Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 30, 2021 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-7784 | |
Entity Registrant Name | LUMEN TECHNOLOGIES, INC. | |
Entity Incorporation, State or Country Code | LA | |
Entity Tax Identification Number | 72-0651161 | |
Entity Address, Address Line One | 100 CenturyLink Drive, | |
Entity Address, City or Town | Monroe, | |
Entity Address, State or Province | LA | |
Entity Address, Postal Zip Code | 71203 | |
City Area Code | 318 | |
Local Phone Number | 388-9000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,105,312,538 | |
Entity Central Index Key | 0000018926 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, par value $1.00 per share | |
Trading Symbol | LUMN | |
Security Exchange Name | NYSE | |
Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Preferred Stock Purchase Rights | |
No Trading Symbol Flag | true | |
Security Exchange Name | NYSE |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
OPERATING REVENUE | $ 5,029 | $ 5,228 |
OPERATING EXPENSES | ||
Cost of services and products (exclusive of depreciation and amortization) | 2,136 | 2,235 |
Selling, general and administrative | 756 | 853 |
Depreciation and amortization | 1,150 | 1,160 |
Total operating expenses | 4,042 | 4,248 |
OPERATING INCOME | 987 | 980 |
OTHER (EXPENSE) INCOME | ||
Interest expense | (389) | (449) |
Other income (expense), net | 34 | (98) |
Total other expense, net | (355) | (547) |
INCOME BEFORE INCOME TAXES | 632 | 433 |
Income tax expense | 157 | 119 |
NET INCOME | $ 475 | $ 314 |
BASIC AND DILUTED EARNINGS PER COMMON SHARE | ||
BASIC (in dollars per share) | $ 0.44 | $ 0.29 |
DILUTED (in dollars per share) | $ 0.44 | $ 0.29 |
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING | ||
BASIC (in shares) | 1,082,474 | 1,075,459 |
DILUTED (in shares) | 1,091,586 | 1,081,754 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
NET INCOME | $ 475 | $ 314 |
Items related to employee benefit plans: | ||
Change in net actuarial loss, net of $(12) and $(12) tax | 38 | 38 |
Change in net prior service cost, net of $(1) and $— tax | 1 | 1 |
Reclassification of realized loss on interest rate swaps to net income, net of $(5) and $— tax | 15 | 5 |
Unrealized holding loss on interest rate swaps, net of $— and $26 tax | 0 | (80) |
Foreign currency translation adjustment, net of $7 and $23 tax | (86) | (239) |
Other comprehensive loss | (32) | (275) |
COMPREHENSIVE INCOME | $ 443 | $ 39 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Change in net actuarial loss, tax | $ (12) | $ (12) |
Change in net prior service cost, tax | (1) | 0 |
Reclassification of realized loss on interest rate swaps to net income, tax | (5) | 0 |
Unrealized holding gain (loss) on interest rate swaps, tax | 0 | 26 |
Foreign currency translation adjustment and other, tax | $ 7 | $ 23 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 486 | $ 406 |
Accounts receivable, less allowance of $162 and $191 | 1,883 | 1,962 |
Other | 924 | 808 |
Total current assets | 3,293 | 3,176 |
Property, plant and equipment, net of accumulated depreciation of $32,214 and $31,596 | 26,091 | 26,338 |
GOODWILL AND OTHER ASSETS | ||
Goodwill | 18,854 | 18,870 |
Other intangible assets, net | 7,884 | 8,219 |
Other, net | 2,706 | 2,791 |
Total goodwill and other assets | 29,444 | 29,880 |
TOTAL ASSETS | 58,828 | 59,394 |
CURRENT LIABILITIES | ||
Current maturities of long-term debt | 3,841 | 2,427 |
Accounts payable | 1,017 | 1,134 |
Accrued expenses and other liabilities | ||
Salaries and benefits | 846 | 1,008 |
Income and other taxes | 346 | 314 |
Current operating lease liabilities | 387 | 379 |
Interest | 285 | 291 |
Other | 307 | 328 |
Current portion of deferred revenue | 758 | 753 |
Total current liabilities | 7,787 | 6,634 |
LONG-TERM DEBT | 27,599 | 29,410 |
DEFERRED CREDITS AND OTHER LIABILITIES | ||
Deferred income taxes, net | 3,471 | 3,342 |
Benefit plan obligations, net | 4,435 | 4,556 |
Other | 4,233 | 4,290 |
Total deferred credits and other liabilities | 12,139 | 12,188 |
COMMITMENTS AND CONTINGENCIES (Note 12) | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock—non-redeemable, $25.00 par value, authorized 2,000 and 2,000 shares, issued and outstanding 7 and 7 shares | 0 | 0 |
Common stock, $1.00 par value, authorized 2,200,000 and 2,200,000 shares, issued and outstanding 1,105,533 and 1,096,921 shares | 1,106 | 1,097 |
Additional paid-in capital | 20,598 | 20,909 |
Accumulated other comprehensive loss | (2,845) | (2,813) |
Accumulated deficit | (7,556) | (8,031) |
Total stockholders' equity | 11,303 | 11,162 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 58,828 | $ 59,394 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 162 | $ 191 |
PP&E, accumulated depreciation | $ 32,214 | $ 31,596 |
Preferred stock-non-redeemable, par value (in dollars per share) | $ 25 | $ 25 |
Preferred stock-non-redeemable, shares authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred stock-non-redeemable, shares issued (in shares) | 7,000 | 7,000 |
Preferred stock-non-redeemable, shares outstanding (in shares) | 7,000 | 7,000 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 2,200,000,000 | 2,200,000,000 |
Common stock, shares issued (in shares) | 1,105,533,000 | 1,096,921,000 |
Common stock, shares outstanding (in shares) | 1,105,533,000 | 1,096,921,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
OPERATING ACTIVITIES | ||
Net income | $ 475 | $ 314 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 1,150 | 1,160 |
Deferred income taxes | 131 | 105 |
Provision for uncollectible accounts | 27 | 35 |
Net (gain) loss on early retirement of debt | (8) | 79 |
Share-based compensation | 20 | 69 |
Changes in current assets and liabilities: | ||
Accounts receivable | 45 | 60 |
Accounts payable | (93) | (115) |
Accrued income and other taxes | 31 | (16) |
Other current assets and liabilities, net | (272) | (366) |
Retirement benefits | (71) | (25) |
Changes in other noncurrent assets and liabilities, net | 66 | (14) |
Other, net | 24 | 13 |
Net cash provided by operating activities | 1,525 | 1,299 |
INVESTING ACTIVITIES | ||
Capital expenditures | (716) | (974) |
Proceeds from sale of property, plant and equipment and other assets | 35 | 35 |
Other, net | 6 | 0 |
Net cash used in investing activities | (675) | (939) |
FINANCING ACTIVITIES | ||
Net proceeds from issuance of long-term debt | 891 | 1,237 |
Payments of long-term debt | (1,176) | (2,488) |
Net (payments of) proceeds from revolving line of credit | (150) | 1,125 |
Dividends paid | (294) | (291) |
Other, net | (45) | (69) |
Net cash used in financing activities | (774) | (486) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 76 | (126) |
Cash, cash equivalents and restricted cash at beginning of period | 427 | 1,717 |
Cash, cash equivalents and restricted cash at end of period | 503 | 1,591 |
Supplemental cash flow information: | ||
Income taxes paid, net | (21) | (6) |
Interest paid (net of capitalized interest of $13 and $23) | (387) | (383) |
Cash, cash equivalents and restricted cash: | ||
Total | $ 503 | $ 1,591 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Cash Flows [Abstract] | ||
Capitalized interest | $ 13 | $ 23 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Total | COMMON STOCK | ADDITIONAL PAID-IN CAPITAL | ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED DEFICIT | ACCUMULATED DEFICITCumulative Effect, Period of Adoption, Adjustment |
Balance at beginning of period at Dec. 31, 2019 | $ 1,090 | $ 21,874 | $ (2,680) | $ (6,814) | $ 9 | |
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of common stock through incentive and benefit plans | 8 | |||||
Shares withheld to satisfy tax withholdings | (33) | |||||
Share-based compensation and other, net | 79 | |||||
Dividends declared | (286) | |||||
Other comprehensive loss | $ (275) | (275) | ||||
Net income | 314 | 314 | ||||
Other | 5 | |||||
Balance at end of period at Mar. 31, 2020 | $ 13,291 | 1,098 | 21,634 | (2,955) | (6,486) | |
Increase (Decrease) in Stockholders' Equity | ||||||
DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $ 0.25 | |||||
Balance at beginning of period at Dec. 31, 2020 | $ 11,162 | 1,097 | 20,909 | (2,813) | (8,031) | |
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of common stock through incentive and benefit plans | 9 | |||||
Shares withheld to satisfy tax withholdings | (39) | |||||
Share-based compensation and other, net | 20 | |||||
Dividends declared | (292) | |||||
Other comprehensive loss | (32) | (32) | ||||
Net income | 475 | 475 | ||||
Other | 0 | |||||
Balance at end of period at Mar. 31, 2021 | $ 11,303 | $ 1,106 | $ 20,598 | $ (2,845) | $ (7,556) | |
Increase (Decrease) in Stockholders' Equity | ||||||
DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $ 0.25 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2019 | |
Income tax expense | $ 157 | $ 119 | |
ACCUMULATED DEFICIT | Cumulative Effect, Period of Adoption, Adjustment | |||
Income tax expense | $ 2 |
Background
Background | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background | Background General We are an international facilities-based technology and communications company engaged primarily in providing a broad array of integrated services to our business and mass markets customers. Our specific products and services are detailed in Note 3—Revenue Recognition. Basis of Presentation Our consolidated balance sheet as of December 31, 2020, which was derived from our audited consolidated financial statements, and our unaudited interim consolidated financial statements provided herein have been prepared in accordance with the instructions for Form 10-Q. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to rules and regulations of the SEC. However, in our opinion, the disclosures made therein are adequate to make the information presented not misleading. We believe that these consolidated financial statements include all normal recurring adjustments necessary to fairly present the results for the interim periods. The consolidated results of operations and cash flows for the first three months of the year are not necessarily indicative of the consolidated results of operations and cash flows that might be expected for the entire year. These consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020. The accompanying consolidated financial statements include our accounts and the accounts of our subsidiaries in which we have a controlling interest. 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 (expense), 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 revenue and expenses in our segment reporting. See Note 11—Segment Information for additional information. These changes had no impact on total operating revenue, total operating expenses or net income (loss) for any period. Operating lease assets are included in other, net under goodwill and other assets on our consolidated balance sheets. Noncurrent operating lease liabilities are included in other under deferred credits and other liabilities on our consolidated balance sheets. There were no book overdrafts included in accounts payable at March 31, 2021 or December 31, 2020. Summary of Significant Accounting Policies The significant accounting policy below is in addition to the significant accounting policies described in Note 1— Background and Summary of Significant Accounting Policies to the consolidated financial statements and accompanying notes in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2020. Operating Lease Income Lumen Technologies leases various dark fiber, office facilities, colocation facilities, switching facilities, other network sites and service equipment to third parties under operating leases. Lease and sublease income are included in operating revenue in our consolidated statements of operations. For the three months ended March 31, 2021 and 2020, our gross rental income was $332 million and $333 million, respectively, which represents approximately 7% and 6%, respectively, of our operating revenue for the three months ended March 31, 2021 and 2020. Recently Adopted Accounting Pronouncements Debt On January 1, 2021, we adopted ASU 2020-09, " Debt (Topic 470) Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762 " ("ASU 2020-09"). This ASU amends and supersedes various SEC paragraphs to reflect SEC Release No. 33-10762, which includes amendments to the financial disclosure requirements applicable to registered debt offerings that include credit enhancements, such as subsidiary guarantees. The adoption of ASU 2020-09 did not have a material impact to our consolidated financial statements. Investments On January 1, 2021, we adopted ASU 2020-01, " Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815) " ("ASU 2020-01"). This ASU, among other things, clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments - Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. As of March 31, 2021, we determined there was no application or discontinuation of the equity method during the reporting periods. The adoption of ASU 2020-01 did not have a material impact to our consolidated financial statements. Income taxes On January 1, 2021, we adopted ASU 2019-12, " Simplifying the Accounting for Income Taxes (Topic 740) " ("ASU 2019-12"). This ASU removes certain exceptions for investments, intra-period allocations and interim calculations, and adds guidance to reduce complexity in accounting for income taxes. The adoption of ASU 2019-12 did not have a material impact to our consolidated financial statements. Measurement of Credit Losses on Financial Instruments We adopted ASU 2016-13, " Measurement of Credit Losses on Financial Instruments " ("ASU 2016-13") on January 1, 2020 and recognized a cumulative adjustment to our accumulated deficit as of the date of adoption of $9 million, net of tax effect of $2 million. Please refer to Note 4—Credit Losses on Financial Instruments for more information. Recently Issued Accounting Pronouncements In January 2021, the FASB issued ASU 2021-01, " Reference Rate Reform (Topic 848)" Scope " ("ASU 2021-01"), which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU 2021-01 also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. ASU 2021-01 provides option guidance for a limited time to ease the potential burden in accounting for reference rate reform. As of March 31, 2021, we are currently evaluating our contracts and the optional expedients provided by the new standard. In March 2020, the FASB issued ASU 2020-04, " Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting " ("ASU 2020-04"), designed to ease the burden of accounting for contract modifications related to the global market-wide reference rate transition period. Subject to certain criteria, ASU 2020-04 provides qualifying entities the option to apply expedients and exceptions to contract modifications and hedging accounting relationships made until December 31, 2022. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. ASU 2020-04 provides optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. As of March 31, 2021, we are evaluating the existing contracts and the impact on consolidated financial statements. |
Goodwill, Customer Relationship
Goodwill, Customer Relationships and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2021 | |
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: March 31, 2021 December 31, 2020 (Dollars in millions) Goodwill $ 18,854 18,870 Indefinite-life intangible assets $ 9 278 Other intangible assets subject to amortization: Customer relationships, less accumulated amortization of $11,356 and $11,060 6,035 6,344 Capitalized software, less accumulated amortization of $3,366 and $3,279 1,509 1,520 Trade names, patents and other, less accumulated amortization of $134 and $120 331 77 Total other intangible assets, net $ 7,884 8,219 When we acquired Embarq Corporation in 2009, we acquired certain right-of-way assets and, because there were no legal, regulatory, contractual or other factors that would reasonably limit the useful life of these assets, we classified them as indefinite-lived and, as such, these assets were not amortized. However, as we leverage our fiber infrastructure assets, our reliance on the legacy infrastructure (largely copper-based) acquired from Embarq is diminishing. Our recent digital transformation efforts have prompted management to reassess and ultimately change the accounting treatment of these indefinite-lived assets to align with our focus on growth products versus our declining products. As a result, during the first quarter of 2021, we reclassified an indefinite-lived intangible asset to definite-lived intangible asset. As of January 1, 2021 we began amortizing the $268 million asset over its estimated 9-year remaining life. This change in the estimated remaining economic life resulted in an increase in amortization expense of approximately $7 million for the three months ended March 31, 2021 and is expected to increase amortization expense by approximately $30 million for the year ending December 31, 2021. The increase in amortization expense, net of tax, reduced consolidated net income by approximately $5 million, with no impact per basic and diluted common share, for the three months ended March 31, 2021 and is expected to reduce consolidated net income by approximately $23 million, or $0.02 per basic and diluted common share, for the year ending December 31, 2021. 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 carrying value of equity of any of our reporting units exceeds its fair value. Our annual impairment assessment date for goodwill is October 31, at which date we assess our reporting units. 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 full 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, we record an impairment equal to the excess amount. Depending on the facts and circumstances, we typically estimate the fair value of our reporting units by considering either or both of (i) a discounted cash flow method, which is based on the present value of projected cash flows over a discrete projection period and a terminal value, which represents the value of expected normalized cash flows of the reporting units following the discrete projection period, and (ii) a market approach, which includes the use of market multiples of publicly-traded companies whose services are comparable to ours . As previously announced, we completed an internal reorganization in January 2021. We now, as a result, report two segments: Business and Mass Markets. The following table shows the rollforward of goodwill assigned to our reportable segments, including the reorganization, from December 31, 2020 through March 31, 2021: International and Global Accounts Enterprise Small and Medium Business Wholesale Consumer Business Mass Markets Total (Dollars in millions) As of December 31, 2020 (1) $ 2,555 4,738 2,808 3,114 5,655 — — 18,870 January 2021 reorganization (2,555) (4,738) (2,808) (3,114) (5,655) 12,173 6,697 — Effect of foreign currency exchange rate change and other — — — — — (16) — (16) As of March 31, 2021 (1) $ — — — — — 12,157 6,697 18,854 ______________________________________________________________________ (1) Goodwill at March 31, 2021 and December 31, 2020 is net of accumulated impairment losses of $12.9 billion. The January 2021 reorganization was considered a change in event or circumstance which required an assessment of our goodwill for impairment. We performed a qualitative impairment assessment and concluded it is more likely than not that the fair value of each of our reporting units exceeded the carrying value of equity of our reporting units at January 31, 2021. Therefore, no impairment existed as of our assessment date. Total amortization expense for intangible assets for the three months ended March 31, 2021 and 2020 totaled $425 million and $431 million, respectively. As of March 31, 2021, the gross carrying amount of goodwill, customer relationships, indefinite-life and other intangible assets was $41.6 billion. We estimate that total amortization expense for intangible assets for the years ending December 31, 2021 through 2025 will be as follows: (Dollars in millions) 2021 (remaining nine months) $ 893 2022 1,081 2023 985 2024 887 2025 797 |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Product and Service Categories Beginning in the first quarter of 2021, we categorize our products and services revenue among the following four categories for the Business segment: • Compute and Application Services , which include our Edge Cloud services, IT solutions, Unified Communications and Collaboration ("UC&C"), data center, content delivery network ("CDN") and Managed Security services; • IP and Data Services , which include Ethernet, IP, and VPN data networks, including software-defined wide area networks ("SD WAN") based services, Dynamic Connections and Hyper WAN; • Fiber Infrastructure Services , which include dark fiber, optical services and equipment; and • Voice and Other , which includes Time Division Multiplexing ("TDM") voice, private line and other legacy services. Beginning in the first quarter of 2021, we categorize our products and services revenue among the following four categories for the Mass Markets segment: • Consumer Broadband , which includes high speed fiber-based and lower speed DSL-based broadband services to residential customers; • Small Business Group ("SBG") Broadband , which includes high speed fiber-based and lower speed DSL-based broadband services to small businesses; • Voice and Other, which includes primarily local and long-distance services, retail video services (including our linear and TV services), professional services and other ancillary services; and • Connect America Fund ("CAF") II, which consists of Connect America Fund II support payments designed to reimburse us for various costs related to certain telecommunications services. Reconciliation of Total Revenue to Revenue from Contracts with Customers The following table provides total revenue by segment, sales channel and product category. It also provides the amount of revenue that is not subject to ASC 606, " Revenue from Contracts with Customers " ("ASC 606"), but is instead governed by other accounting standards: Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Total revenue Adjustments for non-ASC 606 revenue (1) Total revenue from contracts with customers Total revenue Adjustments for non-ASC 606 revenue (1) Total revenue from contracts with customers (Dollars in millions) Business Segment by Sales Channel and Product Category International and Global Accounts ("IGAM") Compute and Application Services $ 179 (69) 110 201 (69) 132 IP and Data Services 427 — 427 437 — 437 Fiber Infrastructure Services 216 (30) 186 202 (26) 176 Voice and Other 191 — 191 201 — 201 Total IGAM Revenue 1,013 (99) 914 1,041 (95) 946 Large Enterprise Compute and Application Services 165 (15) 150 154 (17) 137 IP and Data Services 395 — 395 401 — 401 Fiber Infrastructure Services 124 (15) 109 138 (10) 128 Voice and Other 253 — 253 273 — 273 Total Large Enterprise Revenue 937 (30) 907 966 (27) 939 Mid-Market Enterprise Compute and Application Services 36 (8) 28 34 (8) 26 IP and Data Services 453 (1) 452 466 (1) 465 Fiber Infrastructure Services 60 (2) 58 54 (4) 50 Voice and Other 167 — 167 207 — 207 Total Mid-Market Enterprise Revenue 716 (11) 705 761 (13) 748 Wholesale Compute and Application Services 48 (40) 8 46 (40) 6 IP and Data Services 305 — 305 318 — 318 Fiber Infrastructure Services 154 (31) 123 153 (30) 123 Voice and Other 422 (63) 359 452 (68) 384 Total Wholesale Revenue 929 (134) 795 969 (138) 831 Business Segment by Product Category Compute and Application Services 428 (132) 296 435 (134) 301 IP and Data Services 1,580 (1) 1,579 1,622 (1) 1,621 Fiber Infrastructure Services 554 (78) 476 547 (70) 477 Voice and Other 1,033 (63) 970 1,133 (68) 1,065 Total Business Segment Revenue $ 3,595 (274) 3,321 3,737 (273) 3,464 Mass Markets Segment by Product Category Consumer Broadband $ 731 (52) 679 722 (53) 669 SBG Broadband 39 (4) 35 39 (3) 36 Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Total revenue Adjustments for non-ASC 606 revenue (1) Total revenue from contracts with customers Total revenue Adjustments for non-ASC 606 revenue (1) Total revenue from contracts with customers (Dollars in millions) Voice and Other 541 (21) 520 607 (29) 578 CAF II 123 (123) — 123 (123) — Total Mass Markets Segment $ 1,434 (200) 1,234 1,491 (208) 1,283 Total revenue $ 5,029 (474) 4,555 5,228 (481) 4,747 _____________________________________________________________________ (1) Includes regulatory revenue and lease revenue not within the scope of ASC 606. Customer Receivables and Contract Balances The following table provides balances of customer receivables, contract assets and contract liabilities as of March 31, 2021 and December 31, 2020: March 31, 2021 December 31, 2020 (Dollars in millions) Customer receivables (1) $ 1,805 1,889 Contract assets 103 108 Contract liabilities 883 950 ______________________________________________________________________ (1) Reflects gross customer receivables of $2.0 billion and $2.1 billion, net of allowance for credit losses of $148 million and $174 million, at March 31, 2021 and December 31, 2020, respectively. Contract liabilities are consideration we have received from our customers or billed in advance of providing goods or services promised in the future. We defer recognizing this consideration as revenue until we have satisfied the related performance obligation to the customer. Contract liabilities include recurring services billed one month in advance and installation and maintenance charges that are deferred and recognized over the actual or expected contract term, which typically ranges from one Performance Obligations As of March 31, 2021, our estimated revenue expected to be recognized in the future related to performance obligations associated with existing customer contracts that are partially or wholly unsatisfied is approximately $5.2 billion. We expect to recognize approximately 90% of this revenue through 2023, with the balance recognized thereafter. These amounts exclude (i) the value of unsatisfied performance obligations for contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed (for example, uncommitted usage or non-recurring charges associated with professional or technical services to be completed), and (ii) contracts that are classified as leasing arrangements that are not subject to ASC 606. Contract Costs The following table provides changes in our contract acquisition costs and fulfillment costs: Three Months Ended March 31, 2021 Acquisition Costs Fulfillment Costs (Dollars in millions) Beginning of period balance $ 289 216 Costs incurred 44 37 Amortization (54) (37) End of period balance $ 279 216 Three Months Ended March 31, 2020 Acquisition Costs Fulfillment Costs (Dollars in millions) Beginning of period balance $ 326 221 Costs incurred 49 36 Amortization (55) (37) End of period balance $ 320 220 Acquisition costs include commission fees paid to employees as a result of obtaining contracts. Fulfillment costs include third party and internal costs associated with the provision, installation and activation of telecommunications services to customers, including labor and materials consumed for these activities. Deferred acquisition and fulfillment costs are amortized based on the transfer of services on a straight-line basis over the average customer life of approximately 30 months for mass markets and business customers. Amortized fulfillment costs are included in cost of services and products and amortized acquisition costs are included in selling, general and administrative expenses in our consolidated statements of operations. The amount of these deferred costs that are anticipated to be amortized in the next 12 months are included in other current assets on our consolidated balance sheets. The amount of deferred costs expected to be amortized beyond the next 12 months is included in other non-current assets on our consolidated balance sheets. Deferred acquisition and fulfillment costs are assessed for impairment on an annual basis. |
Credit Losses on Financial Inst
Credit Losses on Financial Instruments | 3 Months Ended |
Mar. 31, 2021 | |
Credit Loss [Abstract] | |
Credit Losses on Financial Instruments | Credit Losses on Financial Instruments In accordance with ASC 326, " Financial Instruments - Credit Losses, " we aggregate financial assets with similar risk characteristics to align our expected credit losses with the credit quality or deterioration over the life of such assets. We monitor certain risk characteristics within our aggregated financial assets and revise their composition accordingly, to the extent internal and external risk factors change each reporting period. Financial assets that do not share risk characteristics with other financial assets are evaluated separately. Our financial assets measured at amortized cost primarily consist of accounts receivable. We implemented the new standard effective January 1, 2020, using a loss rate method to estimate our allowance for credit losses. Our determination of the current expected credit loss rate begins with our use of historical loss experience as a percentage of accounts receivable. We measure our historical loss period based on the average days to recognize accounts receivable as credit losses. When asset specific characteristics and current conditions change from those in the historical period, due to changes in our credit and collections strategy, certain classes of aged balances, or credit loss and recovery policies, we perform a qualitative and quantitative assessment to adjust our historical loss rate. We use regression analysis to develop an expected loss rate using historical experience and economic data over a forecast period. We measure our forecast period based on the average days to collect payment on billed accounts receivable. To determine our current allowance for credit losses, we combine the historical and expected credit loss rates and apply them to our period end accounts receivable. In conjunction with our internal reorganization, as referenced in Note 11—Segment Information, we pooled certain assets with similar credit risk characteristics based on the nature of our customers, their industry, policies used to grant credit terms and their historical and expected credit loss patterns. Additionally, we reassessed our historical loss period for the segment portfolio reorganization. If there is a deterioration of a customer's financial condition or if future default rates in general differ from currently anticipated default rates (including changes caused by COVID-19), we may need to adjust the allowance for credit losses, which would affect earnings in the period that adjustments are made. The assessment of the correlation between historical observed default rates, current conditions and forecasted economic conditions requires judgment. Alternative interpretations of these factors could have resulted in different conclusions regarding the allowance for credit losses. The amount of credit loss is sensitive to changes in circumstances and forecasted economic conditions. Our historical credit loss experience, current conditions and forecast of economic conditions may also not be representative of the customers' actual default experience in the future. The following table presents the activity of our allowance for credit losses by accounts receivable portfolio: Business Mass Markets Total (Dollars in millions) Beginning balance at January 1, 2021 (1) $ 109 82 191 Provision for expected losses 13 14 27 Write-offs charged against the allowance (19) (48) (67) Recoveries collected 5 6 11 Ending balance at March 31, 2021 $ 108 54 162 ______________________________________________________________________ (1) As described in Note 11—Segment Information, we completed an internal reorganization in January 2021. As a result of this change, allowance for credit losses previously included in the Consumer and Business portfolio of $70 million related to consumer and $12 million related to our small business group, respectively, were reclassified to the Mass Markets allowance for credit losses on January 1, 2021. For the three months ended March 31, 2021, we decreased our allowance for credit losses for our business and mass markets accounts receivable portfolios primarily due to higher write-off activity in the quarter with the easing of prior delays due to COVID-19 related restrictions in 2020. |
Long-Term Debt and Credit Facil
Long-Term Debt and Credit Facilities | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Credit Facilities | Long-Term Debt and Credit Facilities The following chart reflects the consolidated long-term debt of Lumen Technologies and its subsidiaries, including unamortized discounts and premiums, net and unamortized debt issuance costs, but excluding intercompany debt: Interest Rates (1) Maturities (1) March 31, 2021 December 31, 2020 (Dollars in millions) Senior Secured Debt: (2) Lumen Technologies, Inc. Revolving Credit Facility LIBOR + 2.00% 2025 $ — 150 Term Loan A (3) LIBOR + 2.00% 2025 1,094 1,108 Term Loan A-1 (3) LIBOR + 2.00% 2025 312 316 Term Loan B (4) LIBOR + 2.25% 2027 4,938 4,950 Senior notes 4.000% 2027 1,250 1,250 Subsidiaries: Level 3 Financing, Inc. Tranche B 2027 Term Loan (5) LIBOR + 1.75% 2027 3,111 3,111 Senior notes 3.400% - 3.875% 2027 - 2029 1,500 1,500 Embarq Corporation subsidiaries First mortgage bonds 7.125% - 8.375% 2023 - 2025 138 138 Senior Notes and Other Debt: Lumen Technologies, Inc. Senior notes 4.500% - 7.650% 2021 - 2042 8,645 8,645 Subsidiaries: Level 3 Financing, Inc. Senior notes 3.625% - 5.375% 2025 - 2029 5,515 5,515 Qwest Corporation Senior notes 6.500% - 7.750% 2021 - 2057 2,935 3,170 Term Loan (6) LIBOR + 2.00% 2027 215 215 Qwest Capital Funding, Inc. Senior notes 6.875% - 7.750% 2021 - 2031 352 352 Embarq Corporation and subsidiary Senior note 7.995% 2036 1,437 1,437 Finance lease and other obligations Various Various 327 295 Unamortized discounts, net (96) (78) Unamortized debt issuance costs (233) (237) Total long-term debt 31,440 31,837 Less current maturities (3,841) (2,427) Long-term debt, excluding current maturities $ 27,599 29,410 ______________________________________________________________________ (1) As of March 31, 2021. (2) See Note 6—Long-Term Debt and Credit Facilities in our Annual Report on Form 10-K for the year ended December 31, 2020 for a description of certain parent or subsidiary guarantees and liens securing this debt. (3) Term Loans A and A-1 had interest rates of 2.109% and 2.147% as of March 31, 2021 and December 31, 2020, respectively. (4) Term Loan B had interest rates of 2.359% and 2.397% as of March 31, 2021 and December 31, 2020, respectively. (5) The Tranche B 2027 Term Loan had interest rates of 1.859% and 1.897% as of March 31, 2021 and December 31, 2020, respectively. (6) Qwest Corporation Term Loan had interest rates of 2.110% and 2.150% as of March 31, 2021 and December 31, 2020, respectively. Long-Term Debt Maturities Set forth below is the aggregate principal amount of our long-term debt as of March 31, 2021 (excluding unamortized discounts, net, and unamortized debt issuance costs), maturing during the following years: (Dollars in millions) 2021 (remaining nine months) $ 2,410 2022 1,541 2023 966 2024 1,143 2025 2,907 2026 and thereafter 22,802 Total long-term debt $ 31,769 Repayments During the three months ended March 31, 2021, Lumen Technologies and its affiliates repaid or redeemed approximately $1.3 billion of their respective debt obligations, which primarily included $150 million of payments on our revolving credit facility, $900 million redemption of Level 3 Financing, Inc. senior notes and $235 million redemption of Qwest Corporation senior notes. These redemptions resulted in a net gain of $8 million. New Issuances On January 13, 2021, Level 3 Financing, Inc. issued $900 million aggregate principal amount of 3.750% Sustainability-Linked Senior Notes due 2029 (the "Sustainability-Linked Notes"). The net proceeds were used, together with cash on hand, to redeem certain of its outstanding senior note indebtedness. See "—Repayments" above. The Sustainability-Linked Notes are (i) guaranteed by Level 3 Parent, LLC and (ii) expected to be guaranteed by Level 3 Communications, LLC, upon the receipt of all requisite material governmental authorizations. Covenants Certain of our debt instruments contain affirmative and negative covenants. Debt at Lumen Technologies, Inc. and Level 3 Financing, Inc. contain more extensive covenants including, among other things and subject to certain exceptions, restrictions on their ability to declare or pay dividends, repay certain other indebtedness, create liens, incur additional indebtedness, make investments, engage in transactions with their affiliates, dispose of assets and merge or consolidate with any other person. Also, Lumen Technologies, Inc. and certain of its affiliates will be required to offer to purchase certain of their respective outstanding debt under certain circumstances in connection with certain specified "change of control" transactions. Certain of our debt instruments contain cross-payment default or cross-acceleration provisions. Compliance As of March 31, 2021, Lumen Technologies, Inc. believes it and its subsidiaries were in compliance with the provisions and financial covenants in their respective material debt agreements in all material respects. |
Severance
Severance | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Severance | SeverancePeriodically, we reduce our workforce and accrue liabilities for the related severance costs. These workforce reductions result 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. Changes in our accrued liabilities for severance expenses were as follows: Severance (Dollars in millions) Balance at December 31, 2020 $ 103 Accrued to expense — Payments, net (25) Balance at March 31, 2021 $ 78 |
Employee Benefits
Employee Benefits | 3 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
Employee Benefits | Employee Benefits For detailed description of the various defined benefit pension plans (qualified and non-qualified) and post-retirement benefits plans we sponsor, see Note 10—Employee Benefits to the consolidated financial statements and accompanying notes in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2020. Net periodic benefit income for the Lumen Combined Pension Plan ("Combined Pension Plan") includes the following components: Combined Pension Plan Three Months Ended March 31, 2021 2020 (Dollars in millions) Service cost $ 13 16 Interest cost 50 82 Expected return on plan assets (138) (149) Recognition of prior service credit (2) (3) Recognition of actuarial loss 49 50 Net periodic pension benefit income $ (28) (4) Net periodic benefit expense for our post-retirement benefit plans includes the following components: Post-Retirement Benefit Plans Three Months Ended March 31, 2021 2020 (Dollars in millions) Service cost $ 4 4 Interest cost 12 20 Recognition of prior service cost 4 4 Recognition of actuarial loss 1 — Net periodic post-retirement benefit expense $ 21 28 Service costs are included in the cost of services and products and selling, general and administrative line items on the consolidated statements of operations and all other costs listed above are included in other income (expense), net on the consolidated statements of operations. |
Earnings Per Common Share
Earnings Per Common Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | Earnings Per Common Share Basic and diluted earnings per common share were calculated as follows: Three Months Ended March 31, 2021 2020 (Dollars in millions, except per share amounts, shares in thousands) Income (Numerator): Net income $ 475 314 Net income applicable to common stock for computing basic earnings per common share 475 314 Net income as adjusted for purposes of computing diluted earnings per common share $ 475 314 Shares (Denominator): Weighted-average number of shares: Outstanding during period 1,100,350 1,092,970 Non-vested restricted stock (17,876) (17,511) Weighted-average shares outstanding for computing basic earnings per common share 1,082,474 1,075,459 Incremental common shares attributable to dilutive securities: Shares issuable under convertible securities 10 10 Shares issuable under incentive compensation plans 9,102 6,285 Number of shares as adjusted for purposes of computing diluted earnings per common share 1,091,586 1,081,754 Basic earnings per common share $ 0.44 0.29 Diluted earnings per common share $ 0.44 0.29 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 were less than 1 million for the three months ended March 31, 2021 and 2.7 million for the three months ended March 31, 2020. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial InstrumentsOur financial instruments consist of cash, cash equivalents and restricted cash, accounts receivable, accounts payable, long-term debt, excluding finance lease and other obligations, and interest rate swap contracts. Due to their short-term nature, the carrying amounts of our cash, cash equivalents and restricted cash, accounts receivable and accounts payable approximate their fair values. The three input levels in the hierarchy of fair value measurements 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 financial liabilities as of March 31, 2021 and December 31, 2020: March 31, 2021 December 31, 2020 Input Carrying Fair Carrying Fair (Dollars in millions) Long-term debt, excluding finance lease and other obligations 2 $ 31,113 32,441 31,542 33,217 Interest rate swap contracts (see Note 10) 2 $ 87 87 107 107 |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments From time to time, we use derivative financial instruments, primarily interest rate swaps, to manage our exposure to fluctuations in interest rates. Our primary objective in managing interest rate risk is to decrease the volatility of our earnings and cash flows affected by changes in the underlying rates. We have floating rate long-term debt (see Note 5—Long-Term Debt and Credit Facilities of this report). These obligations expose us to variability in interest payments due to changes in interest rates. If interest rates increase, interest expense increases. Conversely, if interest rates decrease, interest expense also decreases. We have designated our currently outstanding interest rate swap agreements as cash flow hedges. As described further below, under these hedges, we receive variable-rate amounts from a counterparty in exchange for us making fixed-rate payments over the lives of the agreements without exchange of the underlying notional amount. The change in the fair value of the interest rate swap agreements is reflected in accumulated other comprehensive income ("AOCI") and, as described below, is subsequently reclassified into earnings in the period that the hedged transaction affects earnings by virtue of qualifying as effective cash flow hedges. We do not use derivative financial instruments for speculative purposes. As of March 31, 2021 and December 31, 2020, we evaluated the effectiveness of our hedges quantitatively and any hedges we had entered into at the time qualified as effective hedge relationships. We may be exposed to credit-related losses in the event of non-performance by counterparties. The counterparties to any of the financial derivatives we enter into are major institutions with investment grade credit ratings. We evaluate counterparty credit risk before entering into any hedge transaction and continue to closely monitor the financial market and the risk that our counterparties will default on their obligations as part of our quarterly qualitative effectiveness evaluation. Amounts accumulated in AOCI related to derivatives are indirectly recognized in earnings as periodic settlement payments are made throughout the term of the swaps. The table below presents the fair value of our derivative financial instruments as well as their classification on the consolidated balance sheet at March 31, 2021 and December 31, 2020, as follows (in millions): March 31, 2021 December 31, 2020 Derivatives designated as Balance Sheet Location Fair Value Cash flow hedging contracts Other current and noncurrent liabilities $ 87 107 The amount of unrealized (gains) losses recognized in AOCI consists of the following (in millions): Derivatives designated as hedging instruments 2021 2020 Cash flow hedging contracts Three Months Ended March 31, $ — 106 The amount of realized losses reclassified from AOCI to the statement of operations consists of the following (in millions): Derivatives designated as hedging instruments 2021 2020 Cash flow hedging contracts Three Months Ended March 31, $ 20 5 |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Jeff Storey, our chief operating decision maker ("CODM"), made changes to our segment and customer-facing sales channel reporting categories beginning in 2021 to align with operational changes designed to better support our customers. Following these changes, we now report two segments: Business and Mass Markets. The Business segment includes four sales channels: International and Global Accounts, Large Enterprise, Mid-Market Enterprise and Wholesale. These changes also include both the creation of new product categories and the realignment of products and services within previously reported product categories to better reflect product life cycles and our go-to-market approach. For Business segment revenue, we report the following product categories: Compute and Application Services, IP and Data Services, Fiber Infrastructure Services and Voice and Other, by the sales channels outlined above. For Mass Markets segment revenue, we report the following product categories: Consumer Broadband, SBG Broadband, Voice and Other and CAF II. See detailed descriptions of these product and service categories in Note 3—Revenue Recognition. As described in more detail below, our segments are managed based on the direct costs of providing services to their customers and the associated selling, general and administrative costs (primarily salaries and commissions). Shared costs are managed separately and included in "Operations and Other" in the tables below. As referenced above, we reclassified certain prior period amounts to conform to the current period presentation. See Note 1— Background for additional detail on these changes. At March 31, 2021, we had the following two reportable segments: • Business Segment: Under our Business segment, we provide our products and services under four distinct sales channels to meet the needs of our enterprise and commercial customers; and • Mass Markets Segment: Under our Mass Markets segment, we provide products and services to consumer and small business customers. The following tables summarize our segment results for the three months ended March 31, 2021 and 2020, based on the segment categorization we were operating under at March 31, 2021. Three Months Ended March 31, 2021 Business Mass Markets Total Segments Operations and Other Total (Dollars in millions) Revenue $ 3,595 1,434 5,029 — 5,029 Expenses: Cost of services and products 881 43 924 1,212 2,136 Selling, general and administrative 306 133 439 317 756 Less: share-based compensation — — — (20) (20) Total expense 1,187 176 1,363 1,509 2,872 Total adjusted EBITDA $ 2,408 1,258 3,666 (1,509) 2,157 Three Months Ended March 31, 2020 Business Mass Markets Total Segments Operations and Other Total (Dollars in millions) Revenue $ 3,737 1,491 5,228 — 5,228 Expenses: Cost of services and products 907 49 956 1,279 2,235 Selling, general and administrative 342 140 482 371 853 Less: share-based compensation — — — (69) (69) Total expense 1,249 189 1,438 1,581 3,019 Total adjusted EBITDA $ 2,488 1,302 3,790 (1,581) 2,209 Revenue and Expenses Our segment revenue includes all revenue from our two segments as described in more detail above. Our segment revenue is based upon each customer's classification. We report our segment revenue based upon all services provided to that segment's customers. Our segment expenses include specific cost of service expenses incurred as a direct result of providing services and products to segment customers, along with selling, general and administrative expenses that are directly associated with specific segment customers or activities. The following items are excluded from our segment results, because they are centrally managed and not monitored by or reported to our CODM by segment: • network expenses not incurred as a direct result of providing services and products to segment customers; • centrally managed expenses such as Operations, Finance, Human Resources, Legal, Marketing, Product Management and IT, which are reported as "Operations and Other"; • depreciation and amortization expense or impairments; • interest expense, because we manage our financing on a consolidated basis and have not allocated assets or debt to specific segments; • stock-based compensation; and • other income and expense items are not monitored as a part of our segment operations. The following table reconciles total segment adjusted EBITDA to net income (loss): Three Months Ended March 31, 2021 2020 (Dollars in millions) Total segment adjusted EBITDA $ 3,666 3,790 Depreciation and amortization (1,150) (1,160) Other operating expenses (1,509) (1,581) Stock-based compensation (20) (69) Operating income 987 980 Total other expense, net (355) (547) Income before income taxes 632 433 Income tax expense 157 119 Net income $ 475 314 |
Commitments and Contingencies a
Commitments and Contingencies and Other Items | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies and Other Items | Commitments, Contingencies and Other Items We are subject to various claims, legal proceedings and other contingent liabilities, including the matters described below, which individually or in the aggregate could materially affect our financial condition, future results of operations or cash flows. As a matter of course, we are prepared to both litigate these matters to judgment as needed, as well as to evaluate and consider reasonable settlement opportunities. Irrespective of its merits, litigation may be both lengthy and disruptive to our operations and could cause significant expenditure and diversion of management attention. We review our litigation accrual liabilities on a quarterly basis, but in accordance with applicable accounting guidelines only establish accrual liabilities when losses are deemed probable and reasonably estimable and only revise previously-established accrual liabilities when warranted by changes in circumstances, in each case based on then-available information. As such, as of any given date we could have exposure to losses under proceedings as to which no liability has been accrued or as to which the accrued liability is inadequate. Amounts accrued for our litigation and non-income tax contingencies at March 31, 2021 aggregated to approximately $119 million and are included in other current liabilities and other liabilities in our consolidated balance sheet as of such date. The establishment of an accrual does not mean that actual funds have been set aside to satisfy a given contingency. Thus, the resolution of a particular contingency for the amount accrued could have no effect on our results of operations but nonetheless could have an adverse effect on our cash flows. 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. Principal Proceedings Shareholder Class Action Suit Lumen and certain Lumen Board of Directors members and officers were named as defendants in a putative shareholder class action lawsuit filed on June 12, 2018 in the Boulder County District Court of the state of Colorado, captioned Houser et al. v. CenturyLink, et al. The complaint asserts claims on behalf of a putative class of former Level 3 shareholders who became CenturyLink, Inc. shareholders as a result of our acquisition of Level 3. It alleges that the proxy statement provided to the Level 3 shareholders failed to disclose various material information of several kinds, including information about strategic revenue, customer loss rates, and customer account issues, among other items. The complaint seeks damages, costs and fees, rescission, rescissory damages, and other equitable relief. In May 2020, the court dismissed the complaint. Plaintiffs appealed that decision, and the appeal is pending. State Tax Suits Since 2012, a number of Missouri municipalities have asserted claims in the Circuit Court of St. Louis County, Missouri, alleging that we and several of our subsidiaries have underpaid taxes. These municipalities are seeking, among other things, declaratory relief regarding the application of business license and gross receipts taxes and back taxes from 2007 to the present, plus penalties and interest. In a February 2017 ruling in connection with one of these pending cases, the court entered an order awarding plaintiffs $4 million and broadening the tax base on a going-forward basis. We appealed that decision to the Missouri Supreme Court. In December 2019, it affirmed the circuit court's order in some respects and reversed it in others, remanding the case to the circuit court for further proceedings. The Missouri Supreme Court's decision reduced our exposure in the case. In a June 2017 ruling in connection with another one of these pending cases, the circuit court made findings in a non-final ruling which, if not overturned or modified in light of the Missouri Supreme Court's decision, will result in a tax liability to us well in excess of the contingent liability we have established. The circuit court has indicated it does not intend to alter its 2017 ruling when it issues its final decision. Once a final decision is issued, we will have the right to pursue an appeal. We continue to vigorously defend against these claims. Billing Practices Suits In June 2017, a former employee filed an employment lawsuit against us claiming that she was wrongfully terminated for alleging that we charged some of our retail customers for products and services they did not authorize. Thereafter, based in part on the allegations made by the former employee, several legal proceedings were filed, including consumer class actions in federal and state courts, a series of securities investor class actions in federal courts and several shareholder derivative actions in federal and Louisiana state courts. The derivative cases were brought on behalf of CenturyLink, Inc. against certain current and former officers and directors of the Company and seek damages for alleged breaches of fiduciary duties. The consumer class actions, the securities investor class actions, and the federal derivative actions were transferred to the U.S. District Court for the District of Minnesota for coordinated and consolidated pretrial proceedings as In Re: CenturyLink Sales Practices and Securities Litigation. We have settled the consumer and securities investor class actions. The consumer class settlement was approved by the Court and is final. Approximately 12,000 potential class members elected to opt out of the consumer class settlement, and we have settled the claims of approximately 11,000 such class members asserted by one law firm subject to certain conditions. The securities investors class settlement entails a payment of $55 million, which we expect to be paid by our insurers. That settlement has received preliminary court approval and is subject to certain conditions including final approval by the Court. The derivative actions remain pending. We have engaged in discussions regarding related claims with a number of state attorneys general, and have entered into agreements settling certain of the consumer practices claims asserted by state attorneys general. While we do not agree with allegations raised in these matters, we have been willing to consider reasonable settlements where appropriate. Peruvian Tax Litigation In 2005, the Peruvian tax authorities ("SUNAT") issued tax assessments against one of our Peruvian subsidiaries asserting $26 million, of additional income tax withholding and value-added taxes ("VAT"), penalties and interest for calendar years 2001 and 2002 on the basis that the Peruvian subsidiary incorrectly documented its importations. After taking into account the developments described below, as well as the accrued interest and foreign exchange effects, we believe the total amount of our exposure is $1 million at March 31, 2021. We challenged the assessments via administrative and then judicial review processes. In October 2011, the highest administrative review tribunal (the Tribunal) decided the central issue underlying the 2002 assessments in SUNAT's favor. We appealed the Tribunal's decision to the first judicial level, which decided the central issue in favor of Level 3. SUNAT and we filed cross-appeals with the court of appeal. In May 2017, the court of appeal issued a decision reversing the first judicial level. In June 2017, we filed an appeal of the decision to the Supreme Court of Justice, the final judicial level. Oral argument was held before the Supreme Court of Justice in October 2018. A decision on this case is pending. In October 2013, the Tribunal decided the central issue underlying the 2001 assessments in SUNAT’s favor. We appealed that decision to the first judicial level in Peru, which decided the central issue in favor of SUNAT. In June 2017, we filed an appeal with the court of appeal. In November 2017, the court of appeals issued a decision affirming the first judicial level and we filed an appeal of the decision to the Supreme Court of Justice. Oral argument was held before the Supreme Court of Justice in June 2019. A decision on this case is pending. Brazilian Tax Claims The São Paulo and Rio de Janeiro state tax authorities have issued tax assessments against our Brazilian subsidiaries for the Tax on Distribution of Goods and Services (“ICMS”), mainly with respect to revenue from leasing certain assets and revenue from the provision of Internet access services by treating such activities as the provision of communications services, to which the ICMS tax applies. We filed objections to these assessments in both states, arguing, among other things that neither the lease of assets nor the provision of Internet access qualifies as “communication services” subject to ICMS. We have appealed to the respective state judicial courts the decisions by the respective state administrative courts that rejected our objections to these assessments. In cases in which state lower courts ruled partially in our favor finding that the lease assets are not subject to ICMS, the State appealed those rulings. In other cases, the assessment was affirmed at the first administrative level and we have appealed to the second administrative level. Other assessments are still pending state judicial decisions. We are vigorously contesting all such assessments in both states and view the assessment of ICMS on revenue from equipment leasing and Internet access to be without merit. These assessments, if upheld, could result in a loss of $12 million to as high as $49 million as of March 31, 2021, in excess of the reserved accruals established for these matters. Qui Tam Action Level 3 was notified in late 2017 of a qui tam action pending against Level 3 Communications, Inc. and others in the U.S. District Court for the Eastern District of Virginia, captioned United States of America ex rel., Stephen Bishop v. Level 3 Communications, Inc. et al. The original qui tam complaint and an amended complaint were filed under seal on November 26, 2013 and June 16, 2014, respectively. The court unsealed the complaints on October 26, 2017. The amended complaint alleges that Level 3, principally through two former employees, submitted false claims and made false statements to the government in connection with two government contracts. The relator seeks damages in this lawsuit of approximately $50 million, subject to trebling, plus statutory penalties, pre-and-post judgment interest, and attorney’s fees. The case is currently stayed. Level 3 is evaluating its defenses to the claims. If, contrary to our expectations, the plaintiff obtains an award of the approximate magnitude he has claimed, the award would significantly exceed the reserve we have accrued for the matter. Such an outcome could have a material adverse effect on our results of operations in the period in which a liability is recognized and on our cash flows for the period in which any damages are paid. Several people, including two former Level 3 employees, were indicted in the U.S. District Court for the Eastern District of Virginia on October 3, 2017, and charged with, among other things, accepting kickbacks from a subcontractor, who was also indicted, for work to be performed under a prime government contract. Of the two former employees, one entered into a plea agreement, and the other is deceased. Level 3 is fully cooperating in the government’s investigations in this matter. Other Proceedings, Disputes and Contingencies From time to time, we are involved in other proceedings incidental to our business, including patent infringement allegations, regulatory hearings 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 during 2021 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 $300,000 in fines and penalties. The outcome of these other proceedings described under this heading 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 us. The matters listed above in this Note do not reflect all of our contingencies. For additional information on our contingencies, see Note 17—Commitments, Contingencies and Other Items to the consolidated financial statements and accompanying notes in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2020. The ultimate outcome of the above-described matters may differ materially from the outcomes anticipated, estimated, projected or implied by us in certain of our statements appearing above in this Note, and proceedings currently viewed as immaterial by us may ultimately materially impact us. |
Other Financial Information
Other Financial Information | 3 Months Ended |
Mar. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Financial Information | Other Financial Information Other Current Assets The following table presents details of other current assets reflected in our consolidated balance sheets: March 31, 2021 December 31, 2020 (Dollars in millions) Prepaid expenses $ 403 290 Income tax receivable 6 7 Materials, supplies and inventory 100 105 Contract assets 64 66 Contract acquisition costs 170 173 Contract fulfillment costs 115 114 Other 66 53 Total other current assets $ 924 808 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Information Relating to 2021 The table below summarizes changes in accumulated other comprehensive loss recorded on our consolidated balance sheet by component for the three months ended March 31, 2021: Pension Plans Post-Retirement Foreign Currency Interest Rate Swap Total (Dollars in millions) Balance at December 31, 2020 $ (2,197) (272) (265) (79) (2,813) Other comprehensive loss before reclassifications — — (86) — (86) Amounts reclassified from accumulated other comprehensive loss 35 4 — 15 54 Net current-period other comprehensive income (loss) 35 4 (86) 15 (32) Balance at March 31, 2021 $ (2,162) (268) (351) (64) (2,845) The tables below present further information about our reclassifications out of accumulated other comprehensive loss by component for the three months ended March 31, 2021: Three Months Ended March 31, 2021 Decrease (Increase) Affected Line Item in Consolidated Statement of Operations (Dollars in millions) Interest rate swaps $ 20 Interest expense Income tax benefit (5) Income tax expense Net of tax $ 15 Amortization of pension & post-retirement plans (1) Net actuarial loss $ 50 Other income (expense), net Prior service cost 2 Other income (expense), net Total before tax 52 Income tax benefit (13) Income tax expense Net of tax $ 39 (1) See Note 7—Employee Benefits for additional information on our net periodic benefit (income) expense related to our pension and post-retirement plans. Information Relating to 2020 The table below summarizes changes in accumulated other comprehensive loss recorded on our consolidated balance sheets by component for the three months ended March 31, 2020 : Pension Plans Post-Retirement Foreign Currency Interest Rate Swap Total (Dollars in millions) Balance at December 31, 2019 $ (2,229) (184) (228) (39) (2,680) Other comprehensive loss before reclassifications — — (239) (80) (319) Amounts reclassified from accumulated other comprehensive loss 36 3 — 5 44 Net current-period other comprehensive income (loss) 36 3 (239) (75) (275) Balance at March 31, 2020 $ (2,193) (181) (467) (114) (2,955) The tables below present further information about our reclassifications out of accumulated other comprehensive loss by component for the three months ended March 31, 2020: Three Months Ended March 31, 2020 Decrease (Increase) Affected Line Item in Consolidated Statement of Operations (Dollars in millions) Interest rate swaps $ 5 Interest expense Income tax expense — Income tax expense Net of tax $ 5 Amortization of pension & post-retirement plans (1) Net actuarial loss $ 50 Other income (expense), net Prior service cost 1 Other income (expense), net Total before tax 51 Income tax benefit (12) Income tax expense Net of tax $ 39 (1) See Note 7—Employee Benefits for additional information on our net periodic benefit (expense) income related to our pension and post-retirement plans. |
Labor Union Contracts
Labor Union Contracts | 3 Months Ended |
Mar. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
Labor Union Contracts | Labor Union ContractsAs of March 31, 2021, approximately, 23% of our employees were represented by the Communication Workers of America ("CWA") or the International Brotherhood of Electrical Workers ("IBEW"). Approximately 4% of our union-represented employees were subject to collective bargaining agreements that expired as of March 31, 2021 and are currently being renegotiated. Approximately 10% of our represented employees are subject to collective bargaining agreements that are scheduled to expire over the 12 month period ending March 31, 2022. |
Background (Policies)
Background (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Our consolidated balance sheet as of December 31, 2020, which was derived from our audited consolidated financial statements, and our unaudited interim consolidated financial statements provided herein have been prepared in accordance with the instructions for Form 10-Q. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to rules and regulations of the SEC. However, in our opinion, the disclosures made therein are adequate to make the information presented not misleading. We believe that these consolidated financial statements include all normal recurring adjustments necessary to fairly present the results for the interim periods. The consolidated results of operations and cash flows for the first three months of the year are not necessarily indicative of the consolidated results of operations and cash flows that might be expected for the entire year. These consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020. The accompanying consolidated financial statements include our accounts and the accounts of our subsidiaries in which we have a controlling interest. 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 (expense), 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 revenue and expenses in our segment reporting. See Note 11—Segment Information for additional information. These changes had no impact on total operating revenue, total operating expenses or net income (loss) for any period. |
Operating Leases | Operating lease assets are included in other, net under goodwill and other assets on our consolidated balance sheets. Noncurrent operating lease liabilities are included in other under deferred credits and other liabilities on our consolidated balance sheets. |
Operating Lease Income | Operating Lease Income Lumen Technologies leases various dark fiber, office facilities, colocation facilities, switching facilities, other network sites and service equipment to third parties under operating leases. Lease and sublease income are included in operating revenue in our consolidated statements of operations. |
Recently Adopted and Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements Debt On January 1, 2021, we adopted ASU 2020-09, " Debt (Topic 470) Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762 " ("ASU 2020-09"). This ASU amends and supersedes various SEC paragraphs to reflect SEC Release No. 33-10762, which includes amendments to the financial disclosure requirements applicable to registered debt offerings that include credit enhancements, such as subsidiary guarantees. The adoption of ASU 2020-09 did not have a material impact to our consolidated financial statements. Investments On January 1, 2021, we adopted ASU 2020-01, " Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815) " ("ASU 2020-01"). This ASU, among other things, clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments - Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. As of March 31, 2021, we determined there was no application or discontinuation of the equity method during the reporting periods. The adoption of ASU 2020-01 did not have a material impact to our consolidated financial statements. Income taxes On January 1, 2021, we adopted ASU 2019-12, " Simplifying the Accounting for Income Taxes (Topic 740) " ("ASU 2019-12"). This ASU removes certain exceptions for investments, intra-period allocations and interim calculations, and adds guidance to reduce complexity in accounting for income taxes. The adoption of ASU 2019-12 did not have a material impact to our consolidated financial statements. Measurement of Credit Losses on Financial Instruments We adopted ASU 2016-13, " Measurement of Credit Losses on Financial Instruments " ("ASU 2016-13") on January 1, 2020 and recognized a cumulative adjustment to our accumulated deficit as of the date of adoption of $9 million, net of tax effect of $2 million. Please refer to Note 4—Credit Losses on Financial Instruments for more information. Recently Issued Accounting Pronouncements In January 2021, the FASB issued ASU 2021-01, " Reference Rate Reform (Topic 848)" Scope " ("ASU 2021-01"), which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU 2021-01 also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. ASU 2021-01 provides option guidance for a limited time to ease the potential burden in accounting for reference rate reform. As of March 31, 2021, we are currently evaluating our contracts and the optional expedients provided by the new standard. In March 2020, the FASB issued ASU 2020-04, " Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting " ("ASU 2020-04"), designed to ease the burden of accounting for contract modifications related to the global market-wide reference rate transition period. Subject to certain criteria, ASU 2020-04 provides qualifying entities the option to apply expedients and exceptions to contract modifications and hedging accounting relationships made until December 31, 2022. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. ASU 2020-04 provides optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. As of March 31, 2021, we are evaluating the existing contracts and the impact on consolidated financial statements. |
Goodwill, Customer Relationsh_2
Goodwill, Customer Relationships and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | Goodwill, customer relationships and other intangible assets consisted of the following: March 31, 2021 December 31, 2020 (Dollars in millions) Goodwill $ 18,854 18,870 Indefinite-life intangible assets $ 9 278 Other intangible assets subject to amortization: Customer relationships, less accumulated amortization of $11,356 and $11,060 6,035 6,344 Capitalized software, less accumulated amortization of $3,366 and $3,279 1,509 1,520 Trade names, patents and other, less accumulated amortization of $134 and $120 331 77 Total other intangible assets, net $ 7,884 8,219 |
Schedule of Goodwill | The following table shows the rollforward of goodwill assigned to our reportable segments, including the reorganization, from December 31, 2020 through March 31, 2021: International and Global Accounts Enterprise Small and Medium Business Wholesale Consumer Business Mass Markets Total (Dollars in millions) As of December 31, 2020 (1) $ 2,555 4,738 2,808 3,114 5,655 — — 18,870 January 2021 reorganization (2,555) (4,738) (2,808) (3,114) (5,655) 12,173 6,697 — Effect of foreign currency exchange rate change and other — — — — — (16) — (16) As of March 31, 2021 (1) $ — — — — — 12,157 6,697 18,854 ______________________________________________________________________ (1) Goodwill at March 31, 2021 and December 31, 2020 is net of accumulated impairment losses of $12.9 billion. |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | We estimate that total amortization expense for intangible assets for the years ending December 31, 2021 through 2025 will be as follows: (Dollars in millions) 2021 (remaining nine months) $ 893 2022 1,081 2023 985 2024 887 2025 797 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue | The following table provides total revenue by segment, sales channel and product category. It also provides the amount of revenue that is not subject to ASC 606, " Revenue from Contracts with Customers " ("ASC 606"), but is instead governed by other accounting standards: Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Total revenue Adjustments for non-ASC 606 revenue (1) Total revenue from contracts with customers Total revenue Adjustments for non-ASC 606 revenue (1) Total revenue from contracts with customers (Dollars in millions) Business Segment by Sales Channel and Product Category International and Global Accounts ("IGAM") Compute and Application Services $ 179 (69) 110 201 (69) 132 IP and Data Services 427 — 427 437 — 437 Fiber Infrastructure Services 216 (30) 186 202 (26) 176 Voice and Other 191 — 191 201 — 201 Total IGAM Revenue 1,013 (99) 914 1,041 (95) 946 Large Enterprise Compute and Application Services 165 (15) 150 154 (17) 137 IP and Data Services 395 — 395 401 — 401 Fiber Infrastructure Services 124 (15) 109 138 (10) 128 Voice and Other 253 — 253 273 — 273 Total Large Enterprise Revenue 937 (30) 907 966 (27) 939 Mid-Market Enterprise Compute and Application Services 36 (8) 28 34 (8) 26 IP and Data Services 453 (1) 452 466 (1) 465 Fiber Infrastructure Services 60 (2) 58 54 (4) 50 Voice and Other 167 — 167 207 — 207 Total Mid-Market Enterprise Revenue 716 (11) 705 761 (13) 748 Wholesale Compute and Application Services 48 (40) 8 46 (40) 6 IP and Data Services 305 — 305 318 — 318 Fiber Infrastructure Services 154 (31) 123 153 (30) 123 Voice and Other 422 (63) 359 452 (68) 384 Total Wholesale Revenue 929 (134) 795 969 (138) 831 Business Segment by Product Category Compute and Application Services 428 (132) 296 435 (134) 301 IP and Data Services 1,580 (1) 1,579 1,622 (1) 1,621 Fiber Infrastructure Services 554 (78) 476 547 (70) 477 Voice and Other 1,033 (63) 970 1,133 (68) 1,065 Total Business Segment Revenue $ 3,595 (274) 3,321 3,737 (273) 3,464 Mass Markets Segment by Product Category Consumer Broadband $ 731 (52) 679 722 (53) 669 SBG Broadband 39 (4) 35 39 (3) 36 Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Total revenue Adjustments for non-ASC 606 revenue (1) Total revenue from contracts with customers Total revenue Adjustments for non-ASC 606 revenue (1) Total revenue from contracts with customers (Dollars in millions) Voice and Other 541 (21) 520 607 (29) 578 CAF II 123 (123) — 123 (123) — Total Mass Markets Segment $ 1,434 (200) 1,234 1,491 (208) 1,283 Total revenue $ 5,029 (474) 4,555 5,228 (481) 4,747 _____________________________________________________________________ (1) Includes regulatory revenue and lease revenue not within the scope of ASC 606. |
Contract with Customer, Asset and Liability | The following table provides balances of customer receivables, contract assets and contract liabilities as of March 31, 2021 and December 31, 2020: March 31, 2021 December 31, 2020 (Dollars in millions) Customer receivables (1) $ 1,805 1,889 Contract assets 103 108 Contract liabilities 883 950 ______________________________________________________________________ |
Capitalized Contract Cost | The following table provides changes in our contract acquisition costs and fulfillment costs: Three Months Ended March 31, 2021 Acquisition Costs Fulfillment Costs (Dollars in millions) Beginning of period balance $ 289 216 Costs incurred 44 37 Amortization (54) (37) End of period balance $ 279 216 Three Months Ended March 31, 2020 Acquisition Costs Fulfillment Costs (Dollars in millions) Beginning of period balance $ 326 221 Costs incurred 49 36 Amortization (55) (37) End of period balance $ 320 220 |
Credit Losses on Financial In_2
Credit Losses on Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Credit Loss [Abstract] | |
Financing Receivable, Allowance for Credit Loss | The following table presents the activity of our allowance for credit losses by accounts receivable portfolio: Business Mass Markets Total (Dollars in millions) Beginning balance at January 1, 2021 (1) $ 109 82 191 Provision for expected losses 13 14 27 Write-offs charged against the allowance (19) (48) (67) Recoveries collected 5 6 11 Ending balance at March 31, 2021 $ 108 54 162 ______________________________________________________________________ (1) As described in Note 11—Segment Information, we completed an internal reorganization in January 2021. As a result of this change, allowance for credit losses previously included in the Consumer and Business portfolio of $70 million related to consumer and $12 million related to our small business group, respectively, were reclassified to the Mass Markets allowance for credit losses on January 1, 2021. |
Long-Term Debt and Credit Fac_2
Long-Term Debt and Credit Facilities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Including Unamortized Discounts and Premiums | The following chart reflects the consolidated long-term debt of Lumen Technologies and its subsidiaries, including unamortized discounts and premiums, net and unamortized debt issuance costs, but excluding intercompany debt: Interest Rates (1) Maturities (1) March 31, 2021 December 31, 2020 (Dollars in millions) Senior Secured Debt: (2) Lumen Technologies, Inc. Revolving Credit Facility LIBOR + 2.00% 2025 $ — 150 Term Loan A (3) LIBOR + 2.00% 2025 1,094 1,108 Term Loan A-1 (3) LIBOR + 2.00% 2025 312 316 Term Loan B (4) LIBOR + 2.25% 2027 4,938 4,950 Senior notes 4.000% 2027 1,250 1,250 Subsidiaries: Level 3 Financing, Inc. Tranche B 2027 Term Loan (5) LIBOR + 1.75% 2027 3,111 3,111 Senior notes 3.400% - 3.875% 2027 - 2029 1,500 1,500 Embarq Corporation subsidiaries First mortgage bonds 7.125% - 8.375% 2023 - 2025 138 138 Senior Notes and Other Debt: Lumen Technologies, Inc. Senior notes 4.500% - 7.650% 2021 - 2042 8,645 8,645 Subsidiaries: Level 3 Financing, Inc. Senior notes 3.625% - 5.375% 2025 - 2029 5,515 5,515 Qwest Corporation Senior notes 6.500% - 7.750% 2021 - 2057 2,935 3,170 Term Loan (6) LIBOR + 2.00% 2027 215 215 Qwest Capital Funding, Inc. Senior notes 6.875% - 7.750% 2021 - 2031 352 352 Embarq Corporation and subsidiary Senior note 7.995% 2036 1,437 1,437 Finance lease and other obligations Various Various 327 295 Unamortized discounts, net (96) (78) Unamortized debt issuance costs (233) (237) Total long-term debt 31,440 31,837 Less current maturities (3,841) (2,427) Long-term debt, excluding current maturities $ 27,599 29,410 ______________________________________________________________________ (1) As of March 31, 2021. (2) See Note 6—Long-Term Debt and Credit Facilities in our Annual Report on Form 10-K for the year ended December 31, 2020 for a description of certain parent or subsidiary guarantees and liens securing this debt. (3) Term Loans A and A-1 had interest rates of 2.109% and 2.147% as of March 31, 2021 and December 31, 2020, respectively. (4) Term Loan B had interest rates of 2.359% and 2.397% as of March 31, 2021 and December 31, 2020, respectively. (5) The Tranche B 2027 Term Loan had interest rates of 1.859% and 1.897% as of March 31, 2021 and December 31, 2020, respectively. |
Schedule of Maturities of Long-term Debt | Set forth below is the aggregate principal amount of our long-term debt as of March 31, 2021 (excluding unamortized discounts, net, and unamortized debt issuance costs), maturing during the following years: (Dollars in millions) 2021 (remaining nine months) $ 2,410 2022 1,541 2023 966 2024 1,143 2025 2,907 2026 and thereafter 22,802 Total long-term debt $ 31,769 |
Severance (Tables)
Severance (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Changes in Accrued Liabilities for Severance Expenses | Changes in our accrued liabilities for severance expenses were as follows: Severance (Dollars in millions) Balance at December 31, 2020 $ 103 Accrued to expense — Payments, net (25) Balance at March 31, 2021 $ 78 |
Employee Benefits (Tables)
Employee Benefits (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
Schedule of Components of Net Periodic Pension Benefit (Income) Expense and Post-retirement Benefit Expense | Net periodic benefit income for the Lumen Combined Pension Plan ("Combined Pension Plan") includes the following components: Combined Pension Plan Three Months Ended March 31, 2021 2020 (Dollars in millions) Service cost $ 13 16 Interest cost 50 82 Expected return on plan assets (138) (149) Recognition of prior service credit (2) (3) Recognition of actuarial loss 49 50 Net periodic pension benefit income $ (28) (4) Net periodic benefit expense for our post-retirement benefit plans includes the following components: Post-Retirement Benefit Plans Three Months Ended March 31, 2021 2020 (Dollars in millions) Service cost $ 4 4 Interest cost 12 20 Recognition of prior service cost 4 4 Recognition of actuarial loss 1 — Net periodic post-retirement benefit expense $ 21 28 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Common Share | Basic and diluted earnings per common share were calculated as follows: Three Months Ended March 31, 2021 2020 (Dollars in millions, except per share amounts, shares in thousands) Income (Numerator): Net income $ 475 314 Net income applicable to common stock for computing basic earnings per common share 475 314 Net income as adjusted for purposes of computing diluted earnings per common share $ 475 314 Shares (Denominator): Weighted-average number of shares: Outstanding during period 1,100,350 1,092,970 Non-vested restricted stock (17,876) (17,511) Weighted-average shares outstanding for computing basic earnings per common share 1,082,474 1,075,459 Incremental common shares attributable to dilutive securities: Shares issuable under convertible securities 10 10 Shares issuable under incentive compensation plans 9,102 6,285 Number of shares as adjusted for purposes of computing diluted earnings per common share 1,091,586 1,081,754 Basic earnings per common share $ 0.44 0.29 Diluted earnings per common share $ 0.44 0.29 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Amounts and Estimated Fair Values of Long-term Debt, Excluding Capital Lease Obligations, and Input Level to Determine Fair Values | The following table presents the carrying amounts and estimated fair values of our financial liabilities as of March 31, 2021 and December 31, 2020: March 31, 2021 December 31, 2020 Input Carrying Fair Carrying Fair (Dollars in millions) Long-term debt, excluding finance lease and other obligations 2 $ 31,113 32,441 31,542 33,217 Interest rate swap contracts (see Note 10) 2 $ 87 87 107 107 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The table below presents the fair value of our derivative financial instruments as well as their classification on the consolidated balance sheet at March 31, 2021 and December 31, 2020, as follows (in millions): March 31, 2021 December 31, 2020 Derivatives designated as Balance Sheet Location Fair Value Cash flow hedging contracts Other current and noncurrent liabilities $ 87 107 |
Derivative Instruments, Gain (Loss) | The amount of unrealized (gains) losses recognized in AOCI consists of the following (in millions): Derivatives designated as hedging instruments 2021 2020 Cash flow hedging contracts Three Months Ended March 31, $ — 106 |
Schedule of Reclassifications Out of Accumulated Other Comprehensive Income (Loss) by Component | The amount of realized losses reclassified from AOCI to the statement of operations consists of the following (in millions): Derivatives designated as hedging instruments 2021 2020 Cash flow hedging contracts Three Months Ended March 31, $ 20 5 The tables below present further information about our reclassifications out of accumulated other comprehensive loss by component for the three months ended March 31, 2021: Three Months Ended March 31, 2021 Decrease (Increase) Affected Line Item in Consolidated Statement of Operations (Dollars in millions) Interest rate swaps $ 20 Interest expense Income tax benefit (5) Income tax expense Net of tax $ 15 Amortization of pension & post-retirement plans (1) Net actuarial loss $ 50 Other income (expense), net Prior service cost 2 Other income (expense), net Total before tax 52 Income tax benefit (13) Income tax expense Net of tax $ 39 (1) See Note 7—Employee Benefits for additional information on our net periodic benefit (income) expense related to our pension and post-retirement plans. The tables below present further information about our reclassifications out of accumulated other comprehensive loss by component for the three months ended March 31, 2020: Three Months Ended March 31, 2020 Decrease (Increase) Affected Line Item in Consolidated Statement of Operations (Dollars in millions) Interest rate swaps $ 5 Interest expense Income tax expense — Income tax expense Net of tax $ 5 Amortization of pension & post-retirement plans (1) Net actuarial loss $ 50 Other income (expense), net Prior service cost 1 Other income (expense), net Total before tax 51 Income tax benefit (12) Income tax expense Net of tax $ 39 (1) See Note 7—Employee Benefits for additional information on our net periodic benefit (expense) income related to our pension and post-retirement plans. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Results | The following tables summarize our segment results for the three months ended March 31, 2021 and 2020, based on the segment categorization we were operating under at March 31, 2021. Three Months Ended March 31, 2021 Business Mass Markets Total Segments Operations and Other Total (Dollars in millions) Revenue $ 3,595 1,434 5,029 — 5,029 Expenses: Cost of services and products 881 43 924 1,212 2,136 Selling, general and administrative 306 133 439 317 756 Less: share-based compensation — — — (20) (20) Total expense 1,187 176 1,363 1,509 2,872 Total adjusted EBITDA $ 2,408 1,258 3,666 (1,509) 2,157 Three Months Ended March 31, 2020 Business Mass Markets Total Segments Operations and Other Total (Dollars in millions) Revenue $ 3,737 1,491 5,228 — 5,228 Expenses: Cost of services and products 907 49 956 1,279 2,235 Selling, general and administrative 342 140 482 371 853 Less: share-based compensation — — — (69) (69) Total expense 1,249 189 1,438 1,581 3,019 Total adjusted EBITDA $ 2,488 1,302 3,790 (1,581) 2,209 |
Reconciliation of Operating Profit (Loss) From Segments to Consolidated Net Income | The following table reconciles total segment adjusted EBITDA to net income (loss): Three Months Ended March 31, 2021 2020 (Dollars in millions) Total segment adjusted EBITDA $ 3,666 3,790 Depreciation and amortization (1,150) (1,160) Other operating expenses (1,509) (1,581) Stock-based compensation (20) (69) Operating income 987 980 Total other expense, net (355) (547) Income before income taxes 632 433 Income tax expense 157 119 Net income $ 475 314 |
Other Financial Information (Ta
Other Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Components of Other Current Assets | The following table presents details of other current assets reflected in our consolidated balance sheets: March 31, 2021 December 31, 2020 (Dollars in millions) Prepaid expenses $ 403 290 Income tax receivable 6 7 Materials, supplies and inventory 100 105 Contract assets 64 66 Contract acquisition costs 170 173 Contract fulfillment costs 115 114 Other 66 53 Total other current assets $ 924 808 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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 three months ended March 31, 2021: Pension Plans Post-Retirement Foreign Currency Interest Rate Swap Total (Dollars in millions) Balance at December 31, 2020 $ (2,197) (272) (265) (79) (2,813) Other comprehensive loss before reclassifications — — (86) — (86) Amounts reclassified from accumulated other comprehensive loss 35 4 — 15 54 Net current-period other comprehensive income (loss) 35 4 (86) 15 (32) Balance at March 31, 2021 $ (2,162) (268) (351) (64) (2,845) Pension Plans Post-Retirement Foreign Currency Interest Rate Swap Total (Dollars in millions) Balance at December 31, 2019 $ (2,229) (184) (228) (39) (2,680) Other comprehensive loss before reclassifications — — (239) (80) (319) Amounts reclassified from accumulated other comprehensive loss 36 3 — 5 44 Net current-period other comprehensive income (loss) 36 3 (239) (75) (275) Balance at March 31, 2020 $ (2,193) (181) (467) (114) (2,955) |
Schedule of Reclassifications Out of Accumulated Other Comprehensive Income (Loss) by Component | The amount of realized losses reclassified from AOCI to the statement of operations consists of the following (in millions): Derivatives designated as hedging instruments 2021 2020 Cash flow hedging contracts Three Months Ended March 31, $ 20 5 The tables below present further information about our reclassifications out of accumulated other comprehensive loss by component for the three months ended March 31, 2021: Three Months Ended March 31, 2021 Decrease (Increase) Affected Line Item in Consolidated Statement of Operations (Dollars in millions) Interest rate swaps $ 20 Interest expense Income tax benefit (5) Income tax expense Net of tax $ 15 Amortization of pension & post-retirement plans (1) Net actuarial loss $ 50 Other income (expense), net Prior service cost 2 Other income (expense), net Total before tax 52 Income tax benefit (13) Income tax expense Net of tax $ 39 (1) See Note 7—Employee Benefits for additional information on our net periodic benefit (income) expense related to our pension and post-retirement plans. The tables below present further information about our reclassifications out of accumulated other comprehensive loss by component for the three months ended March 31, 2020: Three Months Ended March 31, 2020 Decrease (Increase) Affected Line Item in Consolidated Statement of Operations (Dollars in millions) Interest rate swaps $ 5 Interest expense Income tax expense — Income tax expense Net of tax $ 5 Amortization of pension & post-retirement plans (1) Net actuarial loss $ 50 Other income (expense), net Prior service cost 1 Other income (expense), net Total before tax 51 Income tax benefit (12) Income tax expense Net of tax $ 39 (1) See Note 7—Employee Benefits for additional information on our net periodic benefit (expense) income related to our pension and post-retirement plans. |
Background - Basis of Presentat
Background - Basis of Presentation (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Book overdraft balance | $ 0 | $ 0 |
Background - Operating Lease In
Background - Operating Lease Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Lease income | $ 332 | $ 333 |
Percent of operating revenue | 7.00% | 6.00% |
Background - Accounting Pronoun
Background - Accounting Pronouncements (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Stockholders' equity | $ 11,303 | $ 13,291 | $ 11,162 | |
Income tax expense | 157 | 119 | ||
Accumulated Deficit | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Stockholders' equity | $ (7,556) | $ (6,486) | $ (6,814) | $ (8,031) |
Accumulated Deficit | Cumulative Effect, Period of Adoption, Adjustment | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Stockholders' equity | 9 | |||
Income tax expense | $ 2 |
Goodwill, Customer Relationsh_3
Goodwill, Customer Relationships and Other Intangible Assets - Schedule of Goodwill, Customer Relationships, and Other Intangible Assets (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Jan. 31, 2021 | Dec. 31, 2020 |
Goodwill [Line Items] | |||
Goodwill | $ 18,854 | $ 0 | $ 18,870 |
Indefinite-life intangible assets | 9 | 278 | |
Total other intangible assets, net | 7,884 | 8,219 | |
Customer relationships | |||
Goodwill [Line Items] | |||
Finite-lived intangible assets, net | 6,035 | 6,344 | |
Accumulated amortization | 11,356 | 11,060 | |
Capitalized software | |||
Goodwill [Line Items] | |||
Finite-lived intangible assets, net | 1,509 | 1,520 | |
Accumulated amortization | 3,366 | 3,279 | |
Trade names, patents and other | |||
Goodwill [Line Items] | |||
Finite-lived intangible assets, net | 331 | 77 | |
Accumulated amortization | $ 134 | $ 120 |
Goodwill, Customer Relationsh_4
Goodwill, Customer Relationships and Other Intangible Assets - Rollforward of Goodwill (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Goodwill [Roll Forward] | |
As of beginning of period | $ 18,870 |
Effect of foreign currency exchange rate change and other | (16) |
As of end of period | 18,854 |
Accumulated impairment losses | 12,900 |
International and Global Accounts | |
Goodwill [Roll Forward] | |
As of beginning of period | 2,555 |
Enterprise | |
Goodwill [Roll Forward] | |
As of beginning of period | 4,738 |
Small and Medium Business | |
Goodwill [Roll Forward] | |
As of beginning of period | 2,808 |
Wholesale | |
Goodwill [Roll Forward] | |
As of beginning of period | 3,114 |
Consumer | |
Goodwill [Roll Forward] | |
As of beginning of period | 5,655 |
Business | |
Goodwill [Roll Forward] | |
Effect of foreign currency exchange rate change and other | (16) |
As of end of period | 12,157 |
Mass Markets | |
Goodwill [Roll Forward] | |
Effect of foreign currency exchange rate change and other | 0 |
As of end of period | $ 6,697 |
Goodwill, Customer Relationsh_5
Goodwill, Customer Relationships and Other Intangible Assets - Additional Information (Details) - USD ($) | Jan. 31, 2021 | Jan. 01, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Impairment loss | $ 0 | ||||
Amortization of intangible assets | $ 425,000,000 | $ 431,000,000 | |||
Intangible assets, gross (including goodwill) | 41,600,000,000 | ||||
Change in Accounting Estimate [Line Items] | |||||
Amortization of intangible assets | 425,000,000 | 431,000,000 | |||
Net income | $ (475,000,000) | $ (314,000,000) | |||
Basic earnings per common share (in dollars per share) | $ (0.44) | $ (0.29) | |||
Diluted earnings per common share (in dollars per share) | $ (0.44) | $ (0.29) | |||
Reclassification of intangible assets | |||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Amortization of intangible assets | $ 7,000,000 | ||||
Change in Accounting Estimate [Line Items] | |||||
Amortization of intangible assets | 7,000,000 | ||||
Net income | $ 5,000,000 | ||||
Reclassification of intangible assets | Forecast | |||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Amortization of intangible assets | $ 30,000,000 | ||||
Change in Accounting Estimate [Line Items] | |||||
Amortization of intangible assets | 30,000,000 | ||||
Net income | $ 23,000,000 | ||||
Basic earnings per common share (in dollars per share) | $ 0.02 | ||||
Diluted earnings per common share (in dollars per share) | $ 0.02 | ||||
Reclassification of intangible assets | Right-of-way | |||||
Change in Accounting Estimate [Line Items] | |||||
Finite-lived intangible assets | $ 268,000,000 | ||||
Remaining amortization period | 9 years |
Goodwill, Customer Relationsh_6
Goodwill, Customer Relationships and Other Intangible Assets - Schedule of Amortization Expense (Details) $ in Millions | Mar. 31, 2021USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2021 (remaining nine months) | $ 893 |
2022 | 1,081 |
2023 | 985 |
2024 | 887 |
2025 | $ 797 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2021USD ($)category | Mar. 31, 2020USD ($) | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue recognized | $ | $ 425 | $ 495 |
Minimum | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract term | 1 year | |
Maximum | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract term | 5 years | |
Weighted Average | Consumer Customers | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Length of customer life | 30 months | |
Weighted Average | Business Customers | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Length of customer life | 30 months | |
Business | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Number of categories of products and services | 4 | |
Mass Markets | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Number of categories of products and services | 4 |
Revenue Recognition - Revenue b
Revenue Recognition - Revenue by Segment, Sales Channel and Product Category (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 5,029 | $ 5,228 |
Adjustments for non-ASC 606 revenue | (474) | (481) |
Total revenue from contracts with customers | 4,555 | 4,747 |
Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 5,029 | 5,228 |
Operating Segments | Business | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 3,595 | 3,737 |
Adjustments for non-ASC 606 revenue | (274) | (273) |
Total revenue from contracts with customers | 3,321 | 3,464 |
Operating Segments | Business | Compute and Application Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 428 | 435 |
Adjustments for non-ASC 606 revenue | (132) | (134) |
Total revenue from contracts with customers | 296 | 301 |
Operating Segments | Business | IP and Data Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 1,580 | 1,622 |
Adjustments for non-ASC 606 revenue | (1) | (1) |
Total revenue from contracts with customers | 1,579 | 1,621 |
Operating Segments | Business | Fiber Infrastructure Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 554 | 547 |
Adjustments for non-ASC 606 revenue | (78) | (70) |
Total revenue from contracts with customers | 476 | 477 |
Operating Segments | Business | Voice and Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 1,033 | 1,133 |
Adjustments for non-ASC 606 revenue | (63) | (68) |
Total revenue from contracts with customers | 970 | 1,065 |
Operating Segments | Business | International and Global Accounts | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 1,013 | 1,041 |
Adjustments for non-ASC 606 revenue | (99) | (95) |
Total revenue from contracts with customers | 914 | 946 |
Operating Segments | Business | International and Global Accounts | Compute and Application Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 179 | 201 |
Adjustments for non-ASC 606 revenue | (69) | (69) |
Total revenue from contracts with customers | 110 | 132 |
Operating Segments | Business | International and Global Accounts | IP and Data Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 427 | 437 |
Adjustments for non-ASC 606 revenue | 0 | 0 |
Total revenue from contracts with customers | 427 | 437 |
Operating Segments | Business | International and Global Accounts | Fiber Infrastructure Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 216 | 202 |
Adjustments for non-ASC 606 revenue | (30) | (26) |
Total revenue from contracts with customers | 186 | 176 |
Operating Segments | Business | International and Global Accounts | Voice and Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 191 | 201 |
Adjustments for non-ASC 606 revenue | 0 | 0 |
Total revenue from contracts with customers | 191 | 201 |
Operating Segments | Business | Large Enterprise | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 937 | 966 |
Adjustments for non-ASC 606 revenue | (30) | (27) |
Total revenue from contracts with customers | 907 | 939 |
Operating Segments | Business | Large Enterprise | Compute and Application Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 165 | 154 |
Adjustments for non-ASC 606 revenue | (15) | (17) |
Total revenue from contracts with customers | 150 | 137 |
Operating Segments | Business | Large Enterprise | IP and Data Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 395 | 401 |
Adjustments for non-ASC 606 revenue | 0 | 0 |
Total revenue from contracts with customers | 395 | 401 |
Operating Segments | Business | Large Enterprise | Fiber Infrastructure Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 124 | 138 |
Adjustments for non-ASC 606 revenue | (15) | (10) |
Total revenue from contracts with customers | 109 | 128 |
Operating Segments | Business | Large Enterprise | Voice and Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 253 | 273 |
Adjustments for non-ASC 606 revenue | 0 | 0 |
Total revenue from contracts with customers | 253 | 273 |
Operating Segments | Business | Mid-Market Enterprise | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 716 | 761 |
Adjustments for non-ASC 606 revenue | (11) | (13) |
Total revenue from contracts with customers | 705 | 748 |
Operating Segments | Business | Mid-Market Enterprise | Compute and Application Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 36 | 34 |
Adjustments for non-ASC 606 revenue | (8) | (8) |
Total revenue from contracts with customers | 28 | 26 |
Operating Segments | Business | Mid-Market Enterprise | IP and Data Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 453 | 466 |
Adjustments for non-ASC 606 revenue | (1) | (1) |
Total revenue from contracts with customers | 452 | 465 |
Operating Segments | Business | Mid-Market Enterprise | Fiber Infrastructure Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 60 | 54 |
Adjustments for non-ASC 606 revenue | (2) | (4) |
Total revenue from contracts with customers | 58 | 50 |
Operating Segments | Business | Mid-Market Enterprise | Voice and Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 167 | 207 |
Adjustments for non-ASC 606 revenue | 0 | 0 |
Total revenue from contracts with customers | 167 | 207 |
Operating Segments | Business | Wholesale | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 929 | 969 |
Adjustments for non-ASC 606 revenue | (134) | (138) |
Total revenue from contracts with customers | 795 | 831 |
Operating Segments | Business | Wholesale | Compute and Application Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 48 | 46 |
Adjustments for non-ASC 606 revenue | (40) | (40) |
Total revenue from contracts with customers | 8 | 6 |
Operating Segments | Business | Wholesale | IP and Data Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 305 | 318 |
Adjustments for non-ASC 606 revenue | 0 | 0 |
Total revenue from contracts with customers | 305 | 318 |
Operating Segments | Business | Wholesale | Fiber Infrastructure Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 154 | 153 |
Adjustments for non-ASC 606 revenue | (31) | (30) |
Total revenue from contracts with customers | 123 | 123 |
Operating Segments | Business | Wholesale | Voice and Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 422 | 452 |
Adjustments for non-ASC 606 revenue | (63) | (68) |
Total revenue from contracts with customers | 359 | 384 |
Operating Segments | Mass Markets | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 1,434 | 1,491 |
Adjustments for non-ASC 606 revenue | (200) | (208) |
Total revenue from contracts with customers | 1,234 | 1,283 |
Operating Segments | Mass Markets | Voice and Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 541 | 607 |
Adjustments for non-ASC 606 revenue | (21) | (29) |
Total revenue from contracts with customers | 520 | 578 |
Operating Segments | Mass Markets | Consumer Broadband | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 731 | 722 |
Adjustments for non-ASC 606 revenue | (52) | (53) |
Total revenue from contracts with customers | 679 | 669 |
Operating Segments | Mass Markets | SBG Broadband | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 39 | 39 |
Adjustments for non-ASC 606 revenue | (4) | (3) |
Total revenue from contracts with customers | 35 | 36 |
Operating Segments | Mass Markets | CAF II | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 123 | 123 |
Adjustments for non-ASC 606 revenue | (123) | (123) |
Total revenue from contracts with customers | $ 0 | $ 0 |
Revenue Recognition - Contract
Revenue Recognition - Contract with Customer, Asset and Liability (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Revenue from Contract with Customer [Abstract] | ||
Customer receivables | $ 1,805 | $ 1,889 |
Contract assets | 103 | 108 |
Contract liabilities | 883 | 950 |
Accounts receivable, gross | 2,000 | 2,100 |
Allowance for doubtful accounts receivable | $ 148 | $ 174 |
Revenue Recognition - Remaining
Revenue Recognition - Remaining Performance Obligation (Details) $ in Billions | Mar. 31, 2021USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 5.2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percentage | 90.00% |
Remaining performance obligation, satisfaction period | 2 years 9 months |
Revenue Recognition - Capitaliz
Revenue Recognition - Capitalized Contract Costs (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Acquisition Costs | ||
Capitalized Contract Cost [Roll Forward] | ||
Beginning of period balance | $ 289 | $ 326 |
Costs incurred | 44 | 49 |
Amortization | (54) | (55) |
End of period balance | 279 | 320 |
Fulfillment Costs | ||
Capitalized Contract Cost [Roll Forward] | ||
Beginning of period balance | 216 | 221 |
Costs incurred | 37 | 36 |
Amortization | (37) | (37) |
End of period balance | $ 216 | $ 220 |
Credit Losses on Financial In_3
Credit Losses on Financial Instruments (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |
Beginning balance at January 1, 2020 | $ 191 |
Provision for expected losses | 27 |
Write-offs charged against the allowance | (67) |
Recoveries collected | 11 |
Ending balance at March 31, 2021 | 162 |
Business | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |
Beginning balance at January 1, 2020 | 109 |
Provision for expected losses | 13 |
Write-offs charged against the allowance | (19) |
Recoveries collected | 5 |
Ending balance at March 31, 2021 | 108 |
Mass Markets | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |
Beginning balance at January 1, 2020 | 82 |
Provision for expected losses | 14 |
Write-offs charged against the allowance | (48) |
Recoveries collected | 6 |
Ending balance at March 31, 2021 | 54 |
Consumer Reclassed to Mass Markets | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |
Beginning balance at January 1, 2020 | 70 |
Business Reclassed to Mass Markets | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |
Beginning balance at January 1, 2020 | $ 12 |
Long-Term Debt and Credit Fac_3
Long-Term Debt and Credit Facilities - Schedule of Long Term Debt (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Long-term Debt and Credit Facilities | ||
Finance lease and other obligations | $ 327 | $ 295 |
Unamortized discounts, net | (96) | (78) |
Unamortized debt issuance costs | (233) | (237) |
Total long-term debt | 31,440 | 31,837 |
Less current maturities | (3,841) | (2,427) |
Long-term debt, excluding current maturities | $ 27,599 | 29,410 |
Lumen Technologies, Inc. | Credit facility | Revolving Credit Facility | ||
Long-term Debt and Credit Facilities | ||
Basis spread (as a percent) | 2.00% | |
Long-term debt, gross | $ 0 | 150 |
Lumen Technologies, Inc. | Term loan | Term Loan A | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 1,094 | $ 1,108 |
Long-term debt, weighted average interest rate | 2.109% | 2.147% |
Lumen Technologies, Inc. | Term loan | Term Loan A | LIBOR | ||
Long-term Debt and Credit Facilities | ||
Basis spread (as a percent) | 2.00% | |
Lumen Technologies, Inc. | Term loan | Term Loan A-1 | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 312 | $ 316 |
Long-term debt, weighted average interest rate | 2.109% | 2.147% |
Lumen Technologies, Inc. | Term loan | Term Loan A-1 | LIBOR | ||
Long-term Debt and Credit Facilities | ||
Basis spread (as a percent) | 2.00% | |
Lumen Technologies, Inc. | Term loan | Term Loan B | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 4,938 | $ 4,950 |
Long-term debt, weighted average interest rate | 2.359% | 2.397% |
Lumen Technologies, Inc. | Term loan | Term Loan B | LIBOR | ||
Long-term Debt and Credit Facilities | ||
Basis spread (as a percent) | 2.25% | |
Lumen Technologies, Inc. | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 8,645 | $ 8,645 |
Lumen Technologies, Inc. | Senior notes | Minimum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate | 4.50% | |
Lumen Technologies, Inc. | Senior notes | Maximum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate | 7.65% | |
Lumen Technologies, Inc. | Senior notes | 4.000% Senior Secured Notes Due 2027 | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate | 4.00% | |
Long-term debt, gross | $ 1,250 | 1,250 |
Level 3 Financing, Inc. | Term loan | Tranche B 2027 Term Loan | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 3,111 | $ 3,111 |
Long-term debt, weighted average interest rate | 1.859% | 1.897% |
Level 3 Financing, Inc. | Term loan | Tranche B 2027 Term Loan | LIBOR | ||
Long-term Debt and Credit Facilities | ||
Basis spread (as a percent) | 1.75% | |
Level 3 Financing, Inc. | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 5,515 | $ 5,515 |
Level 3 Financing, Inc. | Senior notes | Minimum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate | 3.625% | |
Level 3 Financing, Inc. | Senior notes | Maximum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate | 5.375% | |
Level 3 Financing, Inc. | Senior notes | Senior Notes, Maturing 2027-2029 | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 1,500 | 1,500 |
Level 3 Financing, Inc. | Senior notes | Senior Notes, Maturing 2027-2029 | Minimum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate | 3.40% | |
Level 3 Financing, Inc. | Senior notes | Senior Notes, Maturing 2027-2029 | Maximum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate | 3.875% | |
Embarq Corporation and subsidiary | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate | 7.995% | |
Long-term debt, gross | $ 1,437 | 1,437 |
Embarq Corporation and subsidiary | First mortgage bonds | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 138 | 138 |
Embarq Corporation and subsidiary | First mortgage bonds | Minimum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate | 7.125% | |
Embarq Corporation and subsidiary | First mortgage bonds | Maximum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate | 8.375% | |
Qwest Corporation | Term loan | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 215 | $ 215 |
Long-term debt, weighted average interest rate | 2.11% | 2.15% |
Qwest Corporation | Term loan | LIBOR | ||
Long-term Debt and Credit Facilities | ||
Basis spread (as a percent) | 2.00% | |
Qwest Corporation | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 2,935 | $ 3,170 |
Qwest Corporation | Senior notes | Minimum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate | 6.50% | |
Qwest Corporation | Senior notes | Maximum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate | 7.75% | |
Qwest Capital Funding, Inc. | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 352 | $ 352 |
Qwest Capital Funding, Inc. | Senior notes | Minimum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate | 6.875% | |
Qwest Capital Funding, Inc. | Senior notes | Maximum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate | 7.75% |
Long-Term Debt and Credit Fac_4
Long-Term Debt and Credit Facilities - Schedule of Maturities of Long Term Debt (Details) $ in Millions | Mar. 31, 2021USD ($) |
Long-term Debt, Fiscal Year Maturity | |
2021 (remaining nine months) | $ 2,410 |
2022 | 1,541 |
2023 | 966 |
2024 | 1,143 |
2025 | 2,907 |
2026 and thereafter | 22,802 |
Total long-term debt | $ 31,769 |
Long-Term Debt and Credit Fac_5
Long-Term Debt and Credit Facilities - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Jan. 13, 2021 | |
Long-term Debt and Credit Facilities | ||
Repayments of debt | $ 1,300,000,000 | |
Gain on extinguishment of debt | 8,000,000 | |
Lumen Technologies, Inc. | Credit facility | Revolving Credit Facility | ||
Long-term Debt and Credit Facilities | ||
Repayments of debt | 150,000,000 | |
Level 3 Financing, Inc. | Senior notes | 3.750% Sustainability-Linked Senior Notes 2029 | ||
Long-term Debt and Credit Facilities | ||
Face amount | $ 900,000,000 | |
Stated interest rate | 3.75% | |
Level 3 Financing, Inc. | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Repayments of debt | 900,000,000 | |
Qwest Corporation | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Repayments of debt | $ 235,000,000 |
Severance (Details)
Severance (Details) - Severance $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Restructuring reserve | |
Balance at the beginning of the period | $ 103 |
Accrued to expense | 0 |
Payments, net | (25) |
Balance at the end of the period | $ 78 |
Employee Benefits (Details)
Employee Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Combined Pension Plan | ||
Components of net periodic (benefit) expense | ||
Service cost | $ 13 | $ 16 |
Interest cost | 50 | 82 |
Expected return on plan assets | (138) | (149) |
Recognition of prior service credit | (2) | (3) |
Recognition of actuarial loss | 49 | 50 |
Net periodic pension benefit (income) expense | (28) | (4) |
Post-Retirement Benefit Plans | ||
Components of net periodic (benefit) expense | ||
Service cost | 4 | 4 |
Interest cost | 12 | 20 |
Recognition of prior service credit | 4 | 4 |
Recognition of actuarial loss | 1 | 0 |
Net periodic pension benefit (income) expense | $ 21 | $ 28 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
(Loss) Income (Numerator): | ||
Net income | $ 475 | $ 314 |
Net income applicable to common stock for computing basic earnings per common share | 475 | 314 |
Net income as adjusted for purposes of computing diluted earnings per common share | $ 475 | $ 314 |
Weighted-average number of shares: | ||
Outstanding during period (in shares) | 1,100,350 | 1,092,970 |
Non-vested restricted stock (in shares) | (17,876) | (17,511) |
Weighted average shares outstanding for computing basic earnings per common share (in shares) | 1,082,474 | 1,075,459 |
Incremental common shares attributable to dilutive securities: | ||
Shares issuable under convertible securities (in shares) | 10 | 10 |
Shares issuable under incentive compensation plans (in shares) | 9,102 | 6,285 |
Number of shares as adjusted for purposes of computing diluted earnings (loss) per common share (in shares) | 1,091,586 | 1,081,754 |
Basic earnings per common share (in dollars per share) | $ 0.44 | $ 0.29 |
Diluted earnings per common share (in dollars per share) | $ 0.44 | $ 0.29 |
Number of shares of common stock excluded from the computation of diluted earnings per share (less than) (in shares) | 1,000 | 2,700 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - Fair Value Measurements Determined on a Nonrecurring Basis - Fair Value Inputs, Level 2 - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Carrying Amount | ||
Fair value disclosure | ||
Long-term debt, excluding finance lease and other obligations | $ 31,113 | $ 31,542 |
Interest rate swap contracts (see Note 10) | 87 | 107 |
Fair Value | ||
Fair value disclosure | ||
Long-term debt, excluding finance lease and other obligations | 32,441 | 33,217 |
Interest rate swap contracts (see Note 10) | $ 87 | $ 107 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Additional Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Interest Rate Swap | |
Derivative [Line Items] | |
Reclassification in next twelve months | $ 81 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Fair Value of Derivatives (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Cash Flow Hedging | Interest Rate Swap | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value | $ 87 | $ 107 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Losses Recognized in OCI (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Designated as Hedging Instrument | Interest Rate Swap | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Loss recognized in other comprehensive income | $ 0 | $ 106 |
Derivative Financial Instrume_6
Derivative Financial Instruments - Reclassification from AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||
Realized losses reclassified from AOCI | $ 15 | $ 5 |
Interest Rate Swap | Designated as Hedging Instrument | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||
Realized losses reclassified from AOCI | $ 20 | $ 5 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2021sales_channelsegmentcategory | |
Segment Reporting Information [Line Items] | |
Number of operating segments | segment | 2 |
Number of reportable segments | segment | 2 |
Business | |
Segment Reporting Information [Line Items] | |
Number of sales channels | sales_channel | 4 |
Number of categories of products and services | category | 4 |
Mass Markets | |
Segment Reporting Information [Line Items] | |
Number of categories of products and services | category | 4 |
Segment Information - Segment R
Segment Information - Segment Results and Operating Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating revenues by products and services | ||
Revenues | $ 5,029 | $ 5,228 |
Cost of services and products | 2,136 | 2,235 |
Selling, general and administrative | 756 | 853 |
Less: share-based compensation | (20) | (69) |
Total expense | 2,872 | 3,019 |
Total adjusted EBITDA | 2,157 | 2,209 |
Operating Segments | ||
Operating revenues by products and services | ||
Revenues | 5,029 | 5,228 |
Cost of services and products | 924 | 956 |
Selling, general and administrative | 439 | 482 |
Less: share-based compensation | 0 | 0 |
Total expense | 1,363 | 1,438 |
Total adjusted EBITDA | 3,666 | 3,790 |
Operating Segments | Business | ||
Operating revenues by products and services | ||
Revenues | 3,595 | 3,737 |
Cost of services and products | 881 | 907 |
Selling, general and administrative | 306 | 342 |
Less: share-based compensation | 0 | 0 |
Total expense | 1,187 | 1,249 |
Total adjusted EBITDA | 2,408 | 2,488 |
Operating Segments | Mass Markets | ||
Operating revenues by products and services | ||
Revenues | 1,434 | 1,491 |
Cost of services and products | 43 | 49 |
Selling, general and administrative | 133 | 140 |
Less: share-based compensation | 0 | 0 |
Total expense | 176 | 189 |
Total adjusted EBITDA | 1,258 | 1,302 |
Operations and Other | ||
Operating revenues by products and services | ||
Revenues | 0 | 0 |
Cost of services and products | 1,212 | 1,279 |
Selling, general and administrative | 317 | 371 |
Less: share-based compensation | (20) | (69) |
Total expense | 1,509 | 1,581 |
Total adjusted EBITDA | $ (1,509) | $ (1,581) |
Segment Information - Reconcili
Segment Information - Reconciliation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Total adjusted EBITDA | $ 2,157 | $ 2,209 |
Depreciation and amortization | (1,150) | (1,160) |
Total other expense, net | (355) | (547) |
INCOME BEFORE INCOME TAXES | 632 | 433 |
Income tax expense | 157 | 119 |
Net income | 475 | 314 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total adjusted EBITDA | 3,666 | 3,790 |
Operations and Other | ||
Segment Reporting Information [Line Items] | ||
Total adjusted EBITDA | (1,509) | (1,581) |
Depreciation and amortization | (1,150) | (1,160) |
Other operating expenses | (1,509) | (1,581) |
Stock-based compensation | (20) | (69) |
Operating income | 987 | 980 |
Total other expense, net | $ (355) | $ (547) |
Commitments and Contingencies_2
Commitments and Contingencies and Other Items (Details) plaintiff in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | |
Feb. 28, 2017USD ($)lawsuit | Mar. 31, 2021USD ($)Employeeplaintiffcontract | Dec. 31, 2005USD ($)subsidiary | |
Loss Contingencies | |||
Estimate of possible loss | $ 119,000 | ||
Patents allegedly infringed | lawsuit | 1 | ||
Number of members (more than) | plaintiff | 12 | ||
Unfavorable Regulatory Action | |||
Loss Contingencies | |||
Estimate of possible loss | $ 300 | ||
Level 3 Parent, LLC | |||
Loss Contingencies | |||
Damages sought, value | $ 50,000 | ||
U.S. District Court for the District of Minnesota | |||
Loss Contingencies | |||
Number of members (more than) | plaintiff | 11 | ||
Missouri Municipalities | Judicial ruling | |||
Loss Contingencies | |||
Litigation settlement amount | $ 4,000 | ||
Minnesota Securities Investor Class Actions | U.S. District Court for the District of Minnesota | |||
Loss Contingencies | |||
Litigation settlement amount | $ 55,000 | ||
Peruvian Tax Litigation | Pending litigation | |||
Loss Contingencies | |||
Estimate of possible loss | 1,000 | ||
Number of subsidiaries issues with tax assessment | subsidiary | 1 | ||
Loss contingency, asserted claim | $ 26,000 | ||
Brazilian Tax Claims | Pending litigation | |||
Loss Contingencies | |||
Loss contingency, range of possible loss, portion not accrued | 12,000 | ||
Brazilian Tax Claims | Pending litigation | Maximum | |||
Loss Contingencies | |||
Loss contingency, range of possible loss, portion not accrued | $ 49,000 | ||
United States of America ex rel., Stephen Bishop v. Level 3 Communications, Inc. et al. | |||
Loss Contingencies | |||
Number of former employees names in lawsuit | Employee | 2 | ||
Number of government contracts in question | contract | 2 | ||
Number of former employees with plea agreements | Employee | 1 |
Other Financial Information (De
Other Financial Information (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Prepaid Expenses and Other Current Assets [Abstract] | ||
Prepaid expenses | $ 403 | $ 290 |
Income tax receivable | 6 | 7 |
Materials, supplies and inventory | 100 | 105 |
Contract assets | 64 | 66 |
Other | 66 | 53 |
Total other current assets | 924 | 808 |
Acquisition Costs | ||
Prepaid Expenses and Other Current Assets [Abstract] | ||
Contract costs | 170 | 173 |
Fulfillment Costs | ||
Prepaid Expenses and Other Current Assets [Abstract] | ||
Contract costs | $ 115 | $ 114 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - AOCI Activity (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | $ 11,162 | |
Other comprehensive loss before reclassifications | (86) | $ (319) |
Amounts reclassified from accumulated other comprehensive loss | 54 | 44 |
Other comprehensive loss | (32) | (275) |
Balance at end of period | 11,303 | 13,291 |
Defined Benefit Plan | Pension Plans | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (2,197) | (2,229) |
Other comprehensive loss before reclassifications | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss | 35 | 36 |
Other comprehensive loss | 35 | 36 |
Balance at end of period | (2,162) | (2,193) |
Defined Benefit Plan | Post-Retirement Benefit Plans | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (272) | (184) |
Other comprehensive loss before reclassifications | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss | 4 | 3 |
Other comprehensive loss | 4 | 3 |
Balance at end of period | (268) | (181) |
Foreign Currency Translation Adjustment and Other | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (265) | (228) |
Other comprehensive loss before reclassifications | (86) | (239) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 |
Other comprehensive loss | (86) | (239) |
Balance at end of period | (351) | (467) |
Interest Rate Swap | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (79) | (39) |
Other comprehensive loss before reclassifications | 0 | (80) |
Amounts reclassified from accumulated other comprehensive loss | 15 | 5 |
Other comprehensive loss | 15 | (75) |
Balance at end of period | (64) | (114) |
Accumulated Other Comprehensive Loss | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (2,813) | (2,680) |
Other comprehensive loss | (32) | (275) |
Balance at end of period | $ (2,845) | $ (2,955) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss - Reclassifications (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Reclassifications out of accumulated other comprehensive income loss by component | ||
Interest expense | $ 389 | $ 449 |
Other income (expense), net | 34 | (98) |
Total before tax | 632 | 433 |
Income tax expense | (157) | (119) |
Net of tax | 475 | 314 |
Decrease (Increase) in Net Income | Interest rate swaps | ||
Reclassifications out of accumulated other comprehensive income loss by component | ||
Interest expense | 20 | 5 |
Income tax expense | (5) | 0 |
Net of tax | 15 | 5 |
Decrease (Increase) in Net Income | Net actuarial loss | ||
Reclassifications out of accumulated other comprehensive income loss by component | ||
Other income (expense), net | 50 | 50 |
Decrease (Increase) in Net Income | Prior service cost | ||
Reclassifications out of accumulated other comprehensive income loss by component | ||
Other income (expense), net | 2 | 1 |
Decrease (Increase) in Net Income | Defined benefit plan | ||
Reclassifications out of accumulated other comprehensive income loss by component | ||
Total before tax | 52 | 51 |
Income tax expense | (13) | (12) |
Net of tax | $ 39 | $ 39 |
Labor Union Contracts (Details)
Labor Union Contracts (Details) - Unionized employees concentration risk | 3 Months Ended |
Mar. 31, 2021 | |
Total number of employees | |
Concentration risk | |
Concentration risk, percent | 23.00% |
Workforce subject to collective bargaining arrangements, expired | |
Concentration risk | |
Concentration risk, percent | 4.00% |
Workforce subject to collective bargaining arrangements expiring within one year | |
Concentration risk | |
Concentration risk, percent | 10.00% |
Uncategorized Items - lumn-2021
Label | Element | Value |
Restricted Cash, Noncurrent | us-gaap_RestrictedCashNoncurrent | $ 24,000,000 |
Restricted Cash, Noncurrent | us-gaap_RestrictedCashNoncurrent | $ 15,000,000 |
Accounting Standards Update [Extensible List] | us-gaap_AccountingStandardsUpdateExtensibleList | us-gaap:AccountingStandardsUpdate201613Member |
Restricted Cash, Current | us-gaap_RestrictedCashCurrent | $ 2,000,000 |
Restricted Cash, Current | us-gaap_RestrictedCashCurrent | 3,000,000 |
Business Segment [Member] | ||
Goodwill | us-gaap_Goodwill | 12,173,000,000 |
Small and Medium Business [Member] | ||
Goodwill | us-gaap_Goodwill | (2,808,000,000) |
Enterprise [Member] | ||
Goodwill | us-gaap_Goodwill | (4,738,000,000) |
International and Global Accounts [Member] | ||
Goodwill | us-gaap_Goodwill | (2,555,000,000) |
Consumer [Member] | ||
Goodwill | us-gaap_Goodwill | (5,655,000,000) |
Wholesale [Member] | ||
Goodwill | us-gaap_Goodwill | (3,114,000,000) |
Mass Market Segment [Member] | ||
Goodwill | us-gaap_Goodwill | $ 6,697,000,000 |