Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 28, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
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 | 1,007,986,100 | |
Entity Central Index Key | 0000018926 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, par value $1.00 per share | |
Trading Symbol | LUMN | |
Security Exchange Name | NYSE | |
Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Preferred Stock Purchase Rights | |
Security Exchange Name | NYSE | |
Preferred Stock - No Trading Symbol | true |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
OPERATING REVENUE | $ 3,661 | $ 4,612 | $ 7,399 | $ 9,288 |
OPERATING EXPENSES | ||||
Cost of services and products (exclusive of depreciation and amortization) | 1,740 | 2,058 | 3,557 | 4,043 |
Selling, general and administrative | 790 | 815 | 1,511 | 1,615 |
Loss on disposal group held for sale | 13 | 0 | 90 | 0 |
Depreciation and amortization | 746 | 827 | 1,479 | 1,635 |
Goodwill impairment | 8,793 | 0 | 8,793 | 0 |
Total operating expenses | 12,082 | 3,700 | 15,430 | 7,293 |
OPERATING (LOSS) INCOME | (8,421) | 912 | (8,031) | 1,995 |
OTHER (EXPENSE) INCOME | ||||
Interest expense | (294) | (337) | (573) | (689) |
Net gain on early retirement of debt (Note 6) | 9 | 0 | 618 | 0 |
Other income (expense), net | 16 | (122) | (24) | (52) |
Total other (expense) income, net | (269) | (459) | 21 | (741) |
(LOSS) INCOME BEFORE INCOME TAXES | (8,690) | 453 | (8,010) | 1,254 |
Income tax expense | 46 | 109 | 215 | 311 |
NET (LOSS) INCOME | $ (8,736) | $ 344 | $ (8,225) | $ 943 |
BASIC AND DILUTED (LOSS) EARNINGS PER COMMON SHARE | ||||
BASIC (in dollars per share) | $ (8.88) | $ 0.34 | $ (8.37) | $ 0.93 |
DILUTED (in dollars per share) | $ (8.88) | $ 0.34 | $ (8.37) | $ 0.93 |
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING | ||||
BASIC (in shares) | 983,453 | 1,012,943 | 982,505 | 1,010,686 |
DILUTED (in shares) | 983,453 | 1,016,620 | 982,505 | 1,015,917 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
NET (LOSS) INCOME | $ (8,736) | $ 344 | $ (8,225) | $ 943 |
Items related to employee benefit plans: | ||||
Change in net actuarial loss, net of $(5), $(8), $(10) and $(17) tax | 16 | 22 | 31 | 50 |
Change in net prior service cost, net of $1, $—, $2 and $— tax | (2) | 0 | (5) | (1) |
Reclassification of realized loss on interest rate swaps to net income, net of $ —, $—, $— and $(5) tax | 0 | 0 | 0 | 17 |
Foreign currency translation adjustment, net of $(2), $32, $(8) and $42 tax | 2 | (192) | 20 | (125) |
Other comprehensive income (loss) | 16 | (170) | 46 | (59) |
COMPREHENSIVE (LOSS) INCOME | $ (8,720) | $ 174 | $ (8,179) | $ 884 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Change in net actuarial loss, tax | $ (5) | $ (8) | $ (10) | $ (17) |
Change in net prior service cost, tax | 1 | 0 | 2 | 0 |
Reclassification of realized loss on interest rate swaps to net income, tax | 0 | 0 | 0 | (5) |
Foreign currency translation adjustment and other, tax | $ (2) | $ 32 | $ (8) | $ 42 |
CONSOLIDATED BALANCE SHEETS (UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 411 | $ 1,251 |
Accounts receivable, less allowance of $78 and $85 | 1,473 | 1,477 |
Assets held for sale | 2,005 | 1,889 |
Other | 984 | 803 |
Total current assets | 4,873 | 5,420 |
Property, plant and equipment, net of accumulated depreciation of $20,529 and $19,886 | 19,432 | 19,166 |
GOODWILL AND OTHER ASSETS | ||
Goodwill | 3,864 | 12,657 |
Other intangible assets, net | 5,899 | 6,166 |
Other, net | 2,100 | 2,172 |
Total goodwill and other assets | 11,863 | 20,995 |
TOTAL ASSETS | 36,168 | 45,581 |
CURRENT LIABILITIES | ||
Current maturities of long-term debt | 154 | 154 |
Accounts payable | 1,171 | 950 |
Accrued expenses and other liabilities | ||
Salaries and benefits | 605 | 692 |
Income and other taxes | 234 | 1,158 |
Current operating lease liabilities | 323 | 344 |
Interest | 176 | 181 |
Other | 177 | 277 |
Liabilities held for sale | 496 | 451 |
Current portion of deferred revenue | 627 | 596 |
Total current liabilities | 3,963 | 4,803 |
LONG-TERM DEBT | 19,899 | 20,418 |
DEFERRED CREDITS AND OTHER LIABILITIES | ||
Deferred income taxes, net | 3,204 | 3,163 |
Benefit plan obligations, net | 2,335 | 2,391 |
Deferred revenue | 1,850 | 1,758 |
Other | 2,633 | 2,611 |
Total deferred credits and other liabilities | 10,022 | 9,923 |
COMMITMENTS AND CONTINGENCIES (Note 12) | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock—non-redeemable, $25.00 par value, authorized 2,000 and 2,000 shares, issued and outstanding 7 and 7 shares | 0 | 0 |
Common stock, $1.00 par value, authorized 2,200,000 and 2,200,000 shares, issued and outstanding 1,008,084 and 1,001,688 shares | 1,008 | 1,002 |
Additional paid-in capital | 18,100 | 18,080 |
Accumulated other comprehensive loss | (1,053) | (1,099) |
Accumulated deficit | (15,771) | (7,546) |
Total stockholders' equity | 2,284 | 10,437 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 36,168 | $ 45,581 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) shares in Thousands, $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 78 | $ 85 |
Accumulated depreciation | $ 20,529 | $ 19,886 |
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) | 1,008,084 | 1,001,688 |
Common stock, shares outstanding (in shares) | 1,008,084 | 1,001,688 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
OPERATING ACTIVITIES | |||||
Net (loss) income | $ (8,736) | $ 344 | $ (8,225) | $ 943 | |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||
Depreciation and amortization | 1,479 | 1,635 | |||
Loss on disposal group held for sale | 13 | 0 | 90 | 0 | |
Goodwill impairment | 8,793 | 0 | |||
Deferred income taxes | 46 | 249 | |||
Provision for uncollectible accounts | 47 | 56 | |||
Net gain on early retirement of debt | (618) | 0 | |||
Unrealized loss on investments | 81 | 71 | |||
Stock-based compensation | 23 | 48 | |||
Changes in current assets and liabilities: | |||||
Accounts receivable | (36) | 32 | |||
Accounts payable | (11) | 79 | |||
Accrued income and other taxes | (1,011) | 13 | |||
Other current assets and liabilities, net | (330) | (430) | |||
Retirement benefits | (16) | (86) | |||
Changes in other noncurrent assets and liabilities, net | 132 | 65 | |||
Other, net | 51 | 96 | |||
Net cash provided by operating activities | 495 | 2,771 | |||
INVESTING ACTIVITIES | |||||
Capital expenditures | (1,436) | (1,338) | |||
Proceeds from sale of property, plant and equipment, and other assets | 26 | 65 | |||
Other, net | 5 | 3 | |||
Net cash used in investing activities | (1,405) | (1,270) | |||
FINANCING ACTIVITIES | |||||
Payments of long-term debt | (100) | (1,532) | |||
Net proceeds from revolving line of credit | 200 | 600 | |||
Dividends paid | (9) | (525) | |||
Other, net | (19) | (32) | |||
Net cash provided by (used in) financing activities | 72 | (1,489) | |||
Net (decrease) increase in cash, cash equivalents and restricted cash | (838) | 12 | |||
Cash, cash equivalents and restricted cash at beginning of period | 1,307 | 409 | $ 409 | ||
Cash, cash equivalents and restricted cash at end of period | 469 | 421 | 469 | 421 | 1,307 |
Supplemental cash flow information: | |||||
Income taxes paid, net | (1,270) | (58) | |||
Interest paid (net of capitalized interest of $45 and $32) | (561) | (699) | |||
Supplemental noncash information regarding financing activities: | |||||
Cancellation of senior unsecured notes as part of exchange offers (Note 6) | (1,554) | 0 | |||
Issuance of senior secured notes as part of exchange offers (Note 6) | 924 | 0 | |||
Cash, cash equivalents and restricted cash: | |||||
Cash and cash equivalents | 411 | 360 | 411 | 360 | 1,251 |
Cash and cash equivalents and restricted cash included in Assets held for sale | 47 | 48 | 47 | 48 | |
Restricted cash included in Other current assets | 0 | 1 | 0 | 1 | |
Restricted cash included in Other, net noncurrent assets | 11 | 12 | 11 | 12 | |
Total | $ 469 | $ 421 | $ 469 | $ 421 | $ 1,307 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Cash Flows [Abstract] | ||
Capitalized interest | $ 45 | $ 32 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Millions | Total | COMMON STOCK | ADDITIONAL PAID-IN CAPITAL | ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED DEFICIT |
Balance at beginning of period at Dec. 31, 2021 | $ 1,024 | $ 18,972 | $ (2,158) | $ (5,998) | |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock through incentive and benefit plans | 8 | ||||
Shares withheld to satisfy tax withholdings | (29) | ||||
Stock-based compensation | 48 | ||||
Dividends declared | (532) | ||||
Other | 0 | ||||
Other comprehensive income (loss) | $ (59) | (59) | |||
Net (loss) income | 943 | 943 | |||
Balance at end of period at Jun. 30, 2022 | $ 12,219 | 1,032 | 18,459 | (2,217) | (5,055) |
Increase (Decrease) in Stockholders' Equity | |||||
DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $ 0.50 | ||||
Balance at beginning of period at Mar. 31, 2022 | 1,033 | 18,695 | (2,047) | (5,399) | |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock through incentive and benefit plans | (1) | ||||
Shares withheld to satisfy tax withholdings | (1) | ||||
Stock-based compensation | 25 | ||||
Dividends declared | (260) | ||||
Other | 0 | ||||
Other comprehensive income (loss) | $ (170) | (170) | |||
Net (loss) income | 344 | 344 | |||
Balance at end of period at Jun. 30, 2022 | $ 12,219 | 1,032 | 18,459 | (2,217) | (5,055) |
Increase (Decrease) in Stockholders' Equity | |||||
DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $ 0.25 | ||||
Balance at beginning of period at Dec. 31, 2022 | $ 10,437 | 1,002 | 18,080 | (1,099) | (7,546) |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock through incentive and benefit plans | 6 | ||||
Shares withheld to satisfy tax withholdings | (4) | ||||
Stock-based compensation | 23 | ||||
Dividends declared | 0 | ||||
Other | 1 | ||||
Other comprehensive income (loss) | 46 | 46 | |||
Net (loss) income | (8,225) | (8,225) | |||
Balance at end of period at Jun. 30, 2023 | $ 2,284 | 1,008 | 18,100 | (1,053) | (15,771) |
Increase (Decrease) in Stockholders' Equity | |||||
DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $ 0 | ||||
Balance at beginning of period at Mar. 31, 2023 | 1,005 | 18,094 | (1,069) | (7,035) | |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock through incentive and benefit plans | 3 | ||||
Shares withheld to satisfy tax withholdings | 0 | ||||
Stock-based compensation | 9 | ||||
Dividends declared | 0 | ||||
Other | (3) | ||||
Other comprehensive income (loss) | $ 16 | 16 | |||
Net (loss) income | (8,736) | (8,736) | |||
Balance at end of period at Jun. 30, 2023 | $ 2,284 | $ 1,008 | $ 18,100 | $ (1,053) | $ (15,771) |
Increase (Decrease) in Stockholders' Equity | |||||
DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $ 0 |
Background
Background | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background | Background General We are an international facilities-based technology and communications company focused on providing our business and mass markets customers with a broad array of integrated products and services necessary to fully participate in our ever-evolving digital world. We operate one of the world’s most interconnected networks. Our platform empowers our customers to swiftly adjust digital programs securely to meet immediate demands, create efficiencies, accelerate market access and reduce costs - allowing customers to rapidly evolve their IT programs to address dynamic changes. Our specific products and services are detailed in Note 4—Revenue Recognition. Basis of Presentation Our consolidated balance sheet as of December 31, 2022, 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 six 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, 2022. The accompanying consolidated financial statements include our accounts and the accounts of our subsidiaries in which we have a controlling interest. Intercompany amounts and transactions with our consolidated subsidiaries have been eliminated. To simplify the overall presentation of our consolidated financial statements, we report immaterial amounts attributable to noncontrolling interests in certain of our subsidiaries as follows: (i) income attributable to noncontrolling interests in other income (expense), net, (ii) equity attributable to noncontrolling interests in additional paid-in capital and (iii) cash flows attributable to noncontrolling interests in other, net financing activities. We reclassified certain prior period amounts to conform to the current period presentation, including the recategorization of our Business revenue by product category and sales channel in our segment reporting. See Note 11—Segment Information for additional information. These changes had no impact on total operating revenue, total operating expenses or net (loss) 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 June 30, 2023 or December 31, 2022. 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, 2022. Recently Adopted Accounting Pronouncements Supplier Finance Programs On January 1, 2023, we adopted Accounting Standards Update ("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. The adoption of ASU 2022-04 did not have a material impact to our consolidated financial statements. Credit Losses On January 1, 2023, we adopted ASU 2022-02, “ Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings (“TDR”) and Vintage Disclosures ” (“ASU 2022-02”). The ASU eliminates the TDR recognition and measurement guidance, enhances existing disclosure requirements and introduces new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. The adoption of ASU 2022-02 did not have any impact to our consolidated financial statements. Derivatives and Hedging On January 1, 2023, we adopted 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. The adoption of ASU 2022-01 did not have any impact to our consolidated financial statements. Business Combinations On January 1, 2023, we adopted ASU 2021-08, “ Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ” (“ASU 2021-08”). This ASU requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The adoption of ASU 2021-08 did not have any impact to our consolidated financial statements. Government Assistance On January 1, 2022, we adopted ASU 2021-10, " Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance ” (“ASU 2021-10”). This ASU requires business entities to disclose information about certain types of government assistance they receive. The ASU only impacts annual financial statement note disclosures. 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. Recently Issued Accounting Pronouncements In March 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-02, “ Investments-Equity method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method ” (“ASU 2023-02”). These amendments allow reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. ASU 2023-02 will become effective for us in the first quarter of fiscal 2024 and early adoption is permitted. As of June 30, 2023, we do not expect ASU 2023-02 will have an impact to our consolidated financial statements. In March 2023, the FASB issued ASU 2023-01, “ Leases (Topic 842): Common Control Arrangements ” (“ASU 2023-01”). These amendments require all entities to amortize leasehold improvements associated with common control leases over the useful life to the common control group. ASU 2023-01 will become effective for us in the first quarter of fiscal 2024 and early adoption is permitted. As of June 30, 2023, we do not expect ASU 2023-01 will have an impact to 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 |
Planned Divestiture of the EMEA
Planned Divestiture of the EMEA Business | 6 Months Ended |
Jun. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Planned Divestiture of the EMEA Business | Planned Divestiture of the EMEA Business On November 2, 2022, affiliates of Level 3 Parent, LLC, an indirect wholly-owned subsidiary of Lumen Technologies, Inc., granted an option to Colt Technology Services Group Limited, a portfolio company of Fidelity Investments, to purchase certain of their operations in Europe, the Middle East and Africa (the "EMEA business"), in exchange for $1.8 billion in cash, subject to certain working capital and other purchase price adjustments. Following the completion of a French consultative process, Colt exercised its option and on February 8, 2023, the parties entered into a definitive purchase agreement, which contains various customary covenants for transactions of this type, including various indemnities. Level 3 Parent, LLC expects to close the transaction in late 2023, subject to receiving 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. The actual amount of our net after-tax proceeds from this divestiture could vary substantially from the amounts we currently estimate, particularly if we experience delays in completing the transaction or if any of our other assumptions prove to be incorrect. We do not believe this divestiture represents a strategic shift for Lumen. Therefore, the planned divestiture of the EMEA business does not meet the criteria to be classified as discontinued operations. As a result, we will continue to report our operating results for the EMEA business (the "disposal group") in our consolidated operating results until the transaction is closed. As of June 30, 2023 in the accompanying consolidated balance sheet, the assets and liabilities of our EMEA business are classified as held for sale and measured at the lower of (i) the carrying value when we classified the disposal group as held for sale and (ii) the fair value of the disposal group, less costs to sell. Effective with the designation of the disposal group as held for sale on November 2, 2022, 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 $72 million and $144 million of depreciation, intangible amortization, and amortization of right-of-use assets for the three and six months ended June 30, 2023, respectively, if the EMEA business did not meet the held for sale criteria. The classification of the EMEA business as held for sale was considered an event or change in circumstance which requires an assessment of the goodwill of the disposal group for impairment each reporting period until disposal. We performed a pre-classification and post-classification goodwill impairment test of the disposal group as described further in Note 3—Goodwill, Customer Relationships and Other Intangible Assets in our Annual Report on Form 10-K for the year ended December 31, 2022. As a result of our impairment tests, we determined the EMEA business disposal group was impaired, resulting in a non-cash, non-tax-deductible goodwill impairment charge of $43 million in the fourth quarter of 2022. We evaluated the recoverability of the carrying value of the assets and liabilities held for sale relative to the agreed upon sales price, adjusted for costs to sell, and recorded an estimated loss on disposal of $660 million during the year ended December 31, 2022 in the consolidated statement of operations and a valuation allowance included in assets held for sale on the consolidated balance sheet. As a result of our evaluation of the recoverability of the carrying value of the EMEA assets and liabilities held for sale relative to the agreed upon sales price, adjusted for costs to sell, as of June 30, 2023, we recorded a $13 million and $90 million estimated loss on disposal during the three and six months ended June 30, 2023, respectively, and adjusted the valuation allowance by the same amounts. In future quarters, through the closing date, we will conduct similar evaluations and adjust the valuation allowance for the EMEA assets held for sale, as necessary. The principal components of the held for sale assets and liabilities of the EMEA business as of the dates below are as follows: June 30, 2023 December 31, 2022 (Dollars in millions) Assets held for sale Cash and cash equivalents $ 46 43 Accounts receivable, less allowance of $5 and $5 77 76 Other current assets 63 59 Property, plant and equipment, net of accumulated depreciation of $1,059 and $1,033 1,986 1,873 Customer relationships and other intangible assets, net 106 100 Operating lease assets 197 156 Valuation allowance on assets held for sale (1) (750) (660) Deferred tax assets 155 138 Other non-current assets 39 38 Total assets held for sale $ 1,919 1,823 Liabilities held for sale Accounts payable $ 67 78 Salaries and benefits 17 23 Current portion of deferred revenue 39 28 Current operating lease liabilities 44 33 Other current liabilities 34 28 Deferred income taxes 52 38 Asset retirement obligations 31 30 Deferred revenue, non-current 103 85 Operating lease liabilities, non-current 104 103 Total liabilities held for sale $ 491 446 ______________________________________________________________________ (1) Includes the impact of $359 million and $365 million as of June 30, 2023 and December 31, 2022, respectively, primarily related to loss on foreign currency translation, expected to be reclassified out of accumulated other comprehensive loss upon close of the sale. |
Goodwill, Customer Relationship
Goodwill, Customer Relationships and Other Intangible Assets | 6 Months Ended |
Jun. 30, 2023 | |
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: June 30, 2023 (1) December 31, 2022 (1) (Dollars in millions) Goodwill $ 3,864 12,657 Indefinite-lived intangible assets $ 9 9 Other intangible assets subject to amortization: Customer relationships, less accumulated amortization of $3,931 and $3,606 4,246 4,574 Capitalized software, less accumulated amortization of $3,869 and $3,895 (2) 1,551 1,482 Trade names, patents and other, less accumulated amortization of $65 and $188 (2) 93 101 Total other intangible assets, net $ 5,899 6,166 ______________________________________________________________________ (1) These values exclude assets classified as held for sale. (2) Certain capitalized software with a gross carrying value of $183 million and trade names with a gross carrying value of $130 million became fully amortized during 2022 and were retired during the first quarter of 2023. As of June 30, 2023, the gross carrying amount of goodwill, customer relationships, indefinite-lived and other intangible assets was $17.6 billion. Our goodwill was derived from numerous acquisitions where the purchase price exceeded the fair value of the net assets acquired. We report our results within two segments: Business and Mass Markets. See Note 11—Segment Information for more information on these segments. We are required to 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. As of June 30, 2023, we have three reporting units for goodwill impairment testing, which are (i) Mass Markets, (ii) North America Business and (iii) Asia Pacific region. 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 charge 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 and markets are comparable to ours. Second Quarter 2023 Goodwill Impairment Analysis When we performed our October 31, 2022 annual impairment test, we estimated the fair value of our reporting units by considering both a market approach and a discounted cash flow method. The sustained decline in our share price during the second quarter of 2023 was considered a triggering event requiring evaluation of goodwill impairment. Given the continued erosion in our market capitalization, primarily due to the prevailing macroeconomic conditions and market sentiments, we determined our quantitative impairment analysis would estimate the fair value of our reporting units using only the market approach. Applying this approach, we utilized company comparisons and analyst reports within the telecommunications industry which supported a range of fair values derived from annualized revenue and EBITDA multiples between 1.5x and 4.3x and 4.6x and 10.5x, respectively. The revenue and EBITDA multiples used in the quantitative impairment analysis for each of our reporting units were below these comparable market multiples. The estimated fair values of the reporting units determined in connection with our impairment analysis in the second quarter of 2023 resulted in no control premium, which was determined to be reasonable based on our market capitalization relative to recent transactions. For the three months ended June 30, 2023, based on our assessments performed with respect to the reporting units as described above, we concluded the estimated fair value of certain of our reporting units was less than their carrying value of equity. As a result, we recorded a non-cash, non-tax-deductible goodwill impairment charge of $8.8 billion for the three months ended June 30, 2023. The market approach that we used in the quarter ended June 30, 2023 incorporated estimates and assumptions related to the forecasted results for the remainder of the year, including revenues, expenses, and the achievement of certain strategic initiatives. In developing the market multiples applicable for each reporting unit, we considered observed trends of our industry participants. Our assessment included many factors that required significant judgment. Alternative interpretations of these factors could have resulted in different conclusions regarding the size of our impairments. The following table shows the rollforward of goodwill assigned to our reportable segments from December 31, 2022 through June 30, 2023. Business Mass Markets Total (Dollars in Millions) As of December 31, 2022 (1) $ 7,906 4,751 12,657 Impairment (6,580) (2,213) (8,793) As of June 30, 2023 (1) $ 1,326 2,538 3,864 ______________________________________________________________________ (1) Goodwill at June 30, 2023 and December 31, 2022 is net of accumulated impairment losses of $19.8 billion and $11.0 billion, respectively. Total amortization expense for finite-lived intangible assets for the three months ended June 30, 2023 and 2022 totaled $263 million and $277 million, respectively, and for the six months ended June 30, 2023 and 2022 totaled $523 million and $551 million, respectively. We estimate that amortization expense for finite-lived intangible assets for the years ending December 31, 2023 through 2027 will be as provided in the table below. As a result of classifying our EMEA business as held for sale on our June 30, 2023 consolidated balance sheet, the amounts presented below do not include future amortization expense for intangible assets of the business to be divested. See Note 2—Planned Divestiture of the EMEA Business for more information. (Dollars in millions) 2023 (remaining six months) $ 490 2024 904 2025 843 2026 799 2027 719 |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2023 | |
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: • Grow , which includes products and services that we anticipate will grow, including our dark fiber, Edge Cloud services, IP, managed security, software-defined wide area networks ("SD WAN"), secure access service edge ("SASE"), Unified Communications and Collaboration ("UC&C") and wavelengths services; • Nurture , which includes our more mature offerings, including ethernet and VPN data networks services; • Harvest , which includes our legacy services managed for cash flow, including Time Division Multiplexing ("TDM") voice, private line and other legacy services; and • Other , which includes equipment sales, IT solutions and other services. We categorize our products and services revenue among the following categories for the Mass Markets segment: • Fiber Broadband , under which we provide high speed broadband services to residential and small business customers utilizing our fiber-based network infrastructure; • Other Broadband , under which we provide primarily lower speed broadband services to residential and small business customers utilizing our copper-based network infrastructure; and • Voice and Other, under which we derive revenues from (i) providing local and long-distance voice services, professional services, and other ancillary services, and (ii) federal broadband and state support programs. 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 revenue for the Latin American and ILEC businesses prior to their sales on August 1, 2022 and October 3, 2022, respectively. See Note 2—Divestitures of the Latin American and ILEC Businesses and Planned Divestiture of the EMEA Business in our Annual Report on Form 10-K for the year ended December 31, 2022 for additional information on these divestitures. Three Months Ended June 30, 2023 Three Months Ended June 30, 2022 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 Large Enterprise Grow $ 558 (78) 480 658 (102) 556 Nurture 369 — 369 444 — 444 Harvest 197 — 197 272 — 272 Other 55 (1) 54 58 (1) 57 Total Large Enterprise Revenue 1,179 (79) 1,100 1,432 (103) 1,329 Mid-Market Enterprise Grow 202 (8) 194 188 (8) 180 Nurture 202 — 202 231 — 231 Harvest 94 (1) 93 135 (2) 133 Other 9 (1) 8 8 — 8 Total Mid-Market Enterprise Revenue 507 (10) 497 562 (10) 552 Public Sector Grow 118 (19) 99 116 (27) 89 Nurture 93 — 93 128 — 128 Harvest 95 — 95 124 (1) 123 Other 108 — 108 126 (1) 125 Total Public Sector Revenue 414 (19) 395 494 (29) 465 Wholesale Grow 260 (62) 198 240 (68) 172 Nurture 205 (8) 197 258 (7) 251 Harvest 331 (43) 288 405 (56) 349 Other 1 — 1 26 — 26 Total Wholesale Revenue 797 (113) 684 929 (131) 798 Business Segment by Product Category Grow 1,138 (167) 971 1,202 (205) 997 Nurture 869 (8) 861 1,061 (7) 1,054 Harvest 717 (44) 673 936 (59) 877 Other 173 (2) 171 218 (2) 216 Total Business Segment Revenue 2,897 (221) 2,676 3,417 (273) 3,144 Mass Markets Segment by Product Category Fiber Broadband 157 (4) 153 151 (5) 146 Other Broadband 355 (32) 323 597 (55) 542 Voice and Other 252 (9) 243 447 (20) 427 Total Mass Markets Revenue 764 (45) 719 1,195 (80) 1,115 Total Revenue $ 3,661 (266) 3,395 4,612 (353) 4,259 Six Months Ended June 30, 2023 Six Months Ended June 30, 2022 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 Large Enterprise Grow $ 1,108 (157) 951 1,311 (205) 1,106 Nurture 744 — 744 898 — 898 Harvest 404 — 404 548 — 548 Other 117 (2) 115 117 (3) 114 Total Large Enterprise Revenue 2,373 (159) 2,214 2,874 (208) 2,666 Mid-Market Enterprise Grow 398 (15) 383 373 (16) 357 Nurture 413 — 413 472 — 472 Harvest 194 (2) 192 275 (4) 271 Other 17 (3) 14 15 — 15 Total Mid-Market Enterprise Revenue 1,022 (20) 1,002 1,135 (20) 1,115 Public Sector Grow 234 (38) 196 231 (54) 177 Nurture 199 — 199 259 — 259 Harvest 194 — 194 248 (2) 246 Other 217 — 217 235 (1) 234 Total Public Sector Revenue 844 (38) 806 973 (57) 916 Wholesale Grow 526 (133) 393 473 (135) 338 Nurture 418 (14) 404 525 (14) 511 Harvest 664 (87) 577 812 (114) 698 Other 6 — 6 26 — 26 Total Wholesale Revenue 1,614 (234) 1,380 1,836 (263) 1,573 Business Segment by Product Category Grow 2,266 (343) 1,923 2,388 (410) 1,978 Nurture 1,774 (14) 1,760 2,154 (14) 2,140 Harvest 1,456 (89) 1,367 1,883 (120) 1,763 Other 357 (5) 352 393 (4) 389 Total Business Segment Revenue 5,853 (451) 5,402 6,818 (548) 6,270 Mass Markets Segment by Product Category Fiber Broadband 309 (8) 301 296 (10) 286 Other Broadband 724 (65) 659 1,207 (111) 1,096 Voice and Other 513 (18) 495 967 (99) 868 Total Mass Markets Revenue 1,546 (91) 1,455 2,470 (220) 2,250 Total Revenue $ 7,399 (542) 6,857 9,288 (768) 8,520 _____________________________________________________________________ (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 June 30, 2023 and 2022, our gross rental income was $257 million and $334 million, respectively, which represents approximately 7% of our operating revenue for both the three months ended June 30, 2023 and 2022. For the six months ended June 30, 2023 and 2022, our gross rental income was $526 million and $671 million, respectively, which represents approximately 7% of our operating revenue for both the six months ended June 30, 2023 and 2022. 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 June 30, 2023 and December 31, 2022: June 30, 2023 December 31, 2022 (Dollars in millions) Customer receivables (1) $ 1,425 1,424 Contract assets (2) 27 34 Contract liabilities (3) 710 656 ______________________________________________________________________ (1) Reflects gross customer receivables of $1.5 billion at both June 30, 2023 and December 31, 2022, net of allowance for credit losses of $67 million and $73 million, at June 30, 2023 and December 31, 2022, respectively. These amounts exclude customer receivables, net, classified as held for sale of $77 million at June 30, 2023 and $76 million at December 31, 2022 related to the EMEA business. (2) These amounts exclude contract assets classified as held for sale of $12 million at June 30, 2023 and $16 million at December 31, 2022 related to the EMEA business. (3) These amounts exclude contract liabilities classified as held for sale of $62 million at June 30, 2023 and $59 million at December 31, 2022 related to the EMEA 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 June 30, 2023, we expect to recognize approximately $6.9 billion of revenue in the future related to performance obligations associated with existing customer contracts that are partially or wholly unsatisfied. As of June 30, 2023, the transaction price related to unsatisfied performance obligations that are expected to be recognized for the remainder of 2023, 2024 and thereafter was $1.6 billion, $2.0 billion and $3.3 billion, respectively. 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 EMEA business classified as held for sale. Contract Costs The following tables provide changes in our contract acquisition costs and fulfillment costs: Three Months Ended June 30, 2023 Three Months Ended June 30, 2022 Acquisition Costs Fulfillment Costs Acquisition Costs Fulfillment Costs (Dollars in millions) (Dollars in millions) Beginning of period balance (1)(2) $ 192 182 215 187 Costs incurred 29 39 41 41 Amortization (39) (36) (49) (39) Change in contract costs held for sale 1 1 1 (1) End of period balance (5)(6) $ 183 186 208 188 Six Months Ended June 30, 2023 Six Months Ended June 30, 2022 Acquisition Costs Fulfillment Costs Acquisition Costs Fulfillment Costs (Dollars in millions) (Dollars in millions) Beginning of period balance (3)(4) $ 202 192 222 186 Costs incurred 65 79 84 81 Amortization (80) (71) (101) (78) Change in contract costs held for sale (4) (14) 3 (1) End of period balance (5)(6) $ 183 186 208 188 ______________________________________________________________________ (1) Beginning of period balance for the three months ended June 30, 2023 excludes $11 million of acquisition costs and $15 million of fulfillment costs classified as held for sale related to the EMEA business. (2) Beginning of period balance for the three months ended June 30, 2022 excludes $32 million of both acquisition costs and fulfillment costs classified as held for sale (related to both the Latin American business and the ILEC business, sold in the third and fourth quarters of 2022, respectively). (3) Beginning of period balance for the six months ended June 30, 2023 excludes $6 million of acquisition costs and no fulfillment costs classified as held for sale related to the EMEA business. (4) Beginning of period balance for the six months ended June 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, sold in the third and fourth quarters of 2022, respectively). (5) End of period balance for the three and six months ended June 30, 2023 excludes $10 million of acquisition costs and $14 million of fulfillment costs classified as held for sale related to the EMEA business. (6) End of period balance for the three and six months ended June 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, sold in the third and fourth quarters of 2022, respectively). 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. |
Credit Losses on Financial Inst
Credit Losses on Financial Instruments | 6 Months Ended |
Jun. 30, 2023 | |
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 six months ended June 30, 2023: Business Mass Markets Total (Dollars in millions) As of December 31, 2022 (1) $ 57 28 85 Provision for expected losses 18 29 47 Write-offs charged against the allowance (24) (34) (58) Recoveries collected 3 1 4 Ending balance at June 30, 2023 (1) $ 54 24 78 ______________________________________________________________________ (1) As of June 30, 2023 and December 31, 2022, these amounts excluded $5 million of allowance for credit losses classified as held for sale related to the EMEA business included in the Business portfolio. See Note 2—Planned Divestiture of the EMEA Business. |
Long-Term Debt and Credit Facil
Long-Term Debt and Credit Facilities | 6 Months Ended |
Jun. 30, 2023 | |
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 and unamortized debt issuance costs: Interest Rates (1) Maturities (1) June 30, 2023 December 31, 2022 (Dollars in millions) Senior Secured Debt: (2) Lumen Technologies, Inc. Revolving Credit Facility (3) SOFR + 2.00% 2025 $ 200 — Term Loan A (4) SOFR + 2.00% 2025 962 991 Term Loan A-1 (4) SOFR + 2.00% 2025 275 283 Term Loan B (5) SOFR + 2.25% 2027 3,916 3,941 Senior notes 4.000% 2027 1,250 1,250 Subsidiaries: Level 3 Financing, Inc. Tranche B 2027 Term Loan (6) SOFR + 1.75% 2027 2,411 2,411 Senior notes 3.400% - 10.500% 2027 - 2030 2,425 1,500 Senior Notes and Other Debt: Lumen Technologies, Inc. Senior notes 4.500% - 7.650% 2025 - 2042 2,143 3,722 Subsidiaries: Level 3 Financing, Inc. Senior notes 3.625% - 4.625% 2027 - 2029 3,940 3,940 Qwest Corporation Senior notes 6.500% - 7.750% 2025 - 2057 1,986 1,986 Term loan (7) SOFR + 2.50% 2027 215 215 Qwest Capital Funding, Inc. Senior notes 6.875% - 7.750% 2028 - 2031 192 192 Finance lease and other obligations (8) Various Various 299 317 Unamortized discounts, net (3) (7) Unamortized debt issuance costs (158) (169) Total long-term debt 20,053 20,572 Less current maturities (154) (154) Long-term debt, excluding current maturities $ 19,899 20,418 ______________________________________________________________________ (1) As of June 30, 2023. (2) See Note 7—Long-Term Debt and Credit Facilities in our Annual Report on Form 10-K for the year ended December 31, 2022 for a description of certain parent or subsidiary guarantees and liens securing this debt. (3) Revolving Credit Facility had an interest rate of 7.262% as of June 30, 2023. (4) Term Loans A and A-1 had interest rates of 7.217% and 6.384% as of June 30, 2023 and December 31, 2022, respectively. (5) Term Loan B had interest rates of 7.467% and 6.634% as of June 30, 2023 and December 31, 2022, respectively. (6) The Level 3 Tranche B 2027 Term Loan had interest rates of 6.967% and 6.134% as of June 30, 2023 and December 31, 2022, respectively. (7) The Qwest Corporation Term Loan had interest rates of 7.717% and 6.640% as of June 30, 2023 and December 31, 2022, respectively. (8) Excludes finance lease obligations of our EMEA business classified as held for sale. Long-Term Debt Maturities Set forth below is the aggregate principal amount of our long-term debt as of June 30, 2023 (excluding unamortized discounts, net, and unamortized debt issuance costs), maturing during the following years. As a result of classifying our EMEA business as held for sale on our June 30, 2023 consolidated balance sheet, the amounts presented below do not include maturities of the finance lease obligations of that business. See Note 2—Planned Divestiture of the EMEA Business. (Dollars in millions) 2023 (remaining six months) $ 76 2024 157 2025 1,864 2026 498 2027 9,386 2028 and thereafter 8,233 Total long-term debt $ 20,214 Exchange Offers and Repurchases Pursuant to exchange offers that commenced on March 16, 2023 (the “Exchange Offers”), on March 31, 2023, Level 3 Financing, Inc. issued $915 million of its 10.500% Senior Secured Notes due 2030 (the “10.500% Notes”) in exchange for $1.535 billion of Lumen’s outstanding senior unsecured notes. On April 17, 2023, in connection with the Exchange Offers, Level 3 Financing, Inc. issued an additional $9 million of its 10.500% Notes in exchange for $19 million of Lumen's outstanding senior unsecured notes. All exchanged notes were concurrently cancelled. These transactions resulted in a net reduction in the aggregate principal amount of Lumen’s consolidated indebtedness, as of June 30, 2023, of approximately $630 million. In addition to the above described exchange offers, we repurchased $24 million aggregate principal amount of Lumen's outstanding senior unsecured notes during the first quarter of 2023. These above-described transactions resulted in an aggregate gain of $618 million during the six months ended June 30, 2023. The following table sets forth the aggregate principal amount of each series of Lumen’s senior unsecured notes retired during the six months ended June 30, 2023, in connection with the above-described exchange transactions: Debt Period of Reduction (Aggregate principal amount in millions) 5.625% Senior Notes, Series X, due 2025 Q1 2023 $ 48 7.200% Senior Notes, Series D, due 2025 Q1 2023 21 5.125% Senior Notes due 2026 Q1 2023 291 6.875% Debentures, Series G, due 2028 Q1 2023 52 5.375% Senior Notes due 2029 Q1 2023 275 4.500% Senior Notes due 2029 Q1 2023 556 7.600% Senior Notes, Series P, due 2039 Q1 2023 161 7.650% Senior Notes, Series U, due 2042 Q1 2023 131 5.625% Senior Notes, Series X, due 2025 Q2 2023 1 4.500% Senior Notes due 2029 Q2 2023 2 7.600% Senior Notes, Series P, due 2039 Q2 2023 3 7.650% Senior Notes, Series U, due 2042 Q2 2023 13 Total $ 1,554 Level 3 Financing, Inc.’s obligations under the 10.500% Notes will be guaranteed on a secured basis by its direct parent, Level 3 Parent, LLC, and certain of its material domestic subsidiaries that guarantee the term loan under Level 3 Financing, Inc.’s existing senior secured credit facility and existing senior secured notes (the “Issuer’s Secured Debt”), subject in certain instances to receipt of regulatory approvals. Such guarantees, when provided by each entity, will be secured by liens on substantially the same collateral that is pledged to secure the Issuer’s Secured Debt. Revolving Credit Facility Borrowings and Repayments During the three and six months ended June 30, 2023, Lumen borrowed $525 million from, and made repayments of $325 million to, its Revolving Credit Facility. 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 June 30, 2023, 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 | 6 Months Ended |
Jun. 30, 2023 | |
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: 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, 2022 $ 11 Accrued to expense 13 Payments, net (12) Balance at June 30, 2023 $ 12 |
Employee Benefits
Employee Benefits | 6 Months Ended |
Jun. 30, 2023 | |
Retirement Benefits [Abstract] | |
Employee Benefits | Employee Benefits For detailed descriptions 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, 2022. Net periodic benefit expense (income) for the Lumen Combined Pension Plan (the "Combined Pension Plan" or the "Plan") includes the following components: Combined Pension Plan Three Months Ended June 30, Six Months Ended June 30, 2023 2022 (1) 2023 2022 (1) (Dollars in millions) Service cost $ 6 11 12 23 Interest cost 67 50 135 102 Expected return on plan assets (72) (102) (143) (202) Recognition of prior service credit (1) (2) (3) (5) Recognition of actuarial loss 26 30 51 67 Net periodic pension expense (income) $ 26 (13) 52 (15) ______________________________________________________________________ (1) These amounts include pension costs related to the Lumen Pension Plan prior to the sale of the ILEC business on October 3, 2022. For additional information on the Lumen Pension Plan, 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, 2022. Net periodic benefit expense for our post-retirement benefit plans includes the following components: Post-Retirement Benefit Plans Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (Dollars in millions) Service cost $ 2 2 3 5 Interest cost 25 15 51 30 Recognition of prior service cost (2) 2 (4) 4 Recognition of actuarial loss (5) — (10) — Net periodic post-retirement benefit expense $ 20 19 40 39 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 income (expense), net on our consolidated statements of operations for the three and six months ended June 30, 2023 and 2022. Our Combined Pension Plan contains 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. |
Earnings Per Common Share
Earnings Per Common Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | Earnings Per Common Share Basic and diluted (loss) earnings per common share for the three and six months ended June 30, 2023 and 2022 were calculated as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (Dollars in millions, except per share amounts, shares in thousands) (Loss) Income (numerator) Net (loss) income $ (8,736) 344 (8,225) 943 Net (loss) income applicable to common stock for computing basic (loss) earnings per common share (8,736) 344 (8,225) 943 Net (loss) income as adjusted for purposes of computing diluted (loss) earnings per common share $ (8,736) 344 (8,225) 943 Shares (denominator): Weighted-average number of shares: Outstanding during period 1,006,229 1,033,060 1,004,948 1,030,138 Non-vested restricted stock (22,776) (20,117) (22,443) (19,452) Weighted average shares outstanding for computing basic (loss) earnings per common share 983,453 1,012,943 982,505 1,010,686 Incremental common shares attributable to dilutive securities: Shares issuable under convertible securities — 10 — 10 Shares issuable under incentive compensation plans — 3,667 — 5,221 Number of shares as adjusted for purposes of computing diluted (loss) earnings per common share 983,453 1,016,620 982,505 1,015,917 Basic (loss) earnings per common share $ (8.88) 0.34 (8.37) 0.93 Diluted (loss) earnings per common share (1) $ (8.88) 0.34 (8.37) 0.93 ______________________________________________________________________ (1) For the three and six months ended June 30, 2023, we excluded from the calculation of diluted loss per share, less than 1 million shares, potentially issuable under incentive compensations plans or convertible securities, as their effect, if included, would have been anti-dilutive. Our calculation of diluted (loss) earnings per common share excludes unvested restricted stock awards that are antidilutive as a result of unrecognized compensation cost. Such shares were 21.0 million and 10.1 million for the three months ended June 30, 2023 and 2022, respectively, and 21.1 million and 9.2 million for the six months ended June 30, 2023 and 2022, respectively. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2023 | |
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 equity 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 using the below-described 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 following financial assets and liabilities as of June 30, 2023 and December 31, 2022: June 30, 2023 December 31, 2022 Input Carrying Fair Carrying Fair (Dollars in millions) Equity securities (1) 1 $ — — 22 22 Long-term debt, excluding finance lease and other obligations 2 19,754 14,927 20,255 17,309 Indemnifications related to the sale of the Latin American business (2) 3 86 86 86 86 ______________________________________________________________________ (1) For the three and six months ended June 30, 2023, we recognized $3 million and $22 million, respectively, of loss on equity securities in other income (expense), net in our consolidated statements of operations. (2) Nonrecurring fair value is measured as of August 1, 2022. Investment Held at Net Asset Value We hold an investment in a limited partnership created as a holding company for various investments. The limited partnership has sole discretion as to the amount and timing of distributions of the underlying assets. As of June 30, 2023, 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"). 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 of partnership assets to partners. The following table summarizes the net asset value of our investment in this limited partnership. As of June 30, 2023 As of December 31, 2022 Net Asset Value (Dollars in millions) Investment in limited partnership (1) $ 26 85 ______________________________________________________________________ (1) For the three and six months ended June 30, 2023, we recognized a $2 million gain on investment and a $59 million loss on investment, respectively, reflected in other income (expense), net in our consolidated statements of operations. For the three and six months ended June 30, 2022, we recognized $137 million and $71 million, respectively, of loss on investment, reflected in other income (expense), net in our consolidated statements of operations. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2023 | |
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: Large Enterprise, Mid-Market Enterprise, Public Sector and Wholesale. For Business segment revenue, we report the following product categories: Grow, Nurture, Harvest and Other, in each case through the sales channels outlined above. The Business segment included the results of our Latin American and ILEC businesses prior to their sales on August 1, 2022 and October 3, 2022, respectively. Under our Mass Markets Segment, we provide products and services to residential and small business customers. We report the following product categories: Fiber Broadband, Other Broadband and Voice and Other. The Mass Markets segment included the results of our ILEC business prior to its sale on October 3, 2022. 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 "other unallocated expense" in the table included below under the heading "—Revenue and Expenses". 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 six months ended June 30, 2023 and 2022, based on the segment categorization we were operating under at June 30, 2023. Three Months Ended June 30, 2023 Six Months Ended June 30, 2023 Business Mass Markets Business Mass Markets (Dollars in millions) Segment revenue $ 2,897 764 5,853 1,546 Segment expenses: Cost of services and products 746 24 1,547 49 Selling, general and administrative 302 329 592 654 Total segment expense 1,048 353 2,139 703 Total segment adjusted EBITDA $ 1,849 411 3,714 843 Three Months Ended June 30, 2022 Six Months Ended June 30, 2022 Business Mass Markets Business Mass Markets (Dollars in millions) Segment revenue $ 3,417 1,195 6,818 2,470 Segment expenses: Cost of services and products 845 33 1,657 65 Selling, general and administrative 313 418 635 813 Total segment expense 1,158 451 2,292 878 Total segment adjusted EBITDA $ 2,259 744 4,526 1,592 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 "other unallocated expense" in the table 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 (loss) income for the three and six months ended June 30, 2023 and 2022: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (Dollars in millions) Total segment adjusted EBITDA $ 2,260 3,003 4,557 6,118 Depreciation and amortization (746) (827) (1,479) (1,635) Goodwill impairment (8,793) — (8,793) — Other unallocated expense (1,133) (1,239) (2,293) (2,440) Stock-based compensation (9) (25) (23) (48) Operating (loss) income (8,421) 912 (8,031) 1,995 Total other (expense) income, net (269) (459) 21 (741) (Loss) income before income taxes (8,690) 453 (8,010) 1,254 Income tax expenses 46 109 215 311 Net (loss) income $ (8,736) 344 (8,225) 943 |
Commitments, Contingencies and
Commitments, Contingencies and Other Items | 6 Months Ended |
Jun. 30, 2023 | |
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. 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. Subject to these limitations, at June 30, 2023, we had accrued $83 million in the aggregate for our litigation and non-income tax contingencies, which is included in other current liabilities, other liabilities, or liabilities held for sale on our consolidated balance sheet as of such date. We cannot at this time estimate the reasonably possible loss or range of loss in excess of this $83 million accrual due to the inherent uncertainties and speculative nature of contested proceedings. 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 Suits 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. Plaintiff filed an amended complaint, and we filed a motion to dismiss. The court granted our motion to dismiss and the plaintiffs have appealed that dismissal. On March 3, 2023, a purported shareholder of Lumen filed a putative class action complaint captioned Voigt v. Lumen Technologies, Inc., et al., Case 3:23-cv-00286-TAD-KDM, in the U.S. District Court for the Western District of Louisiana. The complaint alleges that Lumen and certain of its current or former officers violated the federal securities laws by omitting or misstating material information related to Lumen’s expansion of its Quantum Fiber business. The complaint seeks money damages, attorneys’ fees and costs, and other relief. 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 of approximately $7 million for alleged violations of Washington regulations and laws. The Washington Attorney General's office sought penalties of $27 million. Following trial before the WUTC, it issued an order in June 2023 penalizing CenturyLink for approximately $1 million. The company and Washington Attorney General's office have both filed for reconsideration. Those motions are pending. Latin American Tax Litigation and Claims In connection with the 2022 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 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. In addition, in the past we acquired companies that installed lead-sheathed cables several decades ago, or operated certain manufacturing companies in the first part of the 1900s. Under applicable environmental laws, we could be responsible for environmental liabilities arising from the historical operations of our predecessors. 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, 2022. 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 | 6 Months Ended |
Jun. 30, 2023 | |
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 on our consolidated balance sheets: June 30, 2023 December 31, 2022 (Dollars in millions) Prepaid expenses $ 456 319 Income tax receivable 91 — Materials, supplies and inventory 205 236 Contract assets 17 20 Contract acquisition costs 111 123 Contract fulfillment costs 99 100 Other 5 5 Total other current assets (1) $ 984 803 ______________________________________________________________________ (1) Excludes $63 million and $59 million of other current assets related to the EMEA business that were classified as held for sale as of June 30, 2023 and December 31, 2022, respectively. |
Repurchases of Lumen Common Sto
Repurchases of Lumen Common Stock | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Repurchases of Lumen Common Stock | Repurchases of Lumen Common Stock During the fourth quarter of 2022, our Board of Directors authorized a two-year program to repurchase up to an aggregate of $1.5 billion of our outstanding common stock. During the three and six months ended June 30, 2023, we did not repurchase any shares of our outstanding common stock under this program. As of June 30, 2023, we are authorized to purchase up to an aggregate of $1.3 billion of our outstanding common stock under this program. Any repurchases made in 2023 or thereafter will be subject to a non-deductible 1% excise tax on the fair market value of the stock under the Inflation Reduction Act of 2022. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Jun. 30, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Information Relating to 2023 The table below summarizes changes in accumulated other comprehensive loss recorded on our consolidated balance sheet by component for the six months ended June 30, 2023: Pension Plans Post-Retirement Benefit Plans Foreign Currency Translation Adjustment and Other Total (Dollars in millions) Balance at December 31, 2022 $ (985) 308 (422) (1,099) Other comprehensive income before reclassifications — — 20 20 Amounts reclassified from accumulated other comprehensive loss 36 (10) — 26 Net current-period other comprehensive income (loss) 36 (10) 20 46 Balance at June 30, 2023 $ (949) 298 (402) (1,053) The tables below present further information about our reclassifications out of accumulated other comprehensive loss by component for the three and six months ended June 30, 2023: Three Months Ended June 30, 2023 Decrease (Increase) Affected Line Item in Consolidated Statement of Operations (Dollars in millions) Amortization of pension & post-retirement plans (1) Net actuarial loss $ 21 Other income (expense), net Prior service credit (3) Other income (expense), net Total before tax 18 Income tax benefit (4) Income tax expense Net of tax $ 14 Six Months Ended June 30, 2023 Decrease (Increase) Affected Line Item in Consolidated Statement of Operations (Dollars in millions) Amortization of pension & post-retirement plans (1) Net actuarial loss $ 41 Other income (expense), net Prior service credit (7) Other income (expense), net Total before tax 34 Income tax benefit (8) Income tax expense Net of tax $ 26 ________________________________________________________________________ (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 2022 The table below summarizes changes in accumulated other comprehensive loss recorded on our consolidated balance sheets by component for the six months ended June 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 — — (125) — (125) Amounts reclassified from accumulated other comprehensive loss 46 3 — 17 66 Net current-period other comprehensive income (loss) 46 3 (125) 17 (59) Balance at June 30, 2022 $ (1,531) (161) (525) — (2,217) The tables below present further information about our reclassifications out of accumulated other comprehensive loss by component for the three and six months ended June 30, 2022: Three Months Ended June 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 $ 30 Other income (expense), net Prior service cost — Other income (expense), net Total before tax 30 Income tax benefit (8) Income tax expense Net of tax $ 22 Six Months Ended June 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 $ 67 Other income (expense), net Prior service cost (1) Other income (expense), net Total before tax 66 Income tax benefit (17) Income tax expense Net of tax $ 49 ________________________________________________________________________ (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 | 6 Months Ended |
Jun. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
Labor Union Contracts | Labor Union ContractsAs of June 30, 2023, approximately 20% of our employees were represented by the Communications Workers of America ("CWA") or the International Brotherhood of Electrical Workers ("IBEW"). Approximately 2% of our represented employees are subject to collective bargaining agreements that are scheduled to expire over the 12 month period ending June 30, 2024. |
Background (Policies)
Background (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Our consolidated balance sheet as of December 31, 2022, 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 six 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, 2022. |
Consolidation | The accompanying consolidated financial statements include our accounts and the accounts of our subsidiaries in which we have a controlling interest. Intercompany amounts and transactions with our consolidated subsidiaries have been eliminated. To simplify the overall presentation of our consolidated financial statements, we report immaterial amounts attributable to noncontrolling interests in certain of our subsidiaries as follows: (i) income attributable to noncontrolling interests in other income (expense), net, (ii) equity attributable to noncontrolling interests in additional paid-in capital and (iii) cash flows attributable to noncontrolling interests in other, net financing activities. |
Reclassification | We reclassified certain prior period amounts to conform to the current period presentation, including the recategorization of our Business revenue by product category and sales channel in our segment reporting. See Note 11—Segment Information for additional information. These changes had no impact on total operating revenue, total operating expenses or net (loss) 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 Supplier Finance Programs On January 1, 2023, we adopted Accounting Standards Update ("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. The adoption of ASU 2022-04 did not have a material impact to our consolidated financial statements. Credit Losses On January 1, 2023, we adopted ASU 2022-02, “ Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings (“TDR”) and Vintage Disclosures ” (“ASU 2022-02”). The ASU eliminates the TDR recognition and measurement guidance, enhances existing disclosure requirements and introduces new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. The adoption of ASU 2022-02 did not have any impact to our consolidated financial statements. Derivatives and Hedging On January 1, 2023, we adopted 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. The adoption of ASU 2022-01 did not have any impact to our consolidated financial statements. Business Combinations On January 1, 2023, we adopted ASU 2021-08, “ Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ” (“ASU 2021-08”). This ASU requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The adoption of ASU 2021-08 did not have any impact to our consolidated financial statements. Government Assistance On January 1, 2022, we adopted ASU 2021-10, " Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance ” (“ASU 2021-10”). This ASU requires business entities to disclose information about certain types of government assistance they receive. The ASU only impacts annual financial statement note disclosures. 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. Recently Issued Accounting Pronouncements In March 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-02, “ Investments-Equity method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method ” (“ASU 2023-02”). These amendments allow reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. ASU 2023-02 will become effective for us in the first quarter of fiscal 2024 and early adoption is permitted. As of June 30, 2023, we do not expect ASU 2023-02 will have an impact to our consolidated financial statements. In March 2023, the FASB issued ASU 2023-01, “ Leases (Topic 842): Common Control Arrangements ” (“ASU 2023-01”). These amendments require all entities to amortize leasehold improvements associated with common control leases over the useful life to the common control group. ASU 2023-01 will become effective for us in the first quarter of fiscal 2024 and early adoption is permitted. As of June 30, 2023, we do not expect ASU 2023-01 will have an impact to 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 |
Planned Divestiture of the EM_2
Planned Divestiture of the EMEA Business (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of 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 EMEA business as of the dates below are as follows: June 30, 2023 December 31, 2022 (Dollars in millions) Assets held for sale Cash and cash equivalents $ 46 43 Accounts receivable, less allowance of $5 and $5 77 76 Other current assets 63 59 Property, plant and equipment, net of accumulated depreciation of $1,059 and $1,033 1,986 1,873 Customer relationships and other intangible assets, net 106 100 Operating lease assets 197 156 Valuation allowance on assets held for sale (1) (750) (660) Deferred tax assets 155 138 Other non-current assets 39 38 Total assets held for sale $ 1,919 1,823 Liabilities held for sale Accounts payable $ 67 78 Salaries and benefits 17 23 Current portion of deferred revenue 39 28 Current operating lease liabilities 44 33 Other current liabilities 34 28 Deferred income taxes 52 38 Asset retirement obligations 31 30 Deferred revenue, non-current 103 85 Operating lease liabilities, non-current 104 103 Total liabilities held for sale $ 491 446 ______________________________________________________________________ (1) Includes the impact of $359 million and $365 million as of June 30, 2023 and December 31, 2022, respectively, primarily related to loss on foreign currency translation, expected to be reclassified out of accumulated other comprehensive loss upon close of the sale. |
Goodwill, Customer Relationsh_2
Goodwill, Customer Relationships and Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | Goodwill, customer relationships and other intangible assets consisted of the following: June 30, 2023 (1) December 31, 2022 (1) (Dollars in millions) Goodwill $ 3,864 12,657 Indefinite-lived intangible assets $ 9 9 Other intangible assets subject to amortization: Customer relationships, less accumulated amortization of $3,931 and $3,606 4,246 4,574 Capitalized software, less accumulated amortization of $3,869 and $3,895 (2) 1,551 1,482 Trade names, patents and other, less accumulated amortization of $65 and $188 (2) 93 101 Total other intangible assets, net $ 5,899 6,166 ______________________________________________________________________ (1) These values exclude assets classified as held for sale. (2) Certain capitalized software with a gross carrying value of $183 million and trade names with a gross carrying value of $130 million became fully amortized during 2022 and were retired during the first quarter of 2023. |
Schedule of Rollforward Goodwill | The following table shows the rollforward of goodwill assigned to our reportable segments from December 31, 2022 through June 30, 2023. Business Mass Markets Total (Dollars in Millions) As of December 31, 2022 (1) $ 7,906 4,751 12,657 Impairment (6,580) (2,213) (8,793) As of June 30, 2023 (1) $ 1,326 2,538 3,864 ______________________________________________________________________ (1) Goodwill at June 30, 2023 and December 31, 2022 is net of accumulated impairment losses of $19.8 billion and $11.0 billion, respectively. |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | We estimate that amortization expense for finite-lived intangible assets for the years ending December 31, 2023 through 2027 will be as provided in the table below. As a result of classifying our EMEA business as held for sale on our June 30, 2023 consolidated balance sheet, the amounts presented below do not include future amortization expense for intangible assets of the business to be divested. See Note 2—Planned Divestiture of the EMEA Business for more information. (Dollars in millions) 2023 (remaining six months) $ 490 2024 904 2025 843 2026 799 2027 719 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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 revenue for the Latin American and ILEC businesses prior to their sales on August 1, 2022 and October 3, 2022, respectively. See Note 2—Divestitures of the Latin American and ILEC Businesses and Planned Divestiture of the EMEA Business in our Annual Report on Form 10-K for the year ended December 31, 2022 for additional information on these divestitures. Three Months Ended June 30, 2023 Three Months Ended June 30, 2022 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 Large Enterprise Grow $ 558 (78) 480 658 (102) 556 Nurture 369 — 369 444 — 444 Harvest 197 — 197 272 — 272 Other 55 (1) 54 58 (1) 57 Total Large Enterprise Revenue 1,179 (79) 1,100 1,432 (103) 1,329 Mid-Market Enterprise Grow 202 (8) 194 188 (8) 180 Nurture 202 — 202 231 — 231 Harvest 94 (1) 93 135 (2) 133 Other 9 (1) 8 8 — 8 Total Mid-Market Enterprise Revenue 507 (10) 497 562 (10) 552 Public Sector Grow 118 (19) 99 116 (27) 89 Nurture 93 — 93 128 — 128 Harvest 95 — 95 124 (1) 123 Other 108 — 108 126 (1) 125 Total Public Sector Revenue 414 (19) 395 494 (29) 465 Wholesale Grow 260 (62) 198 240 (68) 172 Nurture 205 (8) 197 258 (7) 251 Harvest 331 (43) 288 405 (56) 349 Other 1 — 1 26 — 26 Total Wholesale Revenue 797 (113) 684 929 (131) 798 Business Segment by Product Category Grow 1,138 (167) 971 1,202 (205) 997 Nurture 869 (8) 861 1,061 (7) 1,054 Harvest 717 (44) 673 936 (59) 877 Other 173 (2) 171 218 (2) 216 Total Business Segment Revenue 2,897 (221) 2,676 3,417 (273) 3,144 Mass Markets Segment by Product Category Fiber Broadband 157 (4) 153 151 (5) 146 Other Broadband 355 (32) 323 597 (55) 542 Voice and Other 252 (9) 243 447 (20) 427 Total Mass Markets Revenue 764 (45) 719 1,195 (80) 1,115 Total Revenue $ 3,661 (266) 3,395 4,612 (353) 4,259 Six Months Ended June 30, 2023 Six Months Ended June 30, 2022 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 Large Enterprise Grow $ 1,108 (157) 951 1,311 (205) 1,106 Nurture 744 — 744 898 — 898 Harvest 404 — 404 548 — 548 Other 117 (2) 115 117 (3) 114 Total Large Enterprise Revenue 2,373 (159) 2,214 2,874 (208) 2,666 Mid-Market Enterprise Grow 398 (15) 383 373 (16) 357 Nurture 413 — 413 472 — 472 Harvest 194 (2) 192 275 (4) 271 Other 17 (3) 14 15 — 15 Total Mid-Market Enterprise Revenue 1,022 (20) 1,002 1,135 (20) 1,115 Public Sector Grow 234 (38) 196 231 (54) 177 Nurture 199 — 199 259 — 259 Harvest 194 — 194 248 (2) 246 Other 217 — 217 235 (1) 234 Total Public Sector Revenue 844 (38) 806 973 (57) 916 Wholesale Grow 526 (133) 393 473 (135) 338 Nurture 418 (14) 404 525 (14) 511 Harvest 664 (87) 577 812 (114) 698 Other 6 — 6 26 — 26 Total Wholesale Revenue 1,614 (234) 1,380 1,836 (263) 1,573 Business Segment by Product Category Grow 2,266 (343) 1,923 2,388 (410) 1,978 Nurture 1,774 (14) 1,760 2,154 (14) 2,140 Harvest 1,456 (89) 1,367 1,883 (120) 1,763 Other 357 (5) 352 393 (4) 389 Total Business Segment Revenue 5,853 (451) 5,402 6,818 (548) 6,270 Mass Markets Segment by Product Category Fiber Broadband 309 (8) 301 296 (10) 286 Other Broadband 724 (65) 659 1,207 (111) 1,096 Voice and Other 513 (18) 495 967 (99) 868 Total Mass Markets Revenue 1,546 (91) 1,455 2,470 (220) 2,250 Total Revenue $ 7,399 (542) 6,857 9,288 (768) 8,520 _____________________________________________________________________ (1) Includes regulatory revenue and lease revenue not within the scope of ASC 606. |
Schedule of 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 June 30, 2023 and December 31, 2022: June 30, 2023 December 31, 2022 (Dollars in millions) Customer receivables (1) $ 1,425 1,424 Contract assets (2) 27 34 Contract liabilities (3) 710 656 ______________________________________________________________________ (1) Reflects gross customer receivables of $1.5 billion at both June 30, 2023 and December 31, 2022, net of allowance for credit losses of $67 million and $73 million, at June 30, 2023 and December 31, 2022, respectively. These amounts exclude customer receivables, net, classified as held for sale of $77 million at June 30, 2023 and $76 million at December 31, 2022 related to the EMEA business. (2) These amounts exclude contract assets classified as held for sale of $12 million at June 30, 2023 and $16 million at December 31, 2022 related to the EMEA business. (3) These amounts exclude contract liabilities classified as held for sale of $62 million at June 30, 2023 and $59 million at December 31, 2022 related to the EMEA business. |
Schedule of Capitalized Contract Cost | The following tables provide changes in our contract acquisition costs and fulfillment costs: Three Months Ended June 30, 2023 Three Months Ended June 30, 2022 Acquisition Costs Fulfillment Costs Acquisition Costs Fulfillment Costs (Dollars in millions) (Dollars in millions) Beginning of period balance (1)(2) $ 192 182 215 187 Costs incurred 29 39 41 41 Amortization (39) (36) (49) (39) Change in contract costs held for sale 1 1 1 (1) End of period balance (5)(6) $ 183 186 208 188 Six Months Ended June 30, 2023 Six Months Ended June 30, 2022 Acquisition Costs Fulfillment Costs Acquisition Costs Fulfillment Costs (Dollars in millions) (Dollars in millions) Beginning of period balance (3)(4) $ 202 192 222 186 Costs incurred 65 79 84 81 Amortization (80) (71) (101) (78) Change in contract costs held for sale (4) (14) 3 (1) End of period balance (5)(6) $ 183 186 208 188 ______________________________________________________________________ (1) Beginning of period balance for the three months ended June 30, 2023 excludes $11 million of acquisition costs and $15 million of fulfillment costs classified as held for sale related to the EMEA business. (2) Beginning of period balance for the three months ended June 30, 2022 excludes $32 million of both acquisition costs and fulfillment costs classified as held for sale (related to both the Latin American business and the ILEC business, sold in the third and fourth quarters of 2022, respectively). (3) Beginning of period balance for the six months ended June 30, 2023 excludes $6 million of acquisition costs and no fulfillment costs classified as held for sale related to the EMEA business. (4) Beginning of period balance for the six months ended June 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, sold in the third and fourth quarters of 2022, respectively). (5) End of period balance for the three and six months ended June 30, 2023 excludes $10 million of acquisition costs and $14 million of fulfillment costs classified as held for sale related to the EMEA business. (6) End of period balance for the three and six months ended June 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, sold in the third and fourth quarters of 2022, respectively). |
Credit Losses on Financial In_2
Credit Losses on Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Credit Loss [Abstract] | |
Schedule of Financing Receivable, Allowance for Credit Loss | The following table presents the activity of our allowance for credit losses by accounts receivable portfolio for the six months ended June 30, 2023: Business Mass Markets Total (Dollars in millions) As of December 31, 2022 (1) $ 57 28 85 Provision for expected losses 18 29 47 Write-offs charged against the allowance (24) (34) (58) Recoveries collected 3 1 4 Ending balance at June 30, 2023 (1) $ 54 24 78 ______________________________________________________________________ (1) As of June 30, 2023 and December 31, 2022, these amounts excluded $5 million of allowance for credit losses classified as held for sale related to the EMEA business included in the Business portfolio. See Note 2—Planned Divestiture of the EMEA Business. |
Long-Term Debt and Credit Fac_2
Long-Term Debt and Credit Facilities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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 and unamortized debt issuance costs: Interest Rates (1) Maturities (1) June 30, 2023 December 31, 2022 (Dollars in millions) Senior Secured Debt: (2) Lumen Technologies, Inc. Revolving Credit Facility (3) SOFR + 2.00% 2025 $ 200 — Term Loan A (4) SOFR + 2.00% 2025 962 991 Term Loan A-1 (4) SOFR + 2.00% 2025 275 283 Term Loan B (5) SOFR + 2.25% 2027 3,916 3,941 Senior notes 4.000% 2027 1,250 1,250 Subsidiaries: Level 3 Financing, Inc. Tranche B 2027 Term Loan (6) SOFR + 1.75% 2027 2,411 2,411 Senior notes 3.400% - 10.500% 2027 - 2030 2,425 1,500 Senior Notes and Other Debt: Lumen Technologies, Inc. Senior notes 4.500% - 7.650% 2025 - 2042 2,143 3,722 Subsidiaries: Level 3 Financing, Inc. Senior notes 3.625% - 4.625% 2027 - 2029 3,940 3,940 Qwest Corporation Senior notes 6.500% - 7.750% 2025 - 2057 1,986 1,986 Term loan (7) SOFR + 2.50% 2027 215 215 Qwest Capital Funding, Inc. Senior notes 6.875% - 7.750% 2028 - 2031 192 192 Finance lease and other obligations (8) Various Various 299 317 Unamortized discounts, net (3) (7) Unamortized debt issuance costs (158) (169) Total long-term debt 20,053 20,572 Less current maturities (154) (154) Long-term debt, excluding current maturities $ 19,899 20,418 ______________________________________________________________________ (1) As of June 30, 2023. (2) See Note 7—Long-Term Debt and Credit Facilities in our Annual Report on Form 10-K for the year ended December 31, 2022 for a description of certain parent or subsidiary guarantees and liens securing this debt. (3) Revolving Credit Facility had an interest rate of 7.262% as of June 30, 2023. (4) Term Loans A and A-1 had interest rates of 7.217% and 6.384% as of June 30, 2023 and December 31, 2022, respectively. (5) Term Loan B had interest rates of 7.467% and 6.634% as of June 30, 2023 and December 31, 2022, respectively. (6) The Level 3 Tranche B 2027 Term Loan had interest rates of 6.967% and 6.134% as of June 30, 2023 and December 31, 2022, respectively. (7) The Qwest Corporation Term Loan had interest rates of 7.717% and 6.640% as of June 30, 2023 and December 31, 2022, respectively. (8) Excludes finance lease obligations of our EMEA business classified as held for sale. |
Schedule of Maturities of Long-term Debt | Set forth below is the aggregate principal amount of our long-term debt as of June 30, 2023 (excluding unamortized discounts, net, and unamortized debt issuance costs), maturing during the following years. As a result of classifying our EMEA business as held for sale on our June 30, 2023 consolidated balance sheet, the amounts presented below do not include maturities of the finance lease obligations of that business. See Note 2—Planned Divestiture of the EMEA Business. (Dollars in millions) 2023 (remaining six months) $ 76 2024 157 2025 1,864 2026 498 2027 9,386 2028 and thereafter 8,233 Total long-term debt $ 20,214 |
Schedule of Debt Repayments | The following table sets forth the aggregate principal amount of each series of Lumen’s senior unsecured notes retired during the six months ended June 30, 2023, in connection with the above-described exchange transactions: Debt Period of Reduction (Aggregate principal amount in millions) 5.625% Senior Notes, Series X, due 2025 Q1 2023 $ 48 7.200% Senior Notes, Series D, due 2025 Q1 2023 21 5.125% Senior Notes due 2026 Q1 2023 291 6.875% Debentures, Series G, due 2028 Q1 2023 52 5.375% Senior Notes due 2029 Q1 2023 275 4.500% Senior Notes due 2029 Q1 2023 556 7.600% Senior Notes, Series P, due 2039 Q1 2023 161 7.650% Senior Notes, Series U, due 2042 Q1 2023 131 5.625% Senior Notes, Series X, due 2025 Q2 2023 1 4.500% Senior Notes due 2029 Q2 2023 2 7.600% Senior Notes, Series P, due 2039 Q2 2023 3 7.650% Senior Notes, Series U, due 2042 Q2 2023 13 Total $ 1,554 |
Severance (Tables)
Severance (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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, 2022 $ 11 Accrued to expense 13 Payments, net (12) Balance at June 30, 2023 $ 12 |
Employee Benefits (Tables)
Employee Benefits (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Retirement Benefits [Abstract] | |
Schedule of Components of Net Periodic Pension Benefit (Income) Expense and Post-retirement Benefit Expense | Net periodic benefit expense (income) for the Lumen Combined Pension Plan (the "Combined Pension Plan" or the "Plan") includes the following components: Combined Pension Plan Three Months Ended June 30, Six Months Ended June 30, 2023 2022 (1) 2023 2022 (1) (Dollars in millions) Service cost $ 6 11 12 23 Interest cost 67 50 135 102 Expected return on plan assets (72) (102) (143) (202) Recognition of prior service credit (1) (2) (3) (5) Recognition of actuarial loss 26 30 51 67 Net periodic pension expense (income) $ 26 (13) 52 (15) ______________________________________________________________________ (1) These amounts include pension costs related to the Lumen Pension Plan prior to the sale of the ILEC business on October 3, 2022. For additional information on the Lumen Pension Plan, 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, 2022. Net periodic benefit expense for our post-retirement benefit plans includes the following components: Post-Retirement Benefit Plans Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (Dollars in millions) Service cost $ 2 2 3 5 Interest cost 25 15 51 30 Recognition of prior service cost (2) 2 (4) 4 Recognition of actuarial loss (5) — (10) — Net periodic post-retirement benefit expense $ 20 19 40 39 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Common Share | Basic and diluted (loss) earnings per common share for the three and six months ended June 30, 2023 and 2022 were calculated as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (Dollars in millions, except per share amounts, shares in thousands) (Loss) Income (numerator) Net (loss) income $ (8,736) 344 (8,225) 943 Net (loss) income applicable to common stock for computing basic (loss) earnings per common share (8,736) 344 (8,225) 943 Net (loss) income as adjusted for purposes of computing diluted (loss) earnings per common share $ (8,736) 344 (8,225) 943 Shares (denominator): Weighted-average number of shares: Outstanding during period 1,006,229 1,033,060 1,004,948 1,030,138 Non-vested restricted stock (22,776) (20,117) (22,443) (19,452) Weighted average shares outstanding for computing basic (loss) earnings per common share 983,453 1,012,943 982,505 1,010,686 Incremental common shares attributable to dilutive securities: Shares issuable under convertible securities — 10 — 10 Shares issuable under incentive compensation plans — 3,667 — 5,221 Number of shares as adjusted for purposes of computing diluted (loss) earnings per common share 983,453 1,016,620 982,505 1,015,917 Basic (loss) earnings per common share $ (8.88) 0.34 (8.37) 0.93 Diluted (loss) earnings per common share (1) $ (8.88) 0.34 (8.37) 0.93 ______________________________________________________________________ (1) For the three and six months ended June 30, 2023, we excluded from the calculation of diluted loss per share, less than 1 million shares, potentially issuable under incentive compensations plans or convertible securities, as their effect, if included, would have been anti-dilutive. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of the Three Input Levels in the Hierarchy of Fair Value Measurements | The three input levels in the hierarchy of fair value measurements are defined by the FASB generally as follows: Input Level Description of Input Level 1 Observable inputs such as quoted market prices in active markets. Level 2 Inputs other than quoted prices in active markets that are either directly or indirectly observable. Level 3 Unobservable inputs in which little or no market data exists. |
Schedule of Carrying Amounts and Estimated Fair Values of Financial Assets and Liabilities | The following table presents the carrying amounts and estimated fair values of our following financial assets and liabilities as of June 30, 2023 and December 31, 2022: June 30, 2023 December 31, 2022 Input Carrying Fair Carrying Fair (Dollars in millions) Equity securities (1) 1 $ — — 22 22 Long-term debt, excluding finance lease and other obligations 2 19,754 14,927 20,255 17,309 Indemnifications related to the sale of the Latin American business (2) 3 86 86 86 86 ______________________________________________________________________ (1) For the three and six months ended June 30, 2023, we recognized $3 million and $22 million, respectively, of loss on equity securities in other income (expense), net in our consolidated statements of operations. (2) Nonrecurring fair value is measured as of August 1, 2022. |
Schedule of Fair Value, Investments, Entities that Calculate Net Asset Value Per Share | As of June 30, 2023 As of December 31, 2022 Net Asset Value (Dollars in millions) Investment in limited partnership (1) $ 26 85 ______________________________________________________________________ (1) For the three and six months ended June 30, 2023, we recognized a $2 million gain on investment and a $59 million loss on investment, respectively, reflected in other income (expense), net in our consolidated statements of operations. For the three and six months ended June 30, 2022, we recognized $137 million and $71 million, respectively, of loss on investment, reflected in other income (expense), net in our consolidated statements of operations. |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Results | The following tables summarize our segment results for the three and six months ended June 30, 2023 and 2022, based on the segment categorization we were operating under at June 30, 2023. Three Months Ended June 30, 2023 Six Months Ended June 30, 2023 Business Mass Markets Business Mass Markets (Dollars in millions) Segment revenue $ 2,897 764 5,853 1,546 Segment expenses: Cost of services and products 746 24 1,547 49 Selling, general and administrative 302 329 592 654 Total segment expense 1,048 353 2,139 703 Total segment adjusted EBITDA $ 1,849 411 3,714 843 Three Months Ended June 30, 2022 Six Months Ended June 30, 2022 Business Mass Markets Business Mass Markets (Dollars in millions) Segment revenue $ 3,417 1,195 6,818 2,470 Segment expenses: Cost of services and products 845 33 1,657 65 Selling, general and administrative 313 418 635 813 Total segment expense 1,158 451 2,292 878 Total segment adjusted EBITDA $ 2,259 744 4,526 1,592 |
Schedule of Reconciliation of Operating Profit (Loss) From Segments to Consolidated Net Income | The following table reconciles total segment adjusted EBITDA to net (loss) income for the three and six months ended June 30, 2023 and 2022: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (Dollars in millions) Total segment adjusted EBITDA $ 2,260 3,003 4,557 6,118 Depreciation and amortization (746) (827) (1,479) (1,635) Goodwill impairment (8,793) — (8,793) — Other unallocated expense (1,133) (1,239) (2,293) (2,440) Stock-based compensation (9) (25) (23) (48) Operating (loss) income (8,421) 912 (8,031) 1,995 Total other (expense) income, net (269) (459) 21 (741) (Loss) income before income taxes (8,690) 453 (8,010) 1,254 Income tax expenses 46 109 215 311 Net (loss) income $ (8,736) 344 (8,225) 943 |
Other Financial Information (Ta
Other Financial Information (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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 on our consolidated balance sheets: June 30, 2023 December 31, 2022 (Dollars in millions) Prepaid expenses $ 456 319 Income tax receivable 91 — Materials, supplies and inventory 205 236 Contract assets 17 20 Contract acquisition costs 111 123 Contract fulfillment costs 99 100 Other 5 5 Total other current assets (1) $ 984 803 ______________________________________________________________________ (1) Excludes $63 million and $59 million of other current assets related to the EMEA business that were classified as held for sale as of June 30, 2023 and December 31, 2022, respectively. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule 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 six months ended June 30, 2023: Pension Plans Post-Retirement Benefit Plans Foreign Currency Translation Adjustment and Other Total (Dollars in millions) Balance at December 31, 2022 $ (985) 308 (422) (1,099) Other comprehensive income before reclassifications — — 20 20 Amounts reclassified from accumulated other comprehensive loss 36 (10) — 26 Net current-period other comprehensive income (loss) 36 (10) 20 46 Balance at June 30, 2023 $ (949) 298 (402) (1,053) The table below summarizes changes in accumulated other comprehensive loss recorded on our consolidated balance sheets by component for the six months ended June 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 — — (125) — (125) Amounts reclassified from accumulated other comprehensive loss 46 3 — 17 66 Net current-period other comprehensive income (loss) 46 3 (125) 17 (59) Balance at June 30, 2022 $ (1,531) (161) (525) — (2,217) |
Schedule of Reclassifications Out of Accumulated Other Comprehensive Income (Loss) by Component | The tables below present further information about our reclassifications out of accumulated other comprehensive loss by component for the three and six months ended June 30, 2023: Three Months Ended June 30, 2023 Decrease (Increase) Affected Line Item in Consolidated Statement of Operations (Dollars in millions) Amortization of pension & post-retirement plans (1) Net actuarial loss $ 21 Other income (expense), net Prior service credit (3) Other income (expense), net Total before tax 18 Income tax benefit (4) Income tax expense Net of tax $ 14 Six Months Ended June 30, 2023 Decrease (Increase) Affected Line Item in Consolidated Statement of Operations (Dollars in millions) Amortization of pension & post-retirement plans (1) Net actuarial loss $ 41 Other income (expense), net Prior service credit (7) Other income (expense), net Total before tax 34 Income tax benefit (8) Income tax expense Net of tax $ 26 ________________________________________________________________________ (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 six months ended June 30, 2022: Three Months Ended June 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 $ 30 Other income (expense), net Prior service cost — Other income (expense), net Total before tax 30 Income tax benefit (8) Income tax expense Net of tax $ 22 Six Months Ended June 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 $ 67 Other income (expense), net Prior service cost (1) Other income (expense), net Total before tax 66 Income tax benefit (17) Income tax expense Net of tax $ 49 ________________________________________________________________________ (1) See Note 8—Employee Benefits for additional information on our net periodic benefit income related to our pension and post-retirement plans. |
Background (Details)
Background (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Book overdraft balance | $ 0 | $ 0 |
Planned Divestiture of the EM_3
Planned Divestiture of the EMEA Business - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Nov. 02, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Depreciation and amortization | $ 1,479 | $ 1,635 | |||||
Goodwill impairment | $ 8,793 | $ 0 | 8,793 | 0 | |||
Loss on disposal group held for sale | 13 | $ 0 | 90 | $ 0 | |||
Held-for-sale, Not Discontinued Operations | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Depreciation and amortization | 72 | 144 | |||||
Loss on disposal group held for sale | $ 13 | $ 90 | |||||
Held-for-sale, Not Discontinued Operations | EMEA Business | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Goodwill impairment | $ 43 | ||||||
Loss on disposal group held for sale | $ 660 | ||||||
Held-for-sale, Not Discontinued Operations | EMEA 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 | $ 1,800 |
Planned Divestiture of the EM_4
Planned Divestiture of the EMEA Business - Schedule of Components of Pre-Tax Income and Assets and Liabilities as of the Disposal Date (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Assets held for sale | ||
Other current assets | $ 63 | $ 59 |
Held-for-sale, Not Discontinued Operations | EMEA Business | ||
Assets held for sale | ||
Cash and cash equivalents | 46 | 43 |
Accounts receivable, less allowance of $5 and $5 | 77 | 76 |
Other current assets | 63 | 59 |
Property, plant and equipment, net of accumulated depreciation of $1,059 and $1,033 | 1,986 | 1,873 |
Customer relationships and other intangible assets, net | 106 | 100 |
Operating lease assets | 197 | 156 |
Valuation allowance on assets held for sale | (750) | (660) |
Deferred tax assets | 155 | 138 |
Other non-current assets | 39 | 38 |
Total assets held for sale | 1,919 | 1,823 |
Liabilities held for sale | ||
Accounts payable | 67 | 78 |
Salaries and benefits | 17 | 23 |
Current portion of deferred revenue | 39 | 28 |
Current operating lease liabilities | 44 | 33 |
Other current liabilities | 34 | 28 |
Deferred income taxes | 52 | 38 |
Asset retirement obligations | 31 | 30 |
Deferred revenue, non-current | 103 | 85 |
Operating lease liabilities, non-current | 104 | 103 |
Total liabilities held for sale | 491 | 446 |
Allowance for doubtful accounts | 5 | 5 |
Accumulated depreciation | 1,059 | 1,033 |
Loss on foreign currency translation | $ 359 | $ 365 |
Goodwill, Customer Relationsh_3
Goodwill, Customer Relationships and Other Intangible Assets - Schedule of Goodwill, Customer Relationships, and Other Intangible Assets (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Goodwill And Intangible Assets [Line Items] | ||
Goodwill | $ 3,864 | $ 12,657 |
Indefinite-lived intangible assets | 9 | 9 |
Total other intangible assets, net | 5,899 | 6,166 |
Customer Relationships | ||
Goodwill And Intangible Assets [Line Items] | ||
Finite-lived intangible assets, net | 4,246 | 4,574 |
Accumulated amortization | 3,931 | 3,606 |
Capitalized Software | ||
Goodwill And Intangible Assets [Line Items] | ||
Finite-lived intangible assets, net | 1,551 | 1,482 |
Accumulated amortization | 3,869 | 3,895 |
Trade Names, Patents and Other | ||
Goodwill And Intangible Assets [Line Items] | ||
Finite-lived intangible assets, net | 93 | 101 |
Accumulated amortization | $ 65 | 188 |
Fully Amortized and Retired Capitalized Software | ||
Goodwill And Intangible Assets [Line Items] | ||
Gross carrying value | 183 | |
Fully Amortized and Retired Trade Names | ||
Goodwill And Intangible Assets [Line Items] | ||
Gross carrying value | $ 130 |
Goodwill, Customer Relationsh_4
Goodwill, Customer Relationships and Other Intangible Assets - Additional Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) segment reporting_unit | Jun. 30, 2022 USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets, gross (including goodwill) | $ 17,600 | $ 17,600 | |||
Number of reportable segments | segment | 2 | ||||
Number of operating segments | segment | 2 | ||||
Number of reporting units | reporting_unit | 3 | ||||
Goodwill impairment | 8,793 | $ 0 | $ 8,793 | $ 0 | |
Amortization of intangible assets | 263 | $ 277 | 523 | $ 551 | |
Held-for-sale, Not Discontinued Operations | EMEA Business | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill impairment | $ 43 | ||||
Allowance for doubtful accounts | $ 5 | $ 5 | $ 5 | ||
Minimum | Revenue Multiple | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill impairment, measurement input | 1.5 | 1.5 | |||
Minimum | EBITDA Multiple | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill impairment, measurement input | 4.6 | 4.6 | |||
Maximum | Revenue Multiple | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill impairment, measurement input | 4.3 | 4.3 | |||
Maximum | EBITDA Multiple | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill impairment, measurement input | 10.5 | 10.5 |
Goodwill, Customer Relationsh_5
Goodwill, Customer Relationships and Other Intangible Assets - Schedule of Rollforward Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Goodwill Activity | |||||
As of beginning of period | $ 12,657 | ||||
Impairment | $ (8,793) | $ 0 | (8,793) | $ 0 | |
As of end of period | 3,864 | $ 12,657 | 3,864 | ||
Accumulated impairment losses | 19,800 | 11,000 | 19,800 | ||
Business | |||||
Goodwill Activity | |||||
As of beginning of period | 7,906 | ||||
Impairment | (6,580) | ||||
As of end of period | 1,326 | 7,906 | 1,326 | ||
Mass Markets | |||||
Goodwill Activity | |||||
As of beginning of period | 4,751 | ||||
Impairment | (2,213) | ||||
As of end of period | $ 2,538 | $ 4,751 | $ 2,538 |
Goodwill, Customer Relationsh_6
Goodwill, Customer Relationships and Other Intangible Assets - Schedule of Amortization Expense (Details) $ in Millions | Jun. 30, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 (remaining six months) | $ 490 |
2024 | 904 |
2025 | 843 |
2026 | 799 |
2027 | $ 719 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | $ 3,661 | $ 4,612 | $ 7,399 | $ 9,288 |
Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 3,661 | 4,612 | 7,399 | 9,288 |
Adjustments for Non-ASC 606 revenue | (266) | (353) | (542) | (768) |
Total revenue from Contracts with Customers | 3,395 | 4,259 | 6,857 | 8,520 |
Operating Segments | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 2,897 | 3,417 | 5,853 | 6,818 |
Adjustments for Non-ASC 606 revenue | (221) | (273) | (451) | (548) |
Total revenue from Contracts with Customers | 2,676 | 3,144 | 5,402 | 6,270 |
Operating Segments | Mass Markets | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 764 | 1,195 | 1,546 | 2,470 |
Adjustments for Non-ASC 606 revenue | (45) | (80) | (91) | (220) |
Total revenue from Contracts with Customers | 719 | 1,115 | 1,455 | 2,250 |
Operating Segments | Large Enterprise | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 1,179 | 1,432 | 2,373 | 2,874 |
Adjustments for Non-ASC 606 revenue | (79) | (103) | (159) | (208) |
Total revenue from Contracts with Customers | 1,100 | 1,329 | 2,214 | 2,666 |
Operating Segments | Mid-Market Enterprise | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 507 | 562 | 1,022 | 1,135 |
Adjustments for Non-ASC 606 revenue | (10) | (10) | (20) | (20) |
Total revenue from Contracts with Customers | 497 | 552 | 1,002 | 1,115 |
Operating Segments | Public Sector | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 414 | 494 | 844 | 973 |
Adjustments for Non-ASC 606 revenue | (19) | (29) | (38) | (57) |
Total revenue from Contracts with Customers | 395 | 465 | 806 | 916 |
Operating Segments | Wholesale | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 797 | 929 | 1,614 | 1,836 |
Adjustments for Non-ASC 606 revenue | (113) | (131) | (234) | (263) |
Total revenue from Contracts with Customers | 684 | 798 | 1,380 | 1,573 |
Operating Segments | Grow | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 1,138 | 1,202 | 2,266 | 2,388 |
Adjustments for Non-ASC 606 revenue | (167) | (205) | (343) | (410) |
Total revenue from Contracts with Customers | 971 | 997 | 1,923 | 1,978 |
Operating Segments | Grow | Large Enterprise | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 558 | 658 | 1,108 | 1,311 |
Adjustments for Non-ASC 606 revenue | (78) | (102) | (157) | (205) |
Total revenue from Contracts with Customers | 480 | 556 | 951 | 1,106 |
Operating Segments | Grow | Mid-Market Enterprise | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 202 | 188 | 398 | 373 |
Adjustments for Non-ASC 606 revenue | (8) | (8) | (15) | (16) |
Total revenue from Contracts with Customers | 194 | 180 | 383 | 357 |
Operating Segments | Grow | Public Sector | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 118 | 116 | 234 | 231 |
Adjustments for Non-ASC 606 revenue | (19) | (27) | (38) | (54) |
Total revenue from Contracts with Customers | 99 | 89 | 196 | 177 |
Operating Segments | Grow | Wholesale | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 260 | 240 | 526 | 473 |
Adjustments for Non-ASC 606 revenue | (62) | (68) | (133) | (135) |
Total revenue from Contracts with Customers | 198 | 172 | 393 | 338 |
Operating Segments | Nurture | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 869 | 1,061 | 1,774 | 2,154 |
Adjustments for Non-ASC 606 revenue | (8) | (7) | (14) | (14) |
Total revenue from Contracts with Customers | 861 | 1,054 | 1,760 | 2,140 |
Operating Segments | Nurture | Large Enterprise | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 369 | 444 | 744 | 898 |
Adjustments for Non-ASC 606 revenue | 0 | 0 | 0 | 0 |
Total revenue from Contracts with Customers | 369 | 444 | 744 | 898 |
Operating Segments | Nurture | Mid-Market Enterprise | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 202 | 231 | 413 | 472 |
Adjustments for Non-ASC 606 revenue | 0 | 0 | 0 | 0 |
Total revenue from Contracts with Customers | 202 | 231 | 413 | 472 |
Operating Segments | Nurture | Public Sector | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 93 | 128 | 199 | 259 |
Adjustments for Non-ASC 606 revenue | 0 | 0 | 0 | 0 |
Total revenue from Contracts with Customers | 93 | 128 | 199 | 259 |
Operating Segments | Nurture | Wholesale | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 205 | 258 | 418 | 525 |
Adjustments for Non-ASC 606 revenue | (8) | (7) | (14) | (14) |
Total revenue from Contracts with Customers | 197 | 251 | 404 | 511 |
Operating Segments | Harvest | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 717 | 936 | 1,456 | 1,883 |
Adjustments for Non-ASC 606 revenue | (44) | (59) | (89) | (120) |
Total revenue from Contracts with Customers | 673 | 877 | 1,367 | 1,763 |
Operating Segments | Harvest | Large Enterprise | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 197 | 272 | 404 | 548 |
Adjustments for Non-ASC 606 revenue | 0 | 0 | 0 | 0 |
Total revenue from Contracts with Customers | 197 | 272 | 404 | 548 |
Operating Segments | Harvest | Mid-Market Enterprise | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 94 | 135 | 194 | 275 |
Adjustments for Non-ASC 606 revenue | (1) | (2) | (2) | (4) |
Total revenue from Contracts with Customers | 93 | 133 | 192 | 271 |
Operating Segments | Harvest | Public Sector | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 95 | 124 | 194 | 248 |
Adjustments for Non-ASC 606 revenue | 0 | (1) | 0 | (2) |
Total revenue from Contracts with Customers | 95 | 123 | 194 | 246 |
Operating Segments | Harvest | Wholesale | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 331 | 405 | 664 | 812 |
Adjustments for Non-ASC 606 revenue | (43) | (56) | (87) | (114) |
Total revenue from Contracts with Customers | 288 | 349 | 577 | 698 |
Operating Segments | Other | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 173 | 218 | 357 | 393 |
Adjustments for Non-ASC 606 revenue | (2) | (2) | (5) | (4) |
Total revenue from Contracts with Customers | 171 | 216 | 352 | 389 |
Operating Segments | Other | Large Enterprise | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 55 | 58 | 117 | 117 |
Adjustments for Non-ASC 606 revenue | (1) | (1) | (2) | (3) |
Total revenue from Contracts with Customers | 54 | 57 | 115 | 114 |
Operating Segments | Other | Mid-Market Enterprise | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 9 | 8 | 17 | 15 |
Adjustments for Non-ASC 606 revenue | (1) | 0 | (3) | 0 |
Total revenue from Contracts with Customers | 8 | 8 | 14 | 15 |
Operating Segments | Other | Public Sector | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 108 | 126 | 217 | 235 |
Adjustments for Non-ASC 606 revenue | 0 | (1) | 0 | (1) |
Total revenue from Contracts with Customers | 108 | 125 | 217 | 234 |
Operating Segments | Other | Wholesale | Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 1 | 26 | 6 | 26 |
Adjustments for Non-ASC 606 revenue | 0 | 0 | 0 | 0 |
Total revenue from Contracts with Customers | 1 | 26 | 6 | 26 |
Operating Segments | Fiber Broadband | Mass Markets | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 157 | 151 | 309 | 296 |
Adjustments for Non-ASC 606 revenue | (4) | (5) | (8) | (10) |
Total revenue from Contracts with Customers | 153 | 146 | 301 | 286 |
Operating Segments | Other Broadband | Mass Markets | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 355 | 597 | 724 | 1,207 |
Adjustments for Non-ASC 606 revenue | (32) | (55) | (65) | (111) |
Total revenue from Contracts with Customers | 323 | 542 | 659 | 1,096 |
Operating Segments | Voice and Other | Mass Markets | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 252 | 447 | 513 | 967 |
Adjustments for Non-ASC 606 revenue | (9) | (20) | (18) | (99) |
Total revenue from Contracts with Customers | $ 243 | $ 427 | $ 495 | $ 868 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||||
Lease income | $ 257 | $ 334 | $ 526 | $ 671 | ||
Percent of operating revenue (as a percent) | 7% | 7% | 7% | 7% | ||
Revenue recognized | $ 42 | $ 52 | $ 347 | $ 447 | ||
Contract liabilities | $ 715 | $ 841 | ||||
Remaining performance obligation | 6,900 | 6,900 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01 | ||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||||
Remaining performance obligation | $ 1,600 | $ 1,600 | ||||
Remaining performance obligation, satisfaction period | 6 months | 6 months | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | ||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||||
Remaining performance obligation | $ 2,000 | $ 2,000 | ||||
Remaining performance obligation, satisfaction period | 1 year | 1 year | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | ||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||||
Remaining performance obligation | $ 3,300 | $ 3,300 | ||||
Remaining performance obligation, satisfaction period | 3 years | 3 years | ||||
Minimum | ||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||||
Contract term (in years) | 1 year | |||||
Maximum | ||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||||
Contract term (in years) | 5 years | |||||
Weighted Average | Mass Market Customers | ||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||||
Length of customer life (in months) | 36 months | |||||
Weighted Average | Business Customers | ||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||||
Length of customer life (in months) | 33 months |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Contract with Customer, Asset and Liability (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Capitalized Contract Cost [Line Items] | |||
Customer receivables | $ 1,425 | $ 1,424 | |
Contract assets | 27 | 34 | |
Contract liabilities | 710 | 656 | |
Accounts receivable, gross | 1,500 | 1,500 | |
Allowance for doubtful accounts receivable | 67 | 73 | |
Contract liabilities | 715 | $ 841 | |
Held-for-sale, Not Discontinued Operations | EMEA Business | |||
Capitalized Contract Cost [Line Items] | |||
Customer receivables | 77 | 76 | |
Contract assets | 12 | 16 | |
Contract liabilities | $ 62 | $ 59 |
Revenue Recognition - Schedul_3
Revenue Recognition - Schedule of Capitalized Contract Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Held-for-sale | Latin American Business and ILEC Business | ||||
Capitalized Contract Cost [Roll Forward] | ||||
Beginning of period balance | $ 32 | |||
Acquisition Costs | ||||
Capitalized Contract Cost [Roll Forward] | ||||
Beginning of period balance | $ 192 | 215 | $ 202 | $ 222 |
Costs incurred | 29 | 41 | 65 | 84 |
Amortization | (39) | (49) | (80) | (101) |
Change in contract costs held for sale | 1 | 1 | (4) | 3 |
End of period balance | 183 | 208 | 183 | 208 |
Acquisition Costs | Held-for-sale, Not Discontinued Operations | EMEA Business | ||||
Capitalized Contract Cost [Roll Forward] | ||||
Beginning of period balance | 11 | 6 | ||
End of period balance | 10 | 10 | ||
Acquisition Costs | Held-for-sale | Latin American Business and ILEC Business | ||||
Capitalized Contract Cost [Roll Forward] | ||||
Beginning of period balance | 32 | |||
End of period balance | 33 | 33 | ||
Fulfillment Costs | ||||
Capitalized Contract Cost [Roll Forward] | ||||
Beginning of period balance | 182 | 187 | 192 | 186 |
Costs incurred | 39 | 41 | 79 | 81 |
Amortization | (36) | (39) | (71) | (78) |
Change in contract costs held for sale | 1 | (1) | (14) | (1) |
End of period balance | 186 | 188 | 186 | 188 |
Fulfillment Costs | Held-for-sale, Not Discontinued Operations | EMEA Business | ||||
Capitalized Contract Cost [Roll Forward] | ||||
Beginning of period balance | 15 | 0 | ||
End of period balance | $ 14 | $ 14 | ||
Fulfillment Costs | Held-for-sale | Latin American Business and ILEC Business | ||||
Capitalized Contract Cost [Roll Forward] | ||||
Beginning of period balance | 34 | |||
End of period balance | $ 31 | $ 31 |
Credit Losses on Financial In_3
Credit Losses on Financial Instruments (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance at December 31, 2021 | $ 85 | |
Provision for expected losses | 47 | |
Write-offs charged against the allowance | (58) | |
Recoveries collected | 4 | |
Ending balance at September 30, 2022 | 78 | |
Held-for-sale, Not Discontinued Operations | EMEA Business | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance for doubtful accounts | 5 | $ 5 |
Business | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance at December 31, 2021 | 57 | |
Provision for expected losses | 18 | |
Write-offs charged against the allowance | (24) | |
Recoveries collected | 3 | |
Ending balance at September 30, 2022 | 54 | |
Mass Markets | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance at December 31, 2021 | 28 | |
Provision for expected losses | 29 | |
Write-offs charged against the allowance | (34) | |
Recoveries collected | 1 | |
Ending balance at September 30, 2022 | $ 24 |
Long-Term Debt and Credit Fac_3
Long-Term Debt and Credit Facilities - Schedule of Long Term Debt (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Long-term Debt and Credit Facilities | ||
Finance lease and other obligations | $ 299 | $ 317 |
Unamortized discounts, net | (3) | (7) |
Unamortized debt issuance costs | (158) | (169) |
Total long-term debt | 20,053 | 20,572 |
Less current maturities | (154) | (154) |
Long-term debt, excluding current maturities | 19,899 | 20,418 |
Term Loan | Qwest Corporation | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 215 | $ 215 |
Long-term debt, weighted average interest rate (as a percent) | 7.717% | 6.64% |
Term Loan | SOFR | Qwest Corporation | ||
Long-term Debt and Credit Facilities | ||
Basis spread (as a percent) | 2.50% | |
Senior Notes | Qwest Corporation | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 1,986 | $ 1,986 |
Senior Notes | Qwest Corporation | Minimum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate (as a percent ) | 6.50% | |
Senior Notes | Qwest Corporation | Maximum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate (as a percent ) | 7.75% | |
Senior Notes | Qwest Capital Funding, Inc. | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 192 | 192 |
Senior Notes | Qwest Capital Funding, Inc. | Minimum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate (as a percent ) | 6.875% | |
Senior Notes | Qwest Capital Funding, Inc. | Maximum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate (as a percent ) | 7.75% | |
Revolving Credit Facility | Line of Credit | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 200 | 0 |
Long-term debt, weighted average interest rate (as a percent) | 7.262% | |
Revolving Credit Facility | Line of Credit | SOFR | ||
Long-term Debt and Credit Facilities | ||
Basis spread (as a percent) | 2% | |
Term Loan A | Term Loan | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 962 | $ 991 |
Long-term debt, weighted average interest rate (as a percent) | 7.217% | 6.384% |
Term Loan A | Term Loan | SOFR | ||
Long-term Debt and Credit Facilities | ||
Basis spread (as a percent) | 2% | |
Term Loan A-1 | Term Loan | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 275 | $ 283 |
Long-term debt, weighted average interest rate (as a percent) | 7.217% | 6.384% |
Term Loan A-1 | Term Loan | SOFR | ||
Long-term Debt and Credit Facilities | ||
Basis spread (as a percent) | 2% | |
Term Loan B | Term Loan | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 3,916 | $ 3,941 |
Long-term debt, weighted average interest rate (as a percent) | 7.467% | 6.634% |
Term Loan B | Term Loan | SOFR | ||
Long-term Debt and Credit Facilities | ||
Basis spread (as a percent) | 2.25% | |
4.000% Senior Secured Notes Due 2027 | Senior Notes | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate (as a percent ) | 4% | |
Long-term debt, gross | $ 1,250 | $ 1,250 |
Tranche B 2027 Term Loan | Term Loan | Level 3 Financing, Inc. | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 2,411 | $ 2,411 |
Long-term debt, weighted average interest rate (as a percent) | 6.967% | 6.134% |
Tranche B 2027 Term Loan | Term Loan | SOFR | Level 3 Financing, Inc. | ||
Long-term Debt and Credit Facilities | ||
Basis spread (as a percent) | 1.75% | |
Senior Notes, Maturing 2027-2030 | Senior Notes | Level 3 Financing, Inc. | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 2,425 | $ 1,500 |
Senior Notes, Maturing 2027-2030 | Senior Notes | Level 3 Financing, Inc. | Minimum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate (as a percent ) | 3.40% | |
Senior Notes, Maturing 2027-2030 | Senior Notes | Level 3 Financing, Inc. | Maximum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate (as a percent ) | 10.50% | |
Senior Notes Maturing 2025-2042 | Senior Notes | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 2,143 | 3,722 |
Senior Notes Maturing 2025-2042 | Senior Notes | Minimum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate (as a percent ) | 4.50% | |
Senior Notes Maturing 2025-2042 | Senior Notes | Maximum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate (as a percent ) | 7.65% | |
Senior Notes, Maturing 2027-2029 | Senior Notes | Level 3 Financing, Inc. | ||
Long-term Debt and Credit Facilities | ||
Long-term debt, gross | $ 3,940 | $ 3,940 |
Senior Notes, Maturing 2027-2029 | Senior Notes | Level 3 Financing, Inc. | Minimum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate (as a percent ) | 3.625% | |
Senior Notes, Maturing 2027-2029 | Senior Notes | Level 3 Financing, Inc. | Maximum | ||
Long-term Debt and Credit Facilities | ||
Stated interest rate (as a percent ) | 4.625% |
Long-Term Debt and Credit Fac_4
Long-Term Debt and Credit Facilities - Schedule of Maturities of Long Term Debt (Details) $ in Millions | Jun. 30, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2023 (remaining six months) | $ 76 |
2024 | 157 |
2025 | 1,864 |
2026 | 498 |
2027 | 9,386 |
2028 and thereafter | 8,233 |
Total long-term debt | $ 20,214 |
Long-Term Debt and Credit Fac_5
Long-Term Debt and Credit Facilities - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Apr. 17, 2023 | Mar. 31, 2023 | |
Long-term Debt and Credit Facilities | |||||
Reduction in aggregate principal amount of debt | $ 630 | ||||
Net gain on early retirement of debt | 618 | $ 0 | |||
Borrowings from revolving credit facility | $ 525 | 525 | |||
Repayments of revolving credit facility | $ 325 | $ 325 | |||
Senior Notes | Lumen Technologies, Inc. | |||||
Long-term Debt and Credit Facilities | |||||
Face amount | $ 19 | $ 1,535 | |||
Repurchased face amount | 24 | ||||
Senior Notes | 10.500% Senior Secured Notes due 2030 | Level 3 Financing, Inc. | |||||
Long-term Debt and Credit Facilities | |||||
Face amount | $ 9 | $ 915 | |||
Stated interest rate (as a percent ) | 10.50% | 10.50% |
Long-Term Debt and Credit Fac_6
Long-Term Debt and Credit Facilities - Schedule of Debt Repayments (Details) - Senior Notes - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2023 | |
Long-term Debt and Credit Facilities | |||
Repayments of debt | $ 1,554 | ||
5.625% Senior Notes, Series X, due 2025 | |||
Long-term Debt and Credit Facilities | |||
Stated interest rate (as a percent ) | 5.625% | 5.625% | |
Repayments of debt | $ 1 | $ 48 | |
7.200% Senior Notes, Series D, due 2025 | |||
Long-term Debt and Credit Facilities | |||
Stated interest rate (as a percent ) | 7.20% | 7.20% | |
Repayments of debt | 21 | ||
5.125% Senior Notes due 2026 | |||
Long-term Debt and Credit Facilities | |||
Stated interest rate (as a percent ) | 5.125% | 5.125% | |
Repayments of debt | 291 | ||
6.875% Debentures, Series G, due 2028 | |||
Long-term Debt and Credit Facilities | |||
Stated interest rate (as a percent ) | 6.875% | 6.875% | |
Repayments of debt | 52 | ||
5.375% Senior Notes due 2029 | |||
Long-term Debt and Credit Facilities | |||
Stated interest rate (as a percent ) | 5.375% | 5.375% | |
Repayments of debt | 275 | ||
4.500% Senior Notes due 2029 | |||
Long-term Debt and Credit Facilities | |||
Stated interest rate (as a percent ) | 4.50% | 4.50% | |
Repayments of debt | $ 2 | 556 | |
7.600% Senior Notes, Series P, due 2039 | |||
Long-term Debt and Credit Facilities | |||
Stated interest rate (as a percent ) | 7.60% | 7.60% | |
Repayments of debt | $ 3 | 161 | |
7.650% Senior Notes, Series U, due 2042 | |||
Long-term Debt and Credit Facilities | |||
Stated interest rate (as a percent ) | 7.65% | 7.65% | |
Repayments of debt | $ 13 | $ 131 |
Severance (Details)
Severance (Details) - Severance $ in Millions | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Restructuring reserve | |
Balance at the beginning of the period | $ 11 |
Accrued to expense | 13 |
Payments, net | (12) |
Balance at the end of the period | $ 12 |
Employee Benefits - Schedule of
Employee Benefits - Schedule of Net Periodic Benefit (Income) Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Pension Plans | ||||
Components of net periodic (benefit) expense | ||||
Service cost | $ 6 | $ 11 | $ 12 | $ 23 |
Interest cost | 67 | 50 | 135 | 102 |
Expected return on plan assets | (72) | (102) | (143) | (202) |
Recognition of prior service credit | (1) | (2) | (3) | (5) |
Recognition of actuarial loss | 26 | 30 | 51 | 67 |
Net periodic post-retirement benefit expense | 26 | (13) | 52 | (15) |
Post-Retirement Benefit Plans | ||||
Components of net periodic (benefit) expense | ||||
Service cost | 2 | 2 | 3 | 5 |
Interest cost | 25 | 15 | 51 | 30 |
Recognition of prior service credit | (2) | 2 | (4) | 4 |
Recognition of actuarial loss | (5) | 0 | (10) | 0 |
Net periodic post-retirement benefit expense | $ 20 | $ 19 | $ 40 | $ 39 |
Earnings Per Common Share - Sch
Earnings Per Common Share - Schedule of Basic and Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
(Loss) Income (numerator) | ||||
Net (loss) income | $ (8,736) | $ 344 | $ (8,225) | $ 943 |
Net (loss) income applicable to common stock for computing basic (loss) earnings per common share | (8,736) | 344 | (8,225) | 943 |
Net (loss) income as adjusted for purposes of computing diluted (loss) earnings per common share | $ (8,736) | $ 344 | $ (8,225) | $ 943 |
Weighted-average number of shares: | ||||
Outstanding during period (in shares) | 1,006,229 | 1,033,060 | 1,004,948 | 1,030,138 |
Non-vested restricted stock (in shares) | (22,776) | (20,117) | (22,443) | (19,452) |
Weighted average shares outstanding for computing basic (loss) earnings per common share (in shares) | 983,453 | 1,012,943 | 982,505 | 1,010,686 |
Incremental common shares attributable to dilutive securities: | ||||
Shares issuable under convertible securities (in shares) | 0 | 10 | 0 | 10 |
Shares issuable under incentive compensation plans (in shares) | 0 | 3,667 | 0 | 5,221 |
Number of shares as adjusted for purposes of computing diluted (loss) earnings per common share (in shares) | 983,453 | 1,016,620 | 982,505 | 1,015,917 |
Basic (loss) earnings per common share (in dollars per share) | $ (8.88) | $ 0.34 | $ (8.37) | $ 0.93 |
Diluted (loss) earnings per common share (in dollars per share) | $ (8.88) | $ 0.34 | $ (8.37) | $ 0.93 |
Earnings Per Common Share - Add
Earnings Per Common Share - Additional Information (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of shares of common stock excluded from the computation of diluted earnings per share (less than) (in shares) | 21 | 10.1 | 21.1 | 9.2 |
Stock Compensation Plan | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of shares of common stock excluded from the computation of diluted earnings per share (less than) (in shares) | 1 | 1 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Schedule of Carrying Amounts and Estimated Fair Values of Financial Assets and Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | |
Fair value disclosure | |||
Loss on equity securities | $ 3 | $ 22 | |
Fair Value, Inputs, Level 1 | Carrying Amount | |||
Fair value disclosure | |||
Equity securities | 0 | 0 | $ 22 |
Fair Value, Inputs, Level 1 | Fair Value | |||
Fair value disclosure | |||
Equity securities | 0 | 0 | 22 |
Fair Value Inputs, Level 2 | Carrying Amount | |||
Fair value disclosure | |||
Long-term debt, excluding finance lease and other obligations | 19,754 | 19,754 | 20,255 |
Fair Value Inputs, Level 2 | Fair Value | |||
Fair value disclosure | |||
Long-term debt, excluding finance lease and other obligations | 14,927 | 14,927 | 17,309 |
Fair Value, Inputs, Level 3 | Carrying Amount | |||
Fair value disclosure | |||
Indemnifications related to the sale of the Latin American business | 86 | 86 | 86 |
Fair Value, Inputs, Level 3 | Fair Value | |||
Fair value disclosure | |||
Indemnifications related to the sale of the Latin American business | $ 86 | $ 86 | $ 86 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Schedule of Fair Value, Investments, Entities that Calculate Net Asset Value Per Share (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Fair value disclosure | |||||
Gain (loss) on investments | $ 2 | $ 137 | $ (59) | $ 71 | |
Net Asset Value | Fair Value | |||||
Fair value disclosure | |||||
Investment in limited partnership | $ 26 | $ 26 | $ 85 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2023 segment sales_channel | |
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 - Schedule
Segment Information - Schedule of Segment Results (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Operating revenues by products and services | ||||
Segment revenue | $ 3,661 | $ 4,612 | $ 7,399 | $ 9,288 |
Cost of services and products | 1,740 | 2,058 | 3,557 | 4,043 |
Selling, general and administrative | 790 | 815 | 1,511 | 1,615 |
Operating Segments | ||||
Operating revenues by products and services | ||||
Segment revenue | 3,661 | 4,612 | 7,399 | 9,288 |
Total segment adjusted EBITDA | 2,260 | 3,003 | 4,557 | 6,118 |
Operating Segments | Business | ||||
Operating revenues by products and services | ||||
Segment revenue | 2,897 | 3,417 | 5,853 | 6,818 |
Cost of services and products | 746 | 845 | 1,547 | 1,657 |
Selling, general and administrative | 302 | 313 | 592 | 635 |
Total segment expense | 1,048 | 1,158 | 2,139 | 2,292 |
Total segment adjusted EBITDA | 1,849 | 2,259 | 3,714 | 4,526 |
Operating Segments | Mass Markets | ||||
Operating revenues by products and services | ||||
Segment revenue | 764 | 1,195 | 1,546 | 2,470 |
Cost of services and products | 24 | 33 | 49 | 65 |
Selling, general and administrative | 329 | 418 | 654 | 813 |
Total segment expense | 353 | 451 | 703 | 878 |
Total segment adjusted EBITDA | $ 411 | $ 744 | $ 843 | $ 1,592 |
Segment Information - Schedul_2
Segment Information - Schedule of Reconciliation of Segment Adjusted EBITDA to Net (Loss) Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | $ (746) | $ (827) | $ (1,479) | $ (1,635) |
Goodwill impairment | (8,793) | 0 | (8,793) | 0 |
Operating (loss) income | (8,421) | 912 | (8,031) | 1,995 |
Total other (expense) income, net | (269) | (459) | 21 | (741) |
(Loss) income before income taxes | (8,690) | 453 | (8,010) | 1,254 |
Income tax expenses | 46 | 109 | 215 | 311 |
Net (loss) income | (8,736) | 344 | (8,225) | 943 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total segment adjusted EBITDA | 2,260 | 3,003 | 4,557 | 6,118 |
Segment Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | (746) | (827) | (1,479) | (1,635) |
Goodwill impairment | (8,793) | 0 | (8,793) | 0 |
Other unallocated expense | (1,133) | (1,239) | (2,293) | (2,440) |
Stock-based compensation | (9) | (25) | (23) | (48) |
Operating (loss) income | (8,421) | 912 | (8,031) | 1,995 |
Total other (expense) income, net | $ (269) | $ (459) | $ 21 | $ (741) |
Commitments, Contingencies an_2
Commitments, Contingencies and Other Items (Details) $ in Thousands | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 USD ($) | Jun. 30, 2021 USD ($) lawsuit | Feb. 28, 2017 USD ($) lawsuit | Jun. 30, 2023 USD ($) patent | Dec. 31, 2020 USD ($) | |
Loss Contingencies | |||||
Estimate of possible loss | $ 83,000 | $ 83,000 | |||
Patents allegedly infringed | patent | 1 | ||||
Unfavorable Regulatory Action | |||||
Loss Contingencies | |||||
Estimate of possible loss | 300 | $ 300 | |||
Penalties Sought for Violation of Regulations And Laws of WUTC | |||||
Loss Contingencies | |||||
Damages awarded | $ 1,000 | ||||
Penalties for Violation of Washington Regulations and Laws Filed by Staff of WUTC | |||||
Loss Contingencies | |||||
Damages sought, value | $ 7,000 | ||||
Penalties Sought by Washington Attorney's General Office | |||||
Loss Contingencies | |||||
Damages sought, value | $ 27,000 | ||||
Judicial Ruling | Missouri Municipalities | |||||
Loss Contingencies | |||||
Number of pending lawsuits | lawsuit | 1 | 1 | |||
Litigation settlement amount | $ 4,000 | ||||
Judicial Ruling | Columbia and Joplin Municipalities | |||||
Loss Contingencies | |||||
Litigation settlement amount | $ 55,000 |
Other Financial Information (De
Other Financial Information (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Prepaid Expenses and Other Current Assets [Abstract] | ||
Prepaid expenses | $ 456 | $ 319 |
Income tax receivable | 91 | 0 |
Materials, supplies and inventory | 205 | 236 |
Contract assets | 17 | 20 |
Other | 5 | 5 |
Total other current assets | 984 | 803 |
Other current assets, held for sale | 63 | 59 |
Acquisition Costs | ||
Prepaid Expenses and Other Current Assets [Abstract] | ||
Contract costs | 111 | 123 |
Fulfillment Costs | ||
Prepaid Expenses and Other Current Assets [Abstract] | ||
Contract costs | $ 99 | $ 100 |
Repurchases of Lumen Common S_2
Repurchases of Lumen Common Stock (Details) - USD ($) shares in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2023 | |
Equity [Abstract] | |||
Repurchase program, period (in years) | 2 years | ||
Repurchase program, authorized amount | $ 1,300,000,000 | $ 1,500,000,000 | $ 1,300,000,000 |
Number of shares repurchased | 0 | 0 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Schedule of the Entity's Accumulated Other Comprehensive Income (Loss) by Component (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | $ 10,437 | |||
Other comprehensive income (loss) before reclassifications | 20 | $ (125) | ||
Amounts reclassified from accumulated other comprehensive loss | 26 | 66 | ||
Other comprehensive income (loss) | $ 16 | $ (170) | 46 | (59) |
Balance at end of period | 2,284 | 12,219 | 2,284 | 12,219 |
Foreign Currency Translation Adjustment and Other | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (422) | (400) | ||
Other comprehensive income (loss) before reclassifications | 20 | (125) | ||
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | ||
Other comprehensive income (loss) | 20 | (125) | ||
Balance at end of period | (402) | (525) | (402) | (525) |
Interest Rate Swap | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (17) | |||
Other comprehensive income (loss) before reclassifications | 0 | |||
Amounts reclassified from accumulated other comprehensive loss | 17 | |||
Other comprehensive income (loss) | 17 | |||
Balance at end of period | 0 | 0 | ||
Accumulated Other Comprehensive Loss | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (1,069) | (2,047) | (1,099) | (2,158) |
Other comprehensive income (loss) | 16 | (170) | 46 | (59) |
Balance at end of period | (1,053) | (2,217) | (1,053) | (2,217) |
Pension Plans | Defined Benefit Plan | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (985) | (1,577) | ||
Other comprehensive income (loss) before reclassifications | 0 | 0 | ||
Amounts reclassified from accumulated other comprehensive loss | 36 | 46 | ||
Other comprehensive income (loss) | 36 | 46 | ||
Balance at end of period | (949) | (1,531) | (949) | (1,531) |
Post-Retirement Benefit Plans | Defined Benefit Plan | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 308 | (164) | ||
Other comprehensive income (loss) before reclassifications | 0 | 0 | ||
Amounts reclassified from accumulated other comprehensive loss | (10) | 3 | ||
Other comprehensive income (loss) | (10) | 3 | ||
Balance at end of period | $ 298 | $ (161) | $ 298 | $ (161) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss - Schedule of Reclassifications Out of Accumulated Other Comprehensive Income (Loss) by Component (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Reclassifications out of accumulated other comprehensive income loss by component | ||||
Interest expense | $ 294 | $ 337 | $ 573 | $ 689 |
Other income (expense), net | (16) | 122 | 24 | 52 |
Total before tax | 8,690 | (453) | 8,010 | (1,254) |
Income tax expense | 46 | 109 | 215 | 311 |
Net (loss) income | 8,736 | (344) | 8,225 | (943) |
Decrease (Increase) in Net Income | Interest rate swaps | ||||
Reclassifications out of accumulated other comprehensive income loss by component | ||||
Interest expense | 0 | 22 | ||
Income tax expense | 0 | (5) | ||
Net (loss) income | 0 | 17 | ||
Decrease (Increase) in Net Income | Net actuarial loss | ||||
Reclassifications out of accumulated other comprehensive income loss by component | ||||
Other income (expense), net | 21 | 30 | 41 | 67 |
Decrease (Increase) in Net Income | Prior service cost | ||||
Reclassifications out of accumulated other comprehensive income loss by component | ||||
Other income (expense), net | (3) | 0 | (7) | (1) |
Decrease (Increase) in Net Income | Defined benefit plan | ||||
Reclassifications out of accumulated other comprehensive income loss by component | ||||
Total before tax | 18 | 30 | 34 | 66 |
Income tax expense | (4) | (8) | (8) | (17) |
Net (loss) income | $ 14 | $ 22 | $ 26 | $ 49 |
Labor Union Contracts (Details)
Labor Union Contracts (Details) - Unionized Employees Concentration Risk | 6 Months Ended |
Jun. 30, 2023 | |
Total Number of Employees | |
Concentration risk | |
Concentration risk, percent (as a percent) | 20% |
Workforce Subject to Collective Bargaining Arrangements Expiring Within One Year | |
Concentration risk | |
Concentration risk, percent (as a percent) | 2% |