fair value of plan assets at end of year | 4 | ||||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 4 | 4 | 4 | ||||||||
Post-Retirement Benefit Plans | Emerging market stocks | Level 1 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | [9] | 4 | 4 | 4 | |||||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [9] | 4 | |||||||||
Fair value of plan assets at end of year | [9] | 4 | |||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | [9] | 4 | 4 | 4 | |||||||
Post-Retirement Benefit Plans | Emerging market stocks | Level 2 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | [9] | 0 | 0 | 0 | |||||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [9] | 0 | |||||||||
Fair value of plan assets at end of year | [9] | 0 | |||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | [9] | 0 | 0 | 0 | |||||||
Post-Retirement Benefit Plans | Emerging market stocks | Level 3 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | [9] | 0 | 0 | 0 | |||||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [9] | 0 | |||||||||
Fair value of plan assets at end of year | [9] | 0 | |||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | [9] | 0 | 0 | 0 | |||||||
Post-Retirement Benefit Plans | Private equity | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 14 | 21 | |||||||||
Post-Retirement Benefit Plans | Private debt | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 1 | 2 | |||||||||
Post-Retirement Benefit Plans | Market Neutral Hedge Funds | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 1 | 17 | |||||||||
Post-Retirement Benefit Plans | Directional Hedge Funds | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 1 | 1 | |||||||||
Post-Retirement Benefit Plans | Real Estate | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 8 | 20 | |||||||||
Post-Retirement Benefit Plans | Cash equivalents and short-term investment funds | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets valued at NAV | 13 | 2 | |||||||||
Fair value of plan assets | 4 | 4 | 5 | 4 | |||||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | 4 | ||||||||||
Fair value of plan assets at end of year | 5 | 4 | |||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 4 | 4 | 5 | 4 | |||||||
Post-Retirement Benefit Plans | Cash equivalents and short-term investment funds | Level 1 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 0 | [8] | 0 | [8] | 0 | 0 | [8] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [8] | 0 | |||||||||
Fair value of plan assets at end of year | 0 | 0 | [8] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 0 | [8] | 0 | [8] | 0 | 0 | [8] | ||||
Post-Retirement Benefit Plans | Cash equivalents and short-term investment funds | Level 2 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 4 | [8] | 4 | [8] | 5 | 4 | [8] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [8] | 4 | |||||||||
Fair value of plan assets at end of year | 5 | 4 | [8] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | 4 | [8] | 4 | [8] | 5 | 4 | [8] | ||||
Post-Retirement Benefit Plans | Cash equivalents and short-term investment funds | Level 3 | |||||||||||
Employee Benefits | |||||||||||
Fair value of plan assets | 0 | [8] | 0 | [8] | 0 | 0 | [8] | ||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | [8] | 0 | |||||||||
Fair value of plan assets at end of year | 0 | 0 | [8] | ||||||||
Unfunded Status | |||||||||||
Fair value of plan assets | $ 0 | [8] | $ 0 | [8] | $ 0 | $ 0 | [8] | ||||
[1] | Investment grade bonds represent investments in fixed income securities as well as commingled bond funds comprised of U.S. Treasury securities, agencies, corporate bonds, mortgage-backed securities, asset-backed securities and commercial mortgage-backed securities. Treasury securities are valued at the bid price reported in the active market in which the security is traded and are classified as Level 1. The valuation inputs of other investment grade bonds primarily utilize observable market information and are based on a spread to U.S. Treasury securities and consider yields available on comparable securities of issuers with similar credit ratings. The primary observable inputs include references to the new issue market for similar securities, the secondary trading markets and dealer quotes. Option adjusted spread models are utilized to evaluate securities such as asset backed securities that have early redemption features. These securities are classified as Level 2. The commingled funds are valued at NAV based on the market value of the underlying fixed income securities using the same valuation inputs previously described. | ||||||||||
[2] | High yield bonds represent investments in below investment grade fixed income securities as well as commingled high yield bond funds. The valuation inputs for the securities primarily utilize observable market information and are based on a spread to U.S. Treasury securities and consider yields available on comparable securities of issuers with similar credit ratings. These securities are primarily classified as Level 2. The commingled funds are valued at NAV based on the market value of the underlying high yield instruments using the same valuation inputs previously described. | ||||||||||
[3] | Emerging market bonds represent investments in securities issued by governments and other entities located in developing countries as well as registered mutual funds and commingled emerging market bond funds. The valuation inputs for the securities utilize observable market information and are primarily based on dealer quotes or a spread relative to the local government bonds. The registered mutual fund is classified as Level 1 while individual securities are classified as Level 2. The commingled funds are valued at NAV based on the market value of the underlying emerging market bonds using the same valuation inputs previously described. | ||||||||||
[4] | Convertible bonds primarily represent investments in corporate debt securities that have features that allow the debt to be converted into equity securities under certain circumstances. The valuation inputs for the individual convertible bonds primarily utilize observable market information including a spread to U.S. Treasuries and the value and volatility of the underlying equity security. Convertible bonds are classified as Level 1. | ||||||||||
[5] | U.S. stocks represent investments in stocks of U.S. based companies as well as commingled U.S. stock funds. The valuation inputs for U.S. stocks are based on the last published price reported on the major stock market on which the securities are traded and are primarily classified as Level 1. The commingled funds are valued at NAV based on the market value of the underlying investments using the same valuation inputs described above. | ||||||||||
[6] | Non-U.S. stocks represent investments in stocks of companies based in developed countries outside the U.S. as well as commingled funds. The valuation inputs for non-U.S. stocks are based on the last published price reported on the major stock market on which the securities are traded and are primarily classified as Level 1. The commingled funds are valued at NAV based on the market value of the underlying investments using the same valuation inputs described above. | ||||||||||
[7] | Derivatives include exchange traded futures contracts which are classified as Level 1, as well as privately negotiated over-the-counter swaps and options that are valued based on the change in interest rates or a specific market index and are classified as Level 2. The market values represent gains or losses that occur due to fluctuations in interest rates, foreign currency exchange rates, security prices, or other factors. | ||||||||||
[8] | Cash equivalents and short-term investments represent investments that are used in conjunction with derivatives positions or are used to provide liquidity for the payment of benefits or other purposes. The valuation inputs of securities are based on a spread to U.S. Treasury Bills, the Federal Funds Rate, or London Interbank Offered Rate and consider yields available on comparable securities of issuers with similar credit ratings and are classified as Level 2. The commingled funds are valued at NAV based on the market value of the underlying investments using the same valuation inputs described above. | ||||||||||
[9] | Emerging market stocks represent investments in an exchange traded fund and commingled funds comprised of stocks of companies located in developing markets. Exchange traded funds are based on the last published price reported on the major stock market on which the securities are traded and are classified as Level 1. The commingled funds are valued at NAV based on the market value of the underlying investments using the same valuation inputs described previously for individual stocks. |
Employee Benefits (Details 3)
Employee Benefits (Details 3) - 401(k) Defined Contribution Plan - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Company common stock included in the assets of the 401(k) Plan (in shares) | 7 | 8 | |
Expenses related to the 401(k) Plan | $ 79 | $ 83 | $ 81 |
Share-based Compensation (Detai
Share-based Compensation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | Mar. 31, 2016 | Mar. 30, 2015 | Mar. 31, 2016 | Sep. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Share-based compensation, aggregate disclosures | ||||||||||||
Compensation cost | $ 80 | $ 73 | $ 75 | |||||||||
Tax benefit recognized in the income statement for share-based payment arrangements | 31 | $ 28 | 29 | |||||||||
Unrecognized compensation cost | $ 137 | |||||||||||
Weighted-average recognition period | 2 years 7 months | |||||||||||
Stock options | ||||||||||||
Share-based compensation | ||||||||||||
Option expiration term (in years) | 10 years | |||||||||||
Summary of stock options activity | ||||||||||||
Outstanding at December 31, 2015 | 3,525 | 3,525 | 3,525 | |||||||||
Exercised | (31) | |||||||||||
Forfeited/Expired | (486) | |||||||||||
Outstanding at December 31, 2016 | 3,008 | 3,525 | ||||||||||
Exercisable at December 31 | 3,008 | 3,525 | ||||||||||
Summary of stock options weighted-average exercise price activity | ||||||||||||
Outstanding at December 31, 2015 (in dollars per share) | $ 39.67 | $ 39.67 | $ 39.67 | |||||||||
Exercised (in dollars per share) | 26.34 | |||||||||||
Forfeited/Expired (in dollars per share) | 37.96 | |||||||||||
Outstanding at December 31, 2016 (in dollars per share) | 40.08 | $ 39.67 | ||||||||||
Exercisable at December 31 (in dollars per share) | $ 40.08 | $ 39.67 | ||||||||||
Stock options aggregate intrinsic value | ||||||||||||
Outstanding at the end of the period, intrinsic value | $ 1 | |||||||||||
Exercisable at the end of the period, intrinsic value | $ 1 | |||||||||||
Outstanding options weighted-average remaining contractual term | 1 year | |||||||||||
Exercisable options weighted- average remaining contractual term | 1 year | |||||||||||
Net cash proceeds received in connection with option exercises | $ 1 | |||||||||||
Tax benefit realized from option exercises | 1 | |||||||||||
Total intrinsic value of options exercised | $ 1 | $ 4 | 9 | |||||||||
Restricted Stock | ||||||||||||
Summary of restricted stock and restricted stock unit activity | ||||||||||||
Nonvested at the beginning of the period (in shares) | 4,902 | 4,902 | 4,902 | |||||||||
Granted (in shares) | 1,900 | 766 | 496 | 440 | 3,564 | 2,900 | ||||||
Vested (in shares) | (1,547) | |||||||||||
Forfeited (in shares) | (971) | |||||||||||
Nonvested at the end of the period (in shares) | 5,948 | 4,902 | ||||||||||
Weighted-Average Grant Date Fair Value | ||||||||||||
Nonvested at the beginning of the period (in dollars per share) | $ 33.86 | $ 33.86 | $ 33.86 | |||||||||
Granted (in dollars per share) | 30.83 | $ 31.83 | ||||||||||
Vested (in dollars per share) | 34.82 | |||||||||||
Forfeited (in dollars per share) | 33.23 | |||||||||||
Nonvested at the end of the period (in dollars per share) | $ 31.89 | $ 33.86 | ||||||||||
Total fair value of awards vested during the period | $ 47 | $ 59 | $ 53 | |||||||||
Restricted Stock | Minimum | ||||||||||||
Restricted stock awards | ||||||||||||
Percentage of target award (as a percent) | 0.00% | |||||||||||
Restricted Stock | Maximum | ||||||||||||
Restricted stock awards | ||||||||||||
Percentage of target award (as a percent) | 200.00% | |||||||||||
Employee Stock Purchase Plan | ||||||||||||
Share-based compensation | ||||||||||||
Discount given to employees on common stock (as a percent) | 15.00% | |||||||||||
Period during which lower of beginning and ending stock price is considered for purchase of common stock at discount (in months) | 6 months | |||||||||||
Service conditions | Restricted Stock | ||||||||||||
Restricted stock awards | ||||||||||||
Vesting period | 3 years | 3 years | 3 years | |||||||||
Summary of restricted stock and restricted stock unit activity | ||||||||||||
Granted (in shares) | 1,200 | 198 | 1,500 | 250 | ||||||||
Service conditions | Restricted Stock | Awards vesting equally on February 23, 2017, 2018, 2019 | ||||||||||||
Summary of restricted stock and restricted stock unit activity | ||||||||||||
Granted (in shares) | 306 | |||||||||||
Service conditions | Restricted Stock | Awards vesting equally on February 25, 2017, 2018, and 2019 | ||||||||||||
Summary of restricted stock and restricted stock unit activity | ||||||||||||
Granted (in shares) | 1,700 | |||||||||||
Service conditions | Restricted Stock | Awards vesting on August 16, 2019 | ||||||||||||
Summary of restricted stock and restricted stock unit activity | ||||||||||||
Granted (in shares) | 113 | |||||||||||
Service conditions | Restricted Stock | Awards vesting on August 16, 2021 | ||||||||||||
Summary of restricted stock and restricted stock unit activity | ||||||||||||
Granted (in shares) | 322 | |||||||||||
Service conditions | Restricted Stock | Awards vesting on August 16, 2023 | ||||||||||||
Summary of restricted stock and restricted stock unit activity | ||||||||||||
Granted (in shares) | 209 | |||||||||||
Service conditions | Restricted Stock | Awards vesting on January 13, 2021 | ||||||||||||
Summary of restricted stock and restricted stock unit activity | ||||||||||||
Granted (in shares) | 22 | |||||||||||
Service conditions | Restricted Stock | Awards vesting on January 13, 2023 | ||||||||||||
Summary of restricted stock and restricted stock unit activity | ||||||||||||
Granted (in shares) | 22 | |||||||||||
Service conditions | Restricted Stock | Awards vesting on August 14, 2018 | ||||||||||||
Summary of restricted stock and restricted stock unit activity | ||||||||||||
Granted (in shares) | 193 | |||||||||||
Service conditions | Restricted Stock | Awards vesting on August 14, 2020 | ||||||||||||
Summary of restricted stock and restricted stock unit activity | ||||||||||||
Granted (in shares) | 423 | |||||||||||
Service conditions | Restricted Stock | Awards vesting on August 14, 2022 | ||||||||||||
Summary of restricted stock and restricted stock unit activity | ||||||||||||
Granted (in shares) | 230 | |||||||||||
Service conditions | Restricted Stock | Awards vesting equally on August 14, 2017, 2019 and 2021 | ||||||||||||
Summary of restricted stock and restricted stock unit activity | ||||||||||||
Granted (in shares) | 55 | |||||||||||
Service conditions | Restricted Stock | Awards vesting on August 4, 2017 | ||||||||||||
Summary of restricted stock and restricted stock unit activity | ||||||||||||
Granted (in shares) | 105 | |||||||||||
Service conditions | Restricted Stock | Awards vesting on August 4, 2019 | ||||||||||||
Summary of restricted stock and restricted stock unit activity | ||||||||||||
Granted (in shares) | 325 | |||||||||||
Service conditions | Restricted Stock | Awards vesting on August 4, 2021 | ||||||||||||
Summary of restricted stock and restricted stock unit activity | ||||||||||||
Granted (in shares) | 220 | |||||||||||
Service conditions | Restricted Stock | Minimum | ||||||||||||
Restricted stock awards | ||||||||||||
Vesting period | 3 years | 3 years | 3 years | |||||||||
Service conditions | Restricted Stock | Maximum | ||||||||||||
Restricted stock awards | ||||||||||||
Vesting period | 7 years | 7 years | 7 years |
Earnings (Loss) Per Common Sh72
Earnings (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income (Numerator): | |||||||||||
Net income | $ 42 | $ 152 | $ 196 | $ 236 | $ 338 | $ 205 | $ 143 | $ 192 | $ 626 | $ 878 | $ 772 |
Earnings applicable to non-vested restricted stock | 0 | 0 | 0 | ||||||||
Net income applicable to common stock for computing basic earnings per common share | 626 | 878 | 772 | ||||||||
Net income as adjusted for purposes of computing diluted earnings per common share | $ 626 | $ 878 | $ 772 | ||||||||
Weighted average number of shares: | |||||||||||
Outstanding during period (in shares) | 545,946 | 559,260 | 572,748 | ||||||||
Non-vested restricted stock (in shares) | (6,397) | (4,982) | (4,313) | ||||||||
Weighted average shares outstanding for computing basic earnings per common share (in shares) | 539,549 | 554,278 | 568,435 | ||||||||
Incremental common shares attributable to dilutive securities: | |||||||||||
Shares issuable under convertible securities (in shares) | 10 | 10 | 10 | ||||||||
Shares issuable under incentive compensation plans (in shares) | 1,120 | 805 | 1,294 | ||||||||
Number of shares as adjusted for purposes of computing diluted earnings per common share (in shares) | 540,679 | 555,093 | 569,739 | ||||||||
Basic earnings per common share (in dollars per share) | $ 0.08 | $ 0.28 | $ 0.36 | $ 0.44 | $ 0.62 | $ 0.37 | $ 0.26 | $ 0.34 | $ 1.16 | $ 1.58 | $ 1.36 |
Diluted earnings per common share (in dollars per share) | $ 0.08 | $ 0.28 | $ 0.36 | $ 0.44 | $ 0.62 | $ 0.37 | $ 0.26 | $ 0.34 | $ 1.16 | $ 1.58 | $ 1.36 |
Number of shares of common stock excluded from the computation of diluted earnings per share | 3,300 | 3,100 | 2,500 |
Fair Value Disclosure (Details)
Fair Value Disclosure (Details) - Fair value measurements determined on a nonrecurring basis - Fair value, Input Level 2 - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Carrying amount | ||
Liabilities | ||
Liabilities-Long-term debt, excluding capital lease and other obligations | $ 19,553 | $ 19,800 |
Fair value amount | ||
Liabilities | ||
Liabilities-Long-term debt, excluding capital lease and other obligations | $ 19,639 | $ 19,473 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Federal | ||||
Current | $ 335 | $ 28 | $ 18 | |
Deferred | 5 | 329 | 305 | |
State | ||||
Current | 27 | 40 | 26 | |
Deferred | 8 | 21 | (14) | |
Foreign | ||||
Current | 26 | 16 | 3 | |
Deferred | (7) | 4 | 0 | |
Total income tax expense | 394 | 438 | 338 | |
Income tax expense allocation | ||||
Attributable to income | 394 | 438 | 338 | |
Stockholders' equity: | ||||
Compensation expense for tax purposes in excess of amounts recognized for financial reporting purposes | (2) | (5) | (5) | |
Tax effect of the change in accumulated other comprehensive loss | $ (109) | $ 59 | $ (744) | |
Reconciliation of the statutory federal income tax rate to effective income tax rate | ||||
Statutory federal income tax rate (as a percent) | 35.00% | 35.00% | 35.00% | |
State income taxes, net of federal income tax benefit (as a percent) | 2.30% | 2.60% | 2.70% | |
Change in liability for unrecognized tax position (as a percent) | 0.20% | 0.40% | 0.40% | |
Net foreign income taxes (as a percent) | 0.10% | 0.70% | 0.40% | |
Foreign dividend paid to a domestic parent company (as a percent) | 1.80% | 0.00% | 0.00% | |
Affiliate debt rationalization, (as a percent) | (0.00%) | (2.60%) | (0.00%) | |
Research and development credits (as a percent) | (0.60%) | (2.10%) | (0.00%) | |
Loss on worthless investment in foreigh subsidiary (as a percent) | 0.00% | 0.00% | (5.40%) | |
Other, net (as a percent) | (0.20%) | (0.70%) | (2.60%) | |
Effective income tax rate (as a percent) | 38.60% | 33.30% | 30.50% | |
Foreign dividend paid to a domestic parent company | $ 18 | |||
Affiliate debt rationalization | $ 34 | $ 34 | ||
Research and development credits | 28 | 28 | ||
Changes affecting state income taxes | 16 | 16 | $ (13) | |
Loss on worthless investment in foreign subsidiary | (60) | |||
Deferred tax assets | ||||
Post-retirement and pension benefit costs | 2,154 | 2,175 | 2,154 | |
Net operating loss carryforwards | 487 | 473 | 487 | |
Other employee benefits | 182 | 125 | 182 | |
Other | 458 | 342 | 458 | |
Gross deferred tax assets | 3,281 | 3,115 | 3,281 | |
Less valuation allowance | (380) | (375) | (380) | |
Net deferred tax assets | 2,901 | 2,740 | 2,901 | |
Deferred tax liabilities | ||||
Property, plant and equipment, primarily due to depreciation differences | (3,841) | (3,626) | (3,841) | |
Goodwill and other intangible assets | (2,588) | (2,577) | (2,588) | |
Other | (38) | 0 | (38) | |
Gross deferred tax liabilities | (6,467) | (6,203) | (6,467) | |
Net deferred tax liabilities | (3,566) | (3,463) | (3,566) | |
Long-term deferred tax liability, net | 3,569 | 3,471 | 3,569 | |
Noncurrent deferred tax asset, net | 3 | 8 | 3 | |
Summary of reconciliation of the change in gross unrecognized tax benefits activity | ||||
Unrecognized tax benefits, beginning of year | 15 | 17 | ||
Increase in tax positions taken in current year | 1 | 1 | ||
Increase in tax positions taken in the prior year | 0 | 7 | ||
Decrease due to the reversal of tax positions taken in a prior year | 0 | (9) | ||
Decrease from the lapse of statute of limitations | 0 | (1) | ||
Unrecognized tax benefits, end of year | 15 | 16 | 15 | $ 17 |
Unrecognized tax benefits that would impact effective tax rate | 32 | 34 | 32 | |
Interest on income taxes accrued | $ 33 | 35 | $ 33 | |
Significant change in unrecorded benefit | 11 | |||
Federal | ||||
NOLs | ||||
Operating loss carryforward | 61 | |||
State | ||||
NOLs | ||||
Operating loss carryforward | $ 11,900 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income taxes | ||
Valuation allowance | $ 375 | $ 380 |
Deferred tax asset valuation allowance adjustment | 5 | |
Investment tax credits | State | ||
Income taxes | ||
Tax credit carryforwards | 39 | |
Tax credit carryforwards, net of federal income tax | $ 25 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2016USD ($)segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Segment Reporting Information [Line Items] | |||||||||||
Number of reportable segments (segments) | segment | 2 | ||||||||||
Operating revenues | $ 4,289 | $ 4,382 | $ 4,398 | $ 4,401 | $ 4,476 | $ 4,554 | $ 4,419 | $ 4,451 | $ 17,470 | $ 17,900 | $ 18,031 |
Expenses | 15,139 | 15,295 | 15,621 | ||||||||
OPERATING INCOME | $ 392 | $ 595 | $ 650 | $ 694 | $ 751 | $ 656 | $ 549 | $ 649 | 2,331 | 2,605 | 2,410 |
Operating segments (segments) | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | 16,255 | 16,668 | 17,028 | ||||||||
Expenses | 8,492 | 8,461 | 8,502 | ||||||||
OPERATING INCOME | $ 7,763 | $ 8,207 | $ 8,526 | ||||||||
Margin percentage (percent) | 48.00% | 49.00% | 50.00% | ||||||||
Business | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | $ 10,352 | $ 10,646 | $ 11,030 | ||||||||
Expenses | 5,930 | 5,967 | 6,019 | ||||||||
OPERATING INCOME | $ 4,422 | $ 4,679 | $ 5,011 | ||||||||
Margin percentage (percent) | 43.00% | 44.00% | 45.00% | ||||||||
Consumer | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | $ 5,903 | $ 6,022 | $ 5,998 | ||||||||
Expenses | 2,562 | 2,494 | 2,483 | ||||||||
OPERATING INCOME | $ 3,341 | $ 3,528 | $ 3,515 | ||||||||
Margin percentage (percent) | 57.00% | 59.00% | 59.00% | ||||||||
Restatement adjustment | Consumer | Consumer | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Expenses | $ 69 | $ 63 | |||||||||
Restatement adjustment | Business | Business | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Expenses | $ (67) | $ (70) |
Segment Information (Details 2)
Segment Information (Details 2) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2016USD ($)category | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Operating revenues by products and services | |||||||||||
Number of categories of products and services (categories) | category | 4 | ||||||||||
Operating revenues | $ 4,289 | $ 4,382 | $ 4,398 | $ 4,401 | $ 4,476 | $ 4,554 | $ 4,419 | $ 4,451 | $ 17,470 | $ 17,900 | $ 18,031 |
Surcharge amount on customers' bills | 572 | 544 | 526 | ||||||||
Strategic Services | |||||||||||
Operating revenues by products and services | |||||||||||
Operating revenues | $ 8,050 | 7,753 | 7,303 | ||||||||
Facilities-based video services | |||||||||||
Operating revenues by products and services | |||||||||||
Number of markets | 16 | 16 | |||||||||
Legacy services | |||||||||||
Operating revenues by products and services | |||||||||||
Operating revenues | $ 7,672 | 8,338 | 9,033 | ||||||||
Data integration | |||||||||||
Operating revenues by products and services | |||||||||||
Operating revenues | 533 | 577 | 692 | ||||||||
Other revenues | |||||||||||
Operating revenues by products and services | |||||||||||
Operating revenues | 1,215 | 1,232 | 1,003 | ||||||||
High-cost support revenue | |||||||||||
Operating revenues by products and services | |||||||||||
Operating revenues | 688 | 732 | 528 | ||||||||
Other revenue | |||||||||||
Operating revenues by products and services | |||||||||||
Operating revenues | 527 | 500 | 475 | ||||||||
Business | |||||||||||
Operating revenues by products and services | |||||||||||
Operating revenues | 10,352 | 10,646 | 11,030 | ||||||||
Business | Business high-bandwidth data services | |||||||||||
Operating revenues by products and services | |||||||||||
Operating revenues | 2,990 | 2,816 | 2,579 | ||||||||
Business | Business hosting services | |||||||||||
Operating revenues by products and services | |||||||||||
Operating revenues | 1,210 | 1,281 | 1,316 | ||||||||
Business | Other business strategic services | |||||||||||
Operating revenues by products and services | |||||||||||
Operating revenues | 703 | 624 | 558 | ||||||||
Business | Voice services | |||||||||||
Operating revenues by products and services | |||||||||||
Operating revenues | 2,413 | 2,588 | 2,777 | ||||||||
Business | Business low-bandwidth data services | |||||||||||
Operating revenues by products and services | |||||||||||
Operating revenues | 1,382 | 1,594 | 1,893 | ||||||||
Business | Other business legacy services | |||||||||||
Operating revenues by products and services | |||||||||||
Operating revenues | 1,123 | 1,168 | 1,219 | ||||||||
Business | Data integration | |||||||||||
Operating revenues by products and services | |||||||||||
Operating revenues | 531 | 575 | 688 | ||||||||
Consumer | |||||||||||
Operating revenues by products and services | |||||||||||
Operating revenues | 5,903 | 6,022 | 5,998 | ||||||||
Consumer | Consumer broadband services | |||||||||||
Operating revenues by products and services | |||||||||||
Operating revenues | 2,689 | 2,611 | 2,469 | ||||||||
Consumer | Other consumer strategic services | |||||||||||
Operating revenues by products and services | |||||||||||
Operating revenues | 458 | 421 | 381 | ||||||||
Consumer | Voice services | |||||||||||
Operating revenues by products and services | |||||||||||
Operating revenues | 2,442 | 2,676 | 2,865 | ||||||||
Consumer | Other consumer legacy services | |||||||||||
Operating revenues by products and services | |||||||||||
Operating revenues | 312 | 312 | 279 | ||||||||
Consumer | Data integration | |||||||||||
Operating revenues by products and services | |||||||||||
Operating revenues | $ 2 | 2 | 4 | ||||||||
Business low-bandwidth data services | Business | Restatement adjustment | Strategic Services | |||||||||||
Operating revenues by products and services | |||||||||||
Operating revenues | (1,586) | (1,861) | |||||||||
Business low-bandwidth data services | Business | Restatement adjustment | Legacy services | |||||||||||
Operating revenues by products and services | |||||||||||
Operating revenues | 1,586 | 1,861 | |||||||||
Other business strategic services | Business | Restatement adjustment | Strategic Services | |||||||||||
Operating revenues by products and services | |||||||||||
Operating revenues | (9) | (33) | |||||||||
Other business legacy services | Business | Restatement adjustment | Legacy services | |||||||||||
Operating revenues by products and services | |||||||||||
Operating revenues | $ 9 | $ 33 |
Segment Information (Details 3)
Segment Information (Details 3) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Total segment income | $ 392 | $ 595 | $ 650 | $ 694 | $ 751 | $ 656 | $ 549 | $ 649 | $ 2,331 | $ 2,605 | $ 2,410 |
Depreciation and amortization | (3,916) | (4,189) | (4,428) | ||||||||
Other unassigned operating expenses | (3,449) | (3,328) | (3,347) | ||||||||
Other expenses, net | (1,311) | (1,289) | (1,300) | ||||||||
INCOME BEFORE INCOME TAX EXPENSE | 1,020 | 1,316 | 1,110 | ||||||||
Income tax expense | (394) | (438) | (338) | ||||||||
Net income | $ 42 | $ 152 | $ 196 | $ 236 | $ 338 | $ 205 | $ 143 | $ 192 | 626 | 878 | 772 |
Operating segments (segments) | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Total segment income | 7,763 | 8,207 | 8,526 | ||||||||
Unallocated amount to segment | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Other operating revenues | 1,215 | 1,232 | 1,003 | ||||||||
Depreciation and amortization | (3,916) | (4,189) | (4,428) | ||||||||
Other unassigned operating expenses | (2,731) | (2,645) | (2,691) | ||||||||
Other expenses, net | (1,311) | (1,289) | (1,300) | ||||||||
INCOME BEFORE INCOME TAX EXPENSE | 1,020 | 1,316 | 1,110 | ||||||||
Income tax expense | $ (394) | $ (438) | $ (338) |
Quarterly Financial Data (Una79
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating revenues by products and services | |||||||||||
Operating revenues | $ 4,289 | $ 4,382 | $ 4,398 | $ 4,401 | $ 4,476 | $ 4,554 | $ 4,419 | $ 4,451 | $ 17,470 | $ 17,900 | $ 18,031 |
OPERATING INCOME | 392 | 595 | 650 | 694 | 751 | 656 | 549 | 649 | 2,331 | 2,605 | 2,410 |
Net income | $ 42 | $ 152 | $ 196 | $ 236 | $ 338 | $ 205 | $ 143 | $ 192 | $ 626 | $ 878 | $ 772 |
Basic earnings per common share (in dollars per share) | $ 0.08 | $ 0.28 | $ 0.36 | $ 0.44 | $ 0.62 | $ 0.37 | $ 0.26 | $ 0.34 | $ 1.16 | $ 1.58 | $ 1.36 |
Diluted earnings per common share (in dollars per share) | $ 0.08 | $ 0.28 | $ 0.36 | $ 0.44 | $ 0.62 | $ 0.37 | $ 0.26 | $ 0.34 | $ 1.16 | $ 1.58 | $ 1.36 |
Severance expenses | $ 164 | ||||||||||
Affiliate debt rationalization | $ 34 | $ 34 | |||||||||
Research and development credits | 28 | 28 | |||||||||
Changes affecting state income taxes | 16 | 16 | $ (13) | ||||||||
CAF Phase 2 Support | |||||||||||
Operating revenues by products and services | |||||||||||
Incremental increase in other operating revenues | $ 57 | $ 158 | $ 201 | $ 215 | |||||||
Level 3 Communications, Inc. | |||||||||||
Operating revenues by products and services | |||||||||||
Business acquisition, transaction costs | $ 52 | $ 52 |
Commitments and Contingencies80
Commitments and Contingencies (Details) | Apr. 30, 2016 | Oct. 14, 2011 | Dec. 31, 2016USD ($)plaintifflawsuit | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2007USD ($) |
Commitments and Contingencies | ||||||
Number of patents allegedly infringed, minimum | 1 | |||||
Capital lease activity | ||||||
Assets acquired through capital leases | $ 45,000,000 | $ 17,000,000 | $ 37,000,000 | |||
Depreciation expense | 70,000,000 | 96,000,000 | 126,000,000 | |||
Cash payments towards capital leases | 58,000,000 | 89,000,000 | 118,000,000 | |||
Assets included in property, plant and equipment | 705,000,000 | 722,000,000 | ||||
Accumulated depreciation | 351,000,000 | 352,000,000 | ||||
Future annual minimum payments under capital lease arrangements | ||||||
2,017 | 94,000,000 | |||||
2,018 | 91,000,000 | |||||
2,019 | 70,000,000 | |||||
2,020 | 46,000,000 | |||||
2,021 | 43,000,000 | |||||
2022 and thereafter | 170,000,000 | |||||
Total minimum payments | 514,000,000 | |||||
Less: amount representing interest and executory costs | (123,000,000) | |||||
Present value of minimum payments | 391,000,000 | |||||
Less: current portion | (69,000,000) | |||||
Long-term portion | 322,000,000 | |||||
Capital lease obligations | 305,000,000 | 0 | ||||
Operating Leases | ||||||
Rent expense | 482,000,000 | 467,000,000 | 446,000,000 | |||
Sublease rental income | 12,000,000 | $ 12,000,000 | $ 14,000,000 | |||
Future rental commitments | ||||||
2,017 | 295,000,000 | |||||
2,018 | 276,000,000 | |||||
2,019 | 249,000,000 | |||||
2,020 | 226,000,000 | |||||
2,021 | 162,000,000 | |||||
2022 and thereafter | 1,049,000,000 | |||||
Total future minimum payments | 2,257,000,000 | |||||
Minimum sublease rentals due in the future under non-cancelable subleases | 77,000,000 | |||||
Purchase obligations maturities | ||||||
Total purchase commitments | 427,000,000 | |||||
2,017 | 166,000,000 | |||||
2018 and 2019 | 153,000,000 | |||||
2020 and 2021 | 41,000,000 | |||||
2022 and thereafter | $ 67,000,000 | |||||
William Douglas Fulghum, et al. v. Embarq Corporation | ||||||
Commitments and Contingencies | ||||||
Effect of modifications made to Embarq's benefits program, greater than | $ 300,000,000 | |||||
Abbott et al. v. Sprint Nextel et al. | ||||||
Commitments and Contingencies | ||||||
Number of plaintiffs have alleged breach of fiduciary duty (plaintiffs) | 1,500 | |||||
Interexchange Carriers | Subsidiaries | ||||||
Commitments and Contingencies | ||||||
Number of plaintiffs have alleged breach of fiduciary duty (plaintiffs) | plaintiff | 3 | |||||
Loss contingency, pending claims, number | lawsuit | 100 | |||||
Unfavorable regulatory action | ||||||
Commitments and Contingencies | ||||||
Reasonable expectation of loss, maximum per proceeding | $ 100,000 | |||||
Missouri Municipalities | ||||||
Commitments and Contingencies | ||||||
Loss contingency, opinion of counsel | In an April 2016 ruling in connection with one of these pending cases, the court made findings which, if not overturned, will result in a tax liability to us well in excess of the contingent liability we have established. Following further proceedings at the district court, we plan to file an appeal and continue to vigorously defend against these claims. For a variety of reasons, we expect the outcome of our appeal to significantly reduce our ultimate exposure, although we can provide no assurances to this effect. | |||||
Colocation Business and Data Centers | ||||||
Future annual minimum payments under capital lease arrangements | ||||||
2,017 | 60,000,000 | |||||
2,018 | 62,000,000 | |||||
2,019 | 52,000,000 | |||||
2,020 | 39,000,000 | |||||
2,021 | 40,000,000 | |||||
2022 and thereafter | 145,000,000 | |||||
Total minimum payments | 398,000,000 | |||||
Less: amount representing interest and executory costs | (93,000,000) | |||||
Present value of minimum payments | 305,000,000 | |||||
Capital lease obligations | 305,000,000 | |||||
Future rental commitments | ||||||
2,017 | 89,000,000 | |||||
2,018 | 84,000,000 | |||||
2,019 | 71,000,000 | |||||
2,020 | 68,000,000 | |||||
2,021 | 68,000,000 | |||||
2022 and thereafter | 370,000,000 | |||||
Total future minimum payments | 750,000,000 | |||||
Purchase obligations maturities | ||||||
Total purchase commitments | $ 80,000,000 |
Other Financial Information (De
Other Financial Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Prepaid Expenses and Other Current Assets [Abstract] | ||
Prepaid expenses | $ 206 | $ 238 |
Materials, supplies and inventory | 134 | 144 |
Deferred activation and installation charges | 101 | 105 |
Other | 106 | 86 |
Total other current assets | 547 | 573 |
Accounts Payable, Current [Abstract] | ||
Accounts payable | 1,179 | 968 |
Other current liabilities: | ||
Accrued rent | 31 | 32 |
Legal reserves | 30 | 20 |
Other | 152 | 168 |
Total other current liabilities | 213 | 220 |
Book overdraft balance | 56 | 68 |
Capital expenditures included in accounts payable | $ 196 | $ 94 |
Labor Union Contracts (Details)
Labor Union Contracts (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Employees subject to collective bargaining arrangements expiring within one year | |
Labor Union Contracts | |
Number of unionized employees | 12,000 |
Employees subject to collective bargaining arrangements, expiring October 7, 2017 | |
Labor Union Contracts | |
Number of unionized employees | 11,000 |
Total number of employees | Unionized employees concentration risk | |
Labor Union Contracts | |
Concentration risk (percent) | 38.00% |
Total number of employees | Unionized employees concentration risk | Employees subject to collective bargaining arrangements expiring within one year | |
Labor Union Contracts | |
Concentration risk (percent) | 30.00% |
Total number of employees | Unionized employees concentration risk | Employees subject to collective bargaining arrangements, expiring October 7, 2017 | |
Labor Union Contracts | |
Concentration risk (percent) | 28.00% |
Accumulated Other Comprehensi83
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Stockholders' Equity Attributable to Parent | $ 13,399 | $ 14,060 | $ 15,023 | |
Accumulated other comprehensive income (loss) by component | ||||
Other comprehensive income (loss) before reclassifications | (296) | (32) | ||
Amounts reclassified from accumulated other comprehensive income | 113 | 115 | ||
Other comprehensive (loss) income | (183) | 83 | (1,215) | |
Defined Benefit Plans | ||||
Accumulated other comprehensive income (loss) by component | ||||
Amounts reclassified from accumulated other comprehensive income | 113 | 115 | ||
Defined Benefit Plans | Pension Plans | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Stockholders' Equity Attributable to Parent | (1,895) | (1,715) | (1,720) | |
Accumulated other comprehensive income (loss) by component | ||||
Other comprehensive income (loss) before reclassifications | (280) | (98) | ||
Amounts reclassified from accumulated other comprehensive income | 100 | 103 | ||
Other comprehensive (loss) income | (180) | 5 | ||
Defined Benefit Plans | Post-Retirement Benefit Plans | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Stockholders' Equity Attributable to Parent | (162) | (180) | (272) | |
Accumulated other comprehensive income (loss) by component | ||||
Other comprehensive income (loss) before reclassifications | 6 | 80 | ||
Amounts reclassified from accumulated other comprehensive income | 12 | 12 | ||
Other comprehensive (loss) income | 18 | 92 | ||
Foreign Currency Translation Adjustment and Other | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Stockholders' Equity Attributable to Parent | (60) | (39) | (25) | |
Accumulated other comprehensive income (loss) by component | ||||
Other comprehensive income (loss) before reclassifications | (22) | (14) | ||
Amounts reclassified from accumulated other comprehensive income | 1 | 0 | ||
Other comprehensive (loss) income | (21) | (14) | ||
AOCI Attributable to Parent | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Stockholders' Equity Attributable to Parent | (2,117) | (1,934) | (2,017) | $ (802) |
Accumulated other comprehensive income (loss) by component | ||||
Other comprehensive (loss) income | $ (183) | $ 83 | $ (1,215) |
Accumulated Other Comprehensi84
Accumulated Other Comprehensive Loss (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Insignificant items | $ 7 | $ 23 | $ 11 |
Net of tax | 113 | 115 | |
Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Net actuarial loss and prior service cost | 175 | 161 | |
Accumulated Defined Benefit Plans Adjustment, Net Prior Service Attributable to Parent | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Net actuarial loss and prior service cost | 12 | 24 | |
Accumulated Defined Benefit Plans Adjustment Attributable to Parent | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Net actuarial loss and prior service cost | 187 | 185 | |
Income tax expense (benefit) | (75) | (70) | |
Insignificant items | 1 | ||
Net of tax | $ 113 | $ 115 |
Dividends (Details)
Dividends (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 15, 2016 | Aug. 23, 2016 | May 18, 2016 | Feb. 23, 2016 | Nov. 10, 2015 | Aug. 25, 2015 | May 20, 2015 | Feb. 23, 2015 |
Dividends, Common Stock [Abstract] | ||||||||
Dividend per share (usd per share) | $ 0.540 | $ 0.540 | $ 0.540 | $ 0.540 | $ 0.540 | $ 0.540 | $ 0.540 | $ 0.540 |
Total amount declared | $ 294 | $ 295 | $ 294 | $ 295 | $ 293 | $ 300 | $ 303 | $ 303 |