Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Aug. 01, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'CENTURYLINK, INC | ' |
Entity Central Index Key | '0000018926 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 570,164,804 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, except Share data in Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Income Statement [Abstract] | ' | ' | ' | ' |
OPERATING REVENUES | $4,541 | $4,525 | $9,079 | $9,038 |
OPERATING EXPENSES | ' | ' | ' | ' |
Cost of services and products (exclusive of depreciation and amortization) | 1,962 | 1,873 | 3,897 | 3,669 |
Selling, general and administrative | 831 | 814 | 1,674 | 1,632 |
Depreciation and amortization | 1,093 | 1,123 | 2,200 | 2,240 |
Total operating expenses | 3,886 | 3,810 | 7,771 | 7,541 |
OPERATING INCOME | 655 | 715 | 1,308 | 1,497 |
OTHER INCOME (EXPENSE) | ' | ' | ' | ' |
Interest expense | -325 | -325 | -656 | -641 |
Other income | -7 | 4 | 2 | 43 |
Total other income (expense) | -332 | -321 | -654 | -598 |
INCOME BEFORE INCOME TAX EXPENSE | 323 | 394 | 654 | 899 |
Income tax expense | 130 | 125 | 258 | 332 |
Net income | $193 | $269 | $396 | $567 |
BASIC AND DILUTED EARNINGS PER COMMON SHARE | ' | ' | ' | ' |
BASIC (in dollars per share) | $0.34 | $0.45 | $0.69 | $0.93 |
DILUTED (in dollars per share) | $0.34 | $0.44 | $0.69 | $0.92 |
DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $0.54 | $0.54 | $1.08 | $1.08 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ' | ' | ' | ' |
BASIC (in shares) | 567,915 | 604,302 | 571,225 | 611,862 |
DILUTED (in shares) | 569,032 | 605,602 | 572,244 | 613,338 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' | ' | ' |
Net income | $193 | $269 | $396 | $567 |
Items related to employee benefit plans: | ' | ' | ' | ' |
Change in net actuarial loss, net of $(2) and $(8) tax | 3 | 11 | 6 | 24 |
Change in net prior service credit, net of $(3), $—, $(5) and $(1) tax | 5 | 1 | 8 | 2 |
Foreign currency translation adjustment and other, net of $- and $(2) tax | 8 | -5 | 9 | -13 |
Other comprehensive income | 16 | 7 | 23 | 13 |
COMPREHENSIVE INCOME | $209 | $276 | $419 | $580 |
CONSOLIDATED_STATEMENTS_OF_COM1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' | ' | ' |
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Tax, Portion Attributable to Parent | ($2) | ($10) | ($4) | ($18) |
Change in net prior service credit, tax | -3 | 0 | -5 | -1 |
Foreign currency translation adjustment and other, tax | $0 | $2 | $0 | $0 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
CURRENT ASSETS | ' | ' |
Cash and cash equivalents | $181 | $168 |
Accounts receivable, less allowance of $145 and $155 | 1,986 | 1,977 |
Deferred income taxes, net | 803 | 1,165 |
Other | 628 | 597 |
Total current assets | 3,598 | 3,907 |
NET PROPERTY, PLANT AND EQUIPMENT | ' | ' |
Property, plant and equipment | 35,404 | 34,307 |
Accumulated depreciation | -16,969 | -15,661 |
Net property, plant and equipment | 18,435 | 18,646 |
GOODWILL AND OTHER ASSETS | ' | ' |
Goodwill | 20,674 | 20,674 |
Customer relationships, less accumulated amortization of $4,174 and $3,641 | 5,402 | 5,935 |
Other intangible assets, less accumulated amortization of $1,534 and $1,401 | 1,676 | 1,802 |
Other | 829 | 823 |
Total goodwill and other assets | 28,581 | 29,234 |
TOTAL ASSETS | 50,614 | 51,787 |
CURRENT LIABILITIES | ' | ' |
Current maturities of long-term debt | 1,188 | 785 |
Accounts payable | 1,153 | 1,111 |
Accrued expenses and other liabilities | ' | ' |
Salaries and benefits | 572 | 650 |
Income and other taxes | 342 | 339 |
Interest | 264 | 273 |
Other | 208 | 514 |
Advance billings and customer deposits | 716 | 737 |
Total current liabilities | 4,443 | 4,409 |
LONG-TERM DEBT | 19,771 | 20,181 |
DEFERRED CREDITS AND OTHER LIABILITIES | ' | ' |
Deferred income taxes, net | 4,610 | 4,753 |
Benefit plan obligations, net | 3,924 | 4,049 |
Other | 1,268 | 1,204 |
Total deferred credits and other liabilities | 9,802 | 10,006 |
COMMITMENTS AND CONTINGENCIES (Note 8) | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' |
Preferred stock—non-redeemable, $25.00 par value, authorized 2,000 shares, issued and outstanding 7 and 7 shares | 0 | 0 |
Common stock, $1.00 par value, authorized 1,600,000 and 1,600,000 shares, issued and outstanding 571,344 and 583,637 shares | 571 | 584 |
Additional paid-in capital | 16,671 | 17,343 |
Accumulated other comprehensive loss | -779 | -802 |
Retained earnings | 135 | 66 |
Total stockholders' equity | 16,598 | 17,191 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $50,614 | $51,787 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, except Share data in Thousands, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Accounts receivable, allowance | $145 | $155 |
Customer relationships, accumulated amortization (in dollars) | 4,174 | 3,641 |
Other intangible assets, accumulated amortization (in dollars) | $1,534 | $1,401 |
Preferred stock-non-redeemable, par value (in dollars per share) | $25 | $25 |
Preferred stock-non-redeemable, authorized shares (shares) | 2,000 | 2,000 |
Preferred stock-non-redeemable, issued shares (shares) | 7 | 7 |
Preferred stock-non-redeemable, outstanding shares (shares) | 7 | 7 |
Common stock, par value (in dollars per share) | $1 | $1 |
Common stock, authorized shares (shares) | 1,600,000 | 1,600,000 |
Common stock, shares, issued (shares) | 571,344 | 583,637 |
Common Stock, Shares, Outstanding | 571,344 | 583,637 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 6 Months Ended | |
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
OPERATING ACTIVITIES | ' | ' |
Net income | $396 | $567 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 2,200 | 2,240 |
Impairment of assets | 32 | 0 |
Deferred income taxes | 208 | 307 |
Provision for uncollectible accounts | 63 | 65 |
Gain on sale of intangible assets | 0 | -32 |
Net long-term debt premium amortization | -21 | -32 |
Changes in current assets and current liabilities: | ' | ' |
Accounts receivable | -72 | -48 |
Accounts payable | 75 | 123 |
Accrued income and other taxes | -11 | -11 |
Other current assets and other current liabilities, net | -356 | -163 |
Retirement benefits | -102 | -220 |
Changes in other noncurrent assets and liabilities, net | 66 | 48 |
Other, net | 31 | 12 |
Net cash provided by operating activities | 2,509 | 2,856 |
INVESTING ACTIVITIES | ' | ' |
Payments for property, plant and equipment and capitalized software | -1,401 | -1,410 |
Proceeds from sale of intangible assets or property | 0 | 75 |
Other, net | -18 | 23 |
Net cash used in investing activities | -1,419 | -1,312 |
FINANCING ACTIVITIES | ' | ' |
Net proceeds from issuance of long-term debt | 0 | 1,740 |
Repayments of Long-term Debt | -121 | -1,018 |
Net borrowings (payments) on credit facility | 120 | -775 |
Dividends paid | -616 | -661 |
Net proceeds from issuance of common stock | 32 | 40 |
Repurchase of common stock | -493 | -867 |
Other, net | 1 | 0 |
Net cash used in financing activities | -1,077 | -1,541 |
Net increase in cash and cash equivalents | 13 | 3 |
Cash and cash equivalents at beginning of period | 168 | 211 |
Cash and cash equivalents at end of period | 181 | 214 |
Supplemental cash flow information: | ' | ' |
Income taxes (paid), net | -23 | -46 |
Interest (paid) (net of capitalized interest of $22 and $18) | ($672) | ($647) |
CONSOLIDATED_STATEMENTS_OF_CAS1
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $) | 6 Months Ended | |
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Statement of Cash Flows [Abstract] | ' | ' |
Interest (paid), capitalized interest | $22 | $18 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Total | COMMON STOCK | ADDITIONAL PAID-IN CAPITAL | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | RETAINED EARNINGS |
In Millions, unless otherwise specified | |||||
Balance at Dec. 31, 2012 | ' | $626 | $19,079 | ($1,701) | $1,285 |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Issuance of common stock through dividend reinvestment, incentive and benefit plans | ' | 2 | 38 | ' | ' |
Repurchase of common stock | ' | -24 | -845 | ' | ' |
Shares withheld to satisfy tax withholdings | ' | ' | -16 | ' | ' |
Share-based compensation and other, net | ' | ' | 35 | ' | ' |
Other comprehensive income | 13 | ' | ' | 13 | ' |
Net income | 567 | ' | ' | ' | 567 |
Dividends declared | ' | ' | 0 | ' | -659 |
Balance at Jun. 30, 2013 | 18,400 | 604 | 18,291 | -1,688 | 1,193 |
Balance at Dec. 31, 2013 | 17,191 | 584 | 17,343 | -802 | 66 |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Issuance of common stock through dividend reinvestment, incentive and benefit plans | ' | 2 | 30 | ' | ' |
Repurchase of common stock | ' | -15 | -441 | ' | ' |
Shares withheld to satisfy tax withholdings | ' | ' | -14 | ' | ' |
Share-based compensation and other, net | ' | ' | 42 | ' | ' |
Other comprehensive income | 23 | ' | ' | 23 | ' |
Net income | 396 | ' | ' | ' | 396 |
Dividends declared | ' | ' | -289 | ' | -327 |
Balance at Jun. 30, 2014 | $16,598 | $571 | $16,671 | ($779) | $135 |
Basis_of_Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2014 | |
Basis of Presentation [Abstract] | ' |
Basis of Presentation | ' |
Basis of Presentation | |
General | |
We are an integrated communications company engaged primarily in providing an array of communications services to our residential, business, governmental and wholesale customers. Our communications services include local and long-distance, broadband, private line (including special access), Multiprotocol Label Switching ("MPLS"), data integration, managed hosting (including cloud hosting), colocation, Ethernet, network access, public access, wireless, video and other ancillary services. | |
Our consolidated balance sheet as of December 31, 2013, which was derived from our audited consolidated financial statements, and our unaudited interim consolidated financial statements provided herein have been prepared in accordance with the instructions for Form 10-Q. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission ("SEC"); however, in our opinion, the disclosures made are adequate to make the information presented not misleading. We believe that these consolidated financial statements include all normal recurring adjustments necessary to fairly present the results for the interim periods. The consolidated results of operations for the first six months of the year are not necessarily indicative of the consolidated results of operations that might be expected for the entire year. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2013. | |
The accompanying consolidated financial statements include our accounts and the accounts of our subsidiaries over which we exercise control. All intercompany amounts and transactions with our consolidated subsidiaries have been eliminated. | |
During the second quarter of 2014, we began negotiations of a sale-leaseback transaction of an office building and as a result of the indicated offer price we recorded an impairment charge of $16 million, which is included in selling, general and administrative expense in our consolidated statements of operations for the three and six months ended June 30, 2014. We evaluated the indicated offer price using market conditions and determined that it represented a level 3 estimate of the fair value of the building. The negotiations on the sale of the office building are not final and the sales price could still change. | |
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), (ii) equity attributable to noncontrolling interests in additional paid-in capital and (iii) cash flows attributable to noncontrolling interests in other, net financing activities. | |
We pay dividends out of retained earnings to the extent we have retained earnings on the date the dividend is declared. If the dividend is in excess of retained earnings balance on the declaration date, then the excess is recorded to paid-in capital. | |
We reclassified certain prior period amounts to conform to the current period presentation, including the categorization of our revenues and our segment expense reporting. See Note 7—Segment Information for additional information. These changes had no impact on total revenues, total operating expenses or net income for any period. | |
Change in Estimates | |
As a result of our annual reviews to evaluate the reasonableness of the depreciable lives for our property, plant and equipment, effective January 2014, we changed the estimates of the remaining economic lives of certain switch and circuit network equipment. These changes resulted in a net increase in depreciation expense of approximately $20 million and $39 million for the three and six months ended June 30, 2014, respectively, and are expected to result in a net increase in depreciation expense of approximately $78 million for the year ending December 31, 2014. This net increase in depreciation expense, net of tax, reduced consolidated net income by approximately $12 million, or $0.02 per basic and diluted common share, and $24 million, or $0.04 per basic and diluted common share, for the three and six months ended June 30, 2014, respectively, and is expected to reduce consolidated net income by approximately $48 million, or $0.08 per basic and diluted common share, for the year ending December 31, 2014. | |
During the fourth quarter 2013, we changed the estimates of the remaining economic lives of certain intangible assets, specifically, the Savvis trade name, which is no longer being utilized due to the previously announced trade name change from Savvis to CenturyLink Technology Solutions ("CTS"), and certain Savvis cloud software, which has been replaced by cloud software acquired through our more recent acquisitions. These changes resulted in a net increase in amortization expense of approximately $23 million for the six months ended June 30, 2014. This net increase in amortization expense, net of tax, reduced consolidated net income by approximately $14 million, or $0.02 per basic and diluted common share for the six months ended June 30, 2014. For the three months ended June 30, 2014, we recognized an immaterial amount of amortization expense on the Savvis cloud software. As of June 30, 2014, the Savvis trade name and the Savvis cloud software has been fully amortized. | |
Recent Accounting Pronouncements | |
On May 28, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09” or “new standard”). The new standard is effective for annual and interim periods beginning January 1, 2017, and early adoption is prohibited. ASU 2014-09 may be adopted by applying the provisions of the new standard on a retrospective basis to the periods included in the financial statements or on a modified retrospective basis which would result in the recognition of a cumulative effect of adopting ASU 2014-09 in the first quarter of 2017. We have not yet decided which implementation method we will adopt. | |
The new standard replaces virtually all existing generally accepted accounting principles (“GAAP”) on revenue recognition and replaces them with a principles-based approach for determining revenue recognition using a new five step model. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also includes new accounting principles related to the deferral and amortization of contract acquisition and fulfillment costs. We currently do not defer any contract acquisition costs and defer contract fulfillment costs only up to the extent of any revenue deferred. | |
We are studying the new standard and starting to evaluate and determine the impact the new standard will have on the timing of revenue recognition under our customer agreements and the amount of contract related costs that will be deferred. We cannot, however, provide any estimate of the impact of adopting the new standard at this time. |
LongTerm_Debt_and_Credit_Facil
Long-Term Debt and Credit Facilities | 6 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Debt Disclosure [Abstract] | ' | ||||||||||
Long-Term Debt and Credit Facilities | ' | ||||||||||
Long-Term Debt and Credit Facilities | |||||||||||
As of the dates indicated below, our long-term debt, including unamortized discounts and premiums, was as follows: | |||||||||||
Interest Rates | Maturities | 30-Jun-14 | 31-Dec-13 | ||||||||
(Dollars in millions) | |||||||||||
CenturyLink, Inc. | |||||||||||
Senior notes | 5.000% - 7.650% | 2015 - 2042 | $ | 7,825 | 7,825 | ||||||
Credit facility (1) | 2.160% - 4.250% | 2017 | 845 | 725 | |||||||
Term loan | 2.40% | 2019 | 391 | 402 | |||||||
Subsidiaries | |||||||||||
Qwest Communications International Inc. (2) | |||||||||||
Senior notes | 6.125% - 8.375% | 2014 - 2053 | 8,392 | 8,392 | |||||||
Embarq Corporation ("Embarq") | |||||||||||
Senior notes | 7.082% - 7.995% | 2016 - 2036 | 2,669 | 2,669 | |||||||
First mortgage bonds | 7.125% - 8.770% | 2017 - 2025 | 232 | 262 | |||||||
Other | 9.00% | 2019 | 150 | 150 | |||||||
Capital lease and other obligations | Various | Various | 553 | 619 | |||||||
Unamortized discounts, net | (98 | ) | (78 | ) | |||||||
Total long-term debt | 20,959 | 20,966 | |||||||||
Less current maturities | (1,188 | ) | (785 | ) | |||||||
Long-term debt, excluding current maturities | $ | 19,771 | 20,181 | ||||||||
______________________________________________________________________ | |||||||||||
-1 | The outstanding amounts of our credit facility ("Credit Facility") borrowings at June 30, 2014 and December 31, 2013 were $845 million and $725 million, respectively, with weighted average interest rates of 2.642% and 2.176%, respectively. These amounts change on a regular basis. | ||||||||||
-2 | The information presented here includes Qwest Corporation's senior notes of $7.411 billion and Qwest Capital Funding, Inc.'s senior notes of $981 million as of June 30, 2014 and December 31, 2013. | ||||||||||
Repayments | |||||||||||
On April 1, 2014, a subsidiary of Embarq Corporation ("Embarq") paid at maturity the $30 million principal amount of its 7.46% first mortgage bonds. | |||||||||||
Covenants | |||||||||||
As of June 30, 2014, we believe we were in compliance with the provisions and covenants contained in our Credit Facility and other material debt agreements. |
Severance_and_Leased_Real_Esta
Severance and Leased Real Estate | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
Restructuring and Related Activities [Abstract] | ' | ||||||
Severance and Leased Real Estate | ' | ||||||
Severance and Leased Real Estate | |||||||
Periodically, we have reductions in our workforce and have accrued liabilities for the related severance costs. These workforce reductions resulted primarily from the progression or completion of our post-acquisition integration plans, increased competitive pressures, cost reduction initiatives and reduced workload demands due to the loss of legacy revenues. | |||||||
We report severance liabilities within accrued expenses and other liabilities-salaries and benefits in our consolidated balance sheets and report severance expenses in cost of services and products and selling, general and administrative expenses in our consolidated statements of operations but, as noted in Note 7—Segment Information, we do not allocate these expenses to our segments. | |||||||
We have recognized liabilities to reflect our estimates of the fair values of the existing lease obligations for real estate which we have ceased using, net of estimated sublease rentals. Our fair value estimates were determined using discounted cash flow methods. We recognize expense to reflect accretion of the discounted liabilities and periodically we adjust the expense when our actual subleasing experience differs from our initial estimates. We report the current portion of liabilities for ceased-use real estate leases in accrued expenses and other liabilities-other and report the noncurrent portion in deferred credits and other liabilities in our consolidated balance sheets. We report the related expenses in selling, general and administrative expenses in our consolidated statements of operations. At June 30, 2014, the current and noncurrent portions of our leased real estate accrual were $16 million and $88 million, respectively. The remaining lease terms range from 0.6 to 11.5 years, with a weighted average of 8.6 years. | |||||||
Changes in our accrued liabilities for severance expenses and leased real estate were as follows: | |||||||
Severance | Real Estate | ||||||
(Dollars in millions) | |||||||
Balance at December 31, 2013 | $ | 17 | 113 | ||||
Accrued to expense | 51 | — | |||||
Payments, net | (46 | ) | (8 | ) | |||
Reversals and adjustments | — | (1 | ) | ||||
Balance at June 30, 2014 | $ | 22 | 104 | ||||
Employee_Benefits
Employee Benefits | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | ||||||||||||
Employee Benefits | ' | ||||||||||||
Employee Benefits | |||||||||||||
Net periodic (income) expense for our qualified and non-qualified pension plans included the following components: | |||||||||||||
Pension Plans | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
(Dollars in millions) | |||||||||||||
Service cost | $ | 19 | 23 | 39 | 48 | ||||||||
Interest cost | 151 | 135 | 302 | 270 | |||||||||
Expected return on plan assets | (223 | ) | (224 | ) | (446 | ) | (448 | ) | |||||
Recognition of prior service cost | 3 | 1 | 4 | 2 | |||||||||
Recognition of actuarial loss | 5 | 20 | 10 | 40 | |||||||||
Net periodic pension benefit income | $ | (45 | ) | (45 | ) | (91 | ) | (88 | ) | ||||
Net periodic expense (income) for our post-retirement benefit plans included the following components: | |||||||||||||
Post-Retirement Benefit Plans | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
(Dollars in millions) | |||||||||||||
Service cost | $ | 5 | 6 | 11 | 12 | ||||||||
Interest cost | 40 | 35 | 79 | 70 | |||||||||
Expected return on plan assets | (8 | ) | (10 | ) | (16 | ) | (20 | ) | |||||
Recognition of prior service cost | 5 | — | 9 | — | |||||||||
Recognition of actuarial loss | — | 1 | — | 2 | |||||||||
Net periodic post-retirement benefit expense | $ | 42 | 32 | 83 | 64 | ||||||||
We report net periodic benefit (income) expense for our qualified pension, non-qualified pension and post-retirement benefit plans in cost of services and products and selling, general and administrative expenses on our consolidated statements of operations. |
Earnings_per_Common_Share
Earnings per Common Share | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||
Earnings per Common Share | ' | ||||||||||||
Earnings Per Common Share | |||||||||||||
Basic and diluted earnings per common share for the three and six months ended June 30, 2014 and 2013 were calculated as follows: | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
(Dollars in millions, except per share amounts, shares in thousands) | |||||||||||||
Income (Numerator): | |||||||||||||
Net income | $ | 193 | 269 | 396 | 567 | ||||||||
Earnings applicable to non-vested restricted stock | — | — | — | — | |||||||||
Net income applicable to common stock for computing basic earnings per common share | 193 | 269 | 396 | 567 | |||||||||
Net income as adjusted for purposes of computing diluted earnings per common share | $ | 193 | 269 | 396 | 567 | ||||||||
Shares (Denominator): | |||||||||||||
Weighted average number of shares: | |||||||||||||
Outstanding during period | 572,240 | 607,755 | 575,218 | 615,138 | |||||||||
Non-vested restricted stock | (4,325 | ) | (3,453 | ) | (3,993 | ) | (3,276 | ) | |||||
Weighted average shares outstanding for computing basic earnings per common share | 567,915 | 604,302 | 571,225 | 611,862 | |||||||||
Incremental common shares attributable to dilutive securities: | |||||||||||||
Shares issuable under convertible securities | 10 | 10 | 10 | 10 | |||||||||
Shares issuable under incentive compensation plans | 1,107 | 1,290 | 1,009 | 1,466 | |||||||||
Number of shares as adjusted for purposes of computing diluted earnings per common share | 569,032 | 605,602 | 572,244 | 613,338 | |||||||||
Basic earnings per common share | $ | 0.34 | 0.45 | 0.69 | 0.93 | ||||||||
Diluted earnings per common share | $ | 0.34 | 0.44 | 0.69 | 0.92 | ||||||||
Our calculation of diluted earnings per common share excludes shares of common stock that are issuable upon exercise of stock options when the exercise price is greater than the average market price of our common stock during the periods reflected in the table above. Such potentially issuable shares averaged 2.4 million for the three months ended June 30, 2014 and 2013, and 2.8 million and 2.4 million for the six months ended June 30, 2014 and 2013, respectively. |
Fair_Value_Disclosure
Fair Value Disclosure | 6 Months Ended | ||||||||||||||
Jun. 30, 2014 | |||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||
Fair Value Disclosure | ' | ||||||||||||||
Fair Value Disclosure | |||||||||||||||
Our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and long-term debt, excluding capital lease obligations. Due to their short-term nature, the carrying amounts of our cash and cash equivalents, accounts receivable and accounts payable approximate their fair values. | |||||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between independent and knowledgeable parties who are willing and able to transact for an asset or liability at the measurement date. We use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs when determining fair value and then we rank the estimated values based on the reliability of the inputs used following the fair value hierarchy set forth by the FASB. | |||||||||||||||
We determined the fair values of our long-term debt, including the current portion, based on quoted market prices where available or, if not available, based on discounted future cash flows using current market interest rates. | |||||||||||||||
The three input levels in the hierarchy of fair value measurements are defined by the FASB generally as follows: | |||||||||||||||
Input Level | Description of Input | ||||||||||||||
Level 1 | Observable inputs such as quoted market prices in active markets. | ||||||||||||||
Level 2 | Inputs other than quoted prices in active markets that are either directly or indirectly observable. | ||||||||||||||
Level 3 | Unobservable inputs in which little or no market data exists. | ||||||||||||||
The following table presents the carrying amounts and estimated fair values of our long-term debt, excluding capital lease and other obligations, as well as the input level used to determine the fair values as of the dates indicated below: | |||||||||||||||
30-Jun-14 | 31-Dec-13 | ||||||||||||||
Input | Carrying | Fair | Carrying | Fair | |||||||||||
Level | Amount | Value | Amount | Value | |||||||||||
(Dollars in millions) | |||||||||||||||
Liabilities—Long-term debt, excluding capital lease and other obligations | 2 | $ | 20,406 | 21,692 | 20,347 | 20,413 | |||||||||
Segment_Information
Segment Information | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||
Segment Information | ' | ||||||||||||
Segment Information | |||||||||||||
We report the following four segments in our consolidated financial statements: consumer, business, wholesale and hosting. Each of the segments is described further below: | |||||||||||||
• | Consumer. Consists generally of providing strategic and legacy products and services to residential consumers. Our strategic products and services offered to these customers include our broadband, wireless and video services, including our PrismTM TV services. Our legacy services offered to these customers include local and long-distance services. | ||||||||||||
• | Business. Consists generally of providing strategic and legacy products and services to commercial, enterprise, global and governmental customers. Our strategic products and services offered to these customers include our private line, broadband, Ethernet, MPLS, Voice over Internet Protocol ("VoIP"), and network management services. Our legacy services offered to these customers include local and long-distance services. | ||||||||||||
• | Wholesale. Consists generally of providing strategic and legacy products and services to other communications providers. Our strategic products and services offered to these customers are mainly private line (including special access), dedicated internet access, digital subscriber line ("DSL") and MPLS. Our legacy services offered to these customers include resale of our local access services, the sale of unbundled network elements ("UNEs") which allow our wholesale customers the use of our network or a combination of our network and their own networks to provide voice and data services to their customers, long-distance and switched access services and other services, including billing and collection services, pole and floor space rentals, and database services. | ||||||||||||
• | Hosting. Consists primarily of providing colocation, managed hosting and cloud hosting services to commercial, enterprise, global, governmental and wholesale customers. | ||||||||||||
Our segment results are summarized below: | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
(Dollars in millions) | |||||||||||||
Total segment revenues | $ | 4,288 | 4,276 | 8,572 | 8,532 | ||||||||
Total segment expenses | 2,118 | 2,041 | 4,217 | 3,969 | |||||||||
Total segment income | $ | 2,170 | 2,235 | 4,355 | 4,563 | ||||||||
Total margin percentage | 51 | % | 52 | % | 51 | % | 53 | % | |||||
Consumer: | |||||||||||||
Revenues | $ | 1,500 | 1,494 | 3,009 | 3,005 | ||||||||
Expenses | 599 | 574 | 1,182 | 1,123 | |||||||||
Income | $ | 901 | 920 | 1,827 | 1,882 | ||||||||
Margin percentage | 60 | % | 62 | % | 61 | % | 63 | % | |||||
Business: | |||||||||||||
Revenues | $ | 1,564 | 1,525 | 3,123 | 3,030 | ||||||||
Expenses | 972 | 912 | 1,938 | 1,769 | |||||||||
Income | $ | 592 | 613 | 1,185 | 1,261 | ||||||||
Margin percentage | 38 | % | 40 | % | 38 | % | 42 | % | |||||
Wholesale: | |||||||||||||
Revenues | $ | 866 | 910 | 1,728 | 1,816 | ||||||||
Expenses | 283 | 301 | 559 | 575 | |||||||||
Income | $ | 583 | 609 | 1,169 | 1,241 | ||||||||
Margin percentage | 67 | % | 67 | % | 68 | % | 68 | % | |||||
Hosting: | |||||||||||||
Revenues | $ | 358 | 347 | 712 | 681 | ||||||||
Expenses | 264 | 254 | 538 | 502 | |||||||||
Income | $ | 94 | 93 | 174 | 179 | ||||||||
Margin percentage | 26 | % | 27 | % | 24 | % | 26 | % | |||||
During the first quarter of 2014, we adopted several changes with respect to the assignment of certain expenses to our segments. We have restated the previously reported segment results for the three and six months ended June 30, 2013, to conform to the current presentation. The nature of the most significant changes and the related effect on segment expenses for the three and six months ended June 30, 2013, are as follows: | |||||||||||||
• | The method for allocating certain shared costs of consumer sales and care, including bad debt expense and credit card fees, was revised, which resulted in an increase in consumer segment expenses of $22 million and $42 million with a corresponding decrease in business segment expenses for the three and six months ended June 30, 2013, respectively; and | ||||||||||||
• | Hosting segment expenses have been conformed to the reporting of our other segments’ expenses. Specifically, our integration efforts and centralization of certain administrative functions reached the point where it has become more practical to discontinue including certain finance, information technology, legal and human resources expenses in the hosting segment, which resulted in a decrease of $21 million and $39 million in hosting segment expenses for the three and six months ended June 30, 2013, respectively. | ||||||||||||
We categorize our products and services related to revenues into the following four categories: | |||||||||||||
• | Strategic services, which include primarily broadband, private line (including special access which we market to wholesale and business customers), MPLS (which is a data networking technology that can deliver the quality of service required to support real-time voice and video service), hosting (including cloud hosting and managed hosting), colocation, Ethernet, video (including resold satellite and our facilities-based video services), VoIP and Verizon Wireless services; | ||||||||||||
• | Legacy services, which include primarily local, long-distance, switched access, Integrated Services Digital Network ("ISDN") (which uses regular telephone lines to support voice, video and data applications) and traditional wide area network ("WAN") services (which allow a local communications network to link to networks in remote locations); | ||||||||||||
• | Data integration, which includes the sale of telecommunications equipment located on customers' premises and related professional services, such as network management, installation and maintenance of data equipment and building of proprietary fiber-optic broadband networks for our governmental and business customers; and | ||||||||||||
• | Other revenues, which consist primarily of Universal Service Fund ("USF") revenue and surcharges. Unlike the first three revenue categories, other revenues are not included in our segment revenues. | ||||||||||||
Our operating revenues for our products and services consisted of the following categories: | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
(Dollars in millions) | |||||||||||||
Strategic services | $ | 2,298 | 2,186 | 4,579 | 4,350 | ||||||||
Legacy services | 1,803 | 1,923 | 3,632 | 3,875 | |||||||||
Data integration | 187 | 167 | 361 | 307 | |||||||||
Other | 253 | 249 | 507 | 506 | |||||||||
Total operating revenues | $ | 4,541 | 4,525 | 9,079 | 9,038 | ||||||||
During 2013, operating revenues attributable to portions of certain bundled services were revised from legacy services to strategic services. Specifically, the revision resulted in a reduction of revenues from legacy services of $33 million and $64 million and a corresponding increase in revenues from strategic services for the three and six months ended June 30, 2013, respectively. The revision was in response to over-allocating a percentage of the discounts to broadband services revenues and under-allocating a percentage of the discounts to local and long-distance services revenues under bundled services arrangements, which resulted in strategic services revenues being understated and legacy services revenues being overstated. | |||||||||||||
During 2013, operating revenues attributable to certain Competitive Local Exchange Carrier ("CLEC") services were revised from strategic services to legacy services. Specifically, the revision resulted in a reduction of revenue from strategic services of $10 million and $19 million and a corresponding increase in revenues from legacy services for the three and six months ended June 30, 2013, respectively. The revision was in response to recording certain legacy services revenues generated through CLEC services arrangements as strategic services revenues, which resulted in strategic services revenues being overstated and legacy services revenues being understated. | |||||||||||||
Other operating revenues include revenues from universal service funds, which allow us to recover a portion of our costs under federal and state cost recovery mechanisms, and certain surcharges to our customers, including billings for our required contributions to several USF programs. We also generate other operating revenues from leasing and subleasing of space in our office buildings, warehouses and other properties. Because we centrally manage the activities that generate these other operating revenues, we do not allocate these revenues to any of our four segments presented above. | |||||||||||||
We recognize revenue in our statement of operations for certain USF surcharges and transaction taxes that we bill to our customers. Our statement of operations also reflects the related expense for the amounts we remit to the government agencies. The total amount of such surcharges that we included in revenue aggregated approximately $136 million and $121 million for the three months ended June 30, 2014 and 2013, respectively, and approximately $267 million and $249 million for the six months ended June 30, 2014 and 2013, respectively. Those USF surcharges where we record revenue are included in the "other" operating revenues and transaction tax surcharges are included in "legacy services" revenues. We also act as a collection agent for certain other USF and transaction taxes that we are required by government agencies to include in our bills to customers, for which we do not record any revenue or expense because we only act as a pass-through agent. | |||||||||||||
Our segment revenues include all revenues from our strategic, legacy and data integration operations as described in more detail above. We assign each of our customers to a single segment and report all of the revenues we derive from that customer to that segment, with the exception of hosting revenue generated from business and wholesale customers, which is reported as hosting segment revenues. We report our segment expenses for our four segments as follows: | |||||||||||||
• | Direct expenses, which primarily are specific expenses incurred as a direct result of providing services and products to segment customers, along with selling, general and administrative expenses that are directly associated with specific segment customers or activities; and | ||||||||||||
• | Allocated expenses, which include network expenses, facilities expenses and other expenses such as fleet and real estate expenses. | ||||||||||||
We do not assign depreciation and amortization expense or impairments to our segments, as the related assets and capital expenditures are centrally managed and are not monitored by or reported to the chief operating decision maker ("CODM") by segment. Similarly, we do not assign to our segments severance expenses, restructuring expenses and certain centrally managed administrative functions (such as finance, information technology, legal and human resources). Interest expense is also excluded from segment results because we manage our financing on a total company basis and have not allocated assets or debt to specific segments. Similarly, we exclude other income (expense) from our segment results. | |||||||||||||
The following table reconciles segment income to net income: | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
(Dollars in millions) | |||||||||||||
Total segment income | $ | 2,170 | 2,235 | 4,355 | 4,563 | ||||||||
Other operating revenues | 253 | 249 | 507 | 506 | |||||||||
Depreciation and amortization | (1,093 | ) | (1,123 | ) | (2,200 | ) | (2,240 | ) | |||||
Other unassigned operating expenses | (675 | ) | (646 | ) | (1,354 | ) | (1,332 | ) | |||||
Other income (expense), net | (332 | ) | (321 | ) | (654 | ) | (598 | ) | |||||
Income tax expense | (130 | ) | (125 | ) | (258 | ) | (332 | ) | |||||
Net income | $ | 193 | 269 | 396 | 567 | ||||||||
We do not have any single customer that provides more than 10% of our total operating revenues. Substantially all of our revenues come from customers located in the United States. |
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
Commitments and Contingencies | |
We are vigorously defending against all of the matters described below. As a matter of course, we are prepared both to litigate the matters to judgment, as well as to evaluate and consider all reasonable settlement opportunities. In this Note, when we refer to a class action as "putative" it is because a class has been alleged, but not certified in that matter. We have established accrued liabilities for the matters described below where losses are deemed probable and reasonably estimable. | |
Pending Matters | |
In William Douglas Fulghum, et al. v. Embarq Corporation, et al., filed on December 28, 2007 in the United States District Court for the District of Kansas, a group of retirees filed a putative class action lawsuit challenging the decision to make certain modifications in retiree benefits programs relating to life insurance, medical insurance and prescription drug benefits, generally effective January 1, 2006 and January 1, 2008 (which, at the time of the modifications, was expected to reduce estimated future expenses for the subject benefits by more than $300 million). Defendants include Embarq, certain of its benefit plans, its Employee Benefits Committee and the individual plan administrator of certain of its benefits plans. Additional defendants include Sprint Nextel and certain of its benefit plans. The Court certified a class on certain of plaintiffs' claims, but rejected class certification as to other claims. On October 14, 2011, the Fulghum lawyers filed a new, related lawsuit, Abbott et al. v. Sprint Nextel et al. In Abbott, approximately 1,500 plaintiffs allege breach of fiduciary duty in connection with the changes in retiree benefits that also are at issue in the Fulghum case. The Abbott plaintiffs are all members of the class that was certified in Fulghum on claims for allegedly vested benefits (Counts I and III), and the Abbott claims are similar to the Fulghum breach of fiduciary duty claim (Count II), on which the Fulghum court denied class certification. The Court has stayed proceedings in Abbott indefinitely, except for limited discovery and motion practice as to approximately 80 of the plaintiffs. On February 14, 2013, the Fulghum court dismissed the majority of the plaintiffs' claims in that case. On July 16, 2013, the Fulghum court granted plaintiffs' request to seek interlocutory review by the United States Court of Appeals for the Tenth Circuit. Embarq and the other defendants will defend the appeal, continue to vigorously contest any remaining claims in Fulghum and seek to have the claims in the Abbott case dismissed on similar grounds. We have not accrued a liability for these matters because we believe it is premature (i) to determine whether an accrual is warranted and (ii) if so, to determine a reasonable estimate of probable liability. | |
In December 2009, subsidiaries of CenturyLink filed two lawsuits against subsidiaries of Sprint Nextel to recover terminating access charges for VoIP traffic owed under various interconnection agreements and tariffs which originally approximated $34 million in the aggregate. In connection with the first lawsuit, a federal court in Virginia issued a ruling in our favor, which resulted in Sprint paying us approximately $24 million. The other lawsuit is pending in federal court in Louisiana. In that case, in early 2011 the Court dismissed certain of CenturyLink's claims, referred other claims to the Federal Communications Commission ("FCC"), and stayed the litigation. In April 2012, Sprint Nextel filed a petition with the FCC, seeking a declaratory ruling that CenturyLink's access charges do not apply to VoIP originated calls, and earlier this year, CenturyLink filed a complaint with the Missouri Public Service Commission to collect the portion of the remaining unpaid charges arising in that state. We have not deferred any revenue recognition related to these matters. | |
On July 16, 2013, Comcast MO Group, Inc. ("Comcast") filed a lawsuit in Colorado state court against Qwest Communications International, Inc. ("Qwest"). Comcast alleges Qwest breached the parties' 1998 tax sharing agreement ("TSA") when it refused to partially indemnify Comcast for a tax liability settlement Comcast reached with the Commonwealth of Massachusetts in a dispute to which we were not a party. Comcast seeks approximately $80 million in damages, excluding interest. Qwest and Comcast are parties to the TSA in their capacities as successors to the TSA's original parties, U S WEST, Inc., a telecommunications company, and MediaOne Group, Inc., a cable television company, respectively. We have not accrued a liability for this matter because we do not believe that liability is probable. | |
On September 13, 2006, Cargill Financial Markets, Plc ("Cargill") and Citibank, N.A. ("Citibank") filed a lawsuit in the District Court of Amsterdam, the Netherlands, against Qwest, Koninklijke KPN N.V., KPN Telecom B.V., and other former officers, employees or supervisory board members of KPNQwest N.V. ("KPNQwest"), some of whom were formerly affiliated with Qwest. The lawsuit alleges that defendants misrepresented KPNQwest's financial and business condition in connection with the origination of a credit facility and wrongfully allowed KPNQwest to borrow funds under that facility. Plaintiffs allege damages of approximately €219 million (or approximately $299 million based on the exchange rate on June 30, 2014). The value of this claim will be reduced to the degree plaintiffs receive recovery from a distribution of assets from the bankruptcy estate of KPNQwest. The extent of such expected recovery is not yet known. On April 25, 2012, the court issued its judgment denying the claims asserted by Cargill and Citibank in their lawsuit. Cargill and Citibank are appealing that decision. We do not believe that liability is probable in this matter. | |
The terms and conditions of applicable bylaws, certificates or articles of incorporation, agreements or applicable law may obligate Qwest to indemnify its former directors, officers or employees with respect to the Cargill matter described above, and Qwest has been advancing legal fees and costs to certain former directors, officers or employees in connection with that matter. | |
Several putative class actions relating to the installation of fiber optic cable in certain rights-of-way were filed against Qwest on behalf of landowners on various dates and in courts located in 34 states in which Qwest has such cable (Alabama, Arizona, California, Colorado, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, and Wisconsin.) For the most part, the complaints challenge our right to install our fiber optic cable in railroad rights-of-way. The complaints allege that the railroads own the right-of-way as an easement that did not include the right to permit us to install our cable in the right-of-way without the plaintiffs' consent. In general, the complaints seek damages on theories of trespass and unjust enrichment, as well as punitive damages. After previous attempts to enter into a single nationwide settlement in a single court proved unsuccessful, the parties proceeded to seek court approval of settlements on a state-by-state basis. To date, the parties have received final approval of such settlements in 30 states. The settlement administration process, including claim submission and evaluation, is continuing in relation to a number of these settlements. The parties have not yet received either preliminary or final approval in two states where an action is pending (Texas and Massachusetts) and two states where actions were at one time, but are not currently, pending (Arizona and New Mexico). We have accrued an amount that we believe is probable for resolving these matters; however, the amount is not material to our consolidated financial statements. | |
CenturyLink and certain of its affiliates are defendants in one consolidated securities and four shareholder derivative actions. The actions are pending in federal court in the Western District of Louisiana. Plaintiffs in these actions have variously alleged, among other things, that CenturyLink and certain of its current and former officers and directors violated federal securities laws and/or breached fiduciary duties owed to the Company and its shareholders. Plaintiffs' complaints focus on alleged material misstatements or omissions concerning CenturyLink's financial condition and changes in CenturyLink's capital allocation strategy in early 2013. These matters are in preliminary phases and the Company intends to defend against the filed actions vigorously. We have not accrued a liability for these matters as it is premature (i) to determine whether an accrual is warranted and (ii) if so, to determine a reasonable estimate of probable liability. | |
Other Proceedings and Disputes | |
From time to time, we are involved in other proceedings incidental to our business, including patent infringement allegations, administrative hearings of state public utility commissions relating primarily to our rates or services, actions relating to employee claims, various tax issues, environmental law issues, grievance hearings before labor regulatory agencies, and miscellaneous third party tort actions. The outcome of these other proceedings is not predictable. However, based on current circumstances, we do not believe that the ultimate resolution of these other proceedings, after considering available defenses and any insurance coverage or indemnification rights, will have a material adverse effect on our financial position, results of operations or cash flows. | |
We are currently defending several patent infringement lawsuits asserted against us by non-practicing entities. These cases have progressed to various stages and one or more may go to trial in the coming 24 months if they are not otherwise resolved. Where applicable, we are seeking full or partial indemnification from our vendors and suppliers. As with all litigation, we are vigorously defending these actions and, as a matter of course, are prepared both to litigate the matters to judgment, as well as to evaluate and consider all reasonable settlement opportunities. | |
We are aware of disputes and litigation within the industry, including litigation against us, regarding the proper charges to be applied between interexchange and local exchange carriers for certain calls between mobile and wireline devices that are routed through an interexchange carrier. Some carriers are refusing to pay these access charges and some are seeking refunds of past charges paid. As both an interexchange carrier and a local exchange carrier, we both pay and assess significant amounts of the charges in question. The outcome of these disputes and litigation are currently not predictable. If we are required to stop assessing these charges or to pay refunds of any such charges, our financial results could be negatively affected. |
Other_Financial_Information
Other Financial Information | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
Additional Financial Information Disclosure [Abstract] | ' | ||||||
Other financial information | ' | ||||||
Other Financial Information | |||||||
Other Current Assets | |||||||
The following table presents details of other current assets in our consolidated balance sheets as of the dates indicated below: | |||||||
June 30, | 31-Dec-13 | ||||||
2014 | |||||||
(Dollars in millions) | |||||||
Prepaid expenses | $ | 284 | 266 | ||||
Materials, supplies and inventory | 132 | 167 | |||||
Assets held for sale | 54 | 26 | |||||
Deferred activation and installation charges | 102 | 94 | |||||
Other | 56 | 44 | |||||
Total other current assets | $ | 628 | 597 | ||||
Assets held for sale includes several properties that we expect to sell within the next twelve months. During the second quarter of 2014, we began discussions to sell our 700 MHz A-Block wireless spectrum licenses, which we purchased in 2008 but never placed into service. As a result of changes in market conditions and prevailing spectrum prices, we recorded a second quarter 2014 impairment charge of $14 million, which is included in other (expense) income, net in our consolidated statements of operations for the three and six months ended June 30, 2014. As of June 30, 2014, we reclassified the remaining $39 million of wireless spectrum assets from other intangible assets to assets held for sale, as we anticipate completing the sale of such assets within one year. We evaluated spectrum prices using market conditions to determine a level 3 estimate of the fair value of the wireless spectrum licenses. In July 2014, we entered into a definitive agreement to sell and assign our remaining 700 MHz A-Block wireless spectrum licenses for $39 million in cash in the aggregate. The sale is expected to close within one year, subject to regulatory approval and other customary closing conditions. | |||||||
Selected Current Liabilities | |||||||
Current liabilities reflected in our consolidated balance sheets include accounts payable and other current liabilities as of the dates indicated below: | |||||||
June 30, | 31-Dec-13 | ||||||
2014 | |||||||
(Dollars in millions) | |||||||
Accounts payable | $ | 1,153 | 1,111 | ||||
Other current liabilities: | |||||||
Accrued rent | $ | 38 | 52 | ||||
Legal reserves | 24 | 273 | |||||
Other | 146 | 189 | |||||
Total other current liabilities | $ | 208 | 514 | ||||
Included in accounts payable at June 30, 2014 and December 31, 2013, were $84 million and $88 million, respectively, representing book overdrafts and $107 million and $140 million, respectively, associated with capital expenditures. Included in legal reserves at December 31, 2013, was $235 million related to the then tentative settlement agreement with the trustees in the KPNQwest Dutch bankruptcy proceeding. In February 2014, we paid approximately €171 million (or approximately $235 million) to settle this proceeding. |
Repurchase_of_CenturyLink_Comm
Repurchase of CenturyLink Common Stock | 6 Months Ended |
Jun. 30, 2014 | |
Equity [Abstract] | ' |
Repurchase of CenturyLink Common Stock | ' |
Repurchase of CenturyLink Common Stock | |
In February 2013, our Board of Directors authorized us to repurchase up to $2 billion of our outstanding common stock. During the six months ended June 30, 2014, we repurchased 13.7 million shares of our outstanding common stock in the open market under our 2013 repurchase program. These shares were repurchased for an aggregate market price of $433 million, or an average purchase price of $31.54 per share. The repurchased common stock has been retired. On May 29, 2014, we completed the 2013 stock repurchase program, repurchasing over the course of the program a total of 59.5 million shares on the open market at an average purchase price of $33.63 per share. | |
In February 2014, our Board of Directors authorized a new 24-month program to repurchase up to an aggregate of $1 billion of our outstanding common stock. This new program took effect on May 29, 2014, immediately upon the completion of the above-described 2013 stock repurchase program. During the three months ended June 30, 2014, we repurchased 1.2 million shares of our outstanding common stock in the open market under our 2014 stock repurchase program. These shares were repurchased for an aggregate market price of $45 million, or an average purchase price of $37.07 per share. The repurchased common stock has been retired. These repurchased shares exclude shares that, as of June 30, 2014, we had agreed to purchase under this program for an aggregate market price of $6 million, or an average purchase price of $36.09 per share, in transactions that settled early in the third quarter of 2014. As of June 30, 2014, we had approximately $955 million remaining available for stock repurchases under the 2014 stock repurchase program. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ' | ||||||||||||
Other Comprehensive Earnings | ' | ||||||||||||
Accumulated Other Comprehensive Loss | |||||||||||||
The tables below summarize changes in accumulated other comprehensive loss recorded on our consolidated balance sheets by component for the three and six months ended June 30, 2014: | |||||||||||||
Pension Plans | Post-Retirement | Foreign Currency | Total | ||||||||||
Benefit Plans | Translation | ||||||||||||
Adjustment | |||||||||||||
and Other | |||||||||||||
(Dollars in millions) | |||||||||||||
Balance at March 31, 2014 | $ | (666 | ) | (119 | ) | (10 | ) | (795 | ) | ||||
Other comprehensive income before reclassifications | — | — | 8 | 8 | |||||||||
Amounts reclassified from accumulated other comprehensive income | 5 | 3 | — | 8 | |||||||||
Net current-period other comprehensive income | 5 | 3 | 8 | 16 | |||||||||
Balance at June 30, 2014 | $ | (661 | ) | (116 | ) | (2 | ) | (779 | ) | ||||
Pension Plans | Post-Retirement | Foreign Currency | Total | ||||||||||
Benefit Plans | Translation | ||||||||||||
Adjustment | |||||||||||||
and Other | |||||||||||||
(Dollars in millions) | |||||||||||||
Balance at December 31, 2013 | $ | (669 | ) | (122 | ) | (11 | ) | (802 | ) | ||||
Other comprehensive income before reclassifications | — | — | 9 | 9 | |||||||||
Amounts reclassified from accumulated other comprehensive income | 8 | 6 | — | 14 | |||||||||
Net current-period other comprehensive income | 8 | 6 | 9 | 23 | |||||||||
Balance at June 30, 2014 | $ | (661 | ) | (116 | ) | (2 | ) | (779 | ) | ||||
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, 2014: | |||||||||||||
Three Months Ended June 30, 2014 | (Decrease) Increase | Affected Line Item in Consolidated Statement of | |||||||||||
in Net Income | Operations or Footnote Where Additional | ||||||||||||
Information is Presented If The Amount is not | |||||||||||||
Recognized in Net Income in Total | |||||||||||||
(Dollars in millions) | |||||||||||||
Amortization of pension & post-retirement plans | |||||||||||||
Net actuarial loss | $ | (5 | ) | See Note 4-Employee Benefits | |||||||||
Prior service cost | (8 | ) | See Note 4-Employee Benefits | ||||||||||
Total before tax | (13 | ) | |||||||||||
Income tax expense (benefit) | 5 | Income tax expense | |||||||||||
Net of tax | $ | (8 | ) | ||||||||||
Six Months Ended June 30, 2014 | (Decrease) Increase | Affected Line Item in Consolidated Statement of | |||||||||||
in Net Income | Operations or Footnote Where Additional | ||||||||||||
Information is Presented If The Amount is not | |||||||||||||
Recognized in Net Income in Total | |||||||||||||
(Dollars in millions) | |||||||||||||
Amortization of pension & post-retirement plans | |||||||||||||
Net actuarial loss | $ | (10 | ) | See Note 4-Employee Benefits | |||||||||
Prior service cost | (13 | ) | See Note 4-Employee Benefits | ||||||||||
Total before tax | (23 | ) | |||||||||||
Income tax expense (benefit) | 9 | Income tax expense | |||||||||||
Net of tax | $ | (14 | ) | ||||||||||
The tables below summarize changes in accumulated other comprehensive loss recorded on our consolidated balance sheets by component for the three and six months ended June 30, 2013: | |||||||||||||
Pension Plans | Post-Retirement | Foreign Currency | Total | ||||||||||
Benefit Plans | Translation | ||||||||||||
Adjustment | |||||||||||||
and Other | |||||||||||||
(Dollars in millions) | |||||||||||||
Balance at March 31, 2013 | $ | (1,386 | ) | (288 | ) | (21 | ) | (1,695 | ) | ||||
Other comprehensive income before reclassifications | — | — | (6 | ) | (6 | ) | |||||||
Amounts reclassified from accumulated other comprehensive income | 12 | — | 1 | 13 | |||||||||
Net current-period other comprehensive income | 12 | — | (5 | ) | 7 | ||||||||
Balance at June 30, 2013 | $ | (1,374 | ) | (288 | ) | (26 | ) | (1,688 | ) | ||||
Pension Plans | Post-Retirement | Foreign Currency | Total | ||||||||||
Benefit Plans | Translation | ||||||||||||
Adjustment | |||||||||||||
and Other | |||||||||||||
(Dollars in millions) | |||||||||||||
Balance at December 31, 2012 | $ | (1,399 | ) | (289 | ) | (13 | ) | (1,701 | ) | ||||
Other comprehensive income before reclassifications | — | — | (14 | ) | (14 | ) | |||||||
Amounts reclassified from accumulated other comprehensive income | 25 | 1 | 1 | 27 | |||||||||
Net current-period other comprehensive income | 25 | 1 | (13 | ) | 13 | ||||||||
Balance at June 30, 2013 | $ | (1,374 | ) | (288 | ) | (26 | ) | (1,688 | ) | ||||
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, 2013: | |||||||||||||
Three Months Ended June 30, 2013 | (Decrease) Increase | Affected Line Item in Consolidated Statement of | |||||||||||
in Net Income | Operations or Footnote Where Additional | ||||||||||||
Information is Presented If The Amount is not | |||||||||||||
Recognized in Net Income in Total | |||||||||||||
(Dollars in millions) | |||||||||||||
Amortization of pension & post-retirement plans | |||||||||||||
Net actuarial loss | $ | (21 | ) | See Note 4-Employee Benefits | |||||||||
Prior service cost | (1 | ) | See Note 4-Employee Benefits | ||||||||||
Total before tax | (22 | ) | |||||||||||
Income tax expense (benefit) | 10 | Income tax expense | |||||||||||
Insignificant items | (1 | ) | |||||||||||
Net of tax | $ | (13 | ) | ||||||||||
Six Months Ended June 30, 2013 | (Decrease) Increase | Affected Line Item in Consolidated Statement of | |||||||||||
in Net Income | Operations or Footnote Where Additional | ||||||||||||
Information is Presented If The Amount is not | |||||||||||||
Recognized in Net Income in Total | |||||||||||||
(Dollars in millions) | |||||||||||||
Amortization of pension & post-retirement plans | |||||||||||||
Net actuarial loss | $ | (42 | ) | See Note 4-Employee Benefits | |||||||||
Prior service cost | (2 | ) | See Note 4-Employee Benefits | ||||||||||
Total before tax | (44 | ) | |||||||||||
Income tax expense (benefit) | 18 | Income tax expense | |||||||||||
Insignificant items | (1 | ) | |||||||||||
Net of tax | $ | (27 | ) |
Basis_of_Presentation_Basis_of
Basis of Presentation Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2014 | |
Basis of Presentation [Abstract] | ' |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
On May 28, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09” or “new standard”). The new standard is effective for annual and interim periods beginning January 1, 2017, and early adoption is prohibited. ASU 2014-09 may be adopted by applying the provisions of the new standard on a retrospective basis to the periods included in the financial statements or on a modified retrospective basis which would result in the recognition of a cumulative effect of adopting ASU 2014-09 in the first quarter of 2017. We have not yet decided which implementation method we will adopt. | |
The new standard replaces virtually all existing generally accepted accounting principles (“GAAP”) on revenue recognition and replaces them with a principles-based approach for determining revenue recognition using a new five step model. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also includes new accounting principles related to the deferral and amortization of contract acquisition and fulfillment costs. We currently do not defer any contract acquisition costs and defer contract fulfillment costs only up to the extent of any revenue deferred. | |
We are studying the new standard and starting to evaluate and determine the impact the new standard will have on the timing of revenue recognition under our customer agreements and the amount of contract related costs that will be deferred. We cannot, however, provide any estimate of the impact of adopting the new standard at this time. |
LongTerm_Debt_and_Credit_Facil1
Long-Term Debt and Credit Facilities (Tables) | 6 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Debt Disclosure [Abstract] | ' | ||||||||||
Schedule of long-term debt including unamortized discounts and premiums | ' | ||||||||||
As of the dates indicated below, our long-term debt, including unamortized discounts and premiums, was as follows: | |||||||||||
Interest Rates | Maturities | 30-Jun-14 | 31-Dec-13 | ||||||||
(Dollars in millions) | |||||||||||
CenturyLink, Inc. | |||||||||||
Senior notes | 5.000% - 7.650% | 2015 - 2042 | $ | 7,825 | 7,825 | ||||||
Credit facility (1) | 2.160% - 4.250% | 2017 | 845 | 725 | |||||||
Term loan | 2.40% | 2019 | 391 | 402 | |||||||
Subsidiaries | |||||||||||
Qwest Communications International Inc. (2) | |||||||||||
Senior notes | 6.125% - 8.375% | 2014 - 2053 | 8,392 | 8,392 | |||||||
Embarq Corporation ("Embarq") | |||||||||||
Senior notes | 7.082% - 7.995% | 2016 - 2036 | 2,669 | 2,669 | |||||||
First mortgage bonds | 7.125% - 8.770% | 2017 - 2025 | 232 | 262 | |||||||
Other | 9.00% | 2019 | 150 | 150 | |||||||
Capital lease and other obligations | Various | Various | 553 | 619 | |||||||
Unamortized discounts, net | (98 | ) | (78 | ) | |||||||
Total long-term debt | 20,959 | 20,966 | |||||||||
Less current maturities | (1,188 | ) | (785 | ) | |||||||
Long-term debt, excluding current maturities | $ | 19,771 | 20,181 | ||||||||
______________________________________________________________________ | |||||||||||
-1 | The outstanding amounts of our credit facility ("Credit Facility") borrowings at June 30, 2014 and December 31, 2013 were $845 million and $725 million, respectively, with weighted average interest rates of 2.642% and 2.176%, respectively. These amounts change on a regular basis. | ||||||||||
-2 | The information presented here includes Qwest Corporation's senior notes of $7.411 billion and Qwest Capital Funding, Inc.'s senior notes of $981 million as of June 30, 2014 and December 31, 2013. |
Severance_and_Leased_Real_Esta1
Severance and Leased Real Estate (Tables) | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
Restructuring and Related Activities [Abstract] | ' | ||||||
Schedule of changes in accrued liabilities for severance expenses and leased real estate | ' | ||||||
Changes in our accrued liabilities for severance expenses and leased real estate were as follows: | |||||||
Severance | Real Estate | ||||||
(Dollars in millions) | |||||||
Balance at December 31, 2013 | $ | 17 | 113 | ||||
Accrued to expense | 51 | — | |||||
Payments, net | (46 | ) | (8 | ) | |||
Reversals and adjustments | — | (1 | ) | ||||
Balance at June 30, 2014 | $ | 22 | 104 | ||||
Employee_Benefits_Tables
Employee Benefits (Tables) | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | ||||||||||||
Schedule of components of net periodic pension benefit (income) expense and post-retirement benefit expense | ' | ||||||||||||
Net periodic (income) expense for our qualified and non-qualified pension plans included the following components: | |||||||||||||
Pension Plans | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
(Dollars in millions) | |||||||||||||
Service cost | $ | 19 | 23 | 39 | 48 | ||||||||
Interest cost | 151 | 135 | 302 | 270 | |||||||||
Expected return on plan assets | (223 | ) | (224 | ) | (446 | ) | (448 | ) | |||||
Recognition of prior service cost | 3 | 1 | 4 | 2 | |||||||||
Recognition of actuarial loss | 5 | 20 | 10 | 40 | |||||||||
Net periodic pension benefit income | $ | (45 | ) | (45 | ) | (91 | ) | (88 | ) | ||||
Net periodic expense (income) for our post-retirement benefit plans included the following components: | |||||||||||||
Post-Retirement Benefit Plans | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
(Dollars in millions) | |||||||||||||
Service cost | $ | 5 | 6 | 11 | 12 | ||||||||
Interest cost | 40 | 35 | 79 | 70 | |||||||||
Expected return on plan assets | (8 | ) | (10 | ) | (16 | ) | (20 | ) | |||||
Recognition of prior service cost | 5 | — | 9 | — | |||||||||
Recognition of actuarial loss | — | 1 | — | 2 | |||||||||
Net periodic post-retirement benefit expense | $ | 42 | 32 | 83 | 64 | ||||||||
Earnings_per_Common_Share_Tabl
Earnings per Common Share (Tables) | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||
Schedule of basic and diluted earnings per common share | ' | ||||||||||||
Basic and diluted earnings per common share for the three and six months ended June 30, 2014 and 2013 were calculated as follows: | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
(Dollars in millions, except per share amounts, shares in thousands) | |||||||||||||
Income (Numerator): | |||||||||||||
Net income | $ | 193 | 269 | 396 | 567 | ||||||||
Earnings applicable to non-vested restricted stock | — | — | — | — | |||||||||
Net income applicable to common stock for computing basic earnings per common share | 193 | 269 | 396 | 567 | |||||||||
Net income as adjusted for purposes of computing diluted earnings per common share | $ | 193 | 269 | 396 | 567 | ||||||||
Shares (Denominator): | |||||||||||||
Weighted average number of shares: | |||||||||||||
Outstanding during period | 572,240 | 607,755 | 575,218 | 615,138 | |||||||||
Non-vested restricted stock | (4,325 | ) | (3,453 | ) | (3,993 | ) | (3,276 | ) | |||||
Weighted average shares outstanding for computing basic earnings per common share | 567,915 | 604,302 | 571,225 | 611,862 | |||||||||
Incremental common shares attributable to dilutive securities: | |||||||||||||
Shares issuable under convertible securities | 10 | 10 | 10 | 10 | |||||||||
Shares issuable under incentive compensation plans | 1,107 | 1,290 | 1,009 | 1,466 | |||||||||
Number of shares as adjusted for purposes of computing diluted earnings per common share | 569,032 | 605,602 | 572,244 | 613,338 | |||||||||
Basic earnings per common share | $ | 0.34 | 0.45 | 0.69 | 0.93 | ||||||||
Diluted earnings per common share | $ | 0.34 | 0.44 | 0.69 | 0.92 | ||||||||
Fair_Value_Disclosure_Tables
Fair Value Disclosure (Tables) | 6 Months Ended | ||||||||||||||
Jun. 30, 2014 | |||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||
Schedule of the three input levels in the hierarchy of fair value measurements | ' | ||||||||||||||
The three input levels in the hierarchy of fair value measurements are defined by the FASB generally as follows: | |||||||||||||||
Input Level | Description of Input | ||||||||||||||
Level 1 | Observable inputs such as quoted market prices in active markets. | ||||||||||||||
Level 2 | Inputs other than quoted prices in active markets that are either directly or indirectly observable. | ||||||||||||||
Level 3 | Unobservable inputs in which little or no market data exists. | ||||||||||||||
Schedule of carrying amounts and estimated fair values of long-term debt, excluding capital lease obligations, and input level to determine fair values | ' | ||||||||||||||
The following table presents the carrying amounts and estimated fair values of our long-term debt, excluding capital lease and other obligations, as well as the input level used to determine the fair values as of the dates indicated below: | |||||||||||||||
30-Jun-14 | 31-Dec-13 | ||||||||||||||
Input | Carrying | Fair | Carrying | Fair | |||||||||||
Level | Amount | Value | Amount | Value | |||||||||||
(Dollars in millions) | |||||||||||||||
Liabilities—Long-term debt, excluding capital lease and other obligations | 2 | $ | 20,406 | 21,692 | 20,347 | 20,413 | |||||||||
Segment_Information_Tables
Segment Information (Tables) | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||
Schedule of segment results | ' | ||||||||||||
Our segment results are summarized below: | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
(Dollars in millions) | |||||||||||||
Total segment revenues | $ | 4,288 | 4,276 | 8,572 | 8,532 | ||||||||
Total segment expenses | 2,118 | 2,041 | 4,217 | 3,969 | |||||||||
Total segment income | $ | 2,170 | 2,235 | 4,355 | 4,563 | ||||||||
Total margin percentage | 51 | % | 52 | % | 51 | % | 53 | % | |||||
Consumer: | |||||||||||||
Revenues | $ | 1,500 | 1,494 | 3,009 | 3,005 | ||||||||
Expenses | 599 | 574 | 1,182 | 1,123 | |||||||||
Income | $ | 901 | 920 | 1,827 | 1,882 | ||||||||
Margin percentage | 60 | % | 62 | % | 61 | % | 63 | % | |||||
Business: | |||||||||||||
Revenues | $ | 1,564 | 1,525 | 3,123 | 3,030 | ||||||||
Expenses | 972 | 912 | 1,938 | 1,769 | |||||||||
Income | $ | 592 | 613 | 1,185 | 1,261 | ||||||||
Margin percentage | 38 | % | 40 | % | 38 | % | 42 | % | |||||
Wholesale: | |||||||||||||
Revenues | $ | 866 | 910 | 1,728 | 1,816 | ||||||||
Expenses | 283 | 301 | 559 | 575 | |||||||||
Income | $ | 583 | 609 | 1,169 | 1,241 | ||||||||
Margin percentage | 67 | % | 67 | % | 68 | % | 68 | % | |||||
Hosting: | |||||||||||||
Revenues | $ | 358 | 347 | 712 | 681 | ||||||||
Expenses | 264 | 254 | 538 | 502 | |||||||||
Income | $ | 94 | 93 | 174 | 179 | ||||||||
Margin percentage | 26 | % | 27 | % | 24 | % | 26 | % | |||||
Schedule of operating revenues by products and services | ' | ||||||||||||
Our operating revenues for our products and services consisted of the following categories: | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
(Dollars in millions) | |||||||||||||
Strategic services | $ | 2,298 | 2,186 | 4,579 | 4,350 | ||||||||
Legacy services | 1,803 | 1,923 | 3,632 | 3,875 | |||||||||
Data integration | 187 | 167 | 361 | 307 | |||||||||
Other | 253 | 249 | 507 | 506 | |||||||||
Total operating revenues | $ | 4,541 | 4,525 | 9,079 | 9,038 | ||||||||
Schedule of reconciliation of segment income to net income | ' | ||||||||||||
The following table reconciles segment income to net income: | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
(Dollars in millions) | |||||||||||||
Total segment income | $ | 2,170 | 2,235 | 4,355 | 4,563 | ||||||||
Other operating revenues | 253 | 249 | 507 | 506 | |||||||||
Depreciation and amortization | (1,093 | ) | (1,123 | ) | (2,200 | ) | (2,240 | ) | |||||
Other unassigned operating expenses | (675 | ) | (646 | ) | (1,354 | ) | (1,332 | ) | |||||
Other income (expense), net | (332 | ) | (321 | ) | (654 | ) | (598 | ) | |||||
Income tax expense | (130 | ) | (125 | ) | (258 | ) | (332 | ) | |||||
Net income | $ | 193 | 269 | 396 | 567 | ||||||||
Other_Financial_Information_Ta
Other Financial Information (Tables) | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
Additional Financial Information Disclosure [Abstract] | ' | ||||||
Schedule of components of other current assets | ' | ||||||
The following table presents details of other current assets in our consolidated balance sheets as of the dates indicated below: | |||||||
June 30, | 31-Dec-13 | ||||||
2014 | |||||||
(Dollars in millions) | |||||||
Prepaid expenses | $ | 284 | 266 | ||||
Materials, supplies and inventory | 132 | 167 | |||||
Assets held for sale | 54 | 26 | |||||
Deferred activation and installation charges | 102 | 94 | |||||
Other | 56 | 44 | |||||
Total other current assets | $ | 628 | 597 | ||||
Schedule of current liabilities including accounts payable and other current liabilities | ' | ||||||
Current liabilities reflected in our consolidated balance sheets include accounts payable and other current liabilities as of the dates indicated below: | |||||||
June 30, | 31-Dec-13 | ||||||
2014 | |||||||
(Dollars in millions) | |||||||
Accounts payable | $ | 1,153 | 1,111 | ||||
Other current liabilities: | |||||||
Accrued rent | $ | 38 | 52 | ||||
Legal reserves | 24 | 273 | |||||
Other | 146 | 189 | |||||
Total other current liabilities | $ | 208 | 514 | ||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ' | ||||||||||||
Summary of the entity's accumulated other comprehensive income (loss) by component | ' | ||||||||||||
The tables below summarize changes in accumulated other comprehensive loss recorded on our consolidated balance sheets by component for the three and six months ended June 30, 2013: | |||||||||||||
Pension Plans | Post-Retirement | Foreign Currency | Total | ||||||||||
Benefit Plans | Translation | ||||||||||||
Adjustment | |||||||||||||
and Other | |||||||||||||
(Dollars in millions) | |||||||||||||
Balance at March 31, 2013 | $ | (1,386 | ) | (288 | ) | (21 | ) | (1,695 | ) | ||||
Other comprehensive income before reclassifications | — | — | (6 | ) | (6 | ) | |||||||
Amounts reclassified from accumulated other comprehensive income | 12 | — | 1 | 13 | |||||||||
Net current-period other comprehensive income | 12 | — | (5 | ) | 7 | ||||||||
Balance at June 30, 2013 | $ | (1,374 | ) | (288 | ) | (26 | ) | (1,688 | ) | ||||
Pension Plans | Post-Retirement | Foreign Currency | Total | ||||||||||
Benefit Plans | Translation | ||||||||||||
Adjustment | |||||||||||||
and Other | |||||||||||||
(Dollars in millions) | |||||||||||||
Balance at December 31, 2012 | $ | (1,399 | ) | (289 | ) | (13 | ) | (1,701 | ) | ||||
Other comprehensive income before reclassifications | — | — | (14 | ) | (14 | ) | |||||||
Amounts reclassified from accumulated other comprehensive income | 25 | 1 | 1 | 27 | |||||||||
Net current-period other comprehensive income | 25 | 1 | (13 | ) | 13 | ||||||||
Balance at June 30, 2013 | $ | (1,374 | ) | (288 | ) | (26 | ) | (1,688 | ) | ||||
The tables below summarize changes in accumulated other comprehensive loss recorded on our consolidated balance sheets by component for the three and six months ended June 30, 2014: | |||||||||||||
Pension Plans | Post-Retirement | Foreign Currency | Total | ||||||||||
Benefit Plans | Translation | ||||||||||||
Adjustment | |||||||||||||
and Other | |||||||||||||
(Dollars in millions) | |||||||||||||
Balance at March 31, 2014 | $ | (666 | ) | (119 | ) | (10 | ) | (795 | ) | ||||
Other comprehensive income before reclassifications | — | — | 8 | 8 | |||||||||
Amounts reclassified from accumulated other comprehensive income | 5 | 3 | — | 8 | |||||||||
Net current-period other comprehensive income | 5 | 3 | 8 | 16 | |||||||||
Balance at June 30, 2014 | $ | (661 | ) | (116 | ) | (2 | ) | (779 | ) | ||||
Pension Plans | Post-Retirement | Foreign Currency | Total | ||||||||||
Benefit Plans | Translation | ||||||||||||
Adjustment | |||||||||||||
and Other | |||||||||||||
(Dollars in millions) | |||||||||||||
Balance at December 31, 2013 | $ | (669 | ) | (122 | ) | (11 | ) | (802 | ) | ||||
Other comprehensive income before reclassifications | — | — | 9 | 9 | |||||||||
Amounts reclassified from accumulated other comprehensive income | 8 | 6 | — | 14 | |||||||||
Net current-period other comprehensive income | 8 | 6 | 9 | 23 | |||||||||
Balance at June 30, 2014 | $ | (661 | ) | (116 | ) | (2 | ) | (779 | ) | ||||
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, 2014: | |||||||||||||
Three Months Ended June 30, 2014 | (Decrease) Increase | Affected Line Item in Consolidated Statement of | |||||||||||
in Net Income | Operations or Footnote Where Additional | ||||||||||||
Information is Presented If The Amount is not | |||||||||||||
Recognized in Net Income in Total | |||||||||||||
(Dollars in millions) | |||||||||||||
Amortization of pension & post-retirement plans | |||||||||||||
Net actuarial loss | $ | (5 | ) | See Note 4-Employee Benefits | |||||||||
Prior service cost | (8 | ) | See Note 4-Employee Benefits | ||||||||||
Total before tax | (13 | ) | |||||||||||
Income tax expense (benefit) | 5 | Income tax expense | |||||||||||
Net of tax | $ | (8 | ) | ||||||||||
Six Months Ended June 30, 2014 | (Decrease) Increase | Affected Line Item in Consolidated Statement of | |||||||||||
in Net Income | Operations or Footnote Where Additional | ||||||||||||
Information is Presented If The Amount is not | |||||||||||||
Recognized in Net Income in Total | |||||||||||||
(Dollars in millions) | |||||||||||||
Amortization of pension & post-retirement plans | |||||||||||||
Net actuarial loss | $ | (10 | ) | See Note 4-Employee Benefits | |||||||||
Prior service cost | (13 | ) | See Note 4-Employee Benefits | ||||||||||
Total before tax | (23 | ) | |||||||||||
Income tax expense (benefit) | 9 | Income tax expense | |||||||||||
Net of tax | $ | (14 | ) | ||||||||||
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, 2013: | |||||||||||||
Three Months Ended June 30, 2013 | (Decrease) Increase | Affected Line Item in Consolidated Statement of | |||||||||||
in Net Income | Operations or Footnote Where Additional | ||||||||||||
Information is Presented If The Amount is not | |||||||||||||
Recognized in Net Income in Total | |||||||||||||
(Dollars in millions) | |||||||||||||
Amortization of pension & post-retirement plans | |||||||||||||
Net actuarial loss | $ | (21 | ) | See Note 4-Employee Benefits | |||||||||
Prior service cost | (1 | ) | See Note 4-Employee Benefits | ||||||||||
Total before tax | (22 | ) | |||||||||||
Income tax expense (benefit) | 10 | Income tax expense | |||||||||||
Insignificant items | (1 | ) | |||||||||||
Net of tax | $ | (13 | ) | ||||||||||
Six Months Ended June 30, 2013 | (Decrease) Increase | Affected Line Item in Consolidated Statement of | |||||||||||
in Net Income | Operations or Footnote Where Additional | ||||||||||||
Information is Presented If The Amount is not | |||||||||||||
Recognized in Net Income in Total | |||||||||||||
(Dollars in millions) | |||||||||||||
Amortization of pension & post-retirement plans | |||||||||||||
Net actuarial loss | $ | (42 | ) | See Note 4-Employee Benefits | |||||||||
Prior service cost | (2 | ) | See Note 4-Employee Benefits | ||||||||||
Total before tax | (44 | ) | |||||||||||
Income tax expense (benefit) | 18 | Income tax expense | |||||||||||
Insignificant items | (1 | ) | |||||||||||
Net of tax | $ | (27 | ) |
Basis_of_Presentation_Basis_of1
Basis of Presentation Basis of Presentation (Details) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
In Millions, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2014 |
Change in estimates of economic lives of property, plant and equipment | Change in estimates of economic lives of property, plant and equipment | Change in estimates of economic lives of intangible assets | Forecast | |||||
Change in estimates of economic lives of property, plant and equipment | ||||||||
Change in Accounting Estimate [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation | ' | ' | ' | ' | $20 | $39 | ' | $78 |
Amortization | ' | ' | ' | ' | ' | ' | 23 | ' |
Change in net income for change in accounting estimate | ($193) | ($269) | ($396) | ($567) | $12 | $24 | $14 | $48 |
Earnings per share, basic and diluted | ' | ' | ' | ' | $0.02 | $0.04 | $0.02 | $0.08 |
Basis_of_Presentation_Basis_of2
Basis of Presentation Basis of Presentation - (Details 2) (Office building, USD $) | 3 Months Ended | 6 Months Ended |
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2014 |
Office building | ' | ' |
Impaired Long-Lived Assets Held and Used [Line Items] | ' | ' |
Impairment of office building | $16 | $16 |
LongTerm_Debt_and_Credit_Facil2
Long-Term Debt and Credit Facilities (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Apr. 01, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | CenturyLink, Inc. | CenturyLink, Inc. | CenturyLink, Inc. | CenturyLink, Inc. | CenturyLink, Inc. | CenturyLink, Inc. | CenturyLink, Inc. | CenturyLink, Inc. | CenturyLink, Inc. | CenturyLink, Inc. | Qwest Communications International Inc. | Qwest Communications International Inc. | Qwest Communications International Inc. | Qwest Communications International Inc. | Qwest Capital Funding, Inc. | Qwest Corporation | Embarq | Embarq | Embarq | Embarq | Embarq | Embarq | Embarq | Embarq | Embarq | Embarq | Embarq | ||
Senior notes | Senior notes | Senior notes | Senior notes | Credit facility | Credit facility | Credit facility | Credit facility | Term loan | Term loan | Senior notes | Senior notes | Senior notes | Senior notes | Senior notes | Senior notes | Senior notes | Senior notes | Senior notes | Senior notes | First mortgage bonds | First mortgage bonds | First mortgage bonds | First mortgage bonds | Notes, 7.460 percent due 2014 | Other | Other | |||
Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | ||||||||||||||||||||
Long-term Debt and Credit Facilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total long-term debt | ' | ' | $7,825 | $7,825 | ' | ' | $845 | $725 | ' | ' | $391 | $402 | $8,392 | $8,392 | ' | ' | $981 | $7,411 | $2,669 | $2,669 | ' | ' | $232 | $262 | ' | ' | ' | $150 | $150 |
Long-term debt, weighted average interest rate | ' | ' | ' | ' | ' | ' | 2.64% | 2.18% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Capital lease and other obligations | 553 | 619 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized (discounts) premiums and other, net | 98 | 78 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total long-term debt | 20,959 | 20,966 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Less current maturities | -1,188 | -785 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term debt, excluding current maturities | 19,771 | 20,181 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stated interest rate (as a percent) | ' | ' | ' | ' | 5.00% | 7.65% | ' | ' | ' | ' | ' | ' | ' | ' | 6.13% | 8.38% | ' | ' | ' | ' | 7.08% | 8.00% | ' | ' | 7.13% | 8.77% | 7.46% | 9.00% | ' |
Interest rate at period end (percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.40% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate at period end (percent) | ' | ' | ' | ' | ' | ' | ' | ' | 2.16% | 4.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, repurchased face amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $30 | ' | ' |
Severance_and_Leased_Real_Esta2
Severance and Leased Real Estate (Details) (USD $) | 6 Months Ended |
In Millions, unless otherwise specified | Jun. 30, 2014 |
Severance | ' |
Restructuring reserve | ' |
Balance at the beginning of the period | $17 |
Accrued to expense | 51 |
Payments, net | -46 |
Reversals and adjustments | 0 |
Balance at the end of the period | 22 |
Leased real estate | ' |
Leased Real Estate | ' |
Current portion of leased real estate accrual | 16 |
Noncurrent portion of leased real estate accrual | 88 |
Restructuring reserve | ' |
Balance at the beginning of the period | 113 |
Accrued to expense | 0 |
Payments, net | -8 |
Reversals and adjustments | -1 |
Balance at the end of the period | $104 |
Ceased-use leased real estate accrual | Leased real estate | Minimum | ' |
Leased Real Estate | ' |
Remaining lease terms | '7 months 6 days |
Ceased-use leased real estate accrual | Leased real estate | Maximum | ' |
Leased Real Estate | ' |
Remaining lease terms | '11 years 6 months |
Ceased-use leased real estate accrual | Leased real estate | Weighted average | ' |
Leased Real Estate | ' |
Weighted average lease terms | '8 years 7 months |
Employee_Benefits_Details
Employee Benefits (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Pension plans | ' | ' | ' | ' |
Components of net periodic (benefit) expense | ' | ' | ' | ' |
Service cost | $19 | $23 | $39 | $48 |
Interest cost | 151 | 135 | 302 | 270 |
Expected return on plan assets | -223 | -224 | -446 | -448 |
Recognition of prior service cost | 3 | 1 | 4 | 2 |
Recognition of actuarial loss | 5 | 20 | 10 | 40 |
Net periodic benefit (income) expense | -45 | -45 | -91 | -88 |
Post-retirement benefit plans | ' | ' | ' | ' |
Components of net periodic (benefit) expense | ' | ' | ' | ' |
Service cost | 5 | 6 | 11 | 12 |
Interest cost | 40 | 35 | 79 | 70 |
Expected return on plan assets | -8 | -10 | -16 | -20 |
Recognition of prior service cost | 5 | 0 | 9 | 0 |
Recognition of actuarial loss | 0 | 1 | 0 | 2 |
Net periodic benefit (income) expense | $42 | $32 | $83 | $64 |
Earnings_per_Common_Share_Deta
Earnings per Common Share (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Income (Numerator): | ' | ' | ' | ' |
Net income | $193 | $269 | $396 | $567 |
Earnings applicable to non-vested restricted stock | 0 | 0 | 0 | 0 |
Net income applicable to common stock for computing basic earnings per common share | 193 | 269 | 396 | 567 |
Net income as adjusted for purposes of computing diluted earnings per common share | $193 | $269 | $396 | $567 |
Weighted average number of shares: | ' | ' | ' | ' |
Outstanding during period (in shares) | 572,240,000 | 607,755,000 | 575,218,000 | 615,138,000 |
Non-vested restricted stock (in shares) | -4,325,000 | -3,453,000 | -3,993,000 | -3,276,000 |
Weighted average shares outstanding for computing basic (loss) earnings per common share (in shares) | 567,915,000 | 604,302,000 | 571,225,000 | 611,862,000 |
Incremental common shares attributable to dilutive securities: | ' | ' | ' | ' |
Shares issuable under convertible securities (in shares) | 10,000 | 10,000 | 10,000 | 10,000 |
Shares issuable under incentive compensation plans (in shares) | 1,107,000 | 1,290,000 | 1,009,000 | 1,466,000 |
Number of shares as adjusted for purposes of computing diluted (loss) earnings per common share (in shares) | 569,032,000 | 605,602,000 | 572,244,000 | 613,338,000 |
Basic earnings per common share: | ' | ' | ' | ' |
Basic (loss) earnings per common share (in dollars per share) | $0.34 | $0.45 | $0.69 | $0.93 |
Diluted earnings per common share: | ' | ' | ' | ' |
Diluted (loss) earnings per common share (in dollars per share) | $0.34 | $0.44 | $0.69 | $0.92 |
Stock option awards | ' | ' | ' | ' |
Diluted earnings per common share: | ' | ' | ' | ' |
Number of shares of common stock excluded from the computation of diluted earnings per share (in shares) | 2,400,000 | 2,400,000 | 2,800,000 | 2,400,000 |
Fair_Value_Disclosure_Details
Fair Value Disclosure (Details) (Fair value inputs, Level 2, USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Carrying amount | ' | ' |
Liabilities | ' | ' |
Liabilities - Long-term debt, excluding capital lease obligations | $20,406 | $20,347 |
Fair value | ' | ' |
Liabilities | ' | ' |
Liabilities - Long-term debt, excluding capital lease obligations | $21,692 | $20,413 |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
segment | ||||
Segment information | ' | ' | ' | ' |
Number of operating segments (segments) | ' | ' | 4 | ' |
Other operating revenue | $4,541 | $4,525 | $9,079 | $9,038 |
Expenses | 3,886 | 3,810 | 7,771 | 7,541 |
OPERATING INCOME | 655 | 715 | 1,308 | 1,497 |
Operating segments | ' | ' | ' | ' |
Segment information | ' | ' | ' | ' |
Other operating revenue | 4,288 | 4,276 | 8,572 | 8,532 |
Expenses | 2,118 | 2,041 | 4,217 | 3,969 |
OPERATING INCOME | 2,170 | 2,235 | 4,355 | 4,563 |
Margin percentage (percent) | 51.00% | 52.00% | 51.00% | 53.00% |
Consumer | ' | ' | ' | ' |
Segment information | ' | ' | ' | ' |
Other operating revenue | 1,500 | 1,494 | 3,009 | 3,005 |
Expenses | 599 | 574 | 1,182 | 1,123 |
OPERATING INCOME | 901 | 920 | 1,827 | 1,882 |
Margin percentage (percent) | 60.00% | 62.00% | 61.00% | 63.00% |
Intersegment expense reclassification adjustment | ' | 22 | ' | 42 |
Business | ' | ' | ' | ' |
Segment information | ' | ' | ' | ' |
Other operating revenue | 1,564 | 1,525 | 3,123 | 3,030 |
Expenses | 972 | 912 | 1,938 | 1,769 |
OPERATING INCOME | 592 | 613 | 1,185 | 1,261 |
Margin percentage (percent) | 38.00% | 40.00% | 38.00% | 42.00% |
Intersegment expense reclassification adjustment | ' | -22 | ' | -42 |
Wholesale | ' | ' | ' | ' |
Segment information | ' | ' | ' | ' |
Other operating revenue | 866 | 910 | 1,728 | 1,816 |
Expenses | 283 | 301 | 559 | 575 |
OPERATING INCOME | 583 | 609 | 1,169 | 1,241 |
Margin percentage (percent) | 67.00% | 67.00% | 68.00% | 68.00% |
Hosting | ' | ' | ' | ' |
Segment information | ' | ' | ' | ' |
Other operating revenue | 358 | 347 | 712 | 681 |
Expenses | 264 | 254 | 538 | 502 |
OPERATING INCOME | 94 | 93 | 174 | 179 |
Margin percentage (percent) | 26.00% | 27.00% | 24.00% | 26.00% |
Intersegment expense reclassification adjustment | ' | ($21) | ' | ($39) |
Segment_Information_Details_2
Segment Information (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
category | ||||
Operating revenues by products and services | ' | ' | ' | ' |
Number of groups of products and services (categories) | ' | ' | 4 | ' |
Number of groups of products and services included in segment revenue (categories) | ' | ' | 3 | ' |
Other operating revenue | $4,541 | $4,525 | $9,079 | $9,038 |
Surcharge amount on customers' bills | 136 | 121 | 267 | 249 |
Strategic services | ' | ' | ' | ' |
Operating revenues by products and services | ' | ' | ' | ' |
Other operating revenue | 2,298 | 2,186 | 4,579 | 4,350 |
Products and services categories reclassification adjustment | ' | 33 | ' | 64 |
Legacy services | ' | ' | ' | ' |
Operating revenues by products and services | ' | ' | ' | ' |
Other operating revenue | 1,803 | 1,923 | 3,632 | 3,875 |
Products and services categories reclassification adjustment | ' | 10 | ' | 19 |
Data integration | ' | ' | ' | ' |
Operating revenues by products and services | ' | ' | ' | ' |
Other operating revenue | 187 | 167 | 361 | 307 |
Other | ' | ' | ' | ' |
Operating revenues by products and services | ' | ' | ' | ' |
Other operating revenue | $253 | $249 | $507 | $506 |
Segment_Information_Details_3
Segment Information (Details 3) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Reconciliation from segment income to net income | ' | ' | ' | ' |
Total segment income | $655 | $715 | $1,308 | $1,497 |
Depreciation and amortization | -1,093 | -1,123 | -2,200 | -2,240 |
Other unassigned operating expenses | -831 | -814 | -1,674 | -1,632 |
Other income (expense), net | -332 | -321 | -654 | -598 |
Income tax expense | -130 | -125 | -258 | -332 |
Net income | 193 | 269 | 396 | 567 |
Operating segments | ' | ' | ' | ' |
Reconciliation from segment income to net income | ' | ' | ' | ' |
Total segment income | 2,170 | 2,235 | 4,355 | 4,563 |
Unallocated amount to segment | ' | ' | ' | ' |
Reconciliation from segment income to net income | ' | ' | ' | ' |
Other operating revenues | 253 | 249 | 507 | 506 |
Depreciation and amortization | 1,093 | 1,123 | 2,200 | 2,240 |
Other unassigned operating expenses | 675 | 646 | 1,354 | 1,332 |
Other income (expense), net | -332 | -321 | -654 | -598 |
Income tax expense | $130 | $125 | $258 | $332 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) | 12 Months Ended | 24 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2009 | Dec. 31, 2007 | Jun. 30, 2014 | Jul. 17, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 |
Pending litigation related to Federal Communications Act | Pending litigation related to Federal Communications Act | William Douglas Fulghum, et al. v. Embarq Corporation | Abbott et al. v. Sprint Nextel et al. | Comcast | Cargill Financial Markets, Plc and Citibank, N.A. | Cargill Financial Markets, Plc and Citibank, N.A. | Fiber-optic cable installation | Securities actions | Derivative actions | |
CenturyLink, Inc. | CenturyLink, Inc. | Embarq | Embarq | Qwest Communications International Inc. | Qwest Communications International Inc. | Qwest Communications International Inc. | Qwest Communications International Inc. | CenturyLink, Inc. | CenturyLink, Inc. | |
USD ($) | USD ($) | USD ($) | plaintiff | USD ($) | USD ($) | EUR (€) | state | security | lawsuit | |
Loss Contingencies | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Charges claimed against Sprint Nextel | ' | $34 | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from Legal Settlements | 24 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Effect of modifications made to Embarq's benefits program, greater than | ' | ' | 300 | ' | ' | ' | ' | ' | ' | ' |
Number of plaintiffs have alleged breach of fiduciary duty (plaintiffs) | ' | ' | ' | 1,500 | ' | ' | ' | ' | ' | ' |
Litigation Matters Assumed in Qwest Acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Damages sought by plaintiff | ' | ' | ' | ' | $80 | $299 | € 219 | ' | ' | ' |
Number of states in which service is provided (states) | ' | ' | ' | ' | ' | ' | ' | 34 | ' | ' |
Number of states in which final approval of settlements received (states) | ' | ' | ' | ' | ' | ' | ' | 30 | ' | ' |
Number of states in which preliminary or final approval of settlements have not yet been received (states) | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' |
Number of states in which actions are not currently pending | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' |
Number of securities actions | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' |
Number of shareholder derivative actions | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 |
Other_Financial_Information_De
Other Financial Information (Details) (Wireless spectrum licenses, USD $) | 3 Months Ended | 6 Months Ended |
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2014 |
Wireless spectrum licenses | ' | ' |
Schedule of Impaired Long-Lived Assets Held for Sale | ' | ' |
Impairment of indefinite-lived intangible assets | $14 | $14 |
Other_Financial_Information_Ot
Other Financial Information Other Financial Information (Details 2) (Qwest Communications International Inc., KPNQwest) | 1 Months Ended | ||
In Millions, unless otherwise specified | Feb. 27, 2014 | Feb. 27, 2014 | Dec. 31, 2013 |
USD ($) | EUR (€) | USD ($) | |
Loss Contingencies | ' | ' | ' |
Legal reserve, KPNQwest litigation settlement | ' | ' | $235 |
Payments for legal settlements | $235 | € 171 | ' |
Other_Financial_Information_Ot1
Other Financial Information Other Financial Information - Current Assets and Current Liabilities (Details 3) (USD $) | 6 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Dec. 31, 2013 | Jul. 28, 2014 | Jun. 30, 2014 |
Wireless spectrum licenses | Wireless spectrum licenses | |||
Subsequent event | Fair value inputs, Level 3 | |||
Other Current Assets | ' | ' | ' | ' |
Prepaid expenses | $284 | $266 | ' | ' |
Materials, Supplies, and Other | 132 | 167 | ' | ' |
Assets held-for-sale, current | 54 | 26 | ' | 39 |
Deferred activation and installation charges | 102 | 94 | ' | ' |
Other | 56 | 44 | ' | ' |
Total other current assets | 628 | 597 | ' | ' |
Selected Current Liabilities | ' | ' | ' | ' |
Accounts payable | 1,153 | 1,111 | ' | ' |
Other Current Liabilities | ' | ' | ' | ' |
Accrued rent | 38 | 52 | ' | ' |
Legal reserves | 24 | 273 | ' | ' |
Other | 146 | 189 | ' | ' |
Total other current liabilities | 208 | 514 | ' | ' |
Current Liabilities | ' | ' | ' | ' |
Book overdraft balance | 84 | 88 | ' | ' |
Capital Expenditures Incurred but Not yet Paid | 107 | 140 | ' | ' |
Sales Price per Sales Agreement | ' | ' | ' | ' |
Sale price specified in definitive sales agreement | ' | ' | $39 | ' |
Repurchase_of_CenturyLink_Comm1
Repurchase of CenturyLink Common Stock (Details) (USD $) | 1 Months Ended | 6 Months Ended | 16 Months Ended | 1 Months Ended | 6 Months Ended |
Share data in Millions, except Per Share data, unless otherwise specified | Feb. 28, 2013 | Jun. 30, 2014 | 31-May-14 | Feb. 28, 2014 | Jun. 30, 2014 |
Share repurchase program authorized February 2013 | Share repurchase program authorized February 2013 | Share repurchase program authorized February 2013 | Share repurchase program authorized February 2014 | Share repurchase program authorized February 2014 | |
Schedule of Stock Repurchases | ' | ' | ' | ' | ' |
Stock repurchases, aggregate authorized amount | $2,000,000,000 | ' | ' | $1,000,000,000 | ' |
Number of shares repurchased (shares) | ' | 13.7 | ' | ' | 1.2 |
Aggregate market price of shares repurchased | ' | 433,000,000 | ' | ' | 45,000,000 |
Average purchase price at which shares were repurchased (in dollars per share) | ' | $31.54 | ' | ' | $0 |
Stock Repurchased and Retired During Program Period, Shares | ' | ' | 59.5 | ' | ' |
Stock Repurchased and Retired During Program Period, Average Cost per Share | ' | ' | $33.63 | ' | ' |
Stock repurchase program, period in force | ' | ' | ' | ' | '24 months |
Stock repurchases, remaining authorized amount | ' | ' | ' | ' | 955,000,000 |
Aggregate market value of shares agreed to be repurchased, in transactions that will settle early in the third quarter of 2014 | ' | ' | ' | ' | $6,000,000 |
Average purchase price of shares agreed to be repurchased, in transactions that will settle early in the third quarter of 2014 (in dollars per share) | ' | ' | ' | ' | $36.09 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Accumulated other comprehensive income (loss) by component | ' | ' | ' | ' |
Balance at the beginning of the period | ($795) | ($1,695) | ($802) | ($1,701) |
Other comprehensive (loss) income before reclassifications | 8 | -6 | 9 | -14 |
Amounts reclassified from accumulated other comprehensive income | 8 | 13 | 14 | 27 |
Other comprehensive income | 16 | 7 | 23 | 13 |
Balance at the end of the period | -779 | -1,688 | -779 | -1,688 |
Defined benefit plan | Pension plans | ' | ' | ' | ' |
Accumulated other comprehensive income (loss) by component | ' | ' | ' | ' |
Balance at the beginning of the period | -666 | -1,386 | -669 | -1,399 |
Other comprehensive (loss) income before reclassifications | 0 | 0 | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income | 5 | 12 | 8 | 25 |
Other comprehensive income | 5 | 12 | 8 | 25 |
Balance at the end of the period | -661 | -1,374 | -661 | -1,374 |
Defined benefit plan | Post-retirement benefit plans | ' | ' | ' | ' |
Accumulated other comprehensive income (loss) by component | ' | ' | ' | ' |
Balance at the beginning of the period | -119 | -288 | -122 | -289 |
Other comprehensive (loss) income before reclassifications | 0 | 0 | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income | 3 | 0 | 6 | 1 |
Other comprehensive income | 3 | 0 | 6 | 1 |
Balance at the end of the period | -116 | -288 | -116 | -288 |
Foreign currency translation adjustment and other | ' | ' | ' | ' |
Accumulated other comprehensive income (loss) by component | ' | ' | ' | ' |
Balance at the beginning of the period | -10 | -21 | -11 | -13 |
Other comprehensive (loss) income before reclassifications | 8 | -6 | 9 | -14 |
Amounts reclassified from accumulated other comprehensive income | 0 | 1 | 0 | 1 |
Other comprehensive income | 8 | -5 | 9 | -13 |
Balance at the end of the period | ($2) | ($26) | ($2) | ($26) |
Accumulated_Other_Comprehensiv3
Accumulated Other Comprehensive Loss (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Reclassifications out of accumulated other comprehensive income (loss) by component | ' | ' | ' | ' |
Total before tax | ($323) | ($394) | ($654) | ($899) |
Income tax expense (benefit) | -130 | -125 | -258 | -332 |
Net income | 193 | 269 | 396 | 567 |
Amount reclassified from accumulated other comprehensive income (loss) | ' | ' | ' | ' |
Reclassifications out of accumulated other comprehensive income (loss) by component | ' | ' | ' | ' |
Net actuarial loss | -5 | -21 | -10 | -42 |
Prior service cost | -8 | -1 | -13 | -2 |
Total before tax | 13 | 22 | 23 | 44 |
Income tax expense (benefit) | 5 | 10 | 9 | 18 |
Insignificant items | ' | -1 | ' | -1 |
Net income | ($8) | ($13) | ($14) | ($27) |