Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 31, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
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 | 1,034,582,843 | |
Entity Central Index Key | 0000018926 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, par value $1.00 per share | |
Trading Symbol | LUMN | |
Security Exchange Name | NYSE | |
Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Preferred Stock Purchase Rights | |
Security Exchange Name | NYSE | |
Preferred Stock - No Trading Symbol | true |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
OPERATING REVENUE | $ 4,390 | $ 4,887 | $ 13,678 | $ 14,840 |
OPERATING EXPENSES | ||||
Cost of services and products (exclusive of depreciation and amortization) | 1,999 | 2,151 | 6,042 | 6,402 |
Selling, general and administrative | 792 | 654 | 2,407 | 2,172 |
Gain on sale of business | (593) | 0 | (593) | 0 |
Depreciation and amortization | 808 | 951 | 2,443 | 3,142 |
Total operating expenses | 3,006 | 3,756 | 10,299 | 11,716 |
OPERATING INCOME | 1,384 | 1,131 | 3,379 | 3,124 |
OTHER (EXPENSE) INCOME | ||||
Interest expense | (363) | (377) | (1,052) | (1,150) |
Other (expense) income, net | (84) | (38) | (136) | 48 |
Total other expense, net | (447) | (415) | (1,188) | (1,102) |
INCOME BEFORE INCOME TAXES | 937 | 716 | 2,191 | 2,022 |
Income tax expense | 359 | 172 | 670 | 497 |
NET INCOME | $ 578 | $ 544 | $ 1,521 | $ 1,525 |
BASIC AND DILUTED EARNINGS PER COMMON SHARE | ||||
BASIC (in dollars per share) | $ 0.57 | $ 0.51 | $ 1.50 | $ 1.42 |
DILUTED (in dollars per share) | $ 0.57 | $ 0.51 | $ 1.50 | $ 1.41 |
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING | ||||
BASIC (in shares) | 1,013,124 | 1,062,084 | 1,011,498 | 1,077,106 |
DILUTED (in shares) | 1,017,013 | 1,069,157 | 1,016,281 | 1,083,879 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
NET INCOME | $ 578 | $ 544 | $ 1,521 | $ 1,525 |
Items related to employee benefit plans: | ||||
Change in net actuarial loss, net of $(8), $(69), $(25) and $(93) tax | 24 | 214 | 74 | 290 |
Change in net prior service cost, net of $1, $—, $1 and $(1) tax | (1) | 1 | (2) | 3 |
Reclassification of realized loss on interest rate swaps to net income, net of $—, $(5), $(5) and $(15) tax | 0 | 16 | 17 | 47 |
Unrealized holding gain (loss) on interest rate swaps, net of $—, $—, $—, and $— tax | 0 | (1) | 0 | (1) |
Reclassification of realized loss on foreign currency translation to gain on sale of business, net of $—, $—, $—, and $— tax | 112 | 0 | 112 | 0 |
Foreign currency translation adjustment, net of $28, $13, $70 and $16 tax | (120) | (97) | (245) | (103) |
Other comprehensive income (loss) | 15 | 133 | (44) | 236 |
COMPREHENSIVE INCOME | $ 593 | $ 677 | $ 1,477 | $ 1,761 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Change in net actuarial loss, tax | $ (8) | $ (69) | $ (25) | $ (93) |
Change in net prior service cost, tax | 1 | 0 | 1 | (1) |
Reclassification of realized loss on interest rate swaps to net income, tax | 0 | (5) | (5) | (15) |
Unrealized holding gain (loss) on interest rate swaps, tax | 0 | 0 | 0 | 0 |
Reclassification of realized loss on foreign currency translation to gain on sale of business, tax | 0 | 0 | 0 | 0 |
Foreign currency translation adjustment and other, tax | $ 28 | $ 13 | $ 70 | $ 16 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 252 | $ 354 |
Accounts receivable, less allowance of $95 and $114 | 1,457 | 1,544 |
Assets held for sale | 6,779 | 8,809 |
Other | 894 | 829 |
Total current assets | 9,382 | 11,536 |
Property, plant and equipment, net of accumulated depreciation of $20,391 and $19,271 | 20,713 | 20,895 |
GOODWILL AND OTHER ASSETS | ||
Goodwill | 15,918 | 15,986 |
Other intangible assets, net | 6,436 | 6,970 |
Other, net | 2,368 | 2,606 |
Total goodwill and other assets | 24,722 | 25,562 |
TOTAL ASSETS | 54,817 | 57,993 |
CURRENT LIABILITIES | ||
Current maturities of long-term debt | 3,474 | 1,554 |
Accounts payable | 1,009 | 758 |
Accrued expenses and other liabilities | ||
Salaries and benefits | 788 | 860 |
Income and other taxes | 275 | 228 |
Current operating lease liabilities | 396 | 385 |
Interest | 184 | 278 |
Other | 173 | 232 |
Liabilities held for sale | 1,792 | 2,257 |
Current portion of deferred revenue | 624 | 617 |
Total current liabilities | 8,715 | 7,169 |
LONG-TERM DEBT | 21,764 | 27,428 |
DEFERRED CREDITS AND OTHER LIABILITIES | ||
Deferred income taxes, net | 4,595 | 4,049 |
Benefit plan obligations, net | 3,192 | 3,710 |
Other | 3,974 | 3,797 |
Total deferred credits and other liabilities | 11,761 | 11,556 |
COMMITMENTS AND CONTINGENCIES (Note 13) | ||
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 1,034,758 and 1,023,512 shares | 1,035 | 1,024 |
Additional paid-in capital | 18,221 | 18,972 |
Accumulated other comprehensive loss | (2,202) | (2,158) |
Accumulated deficit | (4,477) | (5,998) |
Total stockholders' equity | 12,577 | 11,840 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 54,817 | $ 57,993 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 95 | $ 114 |
Accumulated depreciation | $ 20,391 | $ 19,271 |
Preferred stock-non-redeemable, par value (in dollars per share) | $ 25 | $ 25 |
Preferred stock-non-redeemable, shares authorized (in shares) | 2,000 | 2,000 |
Preferred stock-non-redeemable, shares issued (in shares) | 7 | 7 |
Preferred stock-non-redeemable, shares outstanding (in shares) | 7 | 7 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 2,200,000 | 2,200,000 |
Common stock, shares issued (in shares) | 1,034,758 | 1,023,512 |
Common stock, shares outstanding (in shares) | 1,034,758 | 1,023,512 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | |
OPERATING ACTIVITIES | |||
Net income | $ 578 | $ 1,521 | $ 1,525 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 2,443 | 3,142 | |
Gain on sale of business | (593) | (593) | 0 |
Deferred income taxes | 618 | 431 | |
Provision for uncollectible accounts | 99 | 80 | |
Net gain on early retirement of debt | (9) | (8) | |
Unrealized loss on investments | 197 | 9 | |
Stock-based compensation | 23 | 71 | 89 |
Changes in current assets and liabilities: | |||
Accounts receivable | (27) | 20 | |
Accounts payable | 45 | (240) | |
Accrued income and other taxes | 25 | 7 | |
Other current assets and liabilities, net | (323) | (263) | |
Retirement benefits | (440) | (126) | |
Changes in other noncurrent assets and liabilities, net | 141 | 207 | |
Other, net | 126 | 21 | |
Net cash provided by operating activities | 3,894 | 4,894 | |
INVESTING ACTIVITIES | |||
Capital expenditures | (2,183) | (2,052) | |
Proceeds from sale of business | 2,707 | 0 | |
Proceeds from sale of property, plant and equipment, and other assets | 67 | 90 | |
Other, net | 3 | 13 | |
Net cash provided by (used in) investing activities | 594 | (1,949) | |
FINANCING ACTIVITIES | |||
Net proceeds from issuance of long-term debt | 0 | 1,881 | |
Payments of long-term debt | (3,899) | (2,604) | |
Net proceeds from (payments on) revolving line of credit | 80 | (150) | |
Dividends paid | (780) | (834) | |
Repurchases of common stock | 0 | (909) | |
Other, net | (33) | (52) | |
Net cash used in financing activities | (4,632) | (2,668) | |
Net (decrease) increase in cash, cash equivalents and restricted cash | (144) | 277 | |
Cash, cash equivalents and restricted cash at beginning of period | 409 | 427 | |
Cash, cash equivalents and restricted cash at end of period | 265 | 265 | 704 |
Supplemental cash flow information: | |||
Income taxes paid, net | (58) | (102) | |
Interest paid (net of capitalized interest of $48 and $39) | (1,092) | (1,144) | |
Supplemental noncash information regarding investing activities: | |||
Sale of property, plant and equipment in exchange for note receivable | 0 | 56 | |
Cash, cash equivalents and restricted cash: | |||
Cash and cash equivalents | 252 | 252 | 635 |
Cash and cash equivalents included in Assets held for sale | 0 | 0 | 39 |
Restricted cash included in Other current assets | 1 | 1 | 2 |
Restricted cash included in Other, net noncurrent assets | 12 | 12 | 28 |
Total | $ 265 | $ 265 | $ 704 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Cash Flows [Abstract] | ||
Capitalized interest | $ 48 | $ 39 |
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 |
Balance at beginning of period at Dec. 31, 2020 | $ 1,097 | $ 20,909 | $ (2,813) | $ (8,031) | |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock through incentive and benefit plans | 8 | ||||
Repurchases of common stock | (74) | (880) | |||
Shares withheld to satisfy tax withholdings | (44) | ||||
Stock-based compensation | 89 | ||||
Dividends declared | (839) | ||||
Other comprehensive income (loss) | $ 236 | 236 | |||
Net income | 1,525 | 1,525 | |||
Balance at end of period at Sep. 30, 2021 | $ 11,183 | 1,031 | 19,235 | (2,577) | (6,506) |
Increase (Decrease) in Stockholders' Equity | |||||
DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $ 0.75 | ||||
Balance at beginning of period at Jun. 30, 2021 | 1,105 | 20,361 | (2,710) | (7,050) | |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock through incentive and benefit plans | 0 | ||||
Repurchases of common stock | (74) | (880) | |||
Shares withheld to satisfy tax withholdings | (2) | ||||
Stock-based compensation | 25 | ||||
Dividends declared | (269) | ||||
Other comprehensive income (loss) | $ 133 | 133 | |||
Net income | 544 | 544 | |||
Balance at end of period at Sep. 30, 2021 | $ 11,183 | 1,031 | 19,235 | (2,577) | (6,506) |
Increase (Decrease) in Stockholders' Equity | |||||
DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $ 0.25 | ||||
Balance at beginning of period at Dec. 31, 2021 | $ 11,840 | 1,024 | 18,972 | (2,158) | (5,998) |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock through incentive and benefit plans | 11 | ||||
Repurchases of common stock | 0 | 0 | |||
Shares withheld to satisfy tax withholdings | (30) | ||||
Stock-based compensation | 71 | ||||
Dividends declared | (792) | ||||
Other comprehensive income (loss) | (44) | (44) | |||
Net income | 1,521 | 1,521 | |||
Balance at end of period at Sep. 30, 2022 | $ 12,577 | 1,035 | 18,221 | (2,202) | (4,477) |
Increase (Decrease) in Stockholders' Equity | |||||
DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $ 0.75 | ||||
Balance at beginning of period at Jun. 30, 2022 | 1,032 | 18,459 | (2,217) | (5,055) | |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock through incentive and benefit plans | 3 | ||||
Repurchases of common stock | 0 | 0 | |||
Shares withheld to satisfy tax withholdings | (1) | ||||
Stock-based compensation | 23 | ||||
Dividends declared | (260) | ||||
Other comprehensive income (loss) | $ 15 | 15 | |||
Net income | 578 | 578 | |||
Balance at end of period at Sep. 30, 2022 | $ 12,577 | $ 1,035 | $ 18,221 | $ (2,202) | $ (4,477) |
Increase (Decrease) in Stockholders' Equity | |||||
DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $ 0.25 |
Background
Background | 9 Months Ended |
Sep. 30, 2022 | |
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 products and services to our business and mass markets customers. Our specific products and services are detailed in Note 4—Revenue Recognition. Basis of Presentation Our consolidated balance sheet as of December 31, 2021, 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 note 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 U.S. Securities and Exchange Commission ("SEC"). However, in our opinion, the disclosures made therein are adequate to make the information presented not misleading. We believe 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 nine 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, 2021. 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 (expense) income, net, (ii) equity attributable to noncontrolling interests in additional paid-in capital and (iii) cash flows attributable to noncontrolling interests in other, net financing activities. We reclassified certain prior period amounts to conform to the current period presentation, including the recategorization of our Mass Markets revenue by product category in our segment reporting. See Note 12—Segment Information for additional information. These changes had no impact on total operating revenue, total operating expenses or net income 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 September 30, 2022 or December 31, 2021. Summary of Significant Accounting Policies Refer 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, 2021. Recently Adopted Accounting Pronouncements Government Assistance On January 1, 2022, we adopted Accounting Standards Update ("ASU") 2021-10, " Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance ” (“ASU 2020-10”). This ASU increases transparency in financial reporting by requiring business entities to disclose information about certain types of government assistance they receive. The ASU only impacts annual financial statement note disclosures. Therefore, the adoption of ASU 2021-10 did not have a material impact to our consolidated financial statements. Leases On January 1, 2022, we adopted ASU 2021-05, “ Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments ” (“ASU 2021-05”). This ASU (i) amends the lease classification requirements for lessors to align them with practice under ASC Topic 840, (ii) provides criteria for lessors to classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease; and (iii) provides guidance with respect to net investments by lessors under operating leases and other related topics. The adoption of ASU 2021-05 did not have a material impact to our consolidated financial statements. 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 guidance 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) ” ("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 September 30, 2022, we determined there was no application or discontinuation of the equity method during the reporting periods covered by this report. 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, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“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. Recently Issued Accounting Pronouncements In September 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-04, “Liabilities-Supplier Finance Program (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations ” (“ASU 2022-04”). These amendments require that a company that uses a supplier finance program in connection with the purchase of goods or services disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, program activity during the period, changes from period to period and potential magnitude of program transactions. ASU 2022-04 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of September 30, 2022, we are reviewing our supplier finance agreements to determine the impact to disclosures in our consolidated financial statements. In June 2022, the FASB issued ASU 2022-03, “ Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions ” (“ASU 2022-03”). These amendments clarify that a contractual restriction on the sales of an investment in equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. ASU 2022-03 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of September 30, 2022, we do not expect ASU 2022-03 to have an impact to our consolidated financial statements. In March 2022, the FASB issued ASU 2022-02, “ Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings (“TDR”) and Vintage Disclosures ” (“ASU 2022-02”). These amendments eliminate the TDR recognition and measurement guidance, enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. ASU 2022-02 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of September 30, 2022, we do not expect ASU 2022-02 to have an impact to our consolidated financial statements. In March 2022, the FASB issued ASU 2022-01, “ Derivatives and Hedging (Topic 815): Fair Value Hedging-Portfolio Layer Method ” (ASU 2022-01). The ASU expands the current single-layer method to allow multiple hedged layers of a single closed portfolio under the method. ASU 2022-01 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of September 30, 2022, we do not expect ASU 2022-01 to have an impact to our consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, “ Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ” (“ASU 2021-08”), which requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. ASU 2021-08 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of September 30, 2022, we do not expect ASU 2021-08 to have an impact to our consolidated financial statements. 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 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 optional expedients for a limited time to ease the potential burden in accounting for reference rate reform. Based on our review of our key material contracts through September 30, 2022, ASU 2021-01 does not have a material impact to our consolidated financial statements. |
Recently Completed Divestitures
Recently Completed Divestitures of the Latin American and ILEC Businesses | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Recently Completed Divestitures of the Latin American and ILEC Businesses | Recently Completed Divestitures of the Latin American and ILEC Businesses Latin American Business On August 1, 2022, affiliates of Level 3 Parent, LLC, an indirect wholly-owned subsidiary of Lumen Technologies, Inc., sold Lumen’s Latin American business pursuant to a definitive agreement dated July 25, 2021 for pre-tax cash proceeds of approximately $2.7 billion, subject to certain post-closing adjustments. During both the three and nine months ended September 30, 2022, we recorded a $593 million pre-tax gain on disposal associated with the sale of our Latin American business. This gain is reflected as operating income within the consolidated statements of operations. In connection with the sale, we entered into a transition services agreement under which we will provide to the purchaser various support services. In addition, Lumen and the purchaser entered into commercial agreements whereby they will provide each other various network and other commercial services. In addition, we agreed to indemnify the purchaser for certain matters for which future cash payments by Lumen could be required. Lumen has estimated the fair value of these indemnifications to be $86 million, which is included in other long-term liabilities in our consolidated balance sheet and has reduced our gain on the sale accordingly. The Latin American business was included in our continuing operations and classified as assets and liabilities held for sale on our consolidated balance sheets through the closing of the transaction on August 1, 2022. As a result of closing the transaction, we derecognized net assets of $1.9 billion, primarily made up of property, plant and equipment, net of accumulated depreciation, of $1.7 billion, goodwill of $245 million, other intangible assets, net of accumulated amortization, of $140 million, and deferred income tax liabilities, net, of $154 million. ILEC Business On October 3, 2022, we and certain of our affiliates closed the sale of our incumbent local exchange ("ILEC") business primarily conducted within 20 Midwestern and Southeastern states pursuant to a definitive agreement dated August 3, 2021, as amended and supplemented to date. See Note 17—Subsequent Events for additional information regarding this divestiture. In the accompanying consolidated balance sheet as of September 30, 2022, the assets and liabilities of our ILEC business are classified as held for sale and are measured at the lower of (i) the carrying value of the disposal group and (ii) the fair value of the disposal group, less costs to sell. Effective with the designation of the ILEC business as held for sale on August 3, 2021, we suspended recording depreciation of property, plant and equipment and amortization of finite-lived intangible assets and right-of-use assets while these assets are classified as held for sale. We estimate that we would have recorded an additional $114 million and $350 million of depreciation, intangible amortization, and amortization of right-of-use assets for the three and nine months ended September 30, 2022, respectively, and an additional $81 million of depreciation, intangible amortization, and amortization of right-of-use assets for the three and nine months ended September 30, 2021 if the ILEC business did not meet the held for sale criteria. The principal components of the held for sale assets and liabilities of the ILEC business as of the dates below are as follows: September 30, 2022 December 31, 2021 ILEC Business (Dollars in millions) Assets held for sale (1) Cash and cash equivalents $ — 1 Accounts receivable, less allowance of $19 and $21 195 227 Other current assets 52 45 Property, plant and equipment, net accumulated depreciation of $8,170 and $8,303 3,651 3,491 Goodwill (2) 2,581 2,615 Other intangible assets, net 158 158 Other non-current assets 38 38 Total assets held for sale $ 6,675 6,575 Liabilities held for sale (1) Accounts payable $ 56 64 Salaries and benefits 32 25 Income and other taxes 30 24 Interest 38 10 Current portion of deferred revenue 87 90 Other current liabilities 47 35 Long-term debt, net of discounts (3) 1,400 1,377 Pension and other post-retirement benefits (4) 27 56 Other non-current liabilities 71 141 Total liabilities held for sale $ 1,788 1,822 ______________________________________________________________________ (1) As a result of the above-described sale of our Latin American business on August 1, 2022, this table excludes $2.2 billion of assets and $435 million of liabilities relating to the Latin American business. The net assets of the Latin American business were classified as held for sale on our accompanying balance sheet as of December 31, 2021. (2) The assignment of goodwill was based on the relative fair value of the applicable reporting units prior to being classified as held for sale. (3) Long-term debt, net of discounts, as of September 30, 2022 and December 31, 2021 includes (i) $1.4 billion aggregate principal amount of 7.995% Embarq senior notes maturing in 2036, (ii) $114 million and $117 million of related unamortized discounts, respectively, and (iii) $76 million and $57 million of long-term finance lease obligations, respectively. (4) Excludes pension obligation of approximately $2.5 billion for the ILEC business as of both September 30, 2022 and December 31, 2021, which we transferred to the purchaser of the ILEC business upon closing. As of January 1, 2022, we spun off a new pension plan (the "Lumen Pension Plan") in anticipation of this transfer. Along with the transfer of the $2.5 billion pension benefit obligation, we allocated $2.2 billion of assets to the new plan in January 2022 and contributed $319 million of additional cash to the new plan's trust in September 2022 to fully fund the pension plan. See Note 8—Employee Benefits for additional information. As a result of our evaluation of the recoverability of the carrying value of the ILEC assets and liabilities held for sale relative to the agreed upon sales price, adjusted for costs to sell, we did not record any estimated loss on disposal during the nine months ended September 30, 2022. For information on the October 3, 2022 disposal of the ILEC business, see Note 17—Subsequent Events. Other We do not believe either of these divestitures represent a strategic shift for Lumen. Therefore, neither of the divested businesses meet the criteria to be classified as a discontinued operation. As a result, we continued to report our operating results for the Latin American and ILEC businesses (the "disposal groups") in our consolidated operating results through their disposal dates of August 1, 2022 and October 3, 2022, respectively (see Note 17—Subsequent Events for additional information regarding the close of the sale of the ILEC business). The pre-tax net income of the ILEC business is estimated to be as follows in the tables below: ILEC business pre-tax net income 2022 2021 (Dollars in millions) Three Months Ended September 30, $ 164 234 Nine Months Ended September 30, $ 576 528 |
Goodwill, Customer Relationship
Goodwill, Customer Relationships and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2022 | |
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: September 30, 2022 December 31, 2021 (Dollars in millions) Goodwill $ 15,918 15,986 Indefinite-lived intangible assets $ 9 9 Other intangible assets subject to amortization: Customer relationships, less accumulated amortization of $3,579 and $11,740 (1) 4,822 5,365 Capitalized software, less accumulated amortization of $3,832 and $3,624 1,498 1,459 Trade names, patents and other, less accumulated amortization of $183 and $160 107 137 Total other intangible assets, net $ 6,436 6,970 ______________________________________________________________________ (1) Certain customer relationships with a gross carrying value of $8.7 billion became fully amortized during 2021 and were retired during the first quarter of 2022. As of September 30, 2022, the gross carrying amount of goodwill, customer relationships, indefinite-lived and other intangible assets was $29.9 billion. 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 a non-cash 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 is based on the 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 . The following table shows the rollforward of goodwill assigned to our reportable segments from December 31, 2021 through September 30, 2022: Business Mass Markets Total (Dollars in millions) As of December 31, 2021 (1)(2) $ 11,235 4,751 15,986 Effect of foreign currency exchange rate change and other (68) — (68) As of September 30, 2022 (1)(3) $ 11,167 4,751 15,918 ______________________________________________________________________ (1) Goodwill at September 30, 2022 and December 31, 2021 is net of accumulated impairment losses of $7.7 billion. (2) As of December 31, 2021 these amounts excluded $2.9 billion of goodwill classified as held for sale primarily related to the August 1, 2022 divestiture of the Latin American business and the October 3, 2022 divestiture of the ILEC business. See Note 2—Recently Completed Divestitures of the Latin American and ILEC Businesses for additional information. (3) As of September 30, 2022 these amounts excluded $2.6 billion of goodwill classified as held for sale related to the October 3, 2022 divestiture of the ILEC business. See Note 2—Recently Completed Divestitures of the Latin American and ILEC Businesses and Note 17—Subsequent Events for additional information. We report our results within two segments: Business and Mass Markets. See Note 12—Segment Information for more information on these segments and the underlying sales channels. As of September 30, 2022, we have four reporting units for goodwill impairment testing, which are (i) Mass Markets, (ii) North America Business (iii) Europe, Middle East and Africa region, and (iv) Asia Pacific region. Prior to its August 1, 2022 divestiture, the Latin American region was also considered to be a reporting unit. Total amortization expense for finite-lived intangible assets for the three months ended September 30, 2022 and 2021 totaled $279 million and $306 million, respectively, and for the nine months ended September 30, 2022 and 2021, totaled $830 million and $1.0 billion, respectively. We estimate that total amortization expense for finite-lived intangible assets for the years ending December 31, 2022 through 2026 will be as provided in the table below. The amounts presented in the table below do not include future amortization expense for intangible assets of the ILEC business that was classified as held for sale on September 30, 2022 and sold on October 3, 2022. See Note 2—Recently Completed Divestitures of the Latin American and ILEC Businesses for more information. (Dollars in millions) 2022 (remaining three months) $ 261 2023 978 2024 906 2025 839 2026 762 |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Product and Service Categories We categorize our products and services revenue among the following categories for the Business segment: • Compute and Application Services , which include our Edge Cloud services, IT solutions, Unified Communications and Collaboration ("UC&C"), data center, content delivery network ("CDN") and managed security services; • IP and Data Services , which include Ethernet, IP, and VPN data networks, including software-defined wide area networks ("SD WAN") based services, Dynamic Connections and Hyper WAN; • Fiber Infrastructure Services , which include dark fiber, optical services and equipment; and • Voice and Other , which include Time Division Multiplexing ("TDM") voice, private line and other legacy services. Since the first quarter of 2022, we have categorized our products and services revenue among the following categories for the Mass Markets segment: • Fiber Broadband , which includes high speed fiber-based broadband services to residential and small business customers; • Other Broadband , which primarily includes lower speed copper-based broadband services to residential and small business customers; and • Voice and Other, which includes revenues from (i) providing local and long-distance services, professional services, and other ancillary services, and (ii) federal broadband and state support payments. Reconciliation of Total Revenue to Revenue from Contracts with Customers The following tables provide total revenue by segment, sales channel and product category. They also provide the amount of revenue that is not subject to ASC 606, " Revenue from Contracts with Customers " ("ASC 606"), but is instead governed by other accounting standards. The amounts in the tables below include the Latin American business revenues prior to it being sold on August 1, 2022. Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 Total Revenue Adjustments for Non-ASC 606 revenue (1) Total revenue from Contracts with Customers Total Revenue Adjustments for Non-ASC 606 revenue (1) Total revenue from Contracts with Customers (Dollars in millions) Business Segment by Sales Channel and Product Category International and Global Accounts ("IGAM") Compute and Application Services $ 154 (47) 107 183 (71) 112 IP and Data Services 350 — 350 431 — 431 Fiber Infrastructure 199 (33) 166 231 (33) 198 Voice and Other 150 — 150 182 — 182 Total IGAM Revenue 853 (80) 773 1,027 (104) 923 Large Enterprise Compute and Application Services 148 (16) 132 172 (15) 157 IP and Data Services 378 — 378 394 — 394 Fiber Infrastructure 117 (11) 106 143 (11) 132 Voice and Other 201 — 201 233 — 233 Total Large Enterprise Revenue 844 (27) 817 942 (26) 916 Mid-Market Enterprise Compute and Application Services 35 (7) 28 30 (8) 22 IP and Data Services 406 (1) 405 421 (1) 420 Fiber Infrastructure 49 (2) 47 50 (2) 48 Voice and Other 128 — 128 147 — 147 Total Mid-Market Enterprise Revenue 618 (10) 608 648 (11) 637 Wholesale Compute and Application Services 62 (39) 23 46 (39) 7 IP and Data Services 283 — 283 297 — 297 Fiber Infrastructure 165 (28) 137 154 (30) 124 Voice and Other 392 (62) 330 394 (63) 331 Total Wholesale Revenue 902 (129) 773 891 (132) 759 Business Segment by Product Category Compute and Application Services 399 (109) 290 431 (133) 298 IP and Data Services 1,417 (1) 1,416 1,543 (1) 1,542 Fiber Infrastructure 530 (74) 456 578 (76) 502 Voice and Other 871 (62) 809 956 (63) 893 Total Business Segment Revenue 3,217 (246) 2,971 3,508 (273) 3,235 Mass Markets Segment by Product Category Fiber Broadband 160 (4) 156 135 — 135 Other Broadband 580 (55) 525 619 (56) 563 Voice and Other 433 (26) 407 625 (143) 482 Total Mass Markets Revenue 1,173 (85) 1,088 1,379 (199) 1,180 Total Revenue $ 4,390 (331) 4,059 4,887 (472) 4,415 Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 Total revenue Adjustments for non-ASC 606 revenue (1) Total revenue from contracts with customers Total revenue Adjustments for non-ASC 606 revenue (1) Total revenue from contracts with customers (Dollars in millions) Business Segment by Sales Channel and Product Category International and Global Accounts ("IGAM") Compute and Application Services $ 521 (191) 330 547 (210) 337 IP and Data Services 1,190 — 1,190 1,287 — 1,287 Fiber Infrastructure 642 (102) 540 665 (95) 570 Voice and Other 495 — 495 559 — 559 Total IGAM Revenue 2,848 (293) 2,555 3,058 (305) 2,753 Large Enterprise Compute and Application Services 473 (45) 428 515 (45) 470 IP and Data Services 1,151 — 1,151 1,192 — 1,192 Fiber Infrastructure 359 (35) 324 403 (38) 365 Voice and Other 622 — 622 730 — 730 Total Large Enterprise Revenue 2,605 (80) 2,525 2,840 (83) 2,757 Mid-Market Enterprise Compute and Application Services 102 (21) 81 94 (25) 69 IP and Data Services 1,229 (3) 1,226 1,291 (4) 1,287 Fiber Infrastructure 148 (6) 142 156 (6) 150 Voice and Other 401 — 401 461 — 461 Total Mid-Market Enterprise Revenue 1,880 (30) 1,850 2,002 (35) 1,967 Wholesale Compute and Application Services 183 (118) 65 141 (120) 21 IP and Data Services 864 — 864 900 — 900 Fiber Infrastructure 480 (84) 396 463 (89) 374 Voice and Other 1,174 (189) 985 1,221 (188) 1,033 Total Wholesale Revenue 2,701 (391) 2,310 2,725 (397) 2,328 Business Segment by Product Category Compute and Application Services 1,279 (375) 904 1,297 (400) 897 IP and Data Services 4,434 (3) 4,431 4,670 (4) 4,666 Fiber Infrastructure 1,629 (227) 1,402 1,687 (228) 1,459 Voice and Other 2,692 (189) 2,503 2,971 (188) 2,783 Total Business Segment Revenue 10,034 (794) 9,240 10,625 (820) 9,805 Mass Markets Segment by Product Category Fiber Broadband 456 (14) 442 387 — 387 Other Broadband 1,786 (166) 1,620 1,899 (166) 1,733 Voice and Other 1,402 (125) 1,277 1,929 (431) 1,498 Total Mass Markets Revenue 3,644 (305) 3,339 4,215 (597) 3,618 Total Revenue $ 13,678 (1,099) 12,579 14,840 (1,417) 13,423 _____________________________________________________________________ (1) Includes regulatory revenue and lease revenue not within the scope of ASC 606. Operating Lease Income Lumen Technologies leases various dark fiber, office facilities, colocation facilities, switching facilities, other network sites and service equipment to third parties under operating leases. Lease and sublease income are included in operating revenue in our consolidated statements of operations. For the three months ended September 30, 2022 and 2021, our gross rental income was $307 million and $329 million, respectively, which represents approximately 7% of our operating revenue for both the three months ended September 30, 2022 and 2021. For the nine months ended September 30, 2022, and 2021, our gross rental income was $978 million and $988 million, respectively, which represents approximately 7% of our operating revenue for both the nine months ended September 30, 2022 and 2021. Customer Receivables and Contract Balances The following table provides balances of customer receivables, contract assets and contract liabilities, net of amounts classified as held for sale, as of September 30, 2022 and December 31, 2021: September 30, 2022 December 31, 2021 (Dollars in millions) Customer receivables (1) $ 1,407 1,493 Contract assets (2) 56 73 Contract liabilities (3) 714 680 ______________________________________________________________________ (1) Reflects gross customer receivables of $1.5 billion and $1.6 billion, net of allowance for credit losses of $84 million and $102 million, at September 30, 2022 and December 31, 2021, respectively. These amounts exclude customer receivables, net, classified as held for sale of $175 million at September 30, 2022 (related to the ILEC business) and $288 million at December 31, 2021 (related to both the Latin American business and the ILEC business). (2) These amounts exclude contract assets classified as held for sale of $7 million at September 30, 2022 (related to the ILEC business) and $9 million at December 31, 2021 (related to both the Latin American business and the ILEC business). (3) These amounts exclude contract liabilities classified as held for sale of $76 million at September 30, 2022 (related to the ILEC business) and $161 million at December 31, 2021 (related to both the Latin American business and the ILEC business). Contract liabilities are consideration we have received from our customers or billed in advance of providing goods or services promised in the future. We defer recognizing this consideration as revenue until we have satisfied the related performance obligation to the customer. Contract liabilities include recurring services billed one month in advance and installation and maintenance charges that are deferred and recognized over the actual or expected contract term, which typically ranges from one Performance Obligations As of September 30, 2022, we expect to recognize approximately $5.9 billion of revenue in the future related to performance obligations associated with existing customer contracts that are partially or wholly unsatisfied. We expect to recognize approximately 69% of this revenue through 2024, with the balance recognized thereafter. These amounts exclude (i) the value of unsatisfied performance obligations for contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed (for example, uncommitted usage or non-recurring charges associated with professional or technical services to be completed), (ii) contracts that are classified as leasing arrangements or government assistance that are not subject to ASC 606, and (iii) the value of unsatisfied performance obligations for contracts which relate to our recently completed divestitures. Contract Costs The following tables provide changes in our contract acquisition costs and fulfillment costs: Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 Acquisition Costs Fulfillment Costs Acquisition Costs Fulfillment Costs (Dollars in millions) (Dollars in millions) Beginning of period balance (1) $ 208 188 271 217 Costs incurred 45 38 43 37 Amortization (49) (35) (51) (37) Change in contract costs held for sale 3 (2) (35) (31) End of period balance (2) $ 207 189 228 186 Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 Acquisition Costs Fulfillment Costs Acquisition Costs Fulfillment Costs (Dollars in millions) (Dollars in millions) Beginning of period balance (3) $ 222 186 289 216 Costs incurred 129 119 132 112 Amortization (150) (113) (158) (111) Change in contract costs held for sale 6 (3) (35) (31) End of period balance (2) $ 207 189 228 186 ______________________________________________________________________ (1) Beginning of period balance for the three months ended September 30, 2022 excludes acquisition costs and fulfillment costs classified as held for sale of $31 million and $33 million, respectively (related to both the Latin American business and the ILEC business). (2) Ending of period balance for the three and nine months ended September 30, 2022 excludes acquisition costs and fulfillment costs classified as held for sale of $28 million and $35 million, respectively, related to the ILEC business. Ending of period balance for the three and nine months ended September 30, 2021 excludes acquisition costs and fulfillment costs classified as held for sale of $35 million and $31 million, respectively (related to both the Latin American business and the ILEC business). (3) Beginning of period balance for the nine months ended September 30, 2022 excludes acquisition costs and fulfillment costs classified as held for sale of $34 million and $32 million, respectively (related to both the Latin American business and the ILEC business). Acquisition costs include commission fees paid to employees as a result of obtaining contracts. Fulfillment costs include third party and internal costs associated with the provision, installation and activation of services to customers, including labor and materials consumed for these activities. Deferred acquisition and fulfillment costs are amortized based on the transfer of services on a straight-line basis over the average contract life of approximately 32 months for mass markets customers and 30 months for business customers. Amortized fulfillment costs are included in cost of services and products and amortized acquisition costs are included in selling, general and administrative expenses in our consolidated statements of operations. The amount of these deferred costs that are anticipated to be amortized in the next 12 months are included in other current assets on our consolidated balance sheets. The amount of deferred costs expected to be amortized beyond the next twelve months is included in other non-current assets on our consolidated balance sheets. Deferred acquisition and fulfillment costs are assessed for impairment on a quarterly basis. |
Credit Losses on Financial Inst
Credit Losses on Financial Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Credit Loss [Abstract] | |
Credit Losses on Financial Instruments | Credit Losses on Financial Instruments To assess our expected credit losses on financial instruments, we aggregate financial assets with similar risk characteristics to monitor their credit quality or deterioration over the life of such assets. We periodically monitor certain risk characteristics within our aggregated financial assets and revise their composition accordingly, to the extent internal and external risk factors change. We separately evaluate financial assets that do not share risk characteristics with other financial assets. Our financial assets measured at amortized cost primarily consist of accounts receivable. We use a loss rate method to estimate our allowance for credit losses. Our determination of the current expected credit loss rate begins with our review 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. If there is an unexpected deterioration of a customer's financial condition or an unexpected change in economic conditions, including macroeconomic events, we assess the need to adjust the allowance for credit losses. Any such resulting adjustments 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 our 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, and we may use methodologies that differ from those used by other companies. The following table presents the activity of our allowance for credit losses by accounts receivable portfolio for the nine months ended September 30, 2022: Business Mass Markets Total (Dollars in millions) As of December 31, 2021 (1) $ 88 26 114 Provision for expected losses 19 80 99 Write-offs charged against the allowance (47) (88) (135) Recoveries collected 9 5 14 Foreign currency exchange rate change adjustment 1 — 1 Change in allowance in assets held for sale (1) 3 2 Ending balance at September 30, 2022 (2) $ 69 26 95 ______________________________________________________________________ (1) As of December 31, 2021, these amounts excluded a $24 million allowance for credit losses classified as held for sale related to the August 1, 2022 divestiture of the Latin American business and the divestiture of the ILEC business. See Note 2—Recently Completed Divestitures of the Latin American and ILEC Businesses. (2) As of September 30, 2022, these amounts excluded a $19 million allowance for credit losses classified as held for sale related to the divestiture of the ILEC business. See Note 2—Recently Completed Divestitures of the Latin American and ILEC Businesses. |
Long-Term Debt and Credit Facil
Long-Term Debt and Credit Facilities | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Credit Facilities | Long-Term Debt and Credit Facilities The following table reflects the consolidated long-term debt of Lumen Technologies, Inc. and its subsidiaries as of the dates indicated below, including unamortized discounts and premiums unamortized debt issuance costs: Interest Rates (1) Maturities (1) September 30, 2022 December 31, 2021 (Dollars in millions) Senior Secured Debt: (2) Lumen Technologies, Inc. Revolving Credit Facility (3) LIBOR + 2.00% 2025 $ 280 200 Term Loan A (4) LIBOR + 2.00% 2025 1,006 1,050 Term Loan A-1 (4) LIBOR + 2.00% 2025 287 300 Term Loan B (5) LIBOR + 2.25% 2027 4,863 4,900 Senior notes 4.000% 2027 1,250 1,250 Subsidiaries: Level 3 Financing, Inc. Tranche B 2027 Term Loan (6) LIBOR + 1.75% 2027 2,411 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 137 138 Senior Notes and Other Debt: (7) Lumen Technologies, Inc. Senior notes 4.500% - 7.650% 2023 - 2042 6,985 8,414 Subsidiaries: Level 3 Financing, Inc. Senior notes 3.625% - 4.625% 2027 - 2029 3,940 5,515 Qwest Corporation Senior notes 6.500% - 7.750% 2025 - 2057 1,986 1,986 Term loan (8) LIBOR + 2.00% 2027 215 215 Qwest Capital Funding, Inc. Senior notes 6.875% - 7.750% 2028 - 2031 255 255 Finance lease and other obligations Various Various 324 347 Unamortized (discounts) premiums, net (8) 21 Unamortized debt issuance costs (193) (220) Total long-term debt 25,238 28,982 Less current maturities (3,474) (1,554) Long-term debt, excluding current maturities $ 21,764 27,428 ______________________________________________________________________ (1) As of September 30, 2022. (2) See Note 7—Long-Term Debt and Credit Facilities in our Annual Report on Form 10-K for the year ended December 31, 2021 for a description of certain parent or subsidiary guarantees and liens securing this debt. (3) The Revolving Credit Facility had interest rates of 5.080% and 2.103% as of September 30, 2022 and December 31, 2021, respectively. (4) Term Loans A and A-1 had interest rates of 5.115% and 2.104% as of September 30, 2022 and December 31, 2021, respectively. (5) Term Loan B had interest rates of 5.365% and 2.354% as of September 30, 2022 and December 31, 2021, respectively. (6) The Level 3 Tranche B 2027 Term Loan had interest rates of 4.865% and 1.854% as of September 30, 2022 and December 31, 2021, respectively. (7) The table excludes $1.4 billion of indebtedness under Embarq Corporation's 7.995% senior notes maturing in 2036 that was classified as held for sale as of September 30, 2022 and December 31, 2021, and was assumed by the third-party purchaser as of October 3, 2022 concurrent with the sale of the ILEC business. See Note 2—Recently Completed Divestitures of the Latin American and ILEC Businesses and Note 17—Subsequent Events. (8) The Qwest Corporation Term Loan had interest rates of 5.120% and 2.110% as of September 30, 2022 and December 31, 2021, respectively. Long-Term Debt Maturities Set forth below is the aggregate principal amount of our long-term debt as of September 30, 2022 (excluding unamortized (discounts) premiums, net, and unamortized debt issuance costs), maturing during the following years.: (Dollars in millions) (1) 2022 (remaining three months) (2) $ 1,908 2023 153 2024 158 2025 2,343 2026 1,276 2027 and thereafter 19,601 Total long-term debt $ 25,439 ______________________________________________________________________ (1) These amounts exclude $1.5 billion of debt and finance lease obligations related to the ILEC business that were classified as held for sale as of September 30, 2022. See Note 2—Recently Completed Divestitures of the Latin American and ILEC Businesses for more information. (2) These amounts include $1.9 billion aggregate principal senior notes for which we issued redemption notices on September 26, 2022. See Note 17—Subsequent Events for information on additional debt repayments made since September 30, 2022 and the classification of the related aggregate principal as current maturities of long-term debt on our consolidated balance sheets as of September 30, 2022. Borrowings and Repayments During the nine months ended September 30, 2022, Lumen borrowed $2.4 billion from, and made repayments of $2.3 billion to, its Revolving Credit Facility. We used our net revolving credit draws and available cash to repay the following aggregate principal amount of indebtedness through a combination of tender offers, redemptions, prepayments and payments at maturity. These transactions resulted in a net gain of $9 million. Debt Period of Repayment (Dollars in millions) Lumen Technologies, Inc. 5.800% Senior Notes due 2022 (at Maturity) Q1 2022 $ 1,400 Level 3 Financing, Inc. Tranche B 2027 Term Loan Q3 2022 700 5.375% Senior Notes due 2025 Q3 2022 800 5.250% Senior Notes due 2026 Q3 2022 775 Other Q3 2022 30 Total Debt Repayments $ 3,705 For information on additional debt repayment since September 30, 2022, see Note 17—Subsequent Events. Covenants Certain of our debt instruments contain affirmative and negative covenants. Debt at Lumen Technologies, Inc. and Level 3 Financing, Inc. contains more extensive covenants including, among other things and subject to certain exceptions, restrictions on the ability to declare or pay dividends, repay certain other indebtedness, create liens, incur additional indebtedness, make investments, engage in transactions with 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 defined circumstances in connection with specified "change of control" transactions. Certain of our debt instruments contain cross-payment default or cross-acceleration provisions. Compliance As of September 30, 2022, 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 | 9 Months Ended |
Sep. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Severance | Severance Periodically, 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 workloads due to reduced demand for certain services. Changes in our accrued liabilities for severance expenses were as follows: Severance (Dollars in millions) Balance at December 31, 2021 $ 36 Accrued to expense 2 Payments, net (30) Balance at September 30, 2022 $ 8 |
Employee Benefits
Employee Benefits | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Employee Benefits | Employee Benefits For detailed description of the various defined benefit pension plans (qualified and non-qualified), post-retirement benefits plans and defined contribution plan we sponsor, see Note 11—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, 2021. As of January 1, 2022, we spun off a new pension plan (the "Lumen Pension Plan") from the Lumen Combined Pension Plan (the "Combined Pension Plan") in anticipation of the sale of the ILEC business, as described further in Note 2—Recently Completed Divestitures of the Latin American and ILEC Businesses. The Lumen Pension Plan covers approximately 2,500 active plan participants along with 19,000 other participants. At the time of the spin-off, the Lumen Pension Plan had a pension benefit obligation of $2.5 billion and assets of $2.2 billion. In addition, the December 31, 2021 actuarial (loss) gain and prior service cost included in accumulated other comprehensive loss was allocated between the Lumen Pension Plan and the Lumen Combined Pension Plan. Following a revaluation of the pension obligation and pension assets for the Lumen Pension Plan, in preparation for the closing of the sale of the ILEC business, we contributed approximately $319 million of cash to the Lumen Pension Plan trust to fully fund the pension plan in September 2022. The amounts allocated to the Lumen Pension Plan were subject to adjustment up to the closing of the sale of the ILEC business on October 3, 2022, at which time the plan was transferred along with the rest of the assets and liabilities of the ILEC business. We recognized pension costs related to both plans through the sale of the ILEC business, at which time balances related to the Lumen Pension Plan will be reflected in the calculation of our gain on the sale of the business. Net periodic benefit (income) expense for the Combined Pension Plan and the Lumen Pension Plan (together the "Pension Plans") includes the following components: Pension Plans Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (Dollars in millions) Service cost $ 11 14 34 42 Interest cost 53 49 155 148 Expected return on plan assets (100) (138) (302) (414) Settlement charges — 57 — 57 Recognition of prior service credit (3) (2) (8) (7) Recognition of actuarial loss 32 49 99 147 Net periodic pension (income) expense $ (7) 29 (22) (27) Net periodic benefit expense for our post-retirement benefit plans includes the following components: Post-Retirement Benefit Plans Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (Dollars in millions) Service cost $ 3 4 8 11 Interest cost 15 12 45 35 Recognition of prior service cost 1 3 5 11 Recognition of actuarial loss — 2 — 4 Net periodic post-retirement benefit expense $ 19 21 58 61 Service costs for our Pension Plans and post-retirement benefit plans are included in the cost of services and products and selling, general and administrative line items on our consolidated statements of operations and all other costs listed above are included in other (expense) income, net on our consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021. Our Pension Plans contain provisions that allow us, from time to time, to offer lump sum payment options to certain former employees in settlement of their future retirement benefits. We record an accounting settlement charge, consisting of the recognition of certain deferred costs of the pension plan associated with these lump sum payments, only if, in the aggregate, they exceed or are probable to exceed the sum of the annual service and interest costs for the plan’s net periodic pension benefit cost, which represents the settlement accounting threshold. The amount of any future non-cash settlement charges will be dependent on several factors, including the total amount of our future lump sum benefit payments. Benefits paid by the Combined Pension Plan are paid through a trust that holds the plan's assets. Benefit payments for the Lumen Pension Plan were made from the Combined Pension Plan trust through May of 2022, and from the Lumen Pension Plan trust starting in June of 2022. |
Earnings Per Common Share
Earnings Per Common Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | Earnings Per Common Share Basic and diluted earnings per common share for the three and nine months ended September 30, 2022 and 2021 were calculated as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (Dollars in millions, except per share amounts, shares in thousands) Income (Numerator) Net income $ 578 544 1,521 1,525 Net income applicable to common stock for computing basic earnings per common share 578 544 1,521 1,525 Net income as adjusted for purposes of computing diluted earnings per common share $ 578 544 1,521 1,525 Shares (Denominator): Weighted-average number of shares: Outstanding during period 1,034,786 1,079,917 1,031,687 1,095,223 Non-vested restricted stock (21,662) (17,833) (20,189) (18,117) Weighted average shares outstanding for computing basic earnings per common share 1,013,124 1,062,084 1,011,498 1,077,106 Incremental common shares attributable to dilutive securities: Shares issuable under convertible securities 10 10 10 10 Shares issuable under incentive compensation plans 3,879 7,063 4,773 6,763 Number of shares as adjusted for purposes of computing diluted earnings per common share 1,017,013 1,069,157 1,016,281 1,083,879 Basic earnings per common share $ 0.57 0.51 1.50 1.42 Diluted earnings per common share $ 0.57 0.51 1.50 1.41 Our calculation of diluted earnings per common share excludes unvested restricted stock awards that are antidilutive as a result of unrecognized compensation cost. Such shares were 12.9 million and 3.9 million for the three months ended September 30, 2022 and 2021, respectively, and 10.4 million and 3.0 million for the nine months ended September 30, 2022 and 2021, respectively. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Our financial instruments consist of cash, cash equivalents, restricted cash, accounts receivable, accounts payable, long-term debt (excluding finance lease and other obligations), interest rate swap contracts, certain investments and certain indemnification obligations. Due primarily to their short-term nature, the carrying amounts of our cash, cash equivalents, restricted cash, accounts receivable and accounts payable approximate their fair values. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between independent and knowledgeable parties who are willing and able to transact for an asset or liability at the measurement date. We use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs when determining fair value and then we rank the estimated values based on the reliability of the inputs used following the fair value hierarchy. We determined the fair values of our long-term debt, including the current portion, based on quoted market prices where available or, if not available, based on inputs other than quoted market prices in active markets that are either directly or indirectly observable such as discounted future cash flows using current market interest rates. The three input levels in the hierarchy of fair value measurements are defined by the FASB generally as follows: Input Level Description of Input Level 1 Observable inputs such as quoted market prices in active markets. Level 2 Inputs other than quoted prices in active markets that are either directly or indirectly observable. Level 3 Unobservable inputs in which little or no market data exists. The following table presents the carrying amounts and estimated fair values of our financial assets and liabilities as of September 30, 2022 and December 31, 2021: September 30, 2022 December 31, 2021 Input Carrying Fair Carrying Fair (Dollars in millions) Equity securities (1) 1 $ 47 47 — — Long-term debt, excluding finance lease and other obligations (2) 2 $ 24,914 21,934 28,635 29,221 Interest rate swap contracts (see Note 11) 2 $ — — 25 25 Indemnifications related to the sale of the Latin American business 3 $ 86 86 — — ______________________________________________________________________ (1) For the three and nine months ended September 30, 2022, we recognized $83 million of loss on equity securities in other (expense) income, net in our consolidated statements of operations. (2) As of September 30, 2022 and December 31, 2021, these amounts exclude $1.4 billion aggregate principal amount of debt for both periods and $0.7 billion and $1.6 billion, respectively, of fair value of debt classified as held for sale related to the ILEC business. See Note 2—Recently Completed Divestitures of the Latin American and ILEC Businesses for more information. Investment Held at Net Asset Value We hold an investment in a limited partnership created as a holding company for various investments, including a portion of the colocation and data center business that we divested in 2017. The limited partnership has sole discretion as to the amount and timing of distributions of the underlying assets. As of September 30, 2022, the underlying investments held by the limited partnership are traded in active markets and as such, we account for our investment in the limited partnership using net asset value ("NAV"). The investments held by the limited partnership were subject to lock-up agreements that restricted the sale or distribution of certain underlying assets prior to July 2022 and October 2022. The restrictions on one of the investments held by the limited partnership expired on July 29, 2022, and we received a distribution of 11.5 million shares of publicly-traded common stock, which were valued within our net asset value at $130 million at June 30, 2022 and are reflected in our fair value table as of September 30, 2022, as seen above. The restriction on the remaining underlying investment expired on October 12, 2022. However, no shares have been distributed to date. Subject to restrictions imposed by law and other provisions of the limited partnership agreement, the general partner has the sole discretion as to the amounts and timing of distributions to partners. The following table summarizes the net asset value of our investment in this limited partnership. As of September 30, 2022 As of December 31, 2021 Net Asset Value (Dollars in millions) Investment in limited partnership (1) $ 55 299 ______________________________________________________________________ (1) For the three and nine months ended September 30, 2022, we recognized $43 million and $114 million, respectively, of loss on investment, reflected in other (expense) income, net in our consolidated statements of operations. For both the three and nine months ended September 30, 2021, we recognized $9 million of loss on investment, reflected in other (expense) income, net in our consolidated statements of operations. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2022 | |
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 6—Long-Term Debt and Credit Facilities). These obligations expose us to variability in interest payments due to changes in interest rates. If interest rates increase, our interest expense increases. Conversely, if interest rates decrease, our interest expense also decreases. Through their expiration on June 30, 2022, we designated the interest rate swap agreements described below as cash flow hedges. Under these hedges, we received 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 was reflected in accumulated other comprehensive income ("AOCI") and was subsequently reclassified into earnings in the period that the hedged transaction affected earnings by virtue of qualifying as effective cash flow hedges. We do not use derivative financial instruments for speculative purposes. In 2019, we entered into variable-to-fixed interest rate swap agreements to hedge the interest on $4.0 billion notional amount of floating rate debt. As of December 31, 2021, we evaluated the effectiveness of our remaining hedges quantitatively and determined that hedges in effect on such date qualified as effective hedge relationships. During the nine months ended September 30, 2022, all of these swap agreements expired. 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 sheets at September 30, 2022 and December 31, 2021, as follows (in millions): September 30, 2022 December 31, 2021 Derivatives designated as Balance Sheet Location Fair Value Cash flow hedging contracts Other current and noncurrent liabilities $ — 25 The amount of realized losses reclassified from AOCI to the statement of operations consists of the following (in millions): Derivatives designated as hedging instruments 2022 2021 Cash flow hedging contracts Three Months Ended September 30, $ — 21 Nine Months Ended September 30, $ 22 62 Amounts included in AOCI at the beginning of the period were reclassified into earnings upon the settlement of the cash flow hedging contracts during the nine months ended September 30, 2022. For the nine months ended September 30, 2022, $19 million of net losses on the interest rate swaps have been reflected in our consolidated statements of operations upon settlement of the agreements in the first half of 2022. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We report our results within two segments: Business and Mass Markets. Under our Business segment we provide products and services to meet the needs of our enterprise and wholesale customers under four distinct sales channels: International and Global Accounts, Large Enterprise, Mid-Market Enterprise and Wholesale. 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, in each case through the sales channels outlined above. The Business segment included the results of our Latin American business prior to the closing of its sale on August 1, 2022. Under our Mass Markets Segment, we provide products and services to residential and small business customers. Following the completion of the FCC's Connect America Fund II ("CAF II") program at December 31, 2021, we recategorized our products used to report our Mass Markets segment revenue and currently use the following categories: Fiber Broadband, Other Broadband and Voice and Other. See detailed descriptions of these product and service categories in Note 4—Revenue Recognition. As described in more detail below, our segments are managed based on the direct costs of providing services to their customers and directly 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. The following tables summarize our segment results for the three and nine months ended September 30, 2022 and 2021, based on the segment categorization we were operating under at September 30, 2022. Three Months Ended September 30, 2022 Business Mass Markets Total Segments Operations and Other Total (Dollars in millions) Revenue $ 3,217 1,173 4,390 — 4,390 Expenses: Cost of services and products 792 25 817 1,182 1,999 Selling, general and administrative 263 169 432 360 792 Gain on sale of business — — — (593) (593) Less: stock-based compensation — — — (23) (23) Total expense 1,055 194 1,249 926 2,175 Total adjusted EBITDA $ 2,162 979 3,141 (926) 2,215 Three Months Ended September 30, 2021 Business Mass Markets Total Segments Operations and Other Total (Dollars in millions) Revenue $ 3,508 1,379 4,887 — 4,887 Expenses: Cost of services and products 867 36 903 1,248 2,151 Selling, general and administrative 293 128 421 233 654 Less: stock-based compensation — — — (27) (27) Total expense 1,160 164 1,324 1,454 2,778 Total adjusted EBITDA $ 2,348 1,215 3,563 (1,454) 2,109 Nine Months Ended September 30, 2022 Business Mass Markets Total Segments Operations and Other Total (Dollars in millions) Revenue $ 10,034 3,644 13,678 — 13,678 Expenses: Cost of services and products 2,452 91 2,543 3,499 6,042 Selling, general and administrative 845 439 1,284 1,123 2,407 Gain on sale of business — — — (593) (593) Less: stock-based compensation — — — (71) (71) Total expense 3,297 530 3,827 3,958 7,785 Total adjusted EBITDA $ 6,737 3,114 9,851 (3,958) 5,893 Nine Months Ended September 30, 2021 Business Mass Markets Total Segments Operations and Other Total (Dollars in millions) Revenue $ 10,625 4,215 14,840 — 14,840 Expenses: Cost of services and products 2,614 119 2,733 3,669 6,402 Selling, general and administrative 892 415 1,307 865 2,172 Less: stock-based compensation — — — (89) (89) Total expense 3,506 534 4,040 4,445 8,485 Total adjusted EBITDA $ 7,119 3,681 10,800 (4,445) 6,355 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. We have not allocated assets or debt to specific segments. The following items are excluded from our segment results, because they are centrally managed and not monitored by or reported to our chief operating decision maker by segment: • network expenses not incurred as a direct result of providing services and products to segment customers and centrally managed expenses such as Finance, Human Resources, Legal, Marketing, Product Management and IT, all of which are reported as "Operations and Other" in the tables above, and "Operations and other expenses" in the tables below; • depreciation and amortization expense; • goodwill or other impairments; • interest expense; • stock-based compensation; and • other income and expense items. The following table reconciles total segment adjusted EBITDA to net income for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (Dollars in millions) Total segment adjusted EBITDA $ 3,141 3,563 9,851 10,800 Operations and other expenses (926) (1,454) (3,958) (4,445) Depreciation and amortization (808) (951) (2,443) (3,142) Stock-based compensation (23) (27) (71) (89) Operating income 1,384 1,131 3,379 3,124 Total other expense, net (447) (415) (1,188) (1,102) Income before income taxes 937 716 2,191 2,022 Income tax expense 359 172 670 497 Net income $ 578 544 1,521 1,525 |
Commitments, Contingencies and
Commitments, Contingencies and Other Items | 9 Months Ended |
Sep. 30, 2022 | |
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 September 30, 2022 aggregated to approximately $78 million and are included in other current liabilities, other liabilities or liabilities held for sale 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 asserted 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 alleged 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 in March 2022, the appellate court affirmed the district court's order in part and reversed it in part. It then remanded the case to the district court for further proceedings. 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 the 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 2021 ruling in one of the pending cases, another trial court awarded the cities of Columbia and Joplin approximately $55 million, plus statutory interest. On appeal, the Missouri Court of Appeals affirmed in part and reversed in part, vacated the judgment and remanded the case to the trial court with instructions for further proceedings consistent with the Missouri Supreme Court's decision. 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. Those settlements are final. 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. December 2018 Outage Proceedings We experienced an outage on one of our transport networks that impacted voice, IP, 911, and transport services for some of our customers between the 27th and 29th of December 2018. We believe that the outage was caused by a faulty network management card from a third-party equipment vendor. The FCC and four states (both Washington Utilities and Transportation Commission ("WUTC") and the Washington Attorney General; the Montana Public Service Commission; the Nebraska Public Service Commission; and the Wyoming Public Service Commission) initiated formal investigations. In November 2020, following the FCC's release of a public report on the outage, we negotiated a settlement which was released by the FCC in December 2020. The amount of the settlement was not material to our financial statements. In December 2020, the Staff of the WUTC filed a complaint against us based on the December 2018 outage, seeking penalties owed for alleged violations of Washington regulations and laws. We have denied the allegations and will defend the claims asserted. AT&T Proceedings In August 2022, certain of our subsidiaries filed a complaint in federal district court in Colorado captioned Central Telephone Company of Virginia, et al, v. AT&T Corp., et al. The suit seeks relief and damages for AT&T’s failure to pay amounts for services it receives. AT&T disputes those claims and has asserted counterclaims alleging breach of contract and seeking declaratory relief. It has requested the court to enjoin the plaintiffs from terminating services for failure to pay, and it has requested the court transfer the case to federal court in the southern district of New York for further proceedings. Also in August 2022, AT&T filed a separate lawsuit in federal court in the western district of Louisiana, against Central Telephone Company of Virginia and other of our subsidiaries alleging, among other claims, breach of contract provisions pertaining to network architecture. The Lumen plaintiff entities dispute AT&T’s claims. Latin American Tax Litigation and Claims In connection with the recent divestiture of our Latin American business, the purchaser assumed responsibility for the Peruvian tax litigation and Brazilian tax claims described in our prior periodic reports filed with the SEC. We have agreed to indemnify the purchaser for amounts paid in respect of the Brazilian tax claims. The value of this indemnification is included in the indemnification amount as disclosed in Note 10—Fair Value of Financial Instruments. 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 or commercial disputes. 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 within the next twelve months if they are not otherwise resolved. Where applicable, we are seeking full or partial indemnification from our vendors and suppliers. As with all litigation, we are vigorously defending these actions and, as a matter of course, are prepared to litigate these matters to judgment, as well as to evaluate and consider all reasonable settlement opportunities. We are subject to various foreign, federal, state and local environmental protection and health and safety laws. From time to time, we are subject to judicial and administrative proceedings brought by various governmental authorities under these laws. Several such proceedings are currently pending, but none is reasonably expected to exceed $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 in this Note do not reflect all of our contingencies. For additional information on our contingencies, see Note 18—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, 2021. 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 | 9 Months Ended |
Sep. 30, 2022 | |
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: September 30, 2022 December 31, 2021 (Dollars in millions) Prepaid expenses $ 371 295 Income tax receivable 60 22 Materials, supplies and inventory 179 96 Contract assets 35 45 Contract acquisition costs 131 142 Contract fulfillment costs 104 106 Note receivable — 56 Receivable for sale of land — 56 Other 14 11 Total other current assets (1)(2) $ 894 829 ______________________________________________________________________ (1) Excludes $52 million of other current assets related to the ILEC business that were classified as held for sale as of September 30, 2022. (2) Excludes $126 million of other current assets related to the Latin American business sold on August 1, 2022 and the ILEC business sold on October 3, 2022 that were classified as held for sale as of December 31, 2021. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Information Relating to 2022 The table below summarizes changes in accumulated other comprehensive loss recorded on our consolidated balance sheet by component for the nine months ended September 30, 2022: Pension Plans Post-Retirement Benefit Plans Foreign Currency Translation Adjustment and Other Interest Rate Swap Total (Dollars in millions) Balance at December 31, 2021 $ (1,577) (164) (400) (17) (2,158) Other comprehensive loss before reclassifications — — (245) — (245) Amounts reclassified from accumulated other comprehensive loss 68 4 112 17 201 Net current-period other comprehensive income (loss) 68 4 (133) 17 (44) Balance at September 30, 2022 $ (1,509) (160) (533) — (2,202) The tables below present further information about our reclassifications out of accumulated other comprehensive loss by component for the three and nine months ended September 30, 2022: Three Months Ended September 30, 2022 Decrease (Increase) Affected Line Item in Consolidated Statement of Operations (Dollars in millions) Interest rate swaps $ — Interest expense Income tax benefit — Income tax expense Net of tax $ — Amortization of pension & post-retirement plans (1) Net actuarial loss $ 32 Other (expense) income, net Prior service cost (2) Other (expense) income, net Total before tax 30 Income tax benefit (7) Income tax expense Net of tax $ 23 Reclassification of realized loss on foreign currency translation to gain on sale of business $ 112 Gain on sale of business Income tax benefit — Income tax expense Net of tax $ 112 Nine Months Ended September 30, 2022 Decrease (Increase) Affected Line Item in Consolidated Statement of Operations (Dollars in millions) Interest rate swaps $ 22 Interest expense Income tax benefit (5) Income tax expense Net of tax $ 17 Amortization of pension & post-retirement plans (1) Net actuarial loss $ 99 Other (expense) income, net Prior service credit (3) Other (expense) income, net Total before tax 96 Income tax benefit (24) Income tax expense Net of tax $ 72 Reclassification of realized loss on foreign currency translation to gain on sale of business $ 112 Gain on sale of business Income tax benefit — Income tax expense Net of tax $ 112 ________________________________________________________________________ (1) See Note 8—Employee Benefits for additional information on our net periodic benefit expense (income) related to our pension and post-retirement plans. Information Relating to 2021 The table below summarizes changes in accumulated other comprehensive loss recorded on our consolidated balance sheets by component for the nine months ended September 30, 2021 : Pension Plans Post-Retirement Benefit Plans Foreign Currency Translation Adjustment and Other Interest Rate Swap Total (Dollars in millions) Balance at December 31, 2020 $ (2,197) (272) (265) (79) (2,813) Other comprehensive income (loss) before reclassifications 133 — (103) (1) 29 Amounts reclassified from accumulated other comprehensive loss 149 11 — 47 207 Net current-period other comprehensive income (loss) 282 11 (103) 46 236 Balance at September 30, 2021 $ (1,915) (261) (368) (33) (2,577) The tables below present further information about our reclassifications out of accumulated other comprehensive loss by component for the three and nine months ended September 30, 2021: Three Months Ended September 30, 2021 Decrease (Increase) Affected Line Item in Consolidated Statement of Operations (Dollars in millions) Interest rate swaps $ 21 Interest expense Income tax expense (5) Income tax expense Net of tax $ 16 Amortization of pension & post-retirement plans (1) Net actuarial loss $ 108 Other (expense) income, net Prior service cost 1 Other (expense) income, net Total before tax 109 Income tax benefit (27) Income tax expense Net of tax $ 82 Nine Months Ended September 30, 2021 Decrease (Increase) Affected Line Item in Consolidated Statement of Operations (Dollars in millions) Interest rate swaps $ 62 Interest expense Income tax benefit (15) Income tax expense Net of tax $ 47 Amortization of pension & post-retirement plans (1) Net actuarial loss $ 208 Other (expense) income, net Prior service cost 4 Other (expense) income, net Total before tax 212 Income tax benefit (52) Income tax expense Net of tax $ 160 ________________________________________________________________________ (1) See Note 8—Employee Benefits for additional information on our net periodic benefit income related to our pension and post-retirement plans. |
Labor Union Contracts
Labor Union Contracts | 9 Months Ended |
Sep. 30, 2022 | |
Risks and Uncertainties [Abstract] | |
Labor Union Contracts | Labor Union Contracts As of September 30, 2022, approximately 22% of our employees were represented by the Communication Workers of America ("CWA") or the International Brotherhood of Electrical Workers ("IBEW"). None of our collective bargaining agreements were in expired status as of September 30, 2022. Approximately 10% of our represented employees are subject to collective bargaining agreements that are scheduled to expire over the 12 month period ending September 30, 2023. As discussed in Note 17—Subsequent Events, we completed the sale of our ILEC business on October 3, 2022 and as a result of the transaction certain of our employees associated with such business were hired by the purchaser. As of October 3, 2022, 20% of our remaining employees were represented by CWA or IBEW and 9% of our remaining represented employees are subject to collective bargaining agreements that are scheduled to expire over the 12 month period ending September 30, 2023. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Divestiture of the ILEC Business On October 3, 2022, we closed the previously disclosed sale of our facilities-based incumbent local exchange business primarily conducted within 20 Midwestern and Southeastern states to affiliates of funds advised by Apollo Global Management, Inc. In exchange, we received $7.5 billion of consideration, which was reduced by approximately $0.4 billion of closing adjustments and partially paid through purchaser's assumption of approximately $1.5 billion of our long-term consolidated indebtedness, resulting in pre-tax cash proceeds of approximately $5.6 billion, subject to certain post-closing adjustments and indemnities. We expect to recognize a gain on the transaction in operating income during the fourth quarter of 2022. In connection with the sale, we have entered into a transition services agreement under which we will provide to the purchaser various support services. In addition, Lumen and the purchaser entered into commercial agreements whereby they will provide to each other various network and other commercial services. We also agreed to indemnify the purchaser for certain matters for which future cash payments by Lumen are expected. Debt Repayments Since September 30, 2022, Lumen and its subsidiaries have used available cash to repay the following aggregate principal amount of indebtedness through a combination of tender offers and redemptions: Debt (Dollars in millions) Lumen Technologies, Inc. 6.750% Senior Notes, Series W, due 2023 $ 750 7.500% Senior Notes, Series Y, due 2024 982 5.625% Senior Notes, Series X, due 2025 270 7.200% Senior Notes, Series D, due 2025 34 5.125% Senior Notes due 2026 484 6.875% Debentures, Series G, due 2028 126 5.375% Senior Notes due 2029 490 Embarq Corporation Subsidiaries First Mortgage Bonds 25 Qwest Capital Funding, Inc. Senior Notes 63 Total Debt Repayments $ 3,224 We will additionally redeem $112 million aggregate principal of First Mortgage Bonds issued by a retained subsidiary of Embarq Corporation on November 4, 2022, in accordance with our redemption notice dated September 26, 2022. This amount along with the repayments in the table above are included in current maturities of long-term debt on our consolidated balance sheets. Repurchase Plan On October 31, 2022, our Board of Directors authorized a new two-year program to repurchase up to an aggregate of $1.5 billion of our outstanding common stock. This new stock repurchase program took effect on November 2, 2022, immediately upon the public announcement thereof. As of November 3, 2022, we had not repurchased any shares of common stock under this new program. Pending Divestiture of our European, Middle Eastern and African Business On November 2, 2022, affiliates of Level 3 Parent, LLC, an indirect wholly-owned subsidiary of Lumen Technologies, Inc., entered into an exclusive arrangement to divest Lumen’s operations in Europe, the Middle East and Africa (the “EMEA business”) to Colt Technology Services Group Limited, a portfolio company of Fidelity Investments, in exchange for $1.8 billion in cash, subject to certain working capital and other purchase price adjustments. Level 3 Parent, LLC expects to close the transaction as early as late 2023, following completion of a consultation process under French law required prior to execution of the purchase agreement and receipt of all requisite regulatory approvals in the U.S. and certain countries where the EMEA business operates, as well as the satisfaction of other customary conditions. Upon being executed following the French consultation process, the purchase agreement will contain various customary covenants for transactions of this type, including various indemnities. Dividends On November 2, 2022, we announced that our Board had terminated our quarterly cash dividend program, effective immediately, to enable us to allocate additional capital to growth initiatives, debt reduction and share repurchases. |
Background (Policies)
Background (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Our consolidated balance sheet as of December 31, 2021, 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 note 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 U.S. Securities and Exchange Commission ("SEC"). However, in our opinion, the disclosures made therein are adequate to make the information presented not misleading. We believe 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 nine 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, 2021. 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 (expense) income, net, (ii) equity attributable to noncontrolling interests in additional paid-in capital and (iii) cash flows attributable to noncontrolling interests in other, net financing activities. |
Reclassification | We reclassified certain prior period amounts to conform to the current period presentation, including the recategorization of our Mass Markets revenue by product category in our segment reporting. See Note 12—Segment Information for additional information. These changes had no impact on total operating revenue, total operating expenses or net income 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. |
Recently Adopted and Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements Government Assistance On January 1, 2022, we adopted Accounting Standards Update ("ASU") 2021-10, " Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance ” (“ASU 2020-10”). This ASU increases transparency in financial reporting by requiring business entities to disclose information about certain types of government assistance they receive. The ASU only impacts annual financial statement note disclosures. Therefore, the adoption of ASU 2021-10 did not have a material impact to our consolidated financial statements. Leases On January 1, 2022, we adopted ASU 2021-05, “ Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments ” (“ASU 2021-05”). This ASU (i) amends the lease classification requirements for lessors to align them with practice under ASC Topic 840, (ii) provides criteria for lessors to classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease; and (iii) provides guidance with respect to net investments by lessors under operating leases and other related topics. The adoption of ASU 2021-05 did not have a material impact to our consolidated financial statements. 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 guidance 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) ” ("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 September 30, 2022, we determined there was no application or discontinuation of the equity method during the reporting periods covered by this report. 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, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“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. Recently Issued Accounting Pronouncements In September 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-04, “Liabilities-Supplier Finance Program (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations ” (“ASU 2022-04”). These amendments require that a company that uses a supplier finance program in connection with the purchase of goods or services disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, program activity during the period, changes from period to period and potential magnitude of program transactions. ASU 2022-04 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of September 30, 2022, we are reviewing our supplier finance agreements to determine the impact to disclosures in our consolidated financial statements. In June 2022, the FASB issued ASU 2022-03, “ Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions ” (“ASU 2022-03”). These amendments clarify that a contractual restriction on the sales of an investment in equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. ASU 2022-03 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of September 30, 2022, we do not expect ASU 2022-03 to have an impact to our consolidated financial statements. In March 2022, the FASB issued ASU 2022-02, “ Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings (“TDR”) and Vintage Disclosures ” (“ASU 2022-02”). These amendments eliminate the TDR recognition and measurement guidance, enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. ASU 2022-02 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of September 30, 2022, we do not expect ASU 2022-02 to have an impact to our consolidated financial statements. In March 2022, the FASB issued ASU 2022-01, “ Derivatives and Hedging (Topic 815): Fair Value Hedging-Portfolio Layer Method ” (ASU 2022-01). The ASU expands the current single-layer method to allow multiple hedged layers of a single closed portfolio under the method. ASU 2022-01 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of September 30, 2022, we do not expect ASU 2022-01 to have an impact to our consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, “ Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ” (“ASU 2021-08”), which requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. ASU 2021-08 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of September 30, 2022, we do not expect ASU 2021-08 to have an impact to our consolidated financial statements. 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 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 optional expedients for a limited time to ease the potential burden in accounting for reference rate reform. Based on our review of our key material contracts through September 30, 2022, ASU 2021-01 does not have a material impact to our consolidated financial statements. |
Recently Completed Divestitur_2
Recently Completed Divestitures of the Latin American and ILEC Businesses (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Components of Pre-Tax Income and Assets and Liabilities as of the Disposal Date | The principal components of the held for sale assets and liabilities of the ILEC business as of the dates below are as follows: September 30, 2022 December 31, 2021 ILEC Business (Dollars in millions) Assets held for sale (1) Cash and cash equivalents $ — 1 Accounts receivable, less allowance of $19 and $21 195 227 Other current assets 52 45 Property, plant and equipment, net accumulated depreciation of $8,170 and $8,303 3,651 3,491 Goodwill (2) 2,581 2,615 Other intangible assets, net 158 158 Other non-current assets 38 38 Total assets held for sale $ 6,675 6,575 Liabilities held for sale (1) Accounts payable $ 56 64 Salaries and benefits 32 25 Income and other taxes 30 24 Interest 38 10 Current portion of deferred revenue 87 90 Other current liabilities 47 35 Long-term debt, net of discounts (3) 1,400 1,377 Pension and other post-retirement benefits (4) 27 56 Other non-current liabilities 71 141 Total liabilities held for sale $ 1,788 1,822 ______________________________________________________________________ (1) As a result of the above-described sale of our Latin American business on August 1, 2022, this table excludes $2.2 billion of assets and $435 million of liabilities relating to the Latin American business. The net assets of the Latin American business were classified as held for sale on our accompanying balance sheet as of December 31, 2021. (2) The assignment of goodwill was based on the relative fair value of the applicable reporting units prior to being classified as held for sale. (3) Long-term debt, net of discounts, as of September 30, 2022 and December 31, 2021 includes (i) $1.4 billion aggregate principal amount of 7.995% Embarq senior notes maturing in 2036, (ii) $114 million and $117 million of related unamortized discounts, respectively, and (iii) $76 million and $57 million of long-term finance lease obligations, respectively. (4) Excludes pension obligation of approximately $2.5 billion for the ILEC business as of both September 30, 2022 and December 31, 2021, which we transferred to the purchaser of the ILEC business upon closing. As of January 1, 2022, we spun off a new pension plan (the "Lumen Pension Plan") in anticipation of this transfer. Along with the transfer of the $2.5 billion pension benefit obligation, we allocated $2.2 billion of assets to the new plan in January 2022 and contributed $319 million of additional cash to the new plan's trust in September 2022 to fully fund the pension plan. See Note 8—Employee Benefits for additional information. ILEC business pre-tax net income 2022 2021 (Dollars in millions) Three Months Ended September 30, $ 164 234 Nine Months Ended September 30, $ 576 528 |
Goodwill, Customer Relationsh_2
Goodwill, Customer Relationships and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | Goodwill, customer relationships and other intangible assets consisted of the following: September 30, 2022 December 31, 2021 (Dollars in millions) Goodwill $ 15,918 15,986 Indefinite-lived intangible assets $ 9 9 Other intangible assets subject to amortization: Customer relationships, less accumulated amortization of $3,579 and $11,740 (1) 4,822 5,365 Capitalized software, less accumulated amortization of $3,832 and $3,624 1,498 1,459 Trade names, patents and other, less accumulated amortization of $183 and $160 107 137 Total other intangible assets, net $ 6,436 6,970 ______________________________________________________________________ (1) Certain customer relationships with a gross carrying value of $8.7 billion became fully amortized during 2021 and were retired during the first quarter of 2022. |
Schedule of Goodwill | The following table shows the rollforward of goodwill assigned to our reportable segments from December 31, 2021 through September 30, 2022: Business Mass Markets Total (Dollars in millions) As of December 31, 2021 (1)(2) $ 11,235 4,751 15,986 Effect of foreign currency exchange rate change and other (68) — (68) As of September 30, 2022 (1)(3) $ 11,167 4,751 15,918 ______________________________________________________________________ (1) Goodwill at September 30, 2022 and December 31, 2021 is net of accumulated impairment losses of $7.7 billion. (2) As of December 31, 2021 these amounts excluded $2.9 billion of goodwill classified as held for sale primarily related to the August 1, 2022 divestiture of the Latin American business and the October 3, 2022 divestiture of the ILEC business. See Note 2—Recently Completed Divestitures of the Latin American and ILEC Businesses for additional information. (3) As of September 30, 2022 these amounts excluded $2.6 billion of goodwill classified as held for sale related to the October 3, 2022 divestiture of the ILEC business. See Note 2—Recently Completed Divestitures of the Latin American and ILEC Businesses and Note 17—Subsequent Events for additional information. |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | We estimate that total amortization expense for finite-lived intangible assets for the years ending December 31, 2022 through 2026 will be as provided in the table below. The amounts presented in the table below do not include future amortization expense for intangible assets of the ILEC business that was classified as held for sale on September 30, 2022 and sold on October 3, 2022. See Note 2—Recently Completed Divestitures of the Latin American and ILEC Businesses for more information. (Dollars in millions) 2022 (remaining three months) $ 261 2023 978 2024 906 2025 839 2026 762 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue | The following tables provide total revenue by segment, sales channel and product category. They also provide the amount of revenue that is not subject to ASC 606, " Revenue from Contracts with Customers " ("ASC 606"), but is instead governed by other accounting standards. The amounts in the tables below include the Latin American business revenues prior to it being sold on August 1, 2022. Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 Total Revenue Adjustments for Non-ASC 606 revenue (1) Total revenue from Contracts with Customers Total Revenue Adjustments for Non-ASC 606 revenue (1) Total revenue from Contracts with Customers (Dollars in millions) Business Segment by Sales Channel and Product Category International and Global Accounts ("IGAM") Compute and Application Services $ 154 (47) 107 183 (71) 112 IP and Data Services 350 — 350 431 — 431 Fiber Infrastructure 199 (33) 166 231 (33) 198 Voice and Other 150 — 150 182 — 182 Total IGAM Revenue 853 (80) 773 1,027 (104) 923 Large Enterprise Compute and Application Services 148 (16) 132 172 (15) 157 IP and Data Services 378 — 378 394 — 394 Fiber Infrastructure 117 (11) 106 143 (11) 132 Voice and Other 201 — 201 233 — 233 Total Large Enterprise Revenue 844 (27) 817 942 (26) 916 Mid-Market Enterprise Compute and Application Services 35 (7) 28 30 (8) 22 IP and Data Services 406 (1) 405 421 (1) 420 Fiber Infrastructure 49 (2) 47 50 (2) 48 Voice and Other 128 — 128 147 — 147 Total Mid-Market Enterprise Revenue 618 (10) 608 648 (11) 637 Wholesale Compute and Application Services 62 (39) 23 46 (39) 7 IP and Data Services 283 — 283 297 — 297 Fiber Infrastructure 165 (28) 137 154 (30) 124 Voice and Other 392 (62) 330 394 (63) 331 Total Wholesale Revenue 902 (129) 773 891 (132) 759 Business Segment by Product Category Compute and Application Services 399 (109) 290 431 (133) 298 IP and Data Services 1,417 (1) 1,416 1,543 (1) 1,542 Fiber Infrastructure 530 (74) 456 578 (76) 502 Voice and Other 871 (62) 809 956 (63) 893 Total Business Segment Revenue 3,217 (246) 2,971 3,508 (273) 3,235 Mass Markets Segment by Product Category Fiber Broadband 160 (4) 156 135 — 135 Other Broadband 580 (55) 525 619 (56) 563 Voice and Other 433 (26) 407 625 (143) 482 Total Mass Markets Revenue 1,173 (85) 1,088 1,379 (199) 1,180 Total Revenue $ 4,390 (331) 4,059 4,887 (472) 4,415 Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 Total revenue Adjustments for non-ASC 606 revenue (1) Total revenue from contracts with customers Total revenue Adjustments for non-ASC 606 revenue (1) Total revenue from contracts with customers (Dollars in millions) Business Segment by Sales Channel and Product Category International and Global Accounts ("IGAM") Compute and Application Services $ 521 (191) 330 547 (210) 337 IP and Data Services 1,190 — 1,190 1,287 — 1,287 Fiber Infrastructure 642 (102) 540 665 (95) 570 Voice and Other 495 — 495 559 — 559 Total IGAM Revenue 2,848 (293) 2,555 3,058 (305) 2,753 Large Enterprise Compute and Application Services 473 (45) 428 515 (45) 470 IP and Data Services 1,151 — 1,151 1,192 — 1,192 Fiber Infrastructure 359 (35) 324 403 (38) 365 Voice and Other 622 — 622 730 — 730 Total Large Enterprise Revenue 2,605 (80) 2,525 2,840 (83) 2,757 Mid-Market Enterprise Compute and Application Services 102 (21) 81 94 (25) 69 IP and Data Services 1,229 (3) 1,226 1,291 (4) 1,287 Fiber Infrastructure 148 (6) 142 156 (6) 150 Voice and Other 401 — 401 461 — 461 Total Mid-Market Enterprise Revenue 1,880 (30) 1,850 2,002 (35) 1,967 Wholesale Compute and Application Services 183 (118) 65 141 (120) 21 IP and Data Services 864 — 864 900 — 900 Fiber Infrastructure 480 (84) 396 463 (89) 374 Voice and Other 1,174 (189) 985 1,221 (188) 1,033 Total Wholesale Revenue 2,701 (391) 2,310 2,725 (397) 2,328 Business Segment by Product Category Compute and Application Services 1,279 (375) 904 1,297 (400) 897 IP and Data Services 4,434 (3) 4,431 4,670 (4) 4,666 Fiber Infrastructure 1,629 (227) 1,402 1,687 (228) 1,459 Voice and Other 2,692 (189) 2,503 2,971 (188) 2,783 Total Business Segment Revenue 10,034 (794) 9,240 10,625 (820) 9,805 Mass Markets Segment by Product Category Fiber Broadband 456 (14) 442 387 — 387 Other Broadband 1,786 (166) 1,620 1,899 (166) 1,733 Voice and Other 1,402 (125) 1,277 1,929 (431) 1,498 Total Mass Markets Revenue 3,644 (305) 3,339 4,215 (597) 3,618 Total Revenue $ 13,678 (1,099) 12,579 14,840 (1,417) 13,423 _____________________________________________________________________ (1) Includes regulatory revenue and lease revenue not within the scope of ASC 606. |
Contract with Customer, Asset and Liability | The following table provides balances of customer receivables, contract assets and contract liabilities, net of amounts classified as held for sale, as of September 30, 2022 and December 31, 2021: September 30, 2022 December 31, 2021 (Dollars in millions) Customer receivables (1) $ 1,407 1,493 Contract assets (2) 56 73 Contract liabilities (3) 714 680 ______________________________________________________________________ (1) Reflects gross customer receivables of $1.5 billion and $1.6 billion, net of allowance for credit losses of $84 million and $102 million, at September 30, 2022 and December 31, 2021, respectively. These amounts exclude customer receivables, net, classified as held for sale of $175 million at September 30, 2022 (related to the ILEC business) and $288 million at December 31, 2021 (related to both the Latin American business and the ILEC business). (2) These amounts exclude contract assets classified as held for sale of $7 million at September 30, 2022 (related to the ILEC business) and $9 million at December 31, 2021 (related to both the Latin American business and the ILEC business). (3) These amounts exclude contract liabilities classified as held for sale of $76 million at September 30, 2022 (related to the ILEC business) and $161 million at December 31, 2021 (related to both the Latin American business and the ILEC business). |
Capitalized Contract Cost | The following tables provide changes in our contract acquisition costs and fulfillment costs: Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 Acquisition Costs Fulfillment Costs Acquisition Costs Fulfillment Costs (Dollars in millions) (Dollars in millions) Beginning of period balance (1) $ 208 188 271 217 Costs incurred 45 38 43 37 Amortization (49) (35) (51) (37) Change in contract costs held for sale 3 (2) (35) (31) End of period balance (2) $ 207 189 228 186 Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 Acquisition Costs Fulfillment Costs Acquisition Costs Fulfillment Costs (Dollars in millions) (Dollars in millions) Beginning of period balance (3) $ 222 186 289 216 Costs incurred 129 119 132 112 Amortization (150) (113) (158) (111) Change in contract costs held for sale 6 (3) (35) (31) End of period balance (2) $ 207 189 228 186 ______________________________________________________________________ (1) Beginning of period balance for the three months ended September 30, 2022 excludes acquisition costs and fulfillment costs classified as held for sale of $31 million and $33 million, respectively (related to both the Latin American business and the ILEC business). (2) Ending of period balance for the three and nine months ended September 30, 2022 excludes acquisition costs and fulfillment costs classified as held for sale of $28 million and $35 million, respectively, related to the ILEC business. Ending of period balance for the three and nine months ended September 30, 2021 excludes acquisition costs and fulfillment costs classified as held for sale of $35 million and $31 million, respectively (related to both the Latin American business and the ILEC business). (3) Beginning of period balance for the nine months ended September 30, 2022 excludes acquisition costs and fulfillment costs classified as held for sale of $34 million and $32 million, respectively (related to both the Latin American business and the ILEC business). |
Credit Losses on Financial In_2
Credit Losses on Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 for the nine months ended September 30, 2022: Business Mass Markets Total (Dollars in millions) As of December 31, 2021 (1) $ 88 26 114 Provision for expected losses 19 80 99 Write-offs charged against the allowance (47) (88) (135) Recoveries collected 9 5 14 Foreign currency exchange rate change adjustment 1 — 1 Change in allowance in assets held for sale (1) 3 2 Ending balance at September 30, 2022 (2) $ 69 26 95 ______________________________________________________________________ (1) As of December 31, 2021, these amounts excluded a $24 million allowance for credit losses classified as held for sale related to the August 1, 2022 divestiture of the Latin American business and the divestiture of the ILEC business. See Note 2—Recently Completed Divestitures of the Latin American and ILEC Businesses. (2) As of September 30, 2022, these amounts excluded a $19 million allowance for credit losses classified as held for sale related to the divestiture of the ILEC business. See Note 2—Recently Completed Divestitures of the Latin American and ILEC Businesses. |
Long-Term Debt and Credit Fac_2
Long-Term Debt and Credit Facilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Including Unamortized Discounts and Premiums | The following table reflects the consolidated long-term debt of Lumen Technologies, Inc. and its subsidiaries as of the dates indicated below, including unamortized discounts and premiums unamortized debt issuance costs: Interest Rates (1) Maturities (1) September 30, 2022 December 31, 2021 (Dollars in millions) Senior Secured Debt: (2) Lumen Technologies, Inc. Revolving Credit Facility (3) LIBOR + 2.00% 2025 $ 280 200 Term Loan A (4) LIBOR + 2.00% 2025 1,006 1,050 Term Loan A-1 (4) LIBOR + 2.00% 2025 287 300 Term Loan B (5) LIBOR + 2.25% 2027 4,863 4,900 Senior notes 4.000% 2027 1,250 1,250 Subsidiaries: Level 3 Financing, Inc. Tranche B 2027 Term Loan (6) LIBOR + 1.75% 2027 2,411 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 137 138 Senior Notes and Other Debt: (7) Lumen Technologies, Inc. Senior notes 4.500% - 7.650% 2023 - 2042 6,985 8,414 Subsidiaries: Level 3 Financing, Inc. Senior notes 3.625% - 4.625% 2027 - 2029 3,940 5,515 Qwest Corporation Senior notes 6.500% - 7.750% 2025 - 2057 1,986 1,986 Term loan (8) LIBOR + 2.00% 2027 215 215 Qwest Capital Funding, Inc. Senior notes 6.875% - 7.750% 2028 - 2031 255 255 Finance lease and other obligations Various Various 324 347 Unamortized (discounts) premiums, net (8) 21 Unamortized debt issuance costs (193) (220) Total long-term debt 25,238 28,982 Less current maturities (3,474) (1,554) Long-term debt, excluding current maturities $ 21,764 27,428 ______________________________________________________________________ (1) As of September 30, 2022. (2) See Note 7—Long-Term Debt and Credit Facilities in our Annual Report on Form 10-K for the year ended December 31, 2021 for a description of certain parent or subsidiary guarantees and liens securing this debt. (3) The Revolving Credit Facility had interest rates of 5.080% and 2.103% as of September 30, 2022 and December 31, 2021, respectively. (4) Term Loans A and A-1 had interest rates of 5.115% and 2.104% as of September 30, 2022 and December 31, 2021, respectively. (5) Term Loan B had interest rates of 5.365% and 2.354% as of September 30, 2022 and December 31, 2021, respectively. (6) The Level 3 Tranche B 2027 Term Loan had interest rates of 4.865% and 1.854% as of September 30, 2022 and December 31, 2021, respectively. (7) The table excludes $1.4 billion of indebtedness under Embarq Corporation's 7.995% senior notes maturing in 2036 that was classified as held for sale as of September 30, 2022 and December 31, 2021, and was assumed by the third-party purchaser as of October 3, 2022 concurrent with the sale of the ILEC business. See Note 2—Recently Completed Divestitures of the Latin American and ILEC Businesses and Note 17—Subsequent Events. (8) The Qwest Corporation Term Loan had interest rates of 5.120% and 2.110% as of September 30, 2022 and December 31, 2021, respectively. |
Schedule of Maturities of Long-term Debt | Set forth below is the aggregate principal amount of our long-term debt as of September 30, 2022 (excluding unamortized (discounts) premiums, net, and unamortized debt issuance costs), maturing during the following years.: (Dollars in millions) (1) 2022 (remaining three months) (2) $ 1,908 2023 153 2024 158 2025 2,343 2026 1,276 2027 and thereafter 19,601 Total long-term debt $ 25,439 ______________________________________________________________________ (1) These amounts exclude $1.5 billion of debt and finance lease obligations related to the ILEC business that were classified as held for sale as of September 30, 2022. See Note 2—Recently Completed Divestitures of the Latin American and ILEC Businesses for more information. (2) These amounts include $1.9 billion aggregate principal senior notes for which we issued redemption notices on September 26, 2022. See Note 17—Subsequent Events for information on additional debt repayments made since September 30, 2022 and the classification of the related aggregate principal as current maturities of long-term debt on our consolidated balance sheets as of September 30, 2022. |
Schedule of Debt Repayments | During the nine months ended September 30, 2022, Lumen borrowed $2.4 billion from, and made repayments of $2.3 billion to, its Revolving Credit Facility. We used our net revolving credit draws and available cash to repay the following aggregate principal amount of indebtedness through a combination of tender offers, redemptions, prepayments and payments at maturity. These transactions resulted in a net gain of $9 million. Debt Period of Repayment (Dollars in millions) Lumen Technologies, Inc. 5.800% Senior Notes due 2022 (at Maturity) Q1 2022 $ 1,400 Level 3 Financing, Inc. Tranche B 2027 Term Loan Q3 2022 700 5.375% Senior Notes due 2025 Q3 2022 800 5.250% Senior Notes due 2026 Q3 2022 775 Other Q3 2022 30 Total Debt Repayments $ 3,705 Since September 30, 2022, Lumen and its subsidiaries have used available cash to repay the following aggregate principal amount of indebtedness through a combination of tender offers and redemptions: Debt (Dollars in millions) Lumen Technologies, Inc. 6.750% Senior Notes, Series W, due 2023 $ 750 7.500% Senior Notes, Series Y, due 2024 982 5.625% Senior Notes, Series X, due 2025 270 7.200% Senior Notes, Series D, due 2025 34 5.125% Senior Notes due 2026 484 6.875% Debentures, Series G, due 2028 126 5.375% Senior Notes due 2029 490 Embarq Corporation Subsidiaries First Mortgage Bonds 25 Qwest Capital Funding, Inc. Senior Notes 63 Total Debt Repayments $ 3,224 |
Severance (Tables)
Severance (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2021 $ 36 Accrued to expense 2 Payments, net (30) Balance at September 30, 2022 $ 8 |
Employee Benefits (Tables)
Employee Benefits (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Components of Net Periodic Pension Benefit (Income) Expense and Post-retirement Benefit Expense | Net periodic benefit (income) expense for the Combined Pension Plan and the Lumen Pension Plan (together the "Pension Plans") includes the following components: Pension Plans Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (Dollars in millions) Service cost $ 11 14 34 42 Interest cost 53 49 155 148 Expected return on plan assets (100) (138) (302) (414) Settlement charges — 57 — 57 Recognition of prior service credit (3) (2) (8) (7) Recognition of actuarial loss 32 49 99 147 Net periodic pension (income) expense $ (7) 29 (22) (27) Net periodic benefit expense for our post-retirement benefit plans includes the following components: Post-Retirement Benefit Plans Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (Dollars in millions) Service cost $ 3 4 8 11 Interest cost 15 12 45 35 Recognition of prior service cost 1 3 5 11 Recognition of actuarial loss — 2 — 4 Net periodic post-retirement benefit expense $ 19 21 58 61 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Common Share | Basic and diluted earnings per common share for the three and nine months ended September 30, 2022 and 2021 were calculated as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (Dollars in millions, except per share amounts, shares in thousands) Income (Numerator) Net income $ 578 544 1,521 1,525 Net income applicable to common stock for computing basic earnings per common share 578 544 1,521 1,525 Net income as adjusted for purposes of computing diluted earnings per common share $ 578 544 1,521 1,525 Shares (Denominator): Weighted-average number of shares: Outstanding during period 1,034,786 1,079,917 1,031,687 1,095,223 Non-vested restricted stock (21,662) (17,833) (20,189) (18,117) Weighted average shares outstanding for computing basic earnings per common share 1,013,124 1,062,084 1,011,498 1,077,106 Incremental common shares attributable to dilutive securities: Shares issuable under convertible securities 10 10 10 10 Shares issuable under incentive compensation plans 3,879 7,063 4,773 6,763 Number of shares as adjusted for purposes of computing diluted earnings per common share 1,017,013 1,069,157 1,016,281 1,083,879 Basic earnings per common share $ 0.57 0.51 1.50 1.42 Diluted earnings per common share $ 0.57 0.51 1.50 1.41 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement Inputs and Valuation Techniques | The three input levels in the hierarchy of fair value measurements are defined by the FASB generally as follows: Input Level Description of Input Level 1 Observable inputs such as quoted market prices in active markets. Level 2 Inputs other than quoted prices in active markets that are either directly or indirectly observable. Level 3 Unobservable inputs in which little or no market data exists. |
Schedule of Carrying Amounts and Estimated Fair Values of Financial Assets and Liabilities | The following table presents the carrying amounts and estimated fair values of our financial assets and liabilities as of September 30, 2022 and December 31, 2021: September 30, 2022 December 31, 2021 Input Carrying Fair Carrying Fair (Dollars in millions) Equity securities (1) 1 $ 47 47 — — Long-term debt, excluding finance lease and other obligations (2) 2 $ 24,914 21,934 28,635 29,221 Interest rate swap contracts (see Note 11) 2 $ — — 25 25 Indemnifications related to the sale of the Latin American business 3 $ 86 86 — — ______________________________________________________________________ (1) For the three and nine months ended September 30, 2022, we recognized $83 million of loss on equity securities in other (expense) income, net in our consolidated statements of operations. (2) As of September 30, 2022 and December 31, 2021, these amounts exclude $1.4 billion aggregate principal amount of debt for both periods and $0.7 billion and $1.6 billion, respectively, of fair value of debt classified as held for sale related to the ILEC business. See Note 2—Recently Completed Divestitures of the Latin American and ILEC Businesses for more information. |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share | As of September 30, 2022 As of December 31, 2021 Net Asset Value (Dollars in millions) Investment in limited partnership (1) $ 55 299 ______________________________________________________________________ (1) For the three and nine months ended September 30, 2022, we recognized $43 million and $114 million, respectively, of loss on investment, reflected in other (expense) income, net in our consolidated statements of operations. For both the three and nine months ended September 30, 2021, we recognized $9 million of loss on investment, reflected in other (expense) income, net in our consolidated statements of operations. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 sheets at September 30, 2022 and December 31, 2021, as follows (in millions): September 30, 2022 December 31, 2021 Derivatives designated as Balance Sheet Location Fair Value Cash flow hedging contracts Other current and noncurrent liabilities $ — 25 |
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 2022 2021 Cash flow hedging contracts Three Months Ended September 30, $ — 21 Nine Months Ended September 30, $ 22 62 The tables below present further information about our reclassifications out of accumulated other comprehensive loss by component for the three and nine months ended September 30, 2022: Three Months Ended September 30, 2022 Decrease (Increase) Affected Line Item in Consolidated Statement of Operations (Dollars in millions) Interest rate swaps $ — Interest expense Income tax benefit — Income tax expense Net of tax $ — Amortization of pension & post-retirement plans (1) Net actuarial loss $ 32 Other (expense) income, net Prior service cost (2) Other (expense) income, net Total before tax 30 Income tax benefit (7) Income tax expense Net of tax $ 23 Reclassification of realized loss on foreign currency translation to gain on sale of business $ 112 Gain on sale of business Income tax benefit — Income tax expense Net of tax $ 112 Nine Months Ended September 30, 2022 Decrease (Increase) Affected Line Item in Consolidated Statement of Operations (Dollars in millions) Interest rate swaps $ 22 Interest expense Income tax benefit (5) Income tax expense Net of tax $ 17 Amortization of pension & post-retirement plans (1) Net actuarial loss $ 99 Other (expense) income, net Prior service credit (3) Other (expense) income, net Total before tax 96 Income tax benefit (24) Income tax expense Net of tax $ 72 Reclassification of realized loss on foreign currency translation to gain on sale of business $ 112 Gain on sale of business Income tax benefit — Income tax expense Net of tax $ 112 ________________________________________________________________________ (1) See Note 8—Employee Benefits for additional information on our net periodic benefit expense (income) 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 and nine months ended September 30, 2021: Three Months Ended September 30, 2021 Decrease (Increase) Affected Line Item in Consolidated Statement of Operations (Dollars in millions) Interest rate swaps $ 21 Interest expense Income tax expense (5) Income tax expense Net of tax $ 16 Amortization of pension & post-retirement plans (1) Net actuarial loss $ 108 Other (expense) income, net Prior service cost 1 Other (expense) income, net Total before tax 109 Income tax benefit (27) Income tax expense Net of tax $ 82 Nine Months Ended September 30, 2021 Decrease (Increase) Affected Line Item in Consolidated Statement of Operations (Dollars in millions) Interest rate swaps $ 62 Interest expense Income tax benefit (15) Income tax expense Net of tax $ 47 Amortization of pension & post-retirement plans (1) Net actuarial loss $ 208 Other (expense) income, net Prior service cost 4 Other (expense) income, net Total before tax 212 Income tax benefit (52) Income tax expense Net of tax $ 160 ________________________________________________________________________ (1) See Note 8—Employee Benefits for additional information on our net periodic benefit income related to our pension and post-retirement plans. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Results | The following tables summarize our segment results for the three and nine months ended September 30, 2022 and 2021, based on the segment categorization we were operating under at September 30, 2022. Three Months Ended September 30, 2022 Business Mass Markets Total Segments Operations and Other Total (Dollars in millions) Revenue $ 3,217 1,173 4,390 — 4,390 Expenses: Cost of services and products 792 25 817 1,182 1,999 Selling, general and administrative 263 169 432 360 792 Gain on sale of business — — — (593) (593) Less: stock-based compensation — — — (23) (23) Total expense 1,055 194 1,249 926 2,175 Total adjusted EBITDA $ 2,162 979 3,141 (926) 2,215 Three Months Ended September 30, 2021 Business Mass Markets Total Segments Operations and Other Total (Dollars in millions) Revenue $ 3,508 1,379 4,887 — 4,887 Expenses: Cost of services and products 867 36 903 1,248 2,151 Selling, general and administrative 293 128 421 233 654 Less: stock-based compensation — — — (27) (27) Total expense 1,160 164 1,324 1,454 2,778 Total adjusted EBITDA $ 2,348 1,215 3,563 (1,454) 2,109 Nine Months Ended September 30, 2022 Business Mass Markets Total Segments Operations and Other Total (Dollars in millions) Revenue $ 10,034 3,644 13,678 — 13,678 Expenses: Cost of services and products 2,452 91 2,543 3,499 6,042 Selling, general and administrative 845 439 1,284 1,123 2,407 Gain on sale of business — — — (593) (593) Less: stock-based compensation — — — (71) (71) Total expense 3,297 530 3,827 3,958 7,785 Total adjusted EBITDA $ 6,737 3,114 9,851 (3,958) 5,893 Nine Months Ended September 30, 2021 Business Mass Markets Total Segments Operations and Other Total (Dollars in millions) Revenue $ 10,625 4,215 14,840 — 14,840 Expenses: Cost of services and products 2,614 119 2,733 3,669 6,402 Selling, general and administrative 892 415 1,307 865 2,172 Less: stock-based compensation — — — (89) (89) Total expense 3,506 534 4,040 4,445 8,485 Total adjusted EBITDA $ 7,119 3,681 10,800 (4,445) 6,355 |
Reconciliation of Operating Profit (Loss) From Segments to Consolidated Net Income | The following table reconciles total segment adjusted EBITDA to net income for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (Dollars in millions) Total segment adjusted EBITDA $ 3,141 3,563 9,851 10,800 Operations and other expenses (926) (1,454) (3,958) (4,445) Depreciation and amortization (808) (951) (2,443) (3,142) Stock-based compensation (23) (27) (71) (89) Operating income 1,384 1,131 3,379 3,124 Total other expense, net (447) (415) (1,188) (1,102) Income before income taxes 937 716 2,191 2,022 Income tax expense 359 172 670 497 Net income $ 578 544 1,521 1,525 |
Other Financial Information (Ta
Other Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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: September 30, 2022 December 31, 2021 (Dollars in millions) Prepaid expenses $ 371 295 Income tax receivable 60 22 Materials, supplies and inventory 179 96 Contract assets 35 45 Contract acquisition costs 131 142 Contract fulfillment costs 104 106 Note receivable — 56 Receivable for sale of land — 56 Other 14 11 Total other current assets (1)(2) $ 894 829 ______________________________________________________________________ (1) Excludes $52 million of other current assets related to the ILEC business that were classified as held for sale as of September 30, 2022. (2) Excludes $126 million of other current assets related to the Latin American business sold on August 1, 2022 and the ILEC business sold on October 3, 2022 that were classified as held for sale as of December 31, 2021. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 nine months ended September 30, 2022: Pension Plans Post-Retirement Benefit Plans Foreign Currency Translation Adjustment and Other Interest Rate Swap Total (Dollars in millions) Balance at December 31, 2021 $ (1,577) (164) (400) (17) (2,158) Other comprehensive loss before reclassifications — — (245) — (245) Amounts reclassified from accumulated other comprehensive loss 68 4 112 17 201 Net current-period other comprehensive income (loss) 68 4 (133) 17 (44) Balance at September 30, 2022 $ (1,509) (160) (533) — (2,202) The table below summarizes changes in accumulated other comprehensive loss recorded on our consolidated balance sheets by component for the nine months ended September 30, 2021 : Pension Plans Post-Retirement Benefit Plans Foreign Currency Translation Adjustment and Other Interest Rate Swap Total (Dollars in millions) Balance at December 31, 2020 $ (2,197) (272) (265) (79) (2,813) Other comprehensive income (loss) before reclassifications 133 — (103) (1) 29 Amounts reclassified from accumulated other comprehensive loss 149 11 — 47 207 Net current-period other comprehensive income (loss) 282 11 (103) 46 236 Balance at September 30, 2021 $ (1,915) (261) (368) (33) (2,577) |
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 2022 2021 Cash flow hedging contracts Three Months Ended September 30, $ — 21 Nine Months Ended September 30, $ 22 62 The tables below present further information about our reclassifications out of accumulated other comprehensive loss by component for the three and nine months ended September 30, 2022: Three Months Ended September 30, 2022 Decrease (Increase) Affected Line Item in Consolidated Statement of Operations (Dollars in millions) Interest rate swaps $ — Interest expense Income tax benefit — Income tax expense Net of tax $ — Amortization of pension & post-retirement plans (1) Net actuarial loss $ 32 Other (expense) income, net Prior service cost (2) Other (expense) income, net Total before tax 30 Income tax benefit (7) Income tax expense Net of tax $ 23 Reclassification of realized loss on foreign currency translation to gain on sale of business $ 112 Gain on sale of business Income tax benefit — Income tax expense Net of tax $ 112 Nine Months Ended September 30, 2022 Decrease (Increase) Affected Line Item in Consolidated Statement of Operations (Dollars in millions) Interest rate swaps $ 22 Interest expense Income tax benefit (5) Income tax expense Net of tax $ 17 Amortization of pension & post-retirement plans (1) Net actuarial loss $ 99 Other (expense) income, net Prior service credit (3) Other (expense) income, net Total before tax 96 Income tax benefit (24) Income tax expense Net of tax $ 72 Reclassification of realized loss on foreign currency translation to gain on sale of business $ 112 Gain on sale of business Income tax benefit — Income tax expense Net of tax $ 112 ________________________________________________________________________ (1) See Note 8—Employee Benefits for additional information on our net periodic benefit expense (income) 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 and nine months ended September 30, 2021: Three Months Ended September 30, 2021 Decrease (Increase) Affected Line Item in Consolidated Statement of Operations (Dollars in millions) Interest rate swaps $ 21 Interest expense Income tax expense (5) Income tax expense Net of tax $ 16 Amortization of pension & post-retirement plans (1) Net actuarial loss $ 108 Other (expense) income, net Prior service cost 1 Other (expense) income, net Total before tax 109 Income tax benefit (27) Income tax expense Net of tax $ 82 Nine Months Ended September 30, 2021 Decrease (Increase) Affected Line Item in Consolidated Statement of Operations (Dollars in millions) Interest rate swaps $ 62 Interest expense Income tax benefit (15) Income tax expense Net of tax $ 47 Amortization of pension & post-retirement plans (1) Net actuarial loss $ 208 Other (expense) income, net Prior service cost 4 Other (expense) income, net Total before tax 212 Income tax benefit (52) Income tax expense Net of tax $ 160 ________________________________________________________________________ (1) See Note 8—Employee Benefits for additional information on our net periodic benefit income related to our pension and post-retirement plans. |
Subsequent Events (Tables)
Subsequent Events (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Schedule of Debt Repayments | During the nine months ended September 30, 2022, Lumen borrowed $2.4 billion from, and made repayments of $2.3 billion to, its Revolving Credit Facility. We used our net revolving credit draws and available cash to repay the following aggregate principal amount of indebtedness through a combination of tender offers, redemptions, prepayments and payments at maturity. These transactions resulted in a net gain of $9 million. Debt Period of Repayment (Dollars in millions) Lumen Technologies, Inc. 5.800% Senior Notes due 2022 (at Maturity) Q1 2022 $ 1,400 Level 3 Financing, Inc. Tranche B 2027 Term Loan Q3 2022 700 5.375% Senior Notes due 2025 Q3 2022 800 5.250% Senior Notes due 2026 Q3 2022 775 Other Q3 2022 30 Total Debt Repayments $ 3,705 Since September 30, 2022, Lumen and its subsidiaries have used available cash to repay the following aggregate principal amount of indebtedness through a combination of tender offers and redemptions: Debt (Dollars in millions) Lumen Technologies, Inc. 6.750% Senior Notes, Series W, due 2023 $ 750 7.500% Senior Notes, Series Y, due 2024 982 5.625% Senior Notes, Series X, due 2025 270 7.200% Senior Notes, Series D, due 2025 34 5.125% Senior Notes due 2026 484 6.875% Debentures, Series G, due 2028 126 5.375% Senior Notes due 2029 490 Embarq Corporation Subsidiaries First Mortgage Bonds 25 Qwest Capital Funding, Inc. Senior Notes 63 Total Debt Repayments $ 3,224 |
Background (Details)
Background (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Book overdraft balance | $ 0 | $ 0 |
Recently Completed Divestitur_3
Recently Completed Divestitures of the Latin American and ILEC Businesses - Additional Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Oct. 03, 2022 USD ($) States | Aug. 01, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Gain (loss) on disposal | $ 593 | $ 0 | $ 593 | $ 0 | |||
Goodwill | 15,918 | 15,918 | $ 15,986 | ||||
Depreciation and amortization | 2,443 | 3,142 | |||||
Disposal Group Disposed of by Sale, not Discontinued Operations | Latin American Business | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Gain (loss) on disposal | 593 | 593 | |||||
Indemnifications related to the sale of the Latin American business | 86 | 86 | |||||
Net assets | $ 1,900 | ||||||
Property, plant and equipment, net accumulated depreciation | 1,700 | ||||||
Goodwill | 245 | ||||||
Accumulated depreciation | 140 | ||||||
Deferred income tax liabilities | 154 | ||||||
Disposal Group Disposed of by Sale, not Discontinued Operations | Latin American Business | Level 3 Parent, LLC | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Cash consideration from disposal of business | $ 2,700 | ||||||
Disposal Group Disposed of by Sale, not Discontinued Operations | ILEC Business | Subsequent Event | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Cash consideration from disposal of business | $ 7,500 | ||||||
Number of states in which the business is conducted | States | 20 | ||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Gain (loss) on disposal | 0 | ||||||
Depreciation and amortization | 114 | $ 81 | 350 | $ 81 | |||
Disposal Group, Held-for-sale, Not Discontinued Operations | Latin American Business | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Net assets | 2,200 | ||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | ILEC Business | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Net assets | 6,675 | 6,675 | 6,575 | ||||
Property, plant and equipment, net accumulated depreciation | 3,651 | 3,651 | 3,491 | ||||
Accumulated depreciation | $ 8,170 | $ 8,170 | $ 8,303 |
Recently Completed Divestitur_4
Recently Completed Divestitures of the Latin American and ILEC Businesses - Components of Assets and Liabilities as of Disposal Date (Details) - USD ($) $ in Millions | 9 Months Ended | |||
Sep. 30, 2022 | Jan. 01, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | |
Assets held for sale | ||||
Cash and cash equivalents | $ 0 | $ 39 | ||
Other current assets | $ 52 | $ 126 | ||
Senior notes | Embarq | ||||
Liabilities held for sale | ||||
Stated interest rate | 7.995% | 7.995% | ||
ILEC Business | Defined Benefit Plan, Funded Plan | ||||
Liabilities held for sale | ||||
Pension liability | $ 2,500 | $ 2,500 | $ 2,500 | |
ILEC Business | Defined Benefit Plan, Funded through Transfer of Plan Assets | ||||
Liabilities held for sale | ||||
Pension liability | $ 2,200 | |||
Contributions | 319 | |||
Disposal Group, Held-for-sale, Not Discontinued Operations | ||||
Assets held for sale | ||||
Goodwill | 2,600 | |||
Liabilities held for sale | ||||
Allowance for doubtful accounts | 19 | 24 | ||
Long-term finance lease obligations | 76 | 57 | ||
Disposal Group, Held-for-sale, Not Discontinued Operations | Senior notes | Embarq | ||||
Liabilities held for sale | ||||
Long-term debt, indebtedness | 1,400 | 1,400 | ||
Unamortized discount | 114 | 117 | ||
Disposal Group, Held-for-sale, Not Discontinued Operations | Latin American Business | ||||
Assets held for sale | ||||
Total assets held for sale | 2,200 | |||
Liabilities held for sale | ||||
Total liabilities held for sale | 435 | |||
Disposal Group, Held-for-sale, Not Discontinued Operations | ILEC Business | ||||
Assets held for sale | ||||
Cash and cash equivalents | 0 | 1 | ||
Accounts receivable, less allowance | 195 | 227 | ||
Other current assets | 52 | 45 | ||
Property, plant and equipment, net accumulated depreciation | 3,651 | 3,491 | ||
Goodwill | 2,581 | 2,615 | ||
Other intangible assets, net | 158 | 158 | ||
Other non-current assets | 38 | 38 | ||
Total assets held for sale | 6,675 | 6,575 | ||
Liabilities held for sale | ||||
Accounts payable | 56 | 64 | ||
Salaries and benefits | 32 | 25 | ||
Income and other taxes | 30 | 24 | ||
Interest | 38 | 10 | ||
Current portion of deferred revenue | 87 | 90 | ||
Other current liabilities | 47 | 35 | ||
Long-term debt, indebtedness | 1,400 | 1,377 | ||
Pension and other post-retirement benefits | 27 | 56 | ||
Other non-current liabilities | 71 | 141 | ||
Total liabilities held for sale | 1,788 | 1,822 | ||
Allowance for doubtful accounts | 19 | 21 | ||
Accumulated depreciation | $ 8,170 | $ 8,303 |
Recently Completed Divestitur_5
Recently Completed Divestitures of the Latin American Business and Planned Divestiture of ILEC Businesses - Pre-tax Net Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disposal Group, Held-for-sale, Not Discontinued Operations | ILEC Business | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Pre-tax net income | $ 164 | $ 234 | $ 576 | $ 528 |
Goodwill, Customer Relationsh_3
Goodwill, Customer Relationships and Other Intangible Assets - Schedule of Goodwill, Customer Relationships, and Other Intangible Assets (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Goodwill [Line Items] | ||
Goodwill | $ 15,918 | $ 15,986 |
Indefinite-lived intangible assets | 9 | 9 |
Total other intangible assets, net | 6,436 | 6,970 |
Customer relationships | ||
Goodwill [Line Items] | ||
Finite-lived intangible assets, net | 4,822 | 5,365 |
Accumulated amortization | 3,579 | 11,740 |
Capitalized software | ||
Goodwill [Line Items] | ||
Finite-lived intangible assets, net | 1,498 | 1,459 |
Accumulated amortization | 3,832 | 3,624 |
Trade names, patents and other | ||
Goodwill [Line Items] | ||
Finite-lived intangible assets, net | 107 | 137 |
Accumulated amortization | 183 | $ 160 |
Fully amortized and retired customer relationships | ||
Goodwill [Line Items] | ||
Gross carrying value | $ 8,700 |
Goodwill, Customer Relationsh_4
Goodwill, Customer Relationships and Other Intangible Assets - Additional Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) segment reportingUnit | Sep. 30, 2021 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Intangible assets, gross (including goodwill) | $ | $ 29,900 | $ 29,900 | ||
Number of reportable segments | segment | 2 | |||
Number of operating segments | segment | 2 | |||
Number of reporting units | reportingUnit | 4 | |||
Amortization of intangible assets | $ | $ 279 | $ 306 | $ 830 | $ 1,000 |
Goodwill, Customer Relationsh_5
Goodwill, Customer Relationships and Other Intangible Assets - Rollforward of Goodwill (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | ||
As of beginning of period | $ 15,986 | |
Effect of foreign currency exchange rate change and other | (68) | |
As of end of period | 15,918 | $ 15,986 |
Accumulated impairment losses | 7,700 | 7,700 |
Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Goodwill [Roll Forward] | ||
Reclassified as held for sale | 2,900 | |
Goodwill | 2,600 | |
Disposal Group, Held-for-sale, Not Discontinued Operations | ILEC Business | ||
Goodwill [Roll Forward] | ||
Goodwill | 2,581 | 2,615 |
Business | ||
Goodwill [Roll Forward] | ||
As of beginning of period | 11,235 | |
Effect of foreign currency exchange rate change and other | (68) | |
As of end of period | 11,167 | 11,235 |
Mass Markets | ||
Goodwill [Roll Forward] | ||
As of beginning of period | 4,751 | |
Effect of foreign currency exchange rate change and other | 0 | |
As of end of period | $ 4,751 | $ 4,751 |
Goodwill, Customer Relationsh_6
Goodwill, Customer Relationships and Other Intangible Assets - Schedule of Amortization Expense (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 (remaining three months) | $ 261 |
2023 | 978 |
2024 | 906 |
2025 | 839 |
2026 | $ 762 |
Revenue Recognition - Revenue b
Revenue Recognition - Revenue by Segment, Sales Channel and Product Category (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 4,390 | $ 4,887 | $ 13,678 | $ 14,840 |
Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,390 | 4,887 | 13,678 | 14,840 |
Adjustments for non-ASC 606 revenue | (331) | (472) | (1,099) | (1,417) |
Total revenue from contracts with customers | 4,059 | 4,415 | 12,579 | 13,423 |
Operating Segments | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 3,217 | 3,508 | 10,034 | 10,625 |
Adjustments for non-ASC 606 revenue | (246) | (273) | (794) | (820) |
Total revenue from contracts with customers | 2,971 | 3,235 | 9,240 | 9,805 |
Operating Segments | Business | Compute and Application Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 399 | 431 | 1,279 | 1,297 |
Adjustments for non-ASC 606 revenue | (109) | (133) | (375) | (400) |
Total revenue from contracts with customers | 290 | 298 | 904 | 897 |
Operating Segments | Business | IP and Data Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,417 | 1,543 | 4,434 | 4,670 |
Adjustments for non-ASC 606 revenue | (1) | (1) | (3) | (4) |
Total revenue from contracts with customers | 1,416 | 1,542 | 4,431 | 4,666 |
Operating Segments | Business | Fiber Infrastructure | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 530 | 578 | 1,629 | 1,687 |
Adjustments for non-ASC 606 revenue | (74) | (76) | (227) | (228) |
Total revenue from contracts with customers | 456 | 502 | 1,402 | 1,459 |
Operating Segments | Business | Voice and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 871 | 956 | 2,692 | 2,971 |
Adjustments for non-ASC 606 revenue | (62) | (63) | (189) | (188) |
Total revenue from contracts with customers | 809 | 893 | 2,503 | 2,783 |
Operating Segments | Business | International and Global Accounts ("IGAM") | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 853 | 1,027 | 2,848 | 3,058 |
Adjustments for non-ASC 606 revenue | (80) | (104) | (293) | (305) |
Total revenue from contracts with customers | 773 | 923 | 2,555 | 2,753 |
Operating Segments | Business | International and Global Accounts ("IGAM") | Compute and Application Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 154 | 183 | 521 | 547 |
Adjustments for non-ASC 606 revenue | (47) | (71) | (191) | (210) |
Total revenue from contracts with customers | 107 | 112 | 330 | 337 |
Operating Segments | Business | International and Global Accounts ("IGAM") | IP and Data Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 350 | 431 | 1,190 | 1,287 |
Adjustments for non-ASC 606 revenue | 0 | 0 | 0 | 0 |
Total revenue from contracts with customers | 350 | 431 | 1,190 | 1,287 |
Operating Segments | Business | International and Global Accounts ("IGAM") | Fiber Infrastructure | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 199 | 231 | 642 | 665 |
Adjustments for non-ASC 606 revenue | (33) | (33) | (102) | (95) |
Total revenue from contracts with customers | 166 | 198 | 540 | 570 |
Operating Segments | Business | International and Global Accounts ("IGAM") | Voice and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 150 | 182 | 495 | 559 |
Adjustments for non-ASC 606 revenue | 0 | 0 | 0 | 0 |
Total revenue from contracts with customers | 150 | 182 | 495 | 559 |
Operating Segments | Business | Large Enterprise | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 844 | 942 | 2,605 | 2,840 |
Adjustments for non-ASC 606 revenue | (27) | (26) | (80) | (83) |
Total revenue from contracts with customers | 817 | 916 | 2,525 | 2,757 |
Operating Segments | Business | Large Enterprise | Compute and Application Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 148 | 172 | 473 | 515 |
Adjustments for non-ASC 606 revenue | (16) | (15) | (45) | (45) |
Total revenue from contracts with customers | 132 | 157 | 428 | 470 |
Operating Segments | Business | Large Enterprise | IP and Data Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 378 | 394 | 1,151 | 1,192 |
Adjustments for non-ASC 606 revenue | 0 | 0 | 0 | 0 |
Total revenue from contracts with customers | 378 | 394 | 1,151 | 1,192 |
Operating Segments | Business | Large Enterprise | Fiber Infrastructure | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 117 | 143 | 359 | 403 |
Adjustments for non-ASC 606 revenue | (11) | (11) | (35) | (38) |
Total revenue from contracts with customers | 106 | 132 | 324 | 365 |
Operating Segments | Business | Large Enterprise | Voice and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 201 | 233 | 622 | 730 |
Adjustments for non-ASC 606 revenue | 0 | 0 | 0 | 0 |
Total revenue from contracts with customers | 201 | 233 | 622 | 730 |
Operating Segments | Business | Mid-Market Enterprise | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 618 | 648 | 1,880 | 2,002 |
Adjustments for non-ASC 606 revenue | (10) | (11) | (30) | (35) |
Total revenue from contracts with customers | 608 | 637 | 1,850 | 1,967 |
Operating Segments | Business | Mid-Market Enterprise | Compute and Application Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 35 | 30 | 102 | 94 |
Adjustments for non-ASC 606 revenue | (7) | (8) | (21) | (25) |
Total revenue from contracts with customers | 28 | 22 | 81 | 69 |
Operating Segments | Business | Mid-Market Enterprise | IP and Data Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 406 | 421 | 1,229 | 1,291 |
Adjustments for non-ASC 606 revenue | (1) | (1) | (3) | (4) |
Total revenue from contracts with customers | 405 | 420 | 1,226 | 1,287 |
Operating Segments | Business | Mid-Market Enterprise | Fiber Infrastructure | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 49 | 50 | 148 | 156 |
Adjustments for non-ASC 606 revenue | (2) | (2) | (6) | (6) |
Total revenue from contracts with customers | 47 | 48 | 142 | 150 |
Operating Segments | Business | Mid-Market Enterprise | Voice and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 128 | 147 | 401 | 461 |
Adjustments for non-ASC 606 revenue | 0 | 0 | 0 | 0 |
Total revenue from contracts with customers | 128 | 147 | 401 | 461 |
Operating Segments | Business | Wholesale | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 902 | 891 | 2,701 | 2,725 |
Adjustments for non-ASC 606 revenue | (129) | (132) | (391) | (397) |
Total revenue from contracts with customers | 773 | 759 | 2,310 | 2,328 |
Operating Segments | Business | Wholesale | Compute and Application Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 62 | 46 | 183 | 141 |
Adjustments for non-ASC 606 revenue | (39) | (39) | (118) | (120) |
Total revenue from contracts with customers | 23 | 7 | 65 | 21 |
Operating Segments | Business | Wholesale | IP and Data Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 283 | 297 | 864 | 900 |
Adjustments for non-ASC 606 revenue | 0 | 0 | 0 | 0 |
Total revenue from contracts with customers | 283 | 297 | 864 | 900 |
Operating Segments | Business | Wholesale | Fiber Infrastructure | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 165 | 154 | 480 | 463 |
Adjustments for non-ASC 606 revenue | (28) | (30) | (84) | (89) |
Total revenue from contracts with customers | 137 | 124 | 396 | 374 |
Operating Segments | Business | Wholesale | Voice and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 392 | 394 | 1,174 | 1,221 |
Adjustments for non-ASC 606 revenue | (62) | (63) | (189) | (188) |
Total revenue from contracts with customers | 330 | 331 | 985 | 1,033 |
Operating Segments | Mass Markets | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,173 | 1,379 | 3,644 | 4,215 |
Adjustments for non-ASC 606 revenue | (85) | (199) | (305) | (597) |
Total revenue from contracts with customers | 1,088 | 1,180 | 3,339 | 3,618 |
Operating Segments | Mass Markets | Fiber Broadband | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 160 | 135 | 456 | 387 |
Adjustments for non-ASC 606 revenue | (4) | 0 | (14) | 0 |
Total revenue from contracts with customers | 156 | 135 | 442 | 387 |
Operating Segments | Mass Markets | Other Broadband | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 580 | 619 | 1,786 | 1,899 |
Adjustments for non-ASC 606 revenue | (55) | (56) | (166) | (166) |
Total revenue from contracts with customers | 525 | 563 | 1,620 | 1,733 |
Operating Segments | Mass Markets | Voice and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 433 | 625 | 1,402 | 1,929 |
Adjustments for non-ASC 606 revenue | (26) | (143) | (125) | (431) |
Total revenue from contracts with customers | $ 407 | $ 482 | $ 1,277 | $ 1,498 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||||
Lease income | $ 307 | $ 329 | $ 978 | $ 988 | ||
Percent of operating revenue | 7% | 7% | 7% | 7% | ||
Revenue recognized | $ 47 | $ 61 | $ 494 | $ 544 | ||
Contract liabilities | $ 841 | $ 950 | ||||
Minimum | ||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||||
Contract term | 1 year | |||||
Maximum | ||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||||
Contract term | 5 years | |||||
Weighted Average | Consumer Customers | ||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||||
Length of customer life | 32 months | |||||
Weighted Average | Business Customers | ||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||||
Length of customer life | 30 months |
Revenue Recognition - Contract
Revenue Recognition - Contract with Customer, Asset and Liability (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Capitalized Contract Cost [Line Items] | ||
Customer receivables | $ 1,407 | $ 1,493 |
Contract assets | 56 | 73 |
Contract liabilities | 714 | 680 |
Accounts receivable, gross | 1,500 | 1,600 |
Allowance for doubtful accounts receivable | 84 | 102 |
Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Capitalized Contract Cost [Line Items] | ||
Customer receivables | 288 | |
Contract assets | 9 | |
Contract liabilities | $ 161 | |
Disposal Group, Held-for-sale, Not Discontinued Operations | ILEC Business | ||
Capitalized Contract Cost [Line Items] | ||
Customer receivables | 175 | |
Contract assets | 7 | |
Contract liabilities | $ 76 |
Revenue Recognition - Remaining
Revenue Recognition - Remaining Performance Obligation (Details) $ in Billions | Sep. 30, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 5.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percentage | 69% |
Remaining performance obligation, satisfaction period | 2 years 3 months |
Revenue Recognition - Capitaliz
Revenue Recognition - Capitalized Contract Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Acquisition Costs | ||||
Capitalized Contract Cost [Roll Forward] | ||||
Beginning of period balance | $ 208 | $ 271 | $ 222 | $ 289 |
Costs incurred | 45 | 43 | 129 | 132 |
Amortization | (49) | (51) | (150) | (158) |
Change in contract costs held for sale | 3 | (35) | 6 | (35) |
End of period balance | 207 | 228 | 207 | 228 |
Acquisition Costs | Held-for-sale | ||||
Capitalized Contract Cost [Roll Forward] | ||||
Beginning of period balance | 31 | 34 | ||
End of period balance | 35 | 35 | ||
Acquisition Costs | Held-for-sale | ILEC Business | ||||
Capitalized Contract Cost [Roll Forward] | ||||
End of period balance | 28 | 28 | ||
Fulfillment Costs | ||||
Capitalized Contract Cost [Roll Forward] | ||||
Beginning of period balance | 188 | 217 | 186 | 216 |
Costs incurred | 38 | 37 | 119 | 112 |
Amortization | (35) | (37) | (113) | (111) |
Change in contract costs held for sale | (2) | (31) | (3) | (31) |
End of period balance | 189 | 186 | 189 | 186 |
Fulfillment Costs | Held-for-sale | ||||
Capitalized Contract Cost [Roll Forward] | ||||
Beginning of period balance | 33 | 32 | ||
End of period balance | $ 31 | $ 31 | ||
Fulfillment Costs | Held-for-sale | ILEC Business | ||||
Capitalized Contract Cost [Roll Forward] | ||||
End of period balance | $ 35 | $ 35 |
Credit Losses on Financial In_3
Credit Losses on Financial Instruments (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance at December 31, 2021 | $ 114 | |
Provision for expected losses | 99 | |
Write-offs charged against the allowance | (135) | |
Recoveries collected | 14 | |
Foreign currency exchange rate change adjustment | (1) | |
Change in allowance in assets held for sale | 2 | |
Ending balance at September 30, 2022 | 95 | |
Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance for doubtful accounts | 19 | $ 24 |
Business | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance at December 31, 2021 | 88 | |
Provision for expected losses | 19 | |
Write-offs charged against the allowance | (47) | |
Recoveries collected | 9 | |
Foreign currency exchange rate change adjustment | (1) | |
Change in allowance in assets held for sale | (1) | |
Ending balance at September 30, 2022 | 69 | |
Mass Markets | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance at December 31, 2021 | 26 | |
Provision for expected losses | 80 | |
Write-offs charged against the allowance | (88) | |
Recoveries collected | 5 | |
Foreign currency exchange rate change adjustment | 0 | |
Change in allowance in assets held for sale | 3 | |
Ending balance at September 30, 2022 | $ 26 |
Long-Term Debt and Credit Fac_3
Long-Term Debt and Credit Facilities - Schedule of Long Term Debt (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Long-term Debt and Credit Facilities | ||
Finance lease and other obligations | $ 324 | $ 347 |
Unamortized (discounts) premiums, net | (8) | 21 |
Unamortized debt issuance costs | (193) | (220) |
Total long-term debt | 25,238 | 28,982 |
Less current maturities | (3,474) | (1,554) |
Long-term debt, excluding current maturities | 21,764 | 27,428 |
Lumen Technologies, Inc. | Credit facility | Revolving Credit Facility | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 280 | $ 200 |
Long-term debt, weighted average interest rate | 5.08% | 2.103% |
Lumen Technologies, Inc. | Credit facility | Revolving Credit Facility | LIBOR | ||
Long-term Debt and Credit Facilities | ||
Basis spread (as a percent) | 2% | |
Lumen Technologies, Inc. | Term Loan | Term Loan A | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 1,006 | $ 1,050 |
Long-term debt, weighted average interest rate | 5.115% | 2.104% |
Lumen Technologies, Inc. | Term Loan | Term Loan A | LIBOR | ||
Long-term Debt and Credit Facilities | ||
Basis spread (as a percent) | 2% | |
Lumen Technologies, Inc. | Term Loan | Term Loan A-1 | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 287 | $ 300 |
Long-term debt, weighted average interest rate | 5.115% | 2.104% |
Lumen Technologies, Inc. | Term Loan | Term Loan A-1 | LIBOR | ||
Long-term Debt and Credit Facilities | ||
Basis spread (as a percent) | 2% | |
Lumen Technologies, Inc. | Term Loan | Term Loan B | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 4,863 | $ 4,900 |
Long-term debt, weighted average interest rate | 5.365% | 2.354% |
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 | 4.000% Senior Secured Notes Due 2027 | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate | 4% | |
Long-term debt, gross | $ 1,250 | $ 1,250 |
Lumen Technologies, Inc. | Senior notes | Senior Notes Maturing 2023-2042 | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 6,985 | 8,414 |
Lumen Technologies, Inc. | Senior notes | Senior Notes Maturing 2023-2042 | Minimum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate | 4.50% | |
Lumen Technologies, Inc. | Senior notes | Senior Notes Maturing 2023-2042 | Maximum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate | 7.65% | |
Level 3 Financing, Inc. | Term Loan | Tranche B 2027 Term Loan | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 2,411 | $ 3,111 |
Long-term debt, weighted average interest rate | 4.865% | 1.854% |
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 | 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% | |
Level 3 Financing, Inc. | Senior notes | Senior Notes Maturing 2025-2029 | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 3,940 | $ 5,515 |
Level 3 Financing, Inc. | Senior notes | Senior Notes Maturing 2025-2029 | Minimum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate | 3.625% | |
Level 3 Financing, Inc. | Senior notes | Senior Notes Maturing 2025-2029 | Maximum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate | 4.625% | |
Embarq Corporation subsidiaries | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate | 7.995% | 7.995% |
Embarq Corporation subsidiaries | Senior notes | Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, indebtedness | $ 1,400 | $ 1,400 |
Embarq Corporation subsidiaries | First mortgage bonds | First Mortgage Bonds | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 137 | 138 |
Embarq Corporation subsidiaries | First mortgage bonds | First Mortgage Bonds | Minimum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate | 7.125% | |
Embarq Corporation subsidiaries | First mortgage bonds | 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 | 5.12% | 2.11% |
Qwest Corporation | Term Loan | LIBOR | ||
Long-term Debt and Credit Facilities | ||
Basis spread (as a percent) | 2% | |
Qwest Corporation | Senior notes | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 1,986 | $ 1,986 |
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 | $ 255 | $ 255 |
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 | Sep. 30, 2022 USD ($) |
Long-term Debt, Fiscal Year Maturity | |
2022 (remaining three months) | $ 1,908 |
2023 | 153 |
2024 | 158 |
2025 | 2,343 |
2026 | 1,276 |
2027 and thereafter | 19,601 |
Total long-term debt | 25,439 |
Senior Notes | |
Long-term Debt, Fiscal Year Maturity | |
2022 (remaining three months) | 1,900 |
Disposal Group, Held-for-sale, Not Discontinued Operations | |
Long-term Debt, Fiscal Year Maturity | |
Total long-term debt | $ 1,500 |
Long-Term Debt and Credit Fac_5
Long-Term Debt and Credit Facilities - Schedule of Debt Repayments (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Long-term Debt and Credit Facilities | ||
Borrowings | $ 2,400 | |
Repayments of debt | 2,300 | |
Gain from repayments of debt | 9 | $ 8 |
Repayments of debt | $ 3,705 | |
Senior Notes | 5.800% Senior Notes due 2022 (at Maturity) | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate | 5.80% | |
Repayments of debt | $ 1,400 | |
Other | ||
Long-term Debt and Credit Facilities | ||
Repayments of debt | $ 30 | |
Level 3 Financing, Inc. | Senior Notes | 5.375% Senior Notes due 2025 | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate | 5.375% | |
Repayments of debt | $ 800 | |
Level 3 Financing, Inc. | Senior Notes | 5.250% Senior Notes due 2026 | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate | 5.25% | |
Repayments of debt | $ 775 | |
Level 3 Financing, Inc. | Term Loan | Tranche B 2027 Term Loan | ||
Long-term Debt and Credit Facilities | ||
Repayments of debt | $ 700 |
Severance (Details)
Severance (Details) - Severance $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Restructuring reserve | |
Balance at the beginning of the period | $ 36 |
Accrued to expense | 2 |
Payments, net | (30) |
Balance at the end of the period | $ 8 |
Employee Benefits - Additional
Employee Benefits - Additional Information (Details) - Pension Plans - New Lumen Pension Plan $ in Millions | 1 Months Ended | |
Sep. 30, 2022 USD ($) | Jan. 01, 2022 USD ($) Employee | |
Employee Benefits | ||
Number of active participants (in employees) | Employee | 2,500 | |
Number of other participants (in employees) | Employee | 19,000 | |
Benefit obligation | $ 2,500 | |
Plan assets | $ 2,200 | |
Contributions | $ 319 |
Employee Benefits - Schedule of
Employee Benefits - Schedule of Net Periodic Benefit (Income) Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Pension Plans | ||||
Components of net periodic (benefit) expense | ||||
Service cost | $ 11 | $ 14 | $ 34 | $ 42 |
Interest cost | 53 | 49 | 155 | 148 |
Expected return on plan assets | (100) | (138) | (302) | (414) |
Settlement charges | 0 | 57 | 0 | 57 |
Recognition of prior service credit | (3) | (2) | (8) | (7) |
Recognition of actuarial loss | 32 | 49 | 99 | 147 |
Net periodic benefit expense (income) | (7) | 29 | (22) | (27) |
Post-Retirement Benefit Plans | ||||
Components of net periodic (benefit) expense | ||||
Service cost | 3 | 4 | 8 | 11 |
Interest cost | 15 | 12 | 45 | 35 |
Recognition of prior service credit | 1 | 3 | 5 | 11 |
Recognition of actuarial loss | 0 | 2 | 0 | 4 |
Net periodic benefit expense (income) | $ 19 | $ 21 | $ 58 | $ 61 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income (Numerator) | ||||
Net income | $ 578 | $ 544 | $ 1,521 | $ 1,525 |
Net income applicable to common stock for computing basic earnings per common share | 578 | 544 | 1,521 | 1,525 |
Net income as adjusted for purposes of computing diluted earnings per common share | $ 578 | $ 544 | $ 1,521 | $ 1,525 |
Weighted-average number of shares: | ||||
Outstanding during period (in shares) | 1,034,786 | 1,079,917 | 1,031,687 | 1,095,223 |
Non-vested restricted stock (in shares) | (21,662) | (17,833) | (20,189) | (18,117) |
Weighted average shares outstanding for computing basic earnings per common share (in shares) | 1,013,124 | 1,062,084 | 1,011,498 | 1,077,106 |
Incremental common shares attributable to dilutive securities: | ||||
Shares issuable under convertible securities (in shares) | 10 | 10 | 10 | 10 |
Shares issuable under incentive compensation plans (in shares) | 3,879 | 7,063 | 4,773 | 6,763 |
Number of shares as adjusted for purposes of computing diluted earnings per common share (in shares) | 1,017,013 | 1,069,157 | 1,016,281 | 1,083,879 |
Basic earnings per common share (in dollars per share) | $ 0.57 | $ 0.51 | $ 1.50 | $ 1.42 |
Diluted earnings per common share (in dollars per share) | $ 0.57 | $ 0.51 | $ 1.50 | $ 1.41 |
Number of shares of common stock excluded from the computation of diluted earnings per share (less than) (in shares) | 12,900 | 3,900 | 10,400 | 3,000 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Carrying Amounts (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Dec. 31, 2021 | |
Fair value disclosure | ||||||
Loss on equity securities | $ (83) | $ (83) | ||||
Loss on investments | (43) | $ (9) | (114) | $ (9) | ||
Fair Value, Inputs, Level 1 | Carrying Amount | ||||||
Fair value disclosure | ||||||
Equity securities | 47 | 47 | $ 0 | |||
Fair Value, Inputs, Level 1 | Fair Value | ||||||
Fair value disclosure | ||||||
Equity securities | 47 | 47 | 0 | |||
Fair Value Inputs, Level 2 | Carrying Amount | ||||||
Fair value disclosure | ||||||
Long-term debt, excluding finance lease and other obligations | 24,914 | 24,914 | 28,635 | |||
Interest rate swap contracts (see Note 11) | 0 | 0 | 25 | |||
Fair Value Inputs, Level 2 | Carrying Amount | Disposal Group, Held-for-sale, Not Discontinued Operations | ||||||
Fair value disclosure | ||||||
Long-term debt, excluding finance lease and other obligations | 1,400 | 1,400 | 1,400 | |||
Fair Value Inputs, Level 2 | Fair Value | ||||||
Fair value disclosure | ||||||
Long-term debt, excluding finance lease and other obligations | 21,934 | 21,934 | 29,221 | |||
Interest rate swap contracts (see Note 11) | 0 | 0 | 25 | |||
Fair Value Inputs, Level 2 | Fair Value | Disposal Group, Held-for-sale, Not Discontinued Operations | ||||||
Fair value disclosure | ||||||
Long-term debt, excluding finance lease and other obligations | 700 | 700 | 1,600 | |||
Fair Value, Inputs, Level 3 | Carrying Amount | ||||||
Fair value disclosure | ||||||
Indemnifications related to the sale of the Latin American business | 86 | 86 | 0 | |||
Fair Value, Inputs, Level 3 | Fair Value | ||||||
Fair value disclosure | ||||||
Indemnifications related to the sale of the Latin American business | 86 | 86 | 0 | |||
Net Asset Value | ||||||
Fair value disclosure | ||||||
Investment in limited partnership | $ 130 | |||||
Net Asset Value | Fair Value | ||||||
Fair value disclosure | ||||||
Investment in limited partnership | $ 55 | $ 55 | $ 299 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Additional Information (Details) - USD ($) shares in Millions, $ in Millions | Jul. 29, 2022 | Jun. 30, 2022 |
Fair Value Disclosures [Abstract] | ||
Distribution received (in shares) | 11.5 | |
Net Asset Value | ||
Fair value disclosure | ||
Investment in limited partnership | $ 130 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Additional Information (Details) - Interest Rate Swap - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2019 | |
Derivative [Line Items] | ||
Reclassification in next twelve months | $ 19 | |
Designated as Hedging Instrument | Cash Flow Hedging | ||
Derivative [Line Items] | ||
Notional amount | $ 4,000 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Fair Value of Derivatives (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Cash Flow Hedging | Interest Rate Swap | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value | $ 0 | $ 25 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Reclassification from AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Realized losses reclassified from AOCI | $ 0 | $ 16 | $ 17 | $ 47 |
Interest Rate Swap | Designated as Hedging Instrument | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Realized losses reclassified from AOCI | $ 0 | $ 21 | $ 22 | $ 62 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2022 sales_channel segment | |
Segment Reporting Information [Line Items] | |
Number of operating segments | 2 |
Number of reportable segments | 2 |
Business | |
Segment Reporting Information [Line Items] | |
Number of sales channels | sales_channel | 4 |
Segment Information - Segment R
Segment Information - Segment Results and Operating Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Operating revenues by products and services | ||||
Revenue | $ 4,390 | $ 4,887 | $ 13,678 | $ 14,840 |
Cost of services and products | 1,999 | 2,151 | 6,042 | 6,402 |
Selling, general and administrative | 792 | 654 | 2,407 | 2,172 |
Gain on sale of business | (593) | (593) | 0 | |
Less: stock-based compensation | (23) | (27) | (71) | (89) |
Total expense | 2,175 | 2,778 | 7,785 | 8,485 |
Total adjusted EBITDA | 2,215 | 2,109 | 5,893 | 6,355 |
Operating Segments | ||||
Operating revenues by products and services | ||||
Revenue | 4,390 | 4,887 | 13,678 | 14,840 |
Cost of services and products | 817 | 903 | 2,543 | 2,733 |
Selling, general and administrative | 432 | 421 | 1,284 | 1,307 |
Gain on sale of business | 0 | 0 | ||
Less: stock-based compensation | 0 | 0 | 0 | 0 |
Total expense | 1,249 | 1,324 | 3,827 | 4,040 |
Total adjusted EBITDA | 3,141 | 3,563 | 9,851 | 10,800 |
Operating Segments | Business | ||||
Operating revenues by products and services | ||||
Revenue | 3,217 | 3,508 | 10,034 | 10,625 |
Cost of services and products | 792 | 867 | 2,452 | 2,614 |
Selling, general and administrative | 263 | 293 | 845 | 892 |
Gain on sale of business | 0 | 0 | ||
Less: stock-based compensation | 0 | 0 | 0 | 0 |
Total expense | 1,055 | 1,160 | 3,297 | 3,506 |
Total adjusted EBITDA | 2,162 | 2,348 | 6,737 | 7,119 |
Operating Segments | Mass Markets | ||||
Operating revenues by products and services | ||||
Revenue | 1,173 | 1,379 | 3,644 | 4,215 |
Cost of services and products | 25 | 36 | 91 | 119 |
Selling, general and administrative | 169 | 128 | 439 | 415 |
Gain on sale of business | 0 | 0 | ||
Less: stock-based compensation | 0 | 0 | 0 | 0 |
Total expense | 194 | 164 | 530 | 534 |
Total adjusted EBITDA | 979 | 1,215 | 3,114 | 3,681 |
Segment Reconciling Items | ||||
Operating revenues by products and services | ||||
Revenue | 0 | 0 | 0 | 0 |
Cost of services and products | 1,182 | 1,248 | 3,499 | 3,669 |
Selling, general and administrative | 360 | 233 | 1,123 | 865 |
Gain on sale of business | (593) | (593) | ||
Less: stock-based compensation | (23) | (27) | (71) | (89) |
Total expense | 926 | 1,454 | 3,958 | 4,445 |
Total adjusted EBITDA | $ (926) | $ (1,454) | $ (3,958) | $ (4,445) |
Segment Information - Reconcili
Segment Information - Reconciliation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Total adjusted EBITDA | $ 2,215 | $ 2,109 | $ 5,893 | $ 6,355 |
Depreciation and amortization | (808) | (951) | (2,443) | (3,142) |
OPERATING INCOME | 1,384 | 1,131 | 3,379 | 3,124 |
Total other expense, net | (447) | (415) | (1,188) | (1,102) |
INCOME BEFORE INCOME TAXES | 937 | 716 | 2,191 | 2,022 |
Income tax expense | 359 | 172 | 670 | 497 |
NET INCOME | 578 | 544 | 1,521 | 1,525 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total adjusted EBITDA | 3,141 | 3,563 | 9,851 | 10,800 |
Segment Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Total adjusted EBITDA | (926) | (1,454) | (3,958) | (4,445) |
Operations and other expenses | (926) | (1,454) | (3,958) | (4,445) |
Depreciation and amortization | (808) | (951) | (2,443) | (3,142) |
Stock-based compensation | (23) | (27) | (71) | (89) |
OPERATING INCOME | 1,384 | 1,131 | 3,379 | 3,124 |
Total other expense, net | $ (447) | $ (415) | $ (1,188) | $ (1,102) |
Commitments, Contingencies an_2
Commitments, Contingencies and Other Items (Details) $ in Thousands | 1 Months Ended | ||
Jun. 30, 2021 USD ($) lawsuit | Feb. 28, 2017 USD ($) lawsuit patent | Sep. 30, 2022 USD ($) | |
Loss Contingencies | |||
Estimate of possible loss | $ 78,000 | ||
Patents allegedly infringed | patent | 1 | ||
Unfavorable Regulatory Action | |||
Loss Contingencies | |||
Estimate of possible loss | $ 300 | ||
Missouri Municipalities | Judicial ruling | |||
Loss Contingencies | |||
Number of pending lawsuits | lawsuit | 1 | 1 | |
Litigation settlement amount | $ 4,000 | ||
Columbia and Joplin Municipalities | Judicial ruling | |||
Loss Contingencies | |||
Litigation settlement amount | $ 55,000 |
Other Financial Information (De
Other Financial Information (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Prepaid Expenses and Other Current Assets [Abstract] | ||
Prepaid expenses | $ 371 | $ 295 |
Income tax receivable | 60 | 22 |
Materials, supplies and inventory | 179 | 96 |
Contract assets | 35 | 45 |
Note receivable | 0 | 56 |
Receivable for sale of land | 0 | 56 |
Other | 14 | 11 |
Total other current assets | 894 | 829 |
Other current assets, held for sale | 52 | 126 |
Acquisition Costs | ||
Prepaid Expenses and Other Current Assets [Abstract] | ||
Contract costs | 131 | 142 |
Fulfillment Costs | ||
Prepaid Expenses and Other Current Assets [Abstract] | ||
Contract costs | $ 104 | $ 106 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - AOCI Activity (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | $ 11,840 | |||
Other comprehensive income (loss) before reclassifications | (245) | $ 29 | ||
Amounts reclassified from accumulated other comprehensive loss | 201 | 207 | ||
Other comprehensive income (loss) | $ 15 | $ 133 | (44) | 236 |
Balance at end of period | 12,577 | 11,183 | 12,577 | 11,183 |
Defined Benefit Plan | Pension Plans | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (1,577) | (2,197) | ||
Other comprehensive income (loss) before reclassifications | 0 | 133 | ||
Amounts reclassified from accumulated other comprehensive loss | 68 | 149 | ||
Other comprehensive income (loss) | 68 | 282 | ||
Balance at end of period | (1,509) | (1,915) | (1,509) | (1,915) |
Defined Benefit Plan | Post-Retirement Benefit Plans | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (164) | (272) | ||
Other comprehensive income (loss) before reclassifications | 0 | 0 | ||
Amounts reclassified from accumulated other comprehensive loss | 4 | 11 | ||
Other comprehensive income (loss) | 4 | 11 | ||
Balance at end of period | (160) | (261) | (160) | (261) |
Foreign Currency Translation Adjustment and Other | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (400) | (265) | ||
Other comprehensive income (loss) before reclassifications | (245) | (103) | ||
Amounts reclassified from accumulated other comprehensive loss | 112 | 0 | ||
Other comprehensive income (loss) | (133) | (103) | ||
Balance at end of period | (533) | (368) | (533) | (368) |
Interest Rate Swap | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (17) | (79) | ||
Other comprehensive income (loss) before reclassifications | 0 | (1) | ||
Amounts reclassified from accumulated other comprehensive loss | 17 | 47 | ||
Other comprehensive income (loss) | 17 | 46 | ||
Balance at end of period | 0 | (33) | 0 | (33) |
Accumulated Other Comprehensive Loss | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (2,217) | (2,710) | (2,158) | (2,813) |
Other comprehensive income (loss) | 15 | 133 | (44) | 236 |
Balance at end of period | $ (2,202) | $ (2,577) | $ (2,202) | $ (2,577) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss - Reclassifications (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Reclassifications out of accumulated other comprehensive income loss by component | ||||
Interest expense | $ 363 | $ 377 | $ 1,052 | $ 1,150 |
Income tax expense | 359 | 172 | 670 | 497 |
Other (expense) income, net | 84 | 38 | 136 | (48) |
Gain on sale of business | (593) | 0 | (593) | 0 |
Total before tax | (937) | (716) | (2,191) | (2,022) |
Net income | (578) | (544) | (1,521) | (1,525) |
Decrease (Increase) in Net Income | Interest rate swaps | ||||
Reclassifications out of accumulated other comprehensive income loss by component | ||||
Interest expense | 0 | (21) | 22 | (62) |
Income tax expense | 0 | 5 | (5) | 15 |
Net income | 0 | (16) | 17 | (47) |
Decrease (Increase) in Net Income | Net actuarial loss | ||||
Reclassifications out of accumulated other comprehensive income loss by component | ||||
Other (expense) income, net | 32 | (108) | 99 | (208) |
Decrease (Increase) in Net Income | Prior service cost | ||||
Reclassifications out of accumulated other comprehensive income loss by component | ||||
Other (expense) income, net | (2) | (1) | (3) | (4) |
Decrease (Increase) in Net Income | Defined benefit plan | ||||
Reclassifications out of accumulated other comprehensive income loss by component | ||||
Income tax expense | (7) | 27 | (24) | 52 |
Total before tax | 30 | (109) | 96 | (212) |
Net income | 23 | $ (82) | 72 | $ (160) |
Decrease (Increase) in Net Income | Foreign currency translation | ||||
Reclassifications out of accumulated other comprehensive income loss by component | ||||
Income tax expense | 0 | 0 | ||
Gain on sale of business | 112 | 112 | ||
Net income | $ 112 | $ 112 |
Labor Union Contracts (Details)
Labor Union Contracts (Details) - Unionized employees concentration risk | 9 Months Ended | |
Oct. 03, 2022 | Sep. 30, 2022 | |
Total number of employees | ||
Concentration risk | ||
Concentration risk, percent | 22% | |
Total number of employees | Subsequent Event | ||
Concentration risk | ||
Concentration risk, percent | 20% | |
Workforce subject to collective bargaining arrangements that expired | ||
Concentration risk | ||
Concentration risk, percent | 0% | |
Workforce subject to collective bargaining arrangements expiring within one year | ||
Concentration risk | ||
Concentration risk, percent | 10% | |
Workforce subject to collective bargaining arrangements expiring within one year | Subsequent Event | ||
Concentration risk | ||
Concentration risk, percent | 9% |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) | 9 Months Ended | |||||
Nov. 04, 2022 USD ($) | Nov. 03, 2022 shares | Nov. 02, 2022 USD ($) | Oct. 03, 2022 USD ($) States | Oct. 03, 2022 USD ($) States | Sep. 30, 2022 USD ($) | |
Subsequent Event [Line Items] | ||||||
Repayments of debt | $ 3,705,000,000 | |||||
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Repayments of debt | $ 3,224,000,000 | |||||
Repurchase program, period | 2 years | |||||
Repurchase program, authorized amount | $ 1,500,000,000 | |||||
Number of shares repurchased | shares | 0 | |||||
Subsequent Event | Embarq | First mortgage bonds | First Mortgage Bonds | ||||||
Subsequent Event [Line Items] | ||||||
Repayments of debt | $ 112,000,000 | |||||
Subsequent Event | Disposal Group Disposed of by Sale, not Discontinued Operations | ILEC Business | ||||||
Subsequent Event [Line Items] | ||||||
Number of states in which the business is conducted | States | 20 | 20 | ||||
Cash consideration from disposal of business | $ 7,500,000,000 | $ 7,500,000,000 | ||||
Consideration after closing adjustments | 400,000,000 | 400,000,000 | ||||
Long-term debt, indebtedness | 1,500,000,000 | $ 1,500,000,000 | ||||
Pre-tax cash proceeds | $ 5,600,000,000 | |||||
Subsequent Event | Discontinued Operations, Disposed of by Sale | EMEA Business | Level 3 Parent, LLC | ||||||
Subsequent Event [Line Items] | ||||||
Cash consideration from disposal of business | $ 1,800,000,000 |
Subsequent Events - Debt Repaym
Subsequent Events - Debt Repayments (Details) - USD ($) $ in Millions | 9 Months Ended | |
Oct. 03, 2022 | Sep. 30, 2022 | |
Subsequent Event [Line Items] | ||
Repayments of debt | $ 3,705 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Repayments of debt | $ 3,224 | |
Subsequent Event | Senior Notes | 6.750% Senior Notes, Series W, due 2023 | ||
Subsequent Event [Line Items] | ||
Stated interest rate | 6.75% | |
Repayments of debt | $ 750 | |
Subsequent Event | Senior Notes | 7.500% Senior Notes, Series Y, due 2024 | ||
Subsequent Event [Line Items] | ||
Stated interest rate | 7.50% | |
Repayments of debt | $ 982 | |
Subsequent Event | Senior Notes | 5.625% Senior Notes, Series X, due 2025 | ||
Subsequent Event [Line Items] | ||
Stated interest rate | 5.625% | |
Repayments of debt | $ 270 | |
Subsequent Event | Senior Notes | 7.200% Senior Notes, Series D, due 2025 | ||
Subsequent Event [Line Items] | ||
Stated interest rate | 7.20% | |
Repayments of debt | $ 34 | |
Subsequent Event | Senior Notes | 5.125% Senior Notes due 2026 | ||
Subsequent Event [Line Items] | ||
Stated interest rate | 5.125% | |
Repayments of debt | $ 484 | |
Subsequent Event | Senior Notes | 6.875% Debentures, Series G, due 2028 | ||
Subsequent Event [Line Items] | ||
Stated interest rate | 6.875% | |
Repayments of debt | $ 126 | |
Subsequent Event | Senior Notes | 5.375% Senior Notes due 2029 | ||
Subsequent Event [Line Items] | ||
Stated interest rate | 5.375% | |
Repayments of debt | $ 490 | |
Subsequent Event | Senior Notes | Qwest Capital Funding, Inc. | ||
Subsequent Event [Line Items] | ||
Repayments of debt | 63 | |
Subsequent Event | First Mortgage Bonds | Embarq | ||
Subsequent Event [Line Items] | ||
Repayments of debt | $ 25 |