Cover
Cover | 6 Months Ended |
Jun. 30, 2024 shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Jun. 30, 2024 |
Document Transition Report | false |
Entity File Number | 001-03040 |
Entity Registrant Name | QWEST CORPORATION |
Entity Incorporation, State or Country Code | CO |
Entity Tax Identification Number | 84-0273800 |
Entity Address, Address Line One | 931 14th Street, |
Entity Address, City or Town | Denver, |
Entity Address, State or Province | CO |
Entity Address, Postal Zip Code | 80202 |
City Area Code | 318 |
Local Phone Number | 388-9000 |
Entity Information [Line Items] | |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding (in shares) | 0 |
Entity Central Index Key | 0000068622 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2024 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | false |
6.5% Notes Due 2056 | |
Entity Information [Line Items] | |
Title of 12(b) Security | 6.5% Notes Due 2056 |
Trading Symbol(s) | CTBB |
Security Exchange Name | NYSE |
6.75% Notes Due 2057 | |
Entity Information [Line Items] | |
Title of 12(b) Security | 6.75% Notes Due 2057 |
Trading Symbol(s) | CTDD |
Security Exchange Name | NYSE |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
OPERATING REVENUE | ||||
Total operating revenue | $ 1,389 | $ 1,467 | $ 2,781 | $ 3,008 |
OPERATING EXPENSES | ||||
Cost of services and products (exclusive of depreciation and amortization) | 373 | 404 | 743 | 791 |
Selling, general and administrative | 118 | 116 | 246 | 244 |
Operating expenses—affiliates | 181 | 184 | 393 | 375 |
Depreciation and amortization | 187 | 203 | 374 | 400 |
Total operating expenses | 859 | 907 | 1,756 | 1,810 |
OPERATING INCOME | 530 | 560 | 1,025 | 1,198 |
OTHER (EXPENSE) INCOME | ||||
Interest expense | (14) | (25) | (33) | (52) |
Other (expense) income, net | (2) | 3 | (1) | 4 |
Total other expense, net | (12) | (21) | (28) | (46) |
INCOME BEFORE INCOME TAX EXPENSE | 518 | 539 | 997 | 1,152 |
Income tax expense | 140 | 141 | 266 | 300 |
NET INCOME | 378 | 398 | 731 | 852 |
Affiliated entity | ||||
OTHER (EXPENSE) INCOME | ||||
Interest income - affiliate, net | 4 | 1 | 6 | 2 |
Non-affiliate services | ||||
OPERATING REVENUE | ||||
Total operating revenue | 829 | 964 | 1,675 | 1,945 |
Affiliate services | ||||
OPERATING REVENUE | ||||
Total operating revenue | $ 560 | $ 503 | $ 1,106 | $ 1,063 |
CONSOLIDATED BALANCE SHEETS (UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Assets, Current [Abstract] | ||
Cash and Cash Equivalents, at Carrying Value | $ 18 | $ 10 |
Accounts Receivable, after Allowance for Credit Loss, Current | 246 | 261 |
Advances to affiliates | 195 | 0 |
Other Assets, Current | 151 | 144 |
Assets, Current, Total | 610 | 415 |
Property, Plant and Equipment, Net | 8,810 | 8,700 |
Assets, Noncurrent [Abstract] | ||
Goodwill | 6,955 | 6,955 |
Intangible Assets, Net (Excluding Goodwill) | 92 | 103 |
Other Assets, Noncurrent | 159 | 164 |
Intangible Assets Net Including Goodwill and Other Assets, Noncurrent | 7,206 | 7,222 |
Assets, Total | 16,626 | 16,337 |
Liabilities, Current [Abstract] | ||
Long-Term Debt, Current Maturities | 1 | 1 |
Accounts Payable, Current | 270 | 362 |
Advances From Affiliates, Current | 0 | 61 |
Accrued Liabilities, Current [Abstract] | ||
Employee-related Liabilities, Current | 107 | 130 |
Taxes Payable, Current | 84 | 96 |
Other Liabilities, Current | 122 | 121 |
Contract with Customer, Liability, Current | 152 | 162 |
Liabilities, Current, Total | 736 | 933 |
Long-Term Debt and Lease Obligation | 1,940 | 2,156 |
Deferred Revenue, Noncurrent [Abstract] | ||
Deferred Income Tax Liabilities, Net | 1,303 | 1,318 |
Other Liabilities, Noncurrent | 692 | 679 |
Deferred Credits and Other Liabilities, Noncurrent | 2,463 | 2,492 |
Commitments and Contingencies | ||
Equity, Attributable to Parent [Abstract] | ||
Common Stock, Value, Issued | 10,050 | 10,050 |
Retained Earnings (Accumulated Deficit) | 1,437 | 706 |
Equity, Attributable to Parent, Total | 11,487 | 10,756 |
Liabilities and Equity, Total | 16,626 | 16,337 |
Affiliated entity | ||
Accounts Payable and Accrued Liabilities, Noncurrent | $ 468 | $ 495 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 35 | $ 34 |
PP&E, accumulated depreciation | $ 8,576 | $ 8,239 |
Common stock, share issued (in shares) | 1 | 1 |
Common stock, share outstanding (in shares) | 1 | 1 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
OPERATING ACTIVITIES | ||
Net income | $ 731 | $ 852 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 374 | 400 |
Deferred income taxes | (15) | (17) |
Provision for uncollectible accounts | 29 | 28 |
Changes in current assets and liabilities: | ||
Accounts receivable | (14) | (70) |
Accounts payable | (12) | 31 |
Accrued income and other taxes | (12) | 3 |
Other current assets and liabilities, net | (39) | (48) |
Changes in other noncurrent assets and liabilities, net | 15 | 33 |
Changes in affiliate obligations, net | (27) | (30) |
Other, net | (11) | 4 |
Net cash provided by operating activities | 1,019 | 1,186 |
INVESTING ACTIVITIES | ||
Capital expenditures | (545) | (459) |
Changes in advances to affiliates | (195) | (730) |
Proceeds from sale of property, plant and equipment and other assets | 5 | 2 |
Net cash used in investing activities | (735) | (1,187) |
FINANCING ACTIVITIES | ||
Payments of long-term debt | (215) | (2) |
Changes in advances from affiliates | (61) | 0 |
Net cash used in financing activities | (276) | (2) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 8 | (3) |
Cash, cash equivalents and restricted cash at beginning of period | 12 | 10 |
Cash, cash equivalents and restricted cash at end of period | 20 | 7 |
Supplemental cash flow information: | ||
Income taxes paid, net | (262) | (302) |
Interest paid, including affiliate interest (net of capitalized interest of $38 and $22) | (33) | (53) |
Repayment of long-term debt in exchange for advances from affiliates | 215 | 0 |
Cash, cash equivalents and restricted cash: | ||
Cash and Cash Equivalents, at Carrying Value | 18 | 5 |
Restricted cash - noncurrent | 2 | 2 |
Total | $ 20 | $ 7 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Cash Flows [Abstract] | ||
Interest paid, capitalized interest | $ 38 | $ 22 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (UNAUDITED) - USD ($) $ in Millions | Total | COMMON STOCK | RETAINED EARNINGS |
Balance at beginning of period at Dec. 31, 2022 | $ 10,050 | $ 3,517 | |
Increase (Decrease) in Stockholder's Equity | |||
Net income | 852 | ||
Balance at end of period at Jun. 30, 2023 | $ 14,419 | 10,050 | 4,369 |
Balance at beginning of period at Mar. 31, 2023 | 10,050 | 3,971 | |
Increase (Decrease) in Stockholder's Equity | |||
Net income | 398 | ||
Balance at end of period at Jun. 30, 2023 | 14,419 | 10,050 | 4,369 |
Balance at beginning of period at Dec. 31, 2023 | 10,756 | 10,050 | 706 |
Increase (Decrease) in Stockholder's Equity | |||
Net income | 731 | ||
Balance at end of period at Jun. 30, 2024 | 11,487 | 10,050 | 1,437 |
Balance at beginning of period at Mar. 31, 2024 | 10,050 | 1,059 | |
Increase (Decrease) in Stockholder's Equity | |||
Net income | 378 | ||
Balance at end of period at Jun. 30, 2024 | $ 11,487 | $ 10,050 | $ 1,437 |
Background
Background | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Background | Background General We are a facilities-based technology and communications company that provides a broad array of integrated communications products and services to our business and mass markets customers. Our specific products and services are detailed in Note 3—Revenue Recognition of this report. We generate the majority of our total consolidated operating revenue from services provided in the 14-state region of Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington and Wyoming. We refer to this region as our local service area. Basis of Presentation Our consolidated balance sheet as of December 31, 2023, which was derived from our audited consolidated financial statements, and our unaudited interim consolidated financial statements provided herein have been prepared in accordance with the instructions for Form 10-Q. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). However, in our opinion, the disclosures made therein are adequate to make the information presented not misleading. We believe these consolidated financial statements include all normal recurring adjustments necessary to fairly present the results for the interim periods. The consolidated results of operations and cash flows for the first six months of the year are not necessarily indicative of the consolidated results of operations and cash flows that might be expected for the entire year. These consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023. The accompanying consolidated financial statements include our accounts and the accounts of our subsidiaries. Intercompany amounts and transactions with our consolidated subsidiaries have been eliminated. Transactions with our non-consolidated affiliates (Lumen Technologies and its other subsidiaries, referred to herein as affiliates) have not been eliminated. Operating lease assets are included in Other, net under goodwill and other assets on our consolidated balance sheets. Current operating lease liabilities are included in Other under accrued expenses and other liabilities on our consolidated balance sheets. Noncurrent operating lease liabilities are included in Other under deferred credits and other liabilities on our consolidated balance sheets. We reclassified certain prior period amounts to conform to the current period presentation, including our revenue by product and service categories. See Note 3—Revenue Recognition for additional information. These changes had no impact on total operating revenue, total operating expenses or net income for any period. During 2023, we identified errors in our previously reported consolidated financial statements related to accounts receivable and accounts payable. The errors are the result of understated revenues from one of our legacy mainframe billing systems and understated network expenses for periods prior to 2021.We have recorded an increase to our retained earnings by $13 million, reflected in our January 1, 2023 and June 30, 2023 retained earnings in our consolidated statements of stockholders' equity in this report. Refer to Note 1—Background and Summary of Significant Accounting Policies to the consolidated financial statements and accompanying notes in Part II Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2023 for more information. Segments Our operations are integrated into and reported as part of Lumen Technologies. Lumen's chief operating decision maker ("CODM") is our CODM. The CODM reviews our financial information on an aggregate basis only in connection with our quarterly and annual reports that we file with the SEC. Consequently, we do not provide our discrete financial information to the CODM on a regular basis. As such, we have one reportable segment. Change in Accounting Estimates Effective January 1, 2024, we changed our method of depreciation and amortization for incumbent local exchange carriers ("ILEC") and certain competitive local exchange carriers ("CLEC") fixed assets from the group method of depreciation to straight line by individual asset method. Historically, we have used the group method of depreciation for the property, plant and equipment and amortization of certain intangible capitalized software assets of our ILECs and certain CLECs. Under the group method, all like kind assets were combined into common pools and depreciated under composite depreciation rates. Recent business divestitures by our parent company and asset sales have significantly reduced our composite asset base. We believe the straight-line depreciation method for individual assets is preferable to the group method as it will result in a more precise estimate of depreciation expense and will result in a consistent depreciation method for all our subsidiaries. This change in the method of depreciation and amortization is considered a change in accounting estimate inseparable from a change in accounting principle. The change in accounting estimate decreased depreciation and amortization expense $24 million, $18 million net of tax, and $48 million, $36 million net of tax, for the three and six months ended June 30, 2024, respectively. Additionally, during the first quarter of 2024, we updated our analysis of economic lives of owned fiber network assets. As of January 1, 2024, we extended the estimated economic life and depreciation period of such assets from 25 years to 30 years to better reflect the physical life of the assets that we have experienced and absence of technological changes that would replace fiber. The change in accounting estimate decreased depreciation expense by approximately $6 million, $4 million net of tax, and by $12 million, $9 million net of tax, for the three and six months ended June 30, 2024, respectively. Summary of Significant Accounting Policies Refer to the significant accounting policies described in Note 1—Background and Summary of Significant Accounting Policies to the consolidated financial statements and accompanying notes in Part II Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2023. Recently Adopted Accounting Pronouncements Supplier Finance Programs On January 1, 2023, we adopted Accounting Standards Update (“ASU”) 2022-04, “ Liabilities-Supplier Finance Program (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations ” (“ASU 2022-04”). These amendments require that a company that uses a supplier finance program in connection with the purchase of goods or services disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, program activity during the period, changes from period to period and potential magnitude of program transactions. The adoption of ASU 2022-04 did not have any impact on our consolidated financial statements. Credit Losses On January 1, 2023, we adopted ASU 2022-02, " Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings (“TDR”) and Vintage Disclosures ” (“ASU 2022-02”). The ASU eliminates the TDR recognition and measurement guidance, enhances existing disclosure requirements and introduces new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. The adoption of ASU 2022-02 did not have any impact on our consolidated financial statements. Adoption of Other ASU With No Impact On January 1, 2024, we adopted ASU 2023-01, “ Leases (Topic 842): Common Control Arrangements ”, and ASU 2022-03, “ Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions ”. The adoption of these ASUs did not have any impact on our consolidated financial statements. Recently Issued Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09 “ Income Taxes (Topic 740): Improvements to Income Tax Disclosures ” (“ASU 2023-09”). This ASU requires public business entities to annually (i) disclose specific categories in the rate reconciliation and (ii) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). ASU 2023-09 will become effective for us in the fiscal year 2025 and early adoption is permitted. As of June 30, 2024, we had not early adopted this ASU and are currently evaluating its impact on our consolidated financial statements, including our annual disclosure within our Income Taxes note. In November 2023, the FASB issued ASU 2023-07, “ Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ” (“ASU 2023-07”). This ASU is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. This ASU will become effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. As of June 30, 2024, we had not early adopted this ASU and are currently evaluating its impact on our consolidated financial statements. |
Change in Accounting Estimate | Change in Accounting Estimates Effective January 1, 2024, we changed our method of depreciation and amortization for incumbent local exchange carriers ("ILEC") and certain competitive local exchange carriers ("CLEC") fixed assets from the group method of depreciation to straight line by individual asset method. Historically, we have used the group method of depreciation for the property, plant and equipment and amortization of certain intangible capitalized software assets of our ILECs and certain CLECs. Under the group method, all like kind assets were combined into common pools and depreciated under composite depreciation rates. Recent business divestitures by our parent company and asset sales have significantly reduced our composite asset base. We believe the straight-line depreciation method for individual assets is preferable to the group method as it will result in a more precise estimate of depreciation expense and will result in a consistent depreciation method for all our subsidiaries. This change in the method of depreciation and amortization is considered a change in accounting estimate inseparable from a change in accounting principle. The change in accounting estimate decreased depreciation and amortization expense $24 million, $18 million net of tax, and $48 million, $36 million net of tax, for the three and six months ended June 30, 2024, respectively. Additionally, during the first quarter of 2024, we updated our analysis of economic lives of owned fiber network assets. As of January 1, 2024, we extended the estimated economic life and depreciation period of such assets from 25 years to 30 years to better reflect the physical life of the assets that we have experienced and absence of technological changes that would replace fiber. The change in accounting estimate decreased depreciation expense by approximately $6 million, $4 million net of tax, and by $12 million, $9 million net of tax, for the three and six months ended June 30, 2024, respectively. |
Goodwill, Customer Relationship
Goodwill, Customer Relationships and Other Intangible Assets | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill, Customer Relationships and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill and other intangible assets consisted of the following: June 30, 2024 December 31, 2023 (Dollars in millions) Goodwill (1) $ 6,955 6,955 Other intangible assets, less accumulated amortization of $1,953 and $1,966 $ 92 103 ______________________________________________________________________ (1) Goodwill at June 30, 2024 and December 31, 2023 is net of accumulated impairment losses of $2.4 billion. Substantially all of our goodwill was derived from Lumen's acquisition of us where the purchase price exceeded the fair value of the net assets acquired. We are required to assess our goodwill for impairment annually, or under certain circumstances, more frequently, such as when events or changes in circumstances indicate there may be impairment. We are required to write down the value of goodwill only when our assessment determines the carrying value of equity of our reporting unit exceeds its fair value. Our annual impairment assessment date for goodwill is October 31, at which date we assess goodwill at our reporting unit. In reviewing the criteria for reporting units, we have determined that we are one reporting unit. Second Quarter 2023 Goodwill Impairment Analysis The sustained decline in Lumen's share price during the second quarter of 2023 was considered a triggering event requiring evaluation of goodwill impairment; as such, we estimated the fair value using only the market approach. Applying this approach, we utilized company comparisons and analyst reports within the telecommunications industry which supported a range of fair values derived from annualized revenue and Earnings Before Interest, Tax, Depreciation and Amortization ("EBITDA") multiples between 1.5x and 4.3x and 4.6x and 10.5x, respectively. We selected a revenue multiple within and an EBITDA multiple below these comparable market multiples. For the three months ended June 30, 2023, based on our assessment performed as described above, we concluded that goodwill was not impaired. The market approach that we used in the quarter ended June 30, 2023 incorporated estimates and assumptions related to the forecasted results for the remainder of the year, including revenues, expenses, and the achievement of certain strategic initiatives. In developing the market multiples, we considered observed trends of our industry participants. Our assessment included many factors that required significant judgment. Alternative interpretations of these factors could have resulted in different conclusions. As of June 30, 2024, the gross carrying amount of goodwill and other intangible assets was $9 billion. The amortization expense for finite-lived intangible assets for the three months ended June 30, 2024 and 2023 totaled $12 million and $16 million, respectively, and for the six months ended June 30, 2024 and 2023 totaled $25 million and $33 million, respectively. We estimate that future total amortization expense for finite-lived intangible assets will be as follows: (Dollars in millions) 2024 (remaining six months) $ 16 2025 27 2026 16 2027 12 2028 9 2029 and thereafter 12 |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition We categorize our revenue derived from our operations serving our mass markets customers, primarily within the first three categories listed below, and our revenue derived from our operations servicing our business customers, primarily in the 'Harvest', 'Nurture' and 'Grow' categories listed below: • Other Broadband , under which we provide primarily lower speed broadband services to residential and small business customers utilizing our copper-based network infrastructure; • Voice and Other, under which we derive revenues from (i) providing local and long-distance services, professional services, and other ancillary services, (ii) federal broadband and state support payments, and (iii) equipment, IT solutions and other services; • Fiber Broadband , under which we provide high speed broadband services to residential and small business customers utilizing our fiber-based network infrastructure; • Harvest , which includes our legacy services managed for cash flow, including Time Division Multiplexing ("TDM") voice and private line services; • Nurture , which includes our more mature offerings, including primarily ethernet; • Grow , which includes existing and emerging products and services in which we are significantly investing, including dark fiber and wavelengths services; and • Affiliate Services , which are (i) communications services that we provide to our affiliates and also provide to external customers and (ii) application development and support services that we provide to our affiliates, as described further in Note 8—Affiliate Transactions. Reconciliation of Total Revenue to Revenue from Contracts with Customers The following tables provide our total revenue by product and service category as well as the amount of revenue that is not subject to ASC 606, "Revenue from Contracts with Customers" ("ASC 606"), but is instead governed by other accounting standards: Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 Total Revenue Adjustments for Non-ASC 606 Revenue (1) Total Revenue from Contracts with Customers Total Revenue Adjustments for Non-ASC 606 Revenue (1) Total Revenue from Contracts with Customers (Dollars in millions) Other Broadband $ 237 (20) 217 283 (24) 259 Voice and Other 132 (4) 128 150 (4) 146 Fiber Broadband 98 (3) 95 123 (3) 120 Harvest 240 (31) 209 275 (36) 239 Nurture 89 (2) 87 94 (2) 92 Grow 33 (2) 31 39 — 39 Affiliate Services 560 (12) 548 503 (11) 492 Total revenue $ 1,389 (74) 1,315 1,467 (80) 1,387 Six Months Ended June 30, 2024 Six Months Ended June 30, 2023 Total Revenue Adjustments for Non-ASC 606 Revenue (1) Total Revenue from Contracts with Customers Total Revenue Adjustments for Non-ASC 606 Revenue (1) Total Revenue from Contracts with Customers (Dollars in millions) Other Broadband $ 489 (41) 448 576 (49) 527 Voice and Other 265 (8) 257 306 (8) 298 Fiber Broadband 197 (6) 191 245 (6) 239 Harvest 479 (63) 416 542 (73) 469 Nurture 178 (4) 174 199 (4) 195 Grow 67 (2) 65 77 — 77 Affiliate Services 1,106 (24) 1,082 1,063 (22) 1,041 Total revenue $ 2,781 (148) 2,633 3,008 (162) 2,846 ____________________________________________________________ (1) Includes regulatory revenue and lease revenue not within the scope of ASC 606. Operating Lease Revenue Qwest leases various data transmission capacity, office facilities, switching facilities and other network sites to third parties under operating leases. Lease and sublease revenue are included in Operating Revenue in our consolidated statements of operations. For the three months ended June 30, 2024 and 2023, our gross rental revenue was $71 million and $78 million, respectively, which represented approximately 5% of our operating revenue for both periods. For the six months ended June 30, 2024 and 2023, our gross rental revenue was $142 million and $158 million, respectively, which represented approximately 5% of our operating revenue for both periods. Customer Receivables and Contract Balances The following table provides balances of customer receivables, contract assets and contract liabilities as of June 30, 2024 and December 31, 2023: June 30, 2024 December 31, 2023 (Dollars in millions) Customer receivables (1) $ 228 210 Contract assets 7 7 Contract liabilities 245 269 ______________________________________________________________________ (1) Reflects gross customer receivables, including gross affiliate receivables, of $258 million and $239 million, net of allowance for credit losses of $30 million and $29 million, at June 30, 2024 and December 31, 2023, respectively. Contract liabilities consist of consideration we have received from our customers or billed in advance of providing goods or services promised in the future. We defer recognizing this consideration as revenue until we have satisfied the related performance obligation to the customer. Contract liabilities include recurring services billed one month in advance and installation and maintenance charges that are deferred and recognized over the actual or expected contract term, which typically ranges from one Performance Obligations As of June 30, 2024, we expect to recognize approximately $2.7 billion of revenue in the future related to performance obligations associated with existing customer contracts that are partially or wholly unsatisfied. As of June 30, 2024, the transaction price related to unsatisfied performance obligations that are expected to be recognized for the remainder of 2024, 2025 and thereafter was $721 million, $1.0 billion and $996 million, respectively. These amounts exclude (i) the value of unsatisfied performance obligations for contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed (for example, uncommitted usage or non-recurring charges associated with professional or technical services to be completed), and (ii) contracts that are classified as leasing arrangements that are not subject to ASC 606. Contract Costs The following tables provide changes in our contract acquisition costs and fulfillment costs: Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 Acquisition Costs Fulfillment Costs Acquisition Costs Fulfillment Costs (Dollars in millions) Beginning Balance $ 57 47 58 46 Cost Incurred 9 9 13 9 Amortization (10) (9) (12) (10) Ending Balances $ 56 47 59 45 Six Months Ended June 30, 2024 Six Months Ended June 30, 2023 Acquisition Costs Fulfillment Costs Acquisition Costs Fulfillment Costs (Dollars in millions) Beginning Balance $ 58 46 61 46 Cost incurred 19 19 22 19 Amortization (21) (18) (24) (20) Ending Balances $ 56 47 59 45 Acquisition costs include commission fees paid to employees as a result of obtaining contracts. Fulfillment costs include third party and internal costs associated with the provision, installation and activation of communications services to customers, including labor and materials consumed for these activities. Deferred acquisition and fulfillment costs are amortized based on the transfer of services on a straight-line basis over the average contract life of 50 months for mass markets customers and average contract life of 35 months for business customers. Amortized fulfillment costs are included in cost of services and products and amortized acquisition costs are included in selling, general and administrative expenses in our consolidated statements of operations. The amount of these deferred costs that are anticipated to be amortized in the next 12 months are included in Other Current Assets on our consolidated balance sheets. The amount of deferred costs expected to be amortized beyond the next 12 months is included in Other Non-Current Assets on our consolidated balance sheets. Deferred acquisition and fulfillment costs are assessed for impairment on a quarterly basis. |
Credit Losses on Financial Inst
Credit Losses on Financial Instruments | 6 Months Ended |
Jun. 30, 2024 | |
Credit Loss [Abstract] | |
Credit Losses on Financial Instruments | Credit Losses on Financial Instruments To assess our expected credit losses on financial instruments, we aggregate financial assets with similar risk characteristics to monitor their credit quality or deterioration over the life of such assets. We periodically monitor certain risk characteristics within our aggregated financial assets and revise their composition accordingly, to the extent internal and external risk factors change. We separately evaluate financial assets that do not share risk characteristics with other financial assets. Our financial assets measured at amortized cost primarily consist of accounts receivable. We use a loss rate method to estimate our allowance for credit losses. Our determination of the current expected credit loss rate begins with our review of historical loss experience as a percentage of accounts receivable. We measure our historical loss period based on the average days to recognize accounts receivable as credit losses. When asset specific characteristics and current conditions change from those in the historical period, due to changes in our credit and collections strategy, certain classes of aged balances, or credit loss and recovery policies, we perform a qualitative and quantitative assessment to adjust our historical loss rate. We use regression analysis to develop an expected loss rate using historical experience and economic data over a forecast period. We measure our forecast period based on the average days to collect payment on billed accounts receivable. To determine our current allowance for credit losses, we combine the historical and expected credit loss rates and apply them to our period end accounts receivable. If there is an unexpected deterioration of a customer's financial condition or an unexpected change in economic conditions, including macroeconomic events, we assess the need to adjust the allowance for credit losses. Any such resulting adjustments would affect earnings in the period that adjustments are made. The assessment of the correlation between historical observed default rates, current conditions and forecasted economic conditions requires judgment. Alternative interpretations of these factors could have resulted in different conclusions regarding our allowance for credit losses. The amount of credit loss is sensitive to changes in circumstances and forecasted economic conditions. Our historical credit loss experience, current conditions and forecast of economic conditions may also not be representative of the customers' actual default experience in the future, and we may use methodologies that differ from those used by other companies. The following table presents the activity of our allowance for credit losses by accounts receivable portfolio for the six months ended June 30, 2024: Business Mass Markets Total (Dollars in millions) As of December 31, 2023 $ 14 20 34 Provision for expected losses 7 22 29 Write-offs charged against the allowance (6) (23) (29) Recoveries collected — 1 1 Ending balance at June 30, 2024 $ 15 20 35 |
Long-Term Debt and Note Payable
Long-Term Debt and Note Payable - Affiliate | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Note Payable - Affiliate | Long-Term Debt The following table reflects our consolidated long-term debt as of the dates indicated below, including unamortized discounts and premiums and unamortized debt issuance costs: Interest Rates (1) Maturities (1) June 30, 2024 December 31, 2023 (Dollars in millions) Senior notes 6.500% - 7.750% 2025-2057 $ 1,986 1,986 Term loan (2) SOFR + 2.50% 2027 — 215 Finance lease and other obligations Various Various 4 4 Unamortized premiums, net 2 4 Unamortized debt issuance costs (51) (52) Total long-term debt $ 1,941 2,157 Less current maturities (1) (1) Long-term debt, excluding current maturities $ 1,940 2,156 _______________________________________________________________________________ (1) As of June 30, 2024. (2) The Term Loan had an interest rate of 7.970% as of December 31, 2023. Long-Term Debt Maturities Set forth below is the aggregate principal amount of our long-term debt as of June 30, 2024 (excluding unamortized premiums, net and unamortized debt issuance costs) maturing during the following years: (Dollars in millions) 2024 (remaining six months) $ — 2025 251 2026 1 2027 1 2028 — 2029 and thereafter 1,737 Total long-term debt $ 1,990 Impact of Recent Debt Transactions On March 22, 2024 (the "Effective Date"), Lumen Technologies, Level 3 Financing, Qwest Corporation and a group of creditors holding a majority of our consolidated debt completed transactions contemplated under the amended and restated transaction support agreement ("TSA") that such parties entered into on January 22, 2024 (the "TSA Transactions"), including the termination, repayment or exchange of previous commitments and debt and the issuance of new term loan facilities, notes, and revolving credit facilities. For additional information about the TSA Transactions, see (i) the other information included in this report, (ii) our Current Report on Form 8-K dated March 22, 2024 and (iii) Note 5—Long-Term Debt and Note Payable—Affiliate to the financial statements included in Item 1 of Part I of our Quarterly Report on Form 10-Q for the three months ended March 31, 2024. Qwest Guarantees of Lumen Debt Lumen’s obligations under its new credit agreements entered into on March 22, 2024 and its new superpriority secured senior notes issued on March 22, 2024 are unsecured, but Qwest Corporation and certain of its subsidiaries have provided an unconditional unsecured guarantee of payment of Lumen’s obligations under these agreements and senior notes. Senior Notes and Intercompany Debt For information about our senior notes and intercompany debt arrangement, see Note 6—Long-Term Debt and Note Payable - Affiliate to the financial statements included in Item 8 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2023. Compliance As of June 30, 2024, we believe we were in compliance with the financial covenants contained in our material debt agreements in all material respects. |
Restructuring and Related Activ
Restructuring and Related Activities | 6 Months Ended |
Jun. 30, 2024 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Activities Disclosure | Severance Periodically, we reduce our workforce and accrue liabilities for the related severance costs. These workforce reductions result primarily from the progression or completion of our post-acquisition integration plans, increased competitive pressures, cost reduction initiatives, process improvements through automation and reduced workloads due to reduced demand for certain services. During April 2024, we reduced our workforce by approximately 3% as a part of our efforts to change our workforce composition to reflect our ongoing transformation and cost reduction opportunities that align with our shapeshifting and focus on our strategic priorities. As a result of this plan, we incurred severance and related costs of approximately $25 million. We have not incurred, and do not expect to incur, material impairment or exit costs related to this workforce reduction. Changes in our accrued liabilities for severance expenses were as follows: Severance (Dollars in millions) Balance at December 31, 2023 $ 1 Accrued to expense 29 Payments, net (23) Balance at June 30, 2024 $ 7 |
Fair Value Disclosure
Fair Value Disclosure | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosure | Fair Value of Financial Instruments Our financial instruments consist of cash and cash equivalents, restricted cash, accounts receivable, advances to and from affiliates, accounts payable and long-term debt, excluding finance lease and other obligations. Due to their short-term nature, the carrying amounts of our cash and cash equivalents, restricted cash, accounts receivable, advances to and from affiliates and accounts payable approximate their fair values. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between independent and knowledgeable parties who are willing and able to transact for an asset or liability at the measurement date. We use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs when determining fair value and then we rank the estimated values based on the reliability of the inputs using the below-described fair value hierarchy. We determined the fair values of our long-term debt, including the current portion, based on quoted market prices where available or, if not available, based on inputs other than quoted market prices in active markets that are either directly or indirectly observable such as discounted future cash flows using current market interest rates. The three input levels in the hierarchy of fair value measurements are defined by the FASB generally as follows: Input Level Description of Input Level 1 Observable inputs such as quoted market prices in active markets. Level 2 Inputs other than quoted prices in active markets that are either directly or indirectly observable. Level 3 Unobservable inputs in which little or no market data exists. The following table presents the carrying amounts and estimated fair values of our financial liabilities as of June 30, 2024 and December 31, 2023, as well as the input level used to determine the fair values indicated below: June 30, 2024 December 31, 2023 Input Carrying Fair Carrying Fair (Dollars in millions) Liabilities—Long-term debt (excluding finance lease and other obligations) 2 $ 1,937 956 2,153 1,162 |
Affiliate Transactions
Affiliate Transactions | 6 Months Ended |
Jun. 30, 2024 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure | Affiliate Transactions We provide incumbent local exchange carrier telecommunications services to our affiliates that we also provide to external customers. These services are priced at regulated rates, where applicable, or otherwise at rates we believe are consistent with non-regulated market-based rates charged to external customers. We also provide to our affiliates shared services in the form of application development and support services, as well as network support and technical services, and administrative and corporate support. In this regard, we function as a service company to other Lumen affiliates, and correspondingly recognize affiliate revenue based on the costs for the services that we provide to those affiliates. Whenever possible, costs for shared services are incurred directly by our affiliates for the services they use. When these shared costs are not directly incurred, they are allocated among all affiliates based upon what we determine to be the most reasonable method, first using cost causative measures, or, if no cost causative measure is available, using a general allocator. From time to time, we may adjust the basis for allocating the costs of a shared service among affiliates. Any such changes in allocation methodologies are applied prospectively. For the three months ended June 30, 2024 and 2023, direct affiliate revenue was $417 million and $367 million and allocated affiliate revenue was $143 million and $136 million, respectively. For the six months ended June 30, 2024 and 2023, direct affiliate revenue was $818 million and $794 million and allocated affiliate revenue was $288 million and $269 million, respectively. |
Commitments, Contingencies and
Commitments, Contingencies and Other Items | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Other Items | Commitments, Contingencies and Other Items We are subject to various claims, legal proceedings and other contingent liabilities, including the matters described below, which individually or in the aggregate could materially affect our financial condition, future results of operations or cash flows. We review our litigation accrual liabilities on a quarterly basis, but in accordance with applicable accounting guidelines only establish accrual liabilities when losses are deemed probable and reasonably estimable and only revise previously-established accrual liabilities when warranted by changes in circumstances, in each case based on then-available information. As such, as of any given date we could have exposure to losses under proceedings as to which no liability has been accrued or as to which the accrued liability is inadequate. Subject to these limitations, at June 30, 2024 we had accrued $17 million in the aggregate for our litigation and non-income tax contingencies, which is included in Other under Current Liabilities or Other under Deferred Credits and Other Liabilities in our consolidated balance sheet as of such date. We cannot at this time estimate the reasonably possible loss or range of loss, if any in excess of this $17 million accrual due to the inherent uncertainties and speculative nature of contested proceedings. The establishment of an accrual does not mean that actual funds have been set aside to satisfy a given contingency. Thus, the resolution of a particular contingency for the amount accrued could have no effect on our results of operations but nonetheless could have an adverse effect on our cash flows. Principal Proceedings Lead-Sheathed Cable Environmental Litigation Parish of St. Mary. On July 9, 2024, a putative class action complaint was filed in the 16th Judicial District Court for the Parish of St. Mary, State of Louisiana, case no. 138575 asserting claims on behalf of all parishes, municipalities, and citizens owning real properties in the State of Louisiana that have been affected by lead-sheathed telecommunications cables installed by AT&T and Lumen or their predecessors. The complaint seeks damages and injunctive relief under Louisiana state law. Blum . On November 6, 2023, a putative class action complaint was filed in the 16th Judicial District Court for the Parish of St. Mary, State of Louisiana, case no. 137935 asserting claims on behalf of all citizens owning real properties in the State of Louisiana that have been affected by lead-sheathed telecommunications cables installed by AT&T, BellSouth, Verizon, and Lumen or their predecessors. The complaint seeks damages and injunctive relief under Louisiana state law. The case has been removed to Federal Court in the United States District Court Western District of Louisiana Lafayette Division, case no. 6:23-CV-01748. Billing Practices Suits In June 2017, a former employee of a Lumen Technologies subsidiary filed an employment lawsuit against Lumen Technologies (at the time named CenturyLink, Inc.) claiming that she was wrongfully terminated for alleging that Lumen charged some of its retail customers for products and services they did not authorize. Thereafter, based in part on the allegations made by the former employee, several legal proceedings were filed, including consumer class actions in federal and state courts, a series of securities investor class actions in federal courts, and several shareholder derivative actions in federal and Louisiana state courts. The derivative cases were brought on behalf of CenturyLink, Inc. against certain current and former officers and directors of the Company and seek damages for alleged breaches of fiduciary duties. We have settled the consumer and securities investor class actions, and the derivative actions. Qwest has engaged in discussions regarding related claims with a number of state attorneys general, and has entered into agreements settling certain of the consumer practices claims asserted by several state attorneys general. Huawei Network Deployment Investigations Qwest has received requests from the following federal agencies for information relating to the use of equipment manufactured by Huawei Technologies Company ("Huawei") in networks operated by Lumen and Qwest. • DOJ. Lumen has received a civil investigative demand from the U.S. Department of Justice in the course of a False Claims Act investigation alleging that Lumen Technologies, Inc. and Lumen Technologies Government Solutions, Inc. failed to comply with certain specified requirements in federal contracts concerning their use of Huawei equipment. • FCC. The FCC’s Enforcement Bureau issued a Letter of Inquiry to Lumen Technologies, Inc. regarding its written certifications to the FCC that Lumen has complied with FCC rules governing the use of resources derived from the High Cost Program, Lifeline Program, Rural Health Care Program, E-Rate Program, Emergency Broadband Benefit Program, and the Affordable Connectivity Program. Under these programs federal, funds may not be used to facilitate the deployment or maintenance of equipment or services provided by Huawei, a company the FCC has determined poses a national security threat to the integrity of U.S. communications networks or the communications supply chain. • Team Telecom. The Committee for the Assessment of Foreign Participation in the United States Telecommunications Service Sector (comprised of the U.S. Attorney General, and the Secretaries of the Department of Homeland Security, and the Department of Defense), commonly referred to as Team Telecom, issued questions and requests for information relating to Lumen’s FCC licenses and its use of Huawei equipment. Marshall Fire Litigation. On December 30, 2021, a wildfire referred to as the Marshall Fire ignited near Boulder, Colorado. The Marshall Fire killed two people, and it burned thousands of acres, including entire neighborhoods. Approximately 300 lawsuits naming various defendants and asserting various claims for relief have been filed. To date, three of those name Qwest Corporation as being at fault: Allstate Fire and Casualty Insurance Company, et al., v. Qwest Corp., et al., Case No. 2023-cv-3048, and Wallace, et al. v. Qwest Corp., et al., Case No. 2023-cv-30488, both of which have been consolidated with Kupfner, et al., v. Public Service Company of Colorado, et al., Case No. 2022-cv-30195. The consolidated proceeding is pending in Colorado District Court, Boulder, Colorado, Preliminary estimates of potential damage claims $2 billion. 911 Surcharge In June 2021, the Company was served with a complaint filed in the Santa Fe County District Court by Phone Recovery Services, LLC (“PRS”), acting on behalf of the State of New Mexico. The complaint claims Qwest Corporation and CenturyTel of the Southwest have violated the New Mexico Fraud Against Taxpayers Act since 2004 by failing to bill, collect and remit certain 911 surcharges from customers. Through pre-trial proceedings, the Court has narrowed the issues to be resolved by jury, ruling that Lumen bears the burden of proving that its actions were reasonable or known and approved by the State. Other Proceedings, Disputes and Contingencies From time to time, we are involved in other proceedings incidental to our business, including patent infringement allegations, regulatory hearings relating primarily to our rates or services, actions relating to employee claims, tax issues, or environmental law issues, grievance hearings before labor regulatory agencies, miscellaneous third-party tort actions, or commercial disputes. We are currently defending several patent infringement lawsuits asserted against us by non-practicing entities, many of which are seeking substantial recoveries. These cases have progressed to various stages and one or more may go to trial within the next twelve months if they are not otherwise resolved. Where applicable, we are seeking full or partial indemnification from our vendors and suppliers. We are subject to various federal, state and local environmental protection and health and safety laws. From time to time, we are subject to judicial and administrative proceedings brought by various governmental authorities under these laws. Several such proceedings are currently pending, but none is reasonably expected to exceed $300,000 in fines and penalties. In addition, in the past we acquired companies that had installed lead-sheathed cables several decades earlier, or had operated certain manufacturing companies in the first part of the 1900s. Under applicable environmental laws, we could be named as a potentially responsible party for a share of the remediation of environmental conditions arising from the historical operations of our predecessors. The outcome of these other proceedings described under this heading is not predictable. However, based on current circumstances, we do not believe that the ultimate resolution of these other proceedings, after considering available defenses and any insurance coverage or indemnification rights, will have a material adverse effect on us. The matters listed in this Note do not reflect all of our contingencies. For additional information on our contingencies, see Note 14—Commitments, Contingencies and Other Items to the financial statements included in Item 8 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2023. The ultimate outcome of the above-described matters may differ materially from the outcomes anticipated, estimated, projected or implied by us in certain of our statements appearing above in this Note, and proceedings we currently consider immaterial may ultimately affect us materially. |
Dividends
Dividends | 6 Months Ended |
Jun. 30, 2024 | |
Dividends [Abstract] | |
Dividends | Dividends From time to time we may declare and pay dividends to our direct parent company, Qwest Services Corporation ("QSC"), sometimes in excess of our earnings to the extent permitted by applicable law. Our debt covenants do not currently limit the amount of dividends we can pay to QSC. During the six months ended June 30, 2024 and June 30, 2023, we declared and paid no dividends to QSC. Dividends paid, when applicable, are reflected on our consolidated statements of cash flows as financing activities. |
Other Financial Information
Other Financial Information | 6 Months Ended |
Jun. 30, 2024 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Financial Information | Other Financial Information Other Current Assets The following table presents details of other current assets on our consolidated balance sheets: June 30, 2024 December 31, 2023 (Dollars in millions) Prepaid expenses $ 57 48 Contract acquisition costs 31 34 Contract fulfillment costs 28 28 Assets held for sale 29 29 Other 6 5 Total other current assets $ 151 144 Other Current Liabilities The following table presents details of other current liabilities on our consolidated balance sheets: June 30, 2024 December 31, 2023 (Dollars in millions) Current affiliate obligation $ 52 52 Current operating lease liability 18 20 Other 52 49 Total other current liabilities $ 122 121 Other Noncurrent Liabilities The following table presents details of other noncurrent liabilities on our consolidated balance sheets: June 30, 2024 December 31, 2023 (Dollars in millions) Unrecognized tax benefits $ 461 442 Noncurrent operating lease liability 44 47 Other 187 190 Total other noncurrent liabilities $ 692 679 |
Labor Union Contracts
Labor Union Contracts | 6 Months Ended |
Jun. 30, 2024 | |
Risks and Uncertainties [Abstract] | |
Labor Union Contracts | Labor Union Contracts As of June 30, 2024, approximately 42% of our employees were represented by the Communications Workers of America ("CWA") or the International Brotherhood of Electrical Workers ("IBEW"). 1% of our represented employees are subject to collective bargaining agreements that are scheduled to expire within the twelve-month period ending June 30, 2025. |
Background (Policies)
Background (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Our consolidated balance sheet as of December 31, 2023, which was derived from our audited consolidated financial statements, and our unaudited interim consolidated financial statements provided herein have been prepared in accordance with the instructions for Form 10-Q. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). However, in our opinion, the disclosures made therein are adequate to make the information presented not misleading. We believe these consolidated financial statements include all normal recurring adjustments necessary to fairly present the results for the interim periods. The consolidated results of operations and cash flows for the first six months of the year are not necessarily indicative of the consolidated results of operations and cash flows that might be expected for the entire year. These consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023. The accompanying consolidated financial statements include our accounts and the accounts of our subsidiaries. Intercompany amounts and transactions with our consolidated subsidiaries have been eliminated. Transactions with our non-consolidated affiliates (Lumen Technologies and its other subsidiaries, referred to herein as affiliates) have not been eliminated. |
Segments | Segments Our operations are integrated into and reported as part of Lumen Technologies. Lumen's chief operating decision maker ("CODM") is our CODM. The CODM reviews our financial information on an aggregate basis only in connection with our quarterly and annual reports that we file with the SEC. Consequently, we do not provide our discrete financial information to the CODM on a regular basis. As such, we have one reportable segment. |
Recently Adopted and Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements Supplier Finance Programs On January 1, 2023, we adopted Accounting Standards Update (“ASU”) 2022-04, “ Liabilities-Supplier Finance Program (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations ” (“ASU 2022-04”). These amendments require that a company that uses a supplier finance program in connection with the purchase of goods or services disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, program activity during the period, changes from period to period and potential magnitude of program transactions. The adoption of ASU 2022-04 did not have any impact on our consolidated financial statements. Credit Losses On January 1, 2023, we adopted ASU 2022-02, " Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings (“TDR”) and Vintage Disclosures ” (“ASU 2022-02”). The ASU eliminates the TDR recognition and measurement guidance, enhances existing disclosure requirements and introduces new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. The adoption of ASU 2022-02 did not have any impact on our consolidated financial statements. Adoption of Other ASU With No Impact On January 1, 2024, we adopted ASU 2023-01, “ Leases (Topic 842): Common Control Arrangements ”, and ASU 2022-03, “ Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions ”. The adoption of these ASUs did not have any impact on our consolidated financial statements. Recently Issued Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09 “ Income Taxes (Topic 740): Improvements to Income Tax Disclosures ” (“ASU 2023-09”). This ASU requires public business entities to annually (i) disclose specific categories in the rate reconciliation and (ii) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). ASU 2023-09 will become effective for us in the fiscal year 2025 and early adoption is permitted. As of June 30, 2024, we had not early adopted this ASU and are currently evaluating its impact on our consolidated financial statements, including our annual disclosure within our Income Taxes note. In November 2023, the FASB issued ASU 2023-07, “ Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ” (“ASU 2023-07”). This ASU is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. This ASU will become effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. As of June 30, 2024, we had not early adopted this ASU and are currently evaluating its impact on our consolidated financial statements. |
Goodwill | We are required to assess our goodwill for impairment annually, or under certain circumstances, more frequently, such as when events or changes in circumstances indicate there may be impairment. We are required to write down the value of goodwill only when our assessment determines the carrying value of equity of our reporting unit exceeds its fair value. Our annual impairment assessment date for goodwill is October 31, at which date we assess goodwill at our reporting unit. In reviewing the criteria for reporting units, we have determined that we are one reporting unit. Second Quarter 2023 Goodwill Impairment Analysis The sustained decline in Lumen's share price during the second quarter of 2023 was considered a triggering event requiring evaluation of goodwill impairment; as such, we estimated the fair value using only the market approach. Applying this approach, we utilized company comparisons and analyst reports within the telecommunications industry which supported a range of fair values derived from annualized revenue and Earnings Before Interest, Tax, Depreciation and Amortization ("EBITDA") multiples between 1.5x and 4.3x and 4.6x and 10.5x, respectively. We selected a revenue multiple within and an EBITDA multiple below these comparable market multiples. For the three months ended June 30, 2023, based on our assessment performed as described above, we concluded that goodwill was not impaired. The market approach that we used in the quarter ended June 30, 2023 incorporated estimates and assumptions related to the forecasted results for the remainder of the year, including revenues, expenses, and the achievement of certain strategic initiatives. In developing the market multiples, we considered observed trends of our industry participants. Our assessment included many factors that required significant judgment. Alternative interpretations of these factors could have resulted in different conclusions. |
Operating Lease Revenue | Operating Lease Revenue Qwest leases various data transmission capacity, office facilities, switching facilities and other network sites to third parties under operating leases. Lease and sublease revenue are included in Operating Revenue in our consolidated statements of operations. |
Goodwill, Customer Relationsh_2
Goodwill, Customer Relationships and Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | Goodwill and other intangible assets consisted of the following: June 30, 2024 December 31, 2023 (Dollars in millions) Goodwill (1) $ 6,955 6,955 Other intangible assets, less accumulated amortization of $1,953 and $1,966 $ 92 103 ______________________________________________________________________ (1) |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | We estimate that future total amortization expense for finite-lived intangible assets will be as follows: (Dollars in millions) 2024 (remaining six months) $ 16 2025 27 2026 16 2027 12 2028 9 2029 and thereafter 12 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue | The following tables provide our total revenue by product and service category as well as the amount of revenue that is not subject to ASC 606, "Revenue from Contracts with Customers" ("ASC 606"), but is instead governed by other accounting standards: Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 Total Revenue Adjustments for Non-ASC 606 Revenue (1) Total Revenue from Contracts with Customers Total Revenue Adjustments for Non-ASC 606 Revenue (1) Total Revenue from Contracts with Customers (Dollars in millions) Other Broadband $ 237 (20) 217 283 (24) 259 Voice and Other 132 (4) 128 150 (4) 146 Fiber Broadband 98 (3) 95 123 (3) 120 Harvest 240 (31) 209 275 (36) 239 Nurture 89 (2) 87 94 (2) 92 Grow 33 (2) 31 39 — 39 Affiliate Services 560 (12) 548 503 (11) 492 Total revenue $ 1,389 (74) 1,315 1,467 (80) 1,387 Six Months Ended June 30, 2024 Six Months Ended June 30, 2023 Total Revenue Adjustments for Non-ASC 606 Revenue (1) Total Revenue from Contracts with Customers Total Revenue Adjustments for Non-ASC 606 Revenue (1) Total Revenue from Contracts with Customers (Dollars in millions) Other Broadband $ 489 (41) 448 576 (49) 527 Voice and Other 265 (8) 257 306 (8) 298 Fiber Broadband 197 (6) 191 245 (6) 239 Harvest 479 (63) 416 542 (73) 469 Nurture 178 (4) 174 199 (4) 195 Grow 67 (2) 65 77 — 77 Affiliate Services 1,106 (24) 1,082 1,063 (22) 1,041 Total revenue $ 2,781 (148) 2,633 3,008 (162) 2,846 ____________________________________________________________ (1) Includes regulatory revenue and lease revenue not within the scope of ASC 606. |
Customer Receivables and Contract Balances | The following table provides balances of customer receivables, contract assets and contract liabilities as of June 30, 2024 and December 31, 2023: June 30, 2024 December 31, 2023 (Dollars in millions) Customer receivables (1) $ 228 210 Contract assets 7 7 Contract liabilities 245 269 ______________________________________________________________________ (1) Reflects gross customer receivables, including gross affiliate receivables, of $258 million and $239 million, net of allowance for credit losses of $30 million and $29 million, at June 30, 2024 and December 31, 2023, respectively. |
Contract Costs | The following tables provide changes in our contract acquisition costs and fulfillment costs: Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 Acquisition Costs Fulfillment Costs Acquisition Costs Fulfillment Costs (Dollars in millions) Beginning Balance $ 57 47 58 46 Cost Incurred 9 9 13 9 Amortization (10) (9) (12) (10) Ending Balances $ 56 47 59 45 Six Months Ended June 30, 2024 Six Months Ended June 30, 2023 Acquisition Costs Fulfillment Costs Acquisition Costs Fulfillment Costs (Dollars in millions) Beginning Balance $ 58 46 61 46 Cost incurred 19 19 22 19 Amortization (21) (18) (24) (20) Ending Balances $ 56 47 59 45 |
Credit Losses on Financial In_2
Credit Losses on Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Credit Loss [Abstract] | |
Financing Receivable, Allowance for Credit Loss | The following table presents the activity of our allowance for credit losses by accounts receivable portfolio for the six months ended June 30, 2024: Business Mass Markets Total (Dollars in millions) As of December 31, 2023 $ 14 20 34 Provision for expected losses 7 22 29 Write-offs charged against the allowance (6) (23) (29) Recoveries collected — 1 1 Ending balance at June 30, 2024 $ 15 20 35 |
Fair Value Disclosure (Tables)
Fair Value Disclosure (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Amounts and Estimated Fair Values | The following table presents the carrying amounts and estimated fair values of our financial liabilities as of June 30, 2024 and December 31, 2023, as well as the input level used to determine the fair values indicated below: June 30, 2024 December 31, 2023 Input Carrying Fair Carrying Fair (Dollars in millions) Liabilities—Long-term debt (excluding finance lease and other obligations) 2 $ 1,937 956 2,153 1,162 |
Other Financial Information (Ta
Other Financial Information (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Current Assets | The following table presents details of other current assets on our consolidated balance sheets: June 30, 2024 December 31, 2023 (Dollars in millions) Prepaid expenses $ 57 48 Contract acquisition costs 31 34 Contract fulfillment costs 28 28 Assets held for sale 29 29 Other 6 5 Total other current assets $ 151 144 |
Schedule of Other Current Liabilities | The following table presents details of other current liabilities on our consolidated balance sheets: June 30, 2024 December 31, 2023 (Dollars in millions) Current affiliate obligation $ 52 52 Current operating lease liability 18 20 Other 52 49 Total other current liabilities $ 122 121 |
Schedule of Other Noncurrent Liabilities | The following table presents details of other noncurrent liabilities on our consolidated balance sheets: June 30, 2024 December 31, 2023 (Dollars in millions) Unrecognized tax benefits $ 461 442 Noncurrent operating lease liability 44 47 Other 187 190 Total other noncurrent liabilities $ 692 679 |
Accounting Policies - General (
Accounting Policies - General (Details) | Jun. 30, 2024 state |
Accounting Policies [Abstract] | |
Number of states in which entity operates | 14 |
Accounting Policies- Segments (
Accounting Policies- Segments (Details) | 6 Months Ended |
Jun. 30, 2024 segment | |
Accounting Policies [Abstract] | |
Number of reportable segments | 1 |
Background - Change in Accounti
Background - Change in Accounting Estimates and Correction of Immaterial Errors (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2024 | Jan. 01, 2024 | Dec. 31, 2023 | Jan. 01, 2023 | |
Change in Accounting Estimate [Line Items] | |||||
Retained Earnings (Accumulated Deficit) | $ 1,437 | $ 1,437 | $ 706 | ||
Fiber Network Assets | |||||
Change in Accounting Estimate [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 30 years | 25 years | |||
Fiber Network Assets | Change in Accounting Method Accounted for as Change in Estimate | |||||
Change in Accounting Estimate [Line Items] | |||||
Depreciation | (6) | (12) | |||
Depreciation, Net Of Tax | (4) | (9) | |||
Competitive Local Exchange Carriers Fixed Assets | Change in Accounting Method Accounted for as Change in Estimate | |||||
Change in Accounting Estimate [Line Items] | |||||
Depreciation | (24) | (48) | |||
Depreciation, Net Of Tax | $ (18) | $ (36) | |||
Correction Of Error From Understatement Of Revenues And Network Expenses Prior To 2021 | |||||
Change in Accounting Estimate [Line Items] | |||||
Retained Earnings (Accumulated Deficit) | $ 13 |
Goodwill, Customer Relationsh_3
Goodwill, Customer Relationships and Other Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | $ 6,955 | $ 6,955 |
Goodwill, Impaired, Accumulated Impairment Loss | 2,400 | 2,400 |
Other Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets, less accumulated amortization | 92 | 103 |
Accumulated amortization | $ 1,953 | $ 1,966 |
Goodwill, Customer Relationsh_4
Goodwill, Customer Relationships and Other Intangible Assets - Additional Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) reporting_unit | Jun. 30, 2023 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Number of reporting units | reporting_unit | 1 | |||
Intangible assets, gross (including goodwill) | $ 9,000 | $ 9,000 | ||
Amortization of intangible assets | $ 12 | $ 16 | $ 25 | $ 33 |
Minimum | Measurement Input, Revenue Multiple | ||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Goodwill Impairment, Measurement Input | 1.5 | 1.5 | ||
Goodwill [Line Items] | ||||
Goodwill Impairment, Measurement Input | 1.5 | 1.5 | ||
Minimum | Measurement Input, EBITDA Multiple | ||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Goodwill Impairment, Measurement Input | 4.6 | 4.6 | ||
Goodwill [Line Items] | ||||
Goodwill Impairment, Measurement Input | 4.6 | 4.6 | ||
Maximum | Measurement Input, Revenue Multiple | ||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Goodwill Impairment, Measurement Input | 4.3 | 4.3 | ||
Goodwill [Line Items] | ||||
Goodwill Impairment, Measurement Input | 4.3 | 4.3 | ||
Maximum | Measurement Input, EBITDA Multiple | ||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Goodwill Impairment, Measurement Input | 10.5 | 10.5 | ||
Goodwill [Line Items] | ||||
Goodwill Impairment, Measurement Input | 10.5 | 10.5 |
Goodwill, Customer Relationsh_5
Goodwill, Customer Relationships and Other Intangible Assets - Schedule of Future Amortization Expense (Details) $ in Millions | Jun. 30, 2024 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 (remaining six months) | $ 16 |
2025 | 27 |
2026 | 16 |
2027 | 12 |
2028 | 9 |
Finite-Lived Intangible Asset, Expected Amortization, Year Five and Thereafter | $ 12 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | $ 1,389 | $ 1,467 | $ 2,781 | $ 3,008 |
Adjustments for non-ASC 606 revenue | (74) | (80) | (148) | (162) |
Total Revenue from Contracts with Customers | 1,315 | 1,387 | 2,633 | 2,846 |
Nurture | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 237 | 283 | 489 | 576 |
Adjustments for non-ASC 606 revenue | (20) | (24) | (41) | (49) |
Total Revenue from Contracts with Customers | 217 | 259 | 448 | 527 |
Grow | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 132 | 150 | 265 | 306 |
Adjustments for non-ASC 606 revenue | (4) | (4) | (8) | (8) |
Total Revenue from Contracts with Customers | 128 | 146 | 257 | 298 |
Harvest | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 98 | 123 | 197 | 245 |
Adjustments for non-ASC 606 revenue | (3) | (3) | (6) | (6) |
Total Revenue from Contracts with Customers | 95 | 120 | 191 | 239 |
Fiber Broadband | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 240 | 275 | 479 | 542 |
Adjustments for non-ASC 606 revenue | (31) | (36) | (63) | (73) |
Total Revenue from Contracts with Customers | 209 | 239 | 416 | 469 |
Voice and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 89 | 94 | 178 | 199 |
Adjustments for non-ASC 606 revenue | (2) | (2) | (4) | (4) |
Total Revenue from Contracts with Customers | 87 | 92 | 174 | 195 |
Other Broadband | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 33 | 39 | 67 | 77 |
Adjustments for non-ASC 606 revenue | (2) | 0 | (2) | 0 |
Total Revenue from Contracts with Customers | 31 | 39 | 65 | 77 |
Affiliate Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 560 | 503 | 1,106 | 1,063 |
Adjustments for non-ASC 606 revenue | (12) | (11) | (24) | (22) |
Total Revenue from Contracts with Customers | $ 548 | $ 492 | $ 1,082 | $ 1,041 |
Revenue Recognition - Operating
Revenue Recognition - Operating Lease Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | ||||
Lease income | $ 71 | $ 78 | $ 142 | $ 158 |
Percent of operating revenue | 5% | 5% | 5% | 5% |
Revenue Recognition - Customer
Revenue Recognition - Customer Receivables and Contract Balances (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Jan. 01, 2024 | Dec. 31, 2023 | Jan. 01, 2023 | |
Revenue from Contract with Customer [Abstract] | |||||||
Customer receivables | $ 228 | $ 228 | $ 210 | ||||
Contract assets | 7 | 7 | 7 | ||||
Contract liabilities | 245 | 245 | $ 269 | 269 | $ 343 | ||
Gross affiliate receivables | 258 | 258 | 239 | ||||
Allowance for credit losses | 30 | 30 | $ 29 | ||||
Amounts included in contract liability at the beginning of the period | $ 13 | $ 10 | $ 148 | $ 149 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information, Contract Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Jan. 01, 2024 | Dec. 31, 2023 | Jan. 01, 2023 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||||
Revenue recognized from prior year contract liability | $ 13 | $ 10 | $ 148 | $ 149 | |||
Contract liabilities | $ 245 | $ 245 | $ 269 | $ 269 | $ 343 | ||
Minimum | |||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||||
Contract term | 1 year | ||||||
Maximum | |||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||||
Contract term | 5 years | ||||||
Weighted Average | Mass Markets Customers, Average Contract Life | |||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||||
Length of customer life | 50 months | ||||||
Weighted Average | Business Customer, Average Contract Life | |||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||||
Length of customer life | 35 months |
Revenue Recognition - Additio_2
Revenue Recognition - Additional Information, Performance Obligation (Details) $ in Millions | Jun. 30, 2024 USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 2,700 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | 2,700 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 721 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction, period | 6 months |
Remaining performance obligation | $ 721 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 1,000 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction, period | 1 year |
Remaining performance obligation | $ 1,000 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 996 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction, period | 3 years |
Remaining performance obligation | $ 996 |
Revenue Recognition - Contract
Revenue Recognition - Contract Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Acquisition Costs | ||||
Capitalized Contract Cost [Line Items] | ||||
Beginning Balance | $ 57 | $ 58 | $ 58 | $ 61 |
Cost incurred | 9 | 13 | 19 | 22 |
Amortization | (10) | (12) | (21) | (24) |
Ending Balances | 56 | 59 | 56 | 59 |
Fulfillment Costs | ||||
Capitalized Contract Cost [Line Items] | ||||
Beginning Balance | 47 | 46 | 46 | 46 |
Cost incurred | 9 | 9 | 19 | 19 |
Amortization | (9) | (10) | (18) | (20) |
Ending Balances | $ 47 | $ 45 | $ 47 | $ 45 |
Credit Losses on Financial In_3
Credit Losses on Financial Instruments (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Financing Receivable, Allowance for Credit Loss | |
Beginning balance | $ 34 |
Provision for expected losses | 29 |
Write-offs charged against the allowance | (29) |
Ending balance | 35 |
Recoveries collected | 1 |
Business Portfolio | |
Financing Receivable, Allowance for Credit Loss | |
Beginning balance | 14 |
Provision for expected losses | 7 |
Write-offs charged against the allowance | (6) |
Ending balance | 15 |
Recoveries collected | 0 |
Mass Market Portfolio | |
Financing Receivable, Allowance for Credit Loss | |
Beginning balance | 20 |
Provision for expected losses | 22 |
Write-offs charged against the allowance | (23) |
Ending balance | 20 |
Recoveries collected | $ 1 |
Long-Term Debt and Note Payab_2
Long-Term Debt and Note Payable - Affiliate - Schedule of Long Term Debt (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2024 | Dec. 31, 2023 | |
Long-term debt | ||
Debt Instrument, Unamortized Discount (Premium), Net | $ 2 | $ 4 |
Debt Issuance Costs, Net | (51) | (52) |
Long-Term Debt and Lease Obligation, Including Current Maturities, Total | 1,941 | 2,157 |
Long-Term Debt and Lease Obligation, Current | (1) | (1) |
Long-Term Debt and Lease Obligation | 1,940 | 2,156 |
Senior Notes [Member] | ||
Long-term debt | ||
Long-term debt, gross | $ 1,986 | 1,986 |
Senior Notes [Member] | Minimum | ||
Long-term debt | ||
Stated interest rate | 6.50% | |
Senior Notes [Member] | Maximum | ||
Long-term debt | ||
Stated interest rate | 7.75% | |
Term loan | ||
Long-term debt | ||
Basis spread on variable rate | 2.50% | |
Long-term debt, gross | $ 0 | $ 215 |
Weighted average interest rate | 7.97% | |
Finance Lease Obligation [Member] | ||
Long-term debt | ||
Long-term debt, gross | $ 4 | $ 4 |
Long-Term Debt and Note Payab_3
Long-Term Debt and Note Payable - Affiliate - Schedule of Debt Maturity (Details) $ in Millions | Jun. 30, 2024 USD ($) |
Debt Disclosure [Abstract] | |
2024 (remaining six months) | $ 0 |
2025 | 251 |
2025 | 1 |
2026 | 1 |
2027 | 0 |
2029 and thereafter | 1,737 |
Debt and Lease Obligation | $ 1,990 |
Restructuring and Related Act_2
Restructuring and Related Activities (Details) - Employee Severance - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | |
Apr. 30, 2024 | Jun. 30, 2024 | Dec. 31, 2023 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Reserve | $ 7 | $ 1 | |
Restructuring Charges | 29 | ||
Payments for Restructuring | $ (23) | ||
Workforce Reduction | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring And Related Cost, Percentage Of Positions Eliminated | 3% | ||
Restructuring Costs | $ 25 |
Fair Value Disclosure (Details)
Fair Value Disclosure (Details) - Fair value measurements, nonrecurring - Fair value inputs, Level 2 - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Carrying Amount | ||
Fair Value Disclosure | ||
Liabilities—Long-term debt (excluding finance lease and other obligations) | $ 1,937 | $ 2,153 |
Fair Value | ||
Fair Value Disclosure | ||
Liabilities—Long-term debt (excluding finance lease and other obligations) | $ 956 | $ 1,162 |
Related Party Disclosures (Deta
Related Party Disclosures (Details) - Affiliated entity - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Direct Revenue From Related Party | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Amounts of Transaction | $ 417 | $ 367 | $ 818 | $ 794 |
Allocated Revenue | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Amounts of Transaction | $ 143 | $ 136 | $ 288 | $ 269 |
Commitments, Contingencies an_2
Commitments, Contingencies and Other Items (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2024 USD ($) patent | |
Loss Contingencies [Line Items] | |
Estimate of possible loss | $ 17,000 |
Number of patent infringement lawsuits expected to go to trial within the next twelve months | patent | 1 |
Marshall Fire Litigation | Minimum | Pending Litigation | |
Loss Contingencies [Line Items] | |
Estimate of possible loss | $ 2,000,000 |
Unfavorable Regulatory Action | |
Loss Contingencies [Line Items] | |
Estimate of possible loss | $ 300 |
Other Financial Information- Ot
Other Financial Information- Other Current Assets (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 57 | $ 48 |
Contract acquisition costs | 31 | 34 |
Contract fulfillment costs | 28 | 28 |
Assets held for sale | 29 | 29 |
Other | 6 | 5 |
Total other current assets | $ 151 | $ 144 |
Other Financial Information - O
Other Financial Information - Other Current Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Current operating lease liability | $ 18 | $ 20 |
Other | 52 | 49 |
Total other current liabilities | 122 | 121 |
Accrued Liabilities, Current | $ 52 | $ 52 |
Other Financial Information -_2
Other Financial Information - Other Noncurrent Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Unrecognized tax benefits | $ 461 | $ 442 |
Noncurrent operating lease liability | 44 | 47 |
Other | 187 | 190 |
Total other noncurrent liabilities | $ 692 | $ 679 |
Labor Union Contracts (Details)
Labor Union Contracts (Details) - Union employees concentration risk | 6 Months Ended |
Jun. 30, 2024 | |
Employees covered under collective bargaining agreements | |
Labor Union Contracts | |
Concentration risk percentage | 42% |
Workforce Subject to Collective-Bargaining Arrangements Expiring within One Year | |
Labor Union Contracts | |
Concentration risk percentage | 1% |