QWEST CORP, 10-Q filed on 5/3/2023
Quarterly Report
v3.23.1
Cover - shares
 3 Months Ended
Mar. 31, 2023
May 03, 2023
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Mar. 31, 2023  
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 100 CenturyLink Drive,  
Entity Address, City or Town Monroe,  
Entity Address, State or Province LA  
Entity Address, Postal Zip Code 71203  
City Area Code 318  
Local Phone Number 388-9000  
Entity 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)   1
Entity Central Index Key 0000068622  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2023  
Document Fiscal Period Focus Q1  
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  
v3.23.1
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
OPERATING REVENUE    
Total operating revenue $ 1,541 $ 1,656
OPERATING EXPENSES    
Cost of services and products (exclusive of depreciation and amortization) 387 408
Selling, general and administrative 128 109
Operating expenses—affiliates 191 176
Depreciation and amortization 197 210
Total operating expenses 903 903
OPERATING INCOME 638 753
OTHER (EXPENSE) INCOME    
Interest expense (27) (27)
Interest income - affiliate, net 1  
Interest expense - affiliate, net   (24)
Other income, net 1 5
Total other expense, net (25) (46)
INCOME BEFORE INCOME TAX EXPENSE 613 707
Income tax expense 159 179
NET INCOME 454 528
Non-affiliate services    
OPERATING REVENUE    
Total operating revenue 981 1,075
Affiliate services    
OPERATING REVENUE    
Total operating revenue $ 560 $ 581
v3.23.1
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)
$ in Millions
Mar. 31, 2023
Dec. 31, 2022
CURRENT ASSETS    
Cash and cash equivalents $ 4 $ 8
Accounts receivable, less allowance of $34 and $36 338 309
Advances to affiliates 978 576
Other 169 120
Total current assets 1,489 1,013
Property, plant and equipment, net of accumulated depreciation of $7,789 and $7,617 8,338 8,273
GOODWILL AND OTHER ASSETS    
Goodwill 9,360 9,360
Other intangible assets, net 129 138
Other, net 154 141
Total goodwill and other assets 9,643 9,639
TOTAL ASSETS 19,470 18,925
CURRENT LIABILITIES    
Current maturities of long-term debt 1 2
Accounts payable 305 213
Accrued expenses and other liabilities    
Salaries and benefits 116 127
Income and other taxes 116 89
Other 127 130
Current portion of deferred revenue 169 167
Total current liabilities 834 728
LONG-TERM DEBT 2,156 2,155
DEFERRED CREDITS AND OTHER LIABILITIES    
Deferred income taxes, net 1,272 1,282
Affiliate obligations, net 536 552
Other 664 654
Total deferred credits and other liabilities 2,472 2,488
COMMITMENTS AND CONTINGENCIES (Note 7)
STOCKHOLDER'S EQUITY    
Common stock - one share without par value, owned by Qwest Services Corporation 10,050 10,050
Retained earnings 3,958 3,504
Total stockholder's equity 14,008 13,554
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 19,470 $ 18,925
v3.23.1
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($)
$ in Millions
Mar. 31, 2023
Dec. 31, 2022
Statement of Financial Position [Abstract]    
Accounts receivable, allowance $ 34 $ 36
PP&E, accumulated depreciation $ 7,789 $ 7,617
Common stock, share issued (in shares) 1 1
Common stock, share outstanding (in shares) 1 1
v3.23.1
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
OPERATING ACTIVITIES    
Net income $ 454 $ 528
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 197 210
Deferred income taxes (10) (2)
Provision for uncollectible accounts 13 7
Accrued interest on affiliate note 0 28
Changes in current assets and liabilities:    
Accounts receivable (42) 15
Accounts payable 6 (33)
Accrued income and other taxes 27 22
Other current assets and liabilities, net (34) (56)
Changes in other noncurrent assets and liabilities, net (4) (5)
Changes in affiliate obligations, net (16) (29)
Other, net 5 2
Net cash provided by operating activities 596 687
INVESTING ACTIVITIES    
Capital expenditures (196) (144)
Changes in advances to affiliates (402) (482)
Proceeds from sale of property, plant and equipment and other assets 0 1
Net cash used in investing activities (598) (625)
FINANCING ACTIVITIES    
Payments of long-term debt (2) 0
Changes in advances from affiliates 0 (55)
Net cash used in financing activities (2) (55)
Net (decrease) increase in cash, cash equivalents and restricted cash (4) 7
Cash, cash equivalents and restricted cash at beginning of period 10 4
Cash, cash equivalents and restricted cash at end of period 6 11
Supplemental cash flow information:    
Income taxes paid, net (161) (178)
Interest paid, including affiliate interest (net of capitalized interest of $10 and $6) (30) (31)
Cash, cash equivalents and restricted cash:    
Cash and cash equivalents 4 9
Restricted cash - noncurrent 2 2
Total $ 6 $ 11
v3.23.1
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Statement of Cash Flows [Abstract]    
Interest paid, capitalized interest $ 10 $ 6
v3.23.1
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (UNAUDITED) - USD ($)
$ in Millions
Total
COMMON STOCK
RETAINED EARNINGS
Balance at beginning of period at Dec. 31, 2021   $ 10,050 $ 1,585
Increase (Decrease) in Stockholder's Equity      
Net income     528
Balance at end of period at Mar. 31, 2022 $ 12,163 10,050 2,113
Balance at beginning of period at Dec. 31, 2022 13,554 10,050 3,504
Increase (Decrease) in Stockholder's Equity      
Net income     454
Balance at end of period at Mar. 31, 2023 $ 14,008 $ 10,050 $ 3,958
v3.23.1
Background
 3 Months Ended
Mar. 31, 2023
Accounting Policies [Abstract]  
Background Background
General

We are an integrated facilities-based technology and communications company focused on providing our business and mass markets customers with a broad array of integrated communications products and services necessary to fully participate in our ever-evolving digital world. 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, 2022, which was derived from our audited consolidated financial statements, and our unaudited interim consolidated financial statements provided herein have been prepared in accordance with the instructions for Form 10-Q. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). However, in our opinion, the disclosures made therein are adequate to make the information presented not misleading. We believe these consolidated financial statements include all normal recurring adjustments necessary to fairly present the results for the interim periods. The consolidated results of operations and cash flows for the first three months of the year are not necessarily indicative of the consolidated results of operations and cash flows that might be expected for the entire year. These consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022.

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 (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.

Segments

Our operations are integrated into and reported as part of Lumen Technologies. Lumen's chief operating decision maker ("CODM") is our CODM but 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.
Summary of Significant Accounting Policies

Refer to the significant accounting policies described in Note 1—Background and Summary of Significant Accounting Policies to the consolidated financial statements and accompanying notes in Part II Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2022.

Recently Adopted Accounting Pronouncements

Supplier Finance Programs

On January 1, 2023, we adopted Accounting Standards Update (“ASU”) 2022-04, “Liabilities-Supplier Finance Program (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations” (“ASU 2022-04”). These amendments require that a company that uses a supplier finance program in connection with the purchase of goods or services disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, program activity during the period, changes from period to period and potential magnitude of program transactions. The adoption of ASU 2022-04 did not have any impact to our consolidated financial statements.

Credit Losses

On January 1, 2023, we adopted ASU 2022-02, "Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings (“TDR”) and Vintage Disclosures” (“ASU 2022-02”). The ASU eliminates the TDR recognition and measurement guidance, enhances existing disclosure requirements and introduces new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. The adoption of ASU 2022-02 did not have any impact to our consolidated financial statements.

Derivatives and Hedging

On January 1, 2023, we adopted ASU 2022-01, “Derivatives and Hedging (Topic 815): Fair Value Hedging-Portfolio Layer Method” ("ASU 2022-01"). The ASU expands the current single-layer method to allow multiple hedged layers of a single closed portfolio under the method. The adoption of ASU 2022-01 did not have any impact to our consolidated financial statements.

Business Combinations

On January 1, 2023, we adopted ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”). This ASU requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The adoption of ASU 2021-08 did not have any impact to our consolidated financial statements.

Government Assistance

On January 1, 2022, we adopted ASU 2021-10, "Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance” (“ASU 2021-10”). This ASU requires business entities to disclose information about certain types of government assistance they receive. The ASU only impacts annual financial statement note disclosures. The adoption of ASU 2021-10 did not have an impact to our consolidated financial statements.

Leases

On January 1, 2022, we adopted ASU 2021-05, Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments” (“ASU 2021-05”). This ASU (i) amends the lease classification requirements for lessors to align them with practice under ASC Topic 840, (ii) provides criteria for lessors to classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease; and (iii) provides guidance with respect to net investments by lessors under operating leases and other related topics. The adoption of ASU 2021-05 did not have a material impact to our consolidated financial statements.
Recently Issued Accounting Pronouncements

In March 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-02, “Investments-Equity method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method” (“ASU 2023-02”). These amendments allow reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. ASU 2023-02 will become effective for us in the first quarter of fiscal 2024 and early adoption is permitted. As of March 31, 2023, we do not expect ASU 2023-02 to have an impact to our consolidated financial statements.

In March 2023, the FASB issued ASU 2023-01, “Leases (Topic 842): Common Control Arrangements” (“ASU 2023-01”). These amendments require all entities to amortize leasehold improvements associated with common control leases over the useful life to the common control group. ASU 2023-01 will become effective for us in the first quarter of fiscal 2024 and early adoption is permitted. As of March 31, 2023, we do not expect ASU 2023-01 to have an impact to our consolidated financial statements.

In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions” (“ASU 2022-03”). These amendments clarify that a contractual restriction on the sales of an investment in an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. ASU 2022-03 will become effective for us in the first quarter of fiscal 2024 and early adoption is permitted. As of March 31, 2023, we do not expect ASU 2022-03 to have an impact to our consolidated financial statements.
v3.23.1
Goodwill, Customer Relationships and Other Intangible Assets
 3 Months Ended
Mar. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill, Customer Relationships and Other Intangible Assets Goodwill, Customer Relationships and Other Intangible Assets
Goodwill, customer relationships and other intangible assets consisted of the following:
March 31, 2023December 31, 2022
(Dollars in millions)
Goodwill$9,360 9,360 
Other intangible assets, less accumulated amortization of $1,938 and $1,924
$129 138 

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.

As of March 31, 2023, the gross carrying amount of goodwill, customer relationships and other intangible assets was $11.4 billion. The amortization expense for finite-lived intangible assets for the three months ended March 31, 2023 and 2022 totaled $17 million and $19 million, respectively.

We estimate that total amortization expense for intangible assets for the years ending December 31, 2023 through 2027 will be as follows:
(Dollars in millions)
2023 (remaining nine months)$48 
202432 
202516 
202610 
20277 
v3.23.1
Revenue Recognition
 3 Months Ended
Mar. 31, 2023
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, private line and other legacy services;

•Nurture, which includes our more mature offerings, including primarily ethernet;

•Grow, which includes products and services that we anticipate will grow, including dark fiber and wavelengths services; and

•Affiliate Services, which are communications services that we also provide to external customers. In
addition, we provide to our affiliates application development and support services and network support.

Reconciliation of Total Revenue to Revenue from Contracts with Customers

The following table provides 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 March 31, 2023Three Months Ended March 31, 2022
Total Revenue
Adjustments for Non-ASC 606 Revenue(1)
Total Revenue from Contracts with CustomersTotal Revenue
Adjustments for Non-ASC 606 Revenue(1)
Total Revenue from Contracts with Customers
(Dollars in millions)
Other Broadband$293 (25)268 334 (28)306 
Voice and Other156 (4)152 194 (16)178 
Fiber Broadband121 (3)118 110 (3)107 
Harvest267 (37)230 287 (41)246 
Nurture105 (2)103 112 (2)110 
Grow39 — 39 38 (3)35 
Affiliate Services560 (11)549 581 (11)570 
Total revenue$1,541 (82)1,459 1,656 (104)1,552 
____________________________________________________________
(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 March 31, 2023 and 2022, our gross rental income was $80 million and $88 million, respectively, which represents 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 March 31, 2023 and December 31, 2022:
March 31, 2023December 31, 2022
 (Dollars in millions)
Customer receivables (1)
$332 297 
Contract assets9 9 
Contract liabilities343 343 
______________________________________________________________________
(1)Reflects gross customer receivables, including gross affiliate receivables, of $357 million and $324 million, net of allowance for credit losses of $25 million and $27 million, at March 31, 2023 and December 31, 2022, 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 to five years depending on the service. Contract liabilities are included within deferred revenue in our consolidated balance sheets. During the three months ended March 31, 2023 and 2022, we recognized $139 million and $150 million, respectively, of revenue that was included in contract liabilities of $343 million and $317 million as of January 1, 2023 and January 1, 2022, respectively.

Performance Obligations

As of March 31, 2023, we expect to recognize approximately $1.7 billion of revenue in the future related to performance obligations associated with existing customer contracts that are partially or wholly unsatisfied. As of March 31, 2023, the transaction price related to unsatisfied performance obligations that are expected to be recognized for the remainder of 2023, 2024 and thereafter was $711 million, $436 million and $545 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 March 31, 2023Three Months Ended March 31, 2022
Acquisition CostsFulfillment CostsAcquisition CostsFulfillment Costs
(Dollars in millions)
Beginning Balance$61 $46 64 $47 
Cost incurred9 10 13 9 
Amortization(12)(10)(14)(9)
Ending Balances$58 46 63 47 

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 36 months for mass markets customers and average contract life of 33 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.
v3.23.1
Credit Losses on Financial Instruments
 3 Months Ended
Mar. 31, 2023
Credit Loss [Abstract]  
Credit Losses on Financial Instruments Credit Losses on Financial Instruments
To assess our expected credit losses on financial instruments, we aggregate financial assets with similar risk characteristics to monitor their credit quality or deterioration over the life of such assets. We periodically monitor certain risk characteristics within our aggregated financial assets and revise their composition accordingly, to the extent internal and external risk factors change. We separately evaluate financial assets that do not share risk characteristics with other financial assets. Our financial assets measured at amortized cost primarily consist of accounts receivable.

We use a loss rate method to estimate our allowance for credit losses. Our determination of the current expected credit loss rate begins with our review of historical loss experience as a percentage of accounts receivable. We measure our historical loss period based on the average days to recognize accounts receivable as credit losses. When asset specific characteristics and current conditions change from those in the historical period, due to changes in our credit and collections strategy, certain classes of aged balances, or credit loss and recovery policies, we perform a qualitative and quantitative assessment to adjust our historical loss rate. We use regression analysis to develop an expected loss rate using historical experience and economic data over a forecast period. We measure our forecast period based on the average days to collect payment on billed accounts receivable. To determine our current allowance for credit losses, we combine the historical and expected credit loss rates and apply them to our period end accounts receivable.

If there is an unexpected deterioration of a customer's financial condition or an unexpected change in economic conditions, including macroeconomic events, we assess the need to adjust the allowance for credit losses. Any such resulting adjustments would affect earnings in the period that adjustments are made.

The assessment of the correlation between historical observed default rates, current conditions and forecasted economic conditions requires judgment. Alternative interpretations of these factors could have resulted in different conclusions regarding our allowance for credit losses. The amount of credit loss is sensitive to changes in circumstances and forecasted economic conditions. Our historical credit loss experience, current conditions and forecast of economic conditions may also not be representative of the customers' actual default experience in the future, and we may use methodologies that differ from those used by other companies.
The following table presents the activity of our allowance for credit losses by accounts receivable portfolio for the three months ended March 31, 2023:
BusinessMass MarketsTotal
(Dollars in millions)
As of December 31, 2022$20 16 36 
Provision for expected losses3 10 13 
Write-offs charged against the allowance(3)(12)(15)
Ending balance at March 31, 2023$20 14 34 
v3.23.1
Long-Term Debt and Note Payable - Affiliate
 3 Months Ended
Mar. 31, 2023
Debt Disclosure [Abstract]  
Long-Term Debt and Note Payable - Affiliate Long-Term Debt and Note Payable - Affiliate
The following chart reflects the consolidated long-term debt of Qwest Corporation and its subsidiaries, including finance lease and other obligations, unamortized premiums, net and unamortized debt issuance costs:
Interest Rates (1)
Maturities (1)
March 31, 2023December 31, 2022
   (Dollars in millions)
Senior notes
6.500% - 7.750%
2025 - 2057$1,986 1,986 
Term loan (2)
LIBOR + 2.50%
2027215 215 
Finance lease and other obligationsVariousVarious4 3 
Unamortized premiums, net  4 5 
Unamortized debt issuance costs(52)(52)
Total long-term debt  $2,157 2,157 
Less current maturities(1)(2)
Long-term debt, excluding current maturities$2,156 2,155 
_______________________________________________________________________________
(1)As of March 31, 2023.
(2)Qwest Corporation's Term Loan had interest rates of 7.422% and 6.640% as of March 31, 2023 and December 31, 2022, respectively.

Long-Term Debt Maturities

Set forth below is the aggregate principal amount of our long-term debt as of March 31, 2023 (excluding unamortized premiums, net, unamortized debt issuance costs and note payable-affiliate) maturing during the following years:
(Dollars in millions)
2023 (remaining nine months)$— 
20241 
2025251 
2026— 
2027215 
2028 and thereafter1,738 
Total long-term debt$2,205 
Note Payable - Affiliate

On June 30, 2022, Qwest Corporation entered into an amended and restated revolving promissory note ("Note Payable - Affiliate") with an affiliate of our ultimate parent company, Lumen Technologies, Inc. ("Lender"), that replaces the previous revolving promissory agreement that was scheduled to mature on June 30, 2022 ("Prior Note Payable - Affiliate"). The Note Payable - Affiliate, as amended, provides Qwest Corporation with a funding commitment of up to $2.0 billion. Any outstanding principal balance owed by Qwest Corporation under the Note Payable - Affiliate and the accrued interest thereon is due and payable on demand, but if no demand is made, then on the maturity date. The Note Payable - Affiliate has an initial maturity date of June 30, 2027, but will automatically renew for an unlimited number of successive twelve-month periods unless the Lender provides notice of its intent not to renew at least 30 days prior to the initial maturity date or each subsequent maturity date.

In accordance with the terms of the amended Note Payable - Affiliate, interest is assessed every six months ending on June 30th and December 31st (an "Interest Period") and is payable within 30 days of the end of the respective Interest Period. Interest is accrued on the outstanding principal balance during the respective Interest Period using a weighted average per annum interest rate on the consolidated outstanding debt of Lumen Technologies, Inc. and its subsidiaries.

On September 30, 2022, Qwest Corporation repaid the outstanding principal and interest on the Note Payable - Affiliate of approximately $1.2 billion and $43 million, respectively. As of March 31, 2023, there was no outstanding principal or accrued interest under the Note Payable - Affiliate.

Compliance

As of March 31, 2023, we believe we were in compliance with the financial covenants contained in our material debt agreements in all material respects.
v3.23.1
Fair Value Disclosure
 3 Months Ended
Mar. 31, 2023
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, note payable-affiliate 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, accounts payable and note payable-affiliate approximate their fair values.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between independent and knowledgeable parties who are willing and able to transact for an asset or liability at the measurement date. We use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs when determining fair value and then we rank the estimated values based on the reliability of the inputs used following the fair value hierarchy.

We determined the fair values of our long-term debt, including the current portion, based on quoted market prices where available or, if not available, based on inputs other than quoted market prices in active markets that are either directly or indirectly observable such as discounted future cash flows using current market interest rates.

The three input levels in the hierarchy of fair value measurements are defined by the FASB generally as follows:
Input LevelDescription of Input
Level 1Observable inputs such as quoted market prices in active markets.
Level 2Inputs other than quoted prices in active markets that are either directly or indirectly observable.
Level 3Unobservable inputs in which little or no market data exists.
The following table presents the carrying amounts and estimated fair values of our financial liabilities as of March 31, 2023 and December 31, 2022, as well as the input level used to determine the fair values indicated below:
  March 31, 2023December 31, 2022
 Input
Level		Carrying
Amount		Fair
Value		Carrying
Amount		Fair
Value
  (Dollars in millions)
Liabilities—Long-term debt (excluding finance lease and other obligations)2$2,153 1,476 2,154 1,691 
v3.23.1
Commitments, Contingencies and Other Items
 3 Months Ended
Mar. 31, 2023
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. As a matter of course, we are prepared to both litigate these matters to judgment as needed, as well as to evaluate and consider reasonable settlement opportunities.

We review our litigation accrual liabilities on a quarterly basis, but in accordance with applicable accounting guidelines only establish accrual liabilities when losses are deemed probable and reasonably estimable and only revise previously-established accrual liabilities when warranted by changes in circumstances, in each case based on then-available information. As such, as of any given date we could have exposure to losses under proceedings as to which no liability has been accrued or as to which the accrued liability is inadequate. Subject to these limitations, at March 31, 2023 we had accrued $19 million in the aggregate for our litigation and non-income tax contingencies, which is included in “Other” current liabilities and “Other Liabilities” on our consolidated balance sheet as of such date. We cannot at this time estimate the reasonably possible loss or range of loss in excess of this $19 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

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.

The consumer class actions, the securities investor class actions, and the federal derivative actions were transferred to the U.S. District Court for the District of Minnesota for coordinated and consolidated pretrial proceedings as In Re: CenturyLink Sales Practices and Securities Litigation. Lumen Technologies has settled the consumer and securities investor class actions. Those settlements are final. The derivative actions remain pending.
Lumen 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 state attorneys general. While Lumen Technologies does not agree with allegations raised in these matters, it has been willing to consider reasonable settlements where appropriate.

AT&T Proceedings

In August 2022, certain of our indirect affiliates filed a complaint in federal district court in Colorado captioned Central Telephone Company of Virginia, et al, v. AT&T Corp., et al. The suit seeks relief and damages for AT&T’s failure to pay amounts for services it receives. AT&T disputes those claims and has asserted counterclaims alleging breach of contract and seeking declaratory relief. It has requested the court to enjoin the plaintiffs (including us) from terminating services for its failure to pay, and it has requested the court transfer the case to federal court in the southern district of New York for further proceedings. Also in August 2022, AT&T filed a separate lawsuit in federal court in the western district of Louisiana against Central Telephone Company of Virginia, us, and other of our indirect affiliates alleging, among other claims, breach of contract provisions pertaining to network architecture. We and the other plaintiff entities dispute AT&T’s claims.

Other Proceedings, Disputes and Contingencies

From time to time, we are involved in other proceedings incidental to our business, including patent infringement allegations, regulatory hearings relating primarily to our rates or services, actions relating to employee claims, various tax issues, environmental law issues, grievance hearings before labor regulatory agencies and miscellaneous third-party tort actions or commercial disputes.

We are currently defending several patent infringement lawsuits asserted against us by non-practicing entities, many of which are seeking substantial recoveries. These cases have progressed to various stages and one or more may go to trial within the next twelve months if they are not otherwise resolved. Where applicable, we are seeking full or partial indemnification from our vendors and suppliers. As with all litigation, we are vigorously defending these actions and, as a matter of course, are prepared to litigate these matters to judgment, as well as to evaluate and consider all reasonable settlement opportunities.

We are subject to various federal, state and local environmental protection and health and safety laws. From time to time, we are subject to judicial and administrative proceedings brought by various governmental authorities under these laws. Several such proceedings are currently pending, but none is reasonably expected to exceed $300,000 in fines and penalties.

The outcome of these other proceedings described under this heading is not predictable. However, based on current circumstances, we do not believe that the ultimate resolution of these other proceedings, after considering available defenses and any insurance coverage or indemnification rights, will have a material adverse effect on us.

The matters listed in this Note do not reflect all of our contingencies. For additional information on our contingencies, see Note 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, 2022. The ultimate outcome of the above-described matters may differ materially from the outcomes anticipated, estimated, projected or implied by us in certain of our statements appearing above in this Note, and proceedings currently viewed as immaterial by us may ultimately materially impact us.
v3.23.1
Dividends
 3 Months Ended
Mar. 31, 2023
Dividends [Abstract]  
Dividends Dividends
From time to time we may declare and pay dividends to our direct parent company, 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 three months ended March 31, 2023 and March 31, 2022, we declared and paid no dividends to QSC. Dividends paid, when applicable, are reflected on our consolidated statements of cash flows as financing activities.
v3.23.1
Other Financial Information
 3 Months Ended
Mar. 31, 2023
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Other Financial Information Other Financial Information
Other Current Assets

The following table presents details of other current assets on our consolidated balance sheets:

March 31, 2023December 31, 2022
(Dollars in millions)
Prepaid expenses$68 46
Contract acquisition costs37 38
Contract fulfillment costs30 30
Other34 6
Total other current assets$169 120

Other Current Liabilities

The following table presents details of other current liabilities on our consolidated balance sheets:

March 31, 2023December 31, 2022
(Dollars in millions)
Affiliate obligations$57 57 
Operating lease liabilities22 21 
Other48 52 
Total other current liabilities$127 130 

Other Noncurrent Liabilities

The following table presents details of other noncurrent liabilities on our consolidated balance sheets:

March 31, 2023December 31, 2022
(Dollars in millions)
Unrecognized tax benefits$434 427
Operating lease liabilities58 58
Other172 169
Total other noncurrent liabilities$664 654
v3.23.1
Labor Union Contracts
 3 Months Ended
Mar. 31, 2023
Risks and Uncertainties [Abstract]  
Labor Union Contracts Labor Union Contracts
    
As of March 31, 2023, approximately 43% of our employees were represented by the Communications Workers of America ("CWA") or the International Brotherhood of Electrical Workers ("IBEW"). None of our represented employees are subject to collective bargaining agreements that are scheduled to expire within the twelve-month period ending March 31, 2024. We believe relations with our employees continue to be generally good.
v3.23.1
Background (Policies)
 3 Months Ended
Mar. 31, 2023
Accounting Policies [Abstract]  
Basis of Presentation
Basis of Presentation

Our consolidated balance sheet as of December 31, 2022, which was derived from our audited consolidated financial statements, and our unaudited interim consolidated financial statements provided herein have been prepared in accordance with the instructions for Form 10-Q. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). However, in our opinion, the disclosures made therein are adequate to make the information presented not misleading. We believe these consolidated financial statements include all normal recurring adjustments necessary to fairly present the results for the interim periods. The consolidated results of operations and cash flows for the first three months of the year are not necessarily indicative of the consolidated results of operations and cash flows that might be expected for the entire year. These consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022.

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 (referred to herein as affiliates) have not been eliminated.
Segments SegmentsOur operations are integrated into and reported as part of Lumen Technologies. Lumen's chief operating decision maker ("CODM") is our CODM but 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.
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 to our consolidated financial statements.

Credit Losses

On January 1, 2023, we adopted ASU 2022-02, "Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings (“TDR”) and Vintage Disclosures” (“ASU 2022-02”). The ASU eliminates the TDR recognition and measurement guidance, enhances existing disclosure requirements and introduces new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. The adoption of ASU 2022-02 did not have any impact to our consolidated financial statements.

Derivatives and Hedging

On January 1, 2023, we adopted ASU 2022-01, “Derivatives and Hedging (Topic 815): Fair Value Hedging-Portfolio Layer Method” ("ASU 2022-01"). The ASU expands the current single-layer method to allow multiple hedged layers of a single closed portfolio under the method. The adoption of ASU 2022-01 did not have any impact to our consolidated financial statements.

Business Combinations

On January 1, 2023, we adopted ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”). This ASU requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The adoption of ASU 2021-08 did not have any impact to our consolidated financial statements.

Government Assistance

On January 1, 2022, we adopted ASU 2021-10, "Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance” (“ASU 2021-10”). This ASU requires business entities to disclose information about certain types of government assistance they receive. The ASU only impacts annual financial statement note disclosures. The adoption of ASU 2021-10 did not have an impact to our consolidated financial statements.

Leases

On January 1, 2022, we adopted ASU 2021-05, Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments” (“ASU 2021-05”). This ASU (i) amends the lease classification requirements for lessors to align them with practice under ASC Topic 840, (ii) provides criteria for lessors to classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease; and (iii) provides guidance with respect to net investments by lessors under operating leases and other related topics. The adoption of ASU 2021-05 did not have a material impact to our consolidated financial statements.
Recently Issued Accounting Pronouncements

In March 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-02, “Investments-Equity method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method” (“ASU 2023-02”). These amendments allow reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. ASU 2023-02 will become effective for us in the first quarter of fiscal 2024 and early adoption is permitted. As of March 31, 2023, we do not expect ASU 2023-02 to have an impact to our consolidated financial statements.

In March 2023, the FASB issued ASU 2023-01, “Leases (Topic 842): Common Control Arrangements” (“ASU 2023-01”). These amendments require all entities to amortize leasehold improvements associated with common control leases over the useful life to the common control group. ASU 2023-01 will become effective for us in the first quarter of fiscal 2024 and early adoption is permitted. As of March 31, 2023, we do not expect ASU 2023-01 to have an impact to our consolidated financial statements.

In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions” (“ASU 2022-03”). These amendments clarify that a contractual restriction on the sales of an investment in an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. ASU 2022-03 will become effective for us in the first quarter of fiscal 2024 and early adoption is permitted. As of March 31, 2023, we do not expect ASU 2022-03 to have an impact to 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.
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.
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.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.
v3.23.1
Goodwill, Customer Relationships and Other Intangible Assets (Tables)
 3 Months Ended
Mar. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Intangible Assets and Goodwill
Goodwill, customer relationships and other intangible assets consisted of the following:
March 31, 2023December 31, 2022
(Dollars in millions)
Goodwill$9,360 9,360 
Other intangible assets, less accumulated amortization of $1,938 and $1,924
$129 138 
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense We estimate that total amortization expense for intangible assets for the years ending December 31, 2023 through 2027 will be as follows:
(Dollars in millions)
2023 (remaining nine months)$48 
202432 
202516 
202610 
20277 
v3.23.1
Revenue Recognition (Tables)
 3 Months Ended
Mar. 31, 2023
Revenue from Contract with Customer [Abstract]  
Schedule of Revenue
The following table provides 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 March 31, 2023Three Months Ended March 31, 2022
Total Revenue
Adjustments for Non-ASC 606 Revenue(1)
Total Revenue from Contracts with CustomersTotal Revenue
Adjustments for Non-ASC 606 Revenue(1)
Total Revenue from Contracts with Customers
(Dollars in millions)
Other Broadband$293 (25)268 334 (28)306 
Voice and Other156 (4)152 194 (16)178 
Fiber Broadband121 (3)118 110 (3)107 
Harvest267 (37)230 287 (41)246 
Nurture105 (2)103 112 (2)110 
Grow39 — 39 38 (3)35 
Affiliate Services560 (11)549 581 (11)570 
Total revenue$1,541 (82)1,459 1,656 (104)1,552 
____________________________________________________________
(1)Includes regulatory revenue and lease revenue not within the scope of ASC 606.
Customer Receivables and Contract Balances
The following table provides balances of customer receivables, contract assets and contract liabilities as of March 31, 2023 and December 31, 2022:
March 31, 2023December 31, 2022
 (Dollars in millions)
Customer receivables (1)
$332 297 
Contract assets9 9 
Contract liabilities343 343 
______________________________________________________________________
(1)Reflects gross customer receivables, including gross affiliate receivables, of $357 million and $324 million, net of allowance for credit losses of $25 million and $27 million, at March 31, 2023 and December 31, 2022, respectively.
Contract Costs
The following tables provide changes in our contract acquisition costs and fulfillment costs:

Three Months Ended March 31, 2023Three Months Ended March 31, 2022
Acquisition CostsFulfillment CostsAcquisition CostsFulfillment Costs
(Dollars in millions)
Beginning Balance$61 $46 64 $47 
Cost incurred9 10 13 9 
Amortization(12)(10)(14)(9)
Ending Balances$58 46 63 47 
v3.23.1
Credit Losses on Financial Instruments (Tables)
 3 Months Ended
Mar. 31, 2023
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 three months ended March 31, 2023:
BusinessMass MarketsTotal
(Dollars in millions)
As of December 31, 2022$20 16 36 
Provision for expected losses3 10 13 
Write-offs charged against the allowance(3)(12)(15)
Ending balance at March 31, 2023$20 14 34 
v3.23.1
Long-Term Debt and Note Payable - Affiliate (Tables)
 3 Months Ended
Mar. 31, 2023
Debt Disclosure [Abstract]  
Schedule of Long-Term Debt
The following chart reflects the consolidated long-term debt of Qwest Corporation and its subsidiaries, including finance lease and other obligations, unamortized premiums, net and unamortized debt issuance costs:
Interest Rates (1)
Maturities (1)
March 31, 2023December 31, 2022
   (Dollars in millions)
Senior notes
6.500% - 7.750%
2025 - 2057$1,986 1,986 
Term loan (2)
LIBOR + 2.50%
2027215 215 
Finance lease and other obligationsVariousVarious4 3 
Unamortized premiums, net  4 5 
Unamortized debt issuance costs(52)(52)
Total long-term debt  $2,157 2,157 
Less current maturities(1)(2)
Long-term debt, excluding current maturities$2,156 2,155 
_______________________________________________________________________________
(1)As of March 31, 2023.
(2)Qwest Corporation's Term Loan had interest rates of 7.422% and 6.640% as of March 31, 2023 and December 31, 2022, respectively.
Schedule of Maturities of Long-Term Debt
Set forth below is the aggregate principal amount of our long-term debt as of March 31, 2023 (excluding unamortized premiums, net, unamortized debt issuance costs and note payable-affiliate) maturing during the following years:
(Dollars in millions)
2023 (remaining nine months)$— 
20241 
2025251 
2026— 
2027215 
2028 and thereafter1,738 
Total long-term debt$2,205 
v3.23.1
Fair Value Disclosure (Tables)
 3 Months Ended
Mar. 31, 2023
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 March 31, 2023 and December 31, 2022, as well as the input level used to determine the fair values indicated below:
  March 31, 2023December 31, 2022
 Input
Level		Carrying
Amount		Fair
Value		Carrying
Amount		Fair
Value
  (Dollars in millions)
Liabilities—Long-term debt (excluding finance lease and other obligations)2$2,153 1,476 2,154 1,691 
v3.23.1
Other Financial Information (Tables)
 3 Months Ended
Mar. 31, 2023
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:

March 31, 2023December 31, 2022
(Dollars in millions)
Prepaid expenses$68 46
Contract acquisition costs37 38
Contract fulfillment costs30 30
Other34 6
Total other current assets$169 120
Schedule of Other Current Liabilities
The following table presents details of other current liabilities on our consolidated balance sheets:

March 31, 2023December 31, 2022
(Dollars in millions)
Affiliate obligations$57 57 
Operating lease liabilities22 21 
Other48 52 
Total other current liabilities$127 130 
Schedule of Other Noncurrent Liabilities
The following table presents details of other noncurrent liabilities on our consolidated balance sheets:

March 31, 2023December 31, 2022
(Dollars in millions)
Unrecognized tax benefits$434 427
Operating lease liabilities58 58
Other172 169
Total other noncurrent liabilities$664 654
v3.23.1
Accounting Policies - General (Details)
Mar. 31, 2023
state
Accounting Policies [Abstract]  
Number of states in which entity operates 14
v3.23.1
Accounting Policies- Segments (Details)
 3 Months Ended
Mar. 31, 2023
segment
Accounting Policies [Abstract]  
Number of reportable segments 1
v3.23.1
Goodwill, Customer Relationships and Other Intangible Assets - Schedule of Goodwill (Details) - USD ($)
$ in Millions
Mar. 31, 2023
Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]    
Goodwill $ 9,360 $ 9,360
Other Intangible Assets    
Finite-Lived Intangible Assets [Line Items]    
Other intangible assets, less accumulated amortization 129 138
Accumulated amortization $ 1,938 $ 1,924
v3.23.1
Goodwill, Customer Relationships and Other Intangible Assets - Additional Information (Details)
$ in Millions
 3 Months Ended
Mar. 31, 2023
USD ($)
reporting_unit
Mar. 31, 2022
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]    
Number of reporting units | reporting_unit 1  
Intangible assets, gross (including goodwill) $ 11,400  
Amortization of intangible assets $ 17 $ 19
v3.23.1
Goodwill, Customer Relationships and Other Intangible Assets - Schedule of Future Amortization Expense (Details)
$ in Millions
Mar. 31, 2023
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]  
2023 (remaining nine months) $ 48
2024 32
2025 16
2026 10
2027 $ 7
v3.23.1
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Disaggregation of Revenue [Line Items]    
Total Revenue $ 1,541 $ 1,656
Adjustments for non-ASC 606 revenue (82) (104)
Total Revenue from Contracts with Customers 1,459 1,552
Other Broadband    
Disaggregation of Revenue [Line Items]    
Total Revenue 293 334
Adjustments for non-ASC 606 revenue (25) (28)
Total Revenue from Contracts with Customers 268 306
Voice and Other    
Disaggregation of Revenue [Line Items]    
Total Revenue 156 194
Adjustments for non-ASC 606 revenue (4) (16)
Total Revenue from Contracts with Customers 152 178
Fiber Broadband    
Disaggregation of Revenue [Line Items]    
Total Revenue 121 110
Adjustments for non-ASC 606 revenue (3) (3)
Total Revenue from Contracts with Customers 118 107
Harvest    
Disaggregation of Revenue [Line Items]    
Total Revenue 267 287
Adjustments for non-ASC 606 revenue (37) (41)
Total Revenue from Contracts with Customers 230 246
Nurture    
Disaggregation of Revenue [Line Items]    
Total Revenue 105 112
Adjustments for non-ASC 606 revenue (2) (2)
Total Revenue from Contracts with Customers 103 110
Grow    
Disaggregation of Revenue [Line Items]    
Total Revenue 39 38
Adjustments for non-ASC 606 revenue 0 (3)
Total Revenue from Contracts with Customers 39 35
Affiliate Services    
Disaggregation of Revenue [Line Items]    
Total Revenue 560 581
Adjustments for non-ASC 606 revenue (11) (11)
Total Revenue from Contracts with Customers $ 549 $ 570
v3.23.1
Revenue Recognition - Operating Lease Revenue (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Revenue from Contract with Customer [Abstract]    
Lease income $ 80 $ 88
Percent of operating revenue 5.00% 5.00%
v3.23.1
Revenue Recognition - Customer Receivables and Contract Balances (Details) - USD ($)
$ in Millions
Mar. 31, 2023
Jan. 01, 2023
Dec. 31, 2022
Jan. 01, 2022
Revenue from Contract with Customer [Abstract]        
Customer receivables $ 332   $ 297  
Contract assets 9   9  
Contract liabilities 343 $ 343 343 $ 317
Gross affiliate receivables 357   324  
Allowance for credit losses $ 25   $ 27  
v3.23.1
Revenue Recognition - Additional Information, Contract Costs (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Jan. 01, 2023
Dec. 31, 2022
Jan. 01, 2022
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]          
Revenue recognized from prior year contract liability $ 139 $ 150      
Contract liabilities $ 343   $ 343 $ 343 $ 317
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 36 months        
Weighted Average | Business Customer, Average Contract Life          
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]          
Length of customer life 33 months        
v3.23.1
Revenue Recognition - Additional Information, Performance Obligation (Details)
$ in Millions
Mar. 31, 2023
USD ($)
Revenue from Contract with Customer [Abstract]  
Remaining performance obligation $ 1,700
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation 1,700
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01  
Revenue from Contract with Customer [Abstract]  
Remaining performance obligation $ 711
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Expected timing of satisfaction, period 9 months
Remaining performance obligation $ 711
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01  
Revenue from Contract with Customer [Abstract]  
Remaining performance obligation $ 436
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Expected timing of satisfaction, period 1 year
Remaining performance obligation $ 436
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01  
Revenue from Contract with Customer [Abstract]  
Remaining performance obligation $ 545
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Expected timing of satisfaction, period 3 years
Remaining performance obligation $ 545
v3.23.1
Revenue Recognition - Contract Costs (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Acquisition Costs    
Capitalized Contract Cost [Line Items]    
Beginning Balance $ 61 $ 64
Cost incurred 9 13
Amortization (12) (14)
Ending Balances 58 63
Fulfillment Costs    
Capitalized Contract Cost [Line Items]    
Beginning Balance 46 47
Cost incurred 10 9
Amortization (10) (9)
Ending Balances $ 46 $ 47
v3.23.1
Credit Losses on Financial Instruments (Details)
$ in Millions
 3 Months Ended
Mar. 31, 2023
USD ($)
Financing Receivable, Allowance for Credit Loss  
Beginning balance $ 36
Provision for expected losses 13
Write-offs charged against the allowance (15)
Ending balance 34
Business Portfolio  
Financing Receivable, Allowance for Credit Loss  
Beginning balance 20
Provision for expected losses 3
Write-offs charged against the allowance (3)
Ending balance 20
Mass Market Portfolio  
Financing Receivable, Allowance for Credit Loss  
Beginning balance 16
Provision for expected losses 10
Write-offs charged against the allowance (12)
Ending balance $ 14
v3.23.1
Long-Term Debt and Note Payable - Affiliate - Schedule of Long Term Debt (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2023
Dec. 31, 2022
Long-term debt    
Unamortized premiums, net $ 4 $ 5
Unamortized debt issuance costs (52) (52)
Total long-term debt 2,157 2,157
Less current maturities (1) (2)
Long-term debt, excluding current maturities 2,156 2,155
Senior notes    
Long-term debt    
Long-term debt, gross $ 1,986 1,986
Senior notes | Minimum    
Long-term debt    
Stated interest rate 6.50%  
Senior notes | Maximum    
Long-term debt    
Stated interest rate 7.75%  
Term loan    
Long-term debt    
Long-term debt, gross $ 215 $ 215
Weighted average interest rate 7.422% 6.64%
Term loan | London Interbank Offered Rate (LIBOR)    
Long-term debt    
Basis spread on variable rate 2.50%  
Finance lease and other obligations    
Long-term debt    
Long-term debt, gross $ 4 $ 3
v3.23.1
Long-Term Debt and Note Payable - Affiliate - Schedule of Debt Maturity (Details)
$ in Millions
Mar. 31, 2023
USD ($)
Debt Disclosure [Abstract]  
2023 (remaining nine months) $ 0
2024 1
2025 251
2026 0
2027 215
2028 and thereafter 1,738
Total long-term debt $ 2,205
v3.23.1
Long-Term Debt and Note Payable - Affiliate - Additional Information (Details) - Note payable - affiliate - Affiliated entity - Qwest Corporation - USD ($)
$ in Millions
 3 Months Ended
Sep. 30, 2022
Mar. 31, 2023
Long-term debt    
Note Payable - Affiliate, funding commitment (up to)   $ 2,000
Note Payable - Affiliate, term subject to automatic renewal   12 months
Note Payable - Affiliate, period to provide notice of intent not to renew   30 days
Note Payable - Affiliate, period to pay interest from end of Interest Period   30 days
Note Payable - Affiliate, outstanding principal repaid $ 1,200  
Note Payable - Affiliate, interest repaid $ 43  
Note Payable - Affiliate, outstanding   $ 0
v3.23.1
Fair Value Disclosure (Details) - Fair value measurements, nonrecurring - Fair value inputs, Level 2 - USD ($)
$ in Millions
Mar. 31, 2023
Dec. 31, 2022
Carrying Amount    
Fair Value Disclosure    
Liabilities—Long-term debt (excluding finance lease and other obligations) $ 2,153 $ 2,154
Fair Value    
Fair Value Disclosure    
Liabilities—Long-term debt (excluding finance lease and other obligations) $ 1,476 $ 1,691
v3.23.1
Commitments, Contingencies and Other Items (Details)
 3 Months Ended
Mar. 31, 2023
USD ($)
patent
Loss Contingencies [Line Items]  
Estimate of possible loss $ 19,000,000
Number of patent infringement lawsuits expected to go to trial within the next twelve months | patent 1
Unfavorable Regulatory Action  
Loss Contingencies [Line Items]  
Estimate of possible loss $ 300,000
v3.23.1
Dividends (Details) - USD ($)
 3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Dividends [Abstract]    
Dividends declared and paid to Qwest Services Corporation $ 0 $ 0
v3.23.1
Other Financial Information- Other Current Assets (Details) - USD ($)
$ in Millions
Mar. 31, 2023
Dec. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]    
Prepaid expenses $ 68 $ 46
Contract acquisition costs 37 38
Contract fulfillment costs 30 30
Other 34 6
Total other current assets $ 169 $ 120
v3.23.1
Other Financial Information - Other Current Liabilities (Details) - USD ($)
$ in Millions
Mar. 31, 2023
Dec. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]    
Affiliate obligations $ 57 $ 57
Operating lease liabilities 22 21
Other 48 52
Total other current liabilities $ 127 $ 130
v3.23.1
Other Financial Information - Other Noncurrent Liabilities (Details) - USD ($)
$ in Millions
Mar. 31, 2023
Dec. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]    
Unrecognized tax benefits $ 434 $ 427
Noncurrent operating lease liability 58 58
Other 172 169
Total other noncurrent liabilities $ 664 $ 654
v3.23.1
Labor Union Contracts (Details) - Union employees concentration risk
 3 Months Ended
Mar. 31, 2023
Employees covered under collective bargaining agreements  
Labor Union Contracts  
Concentration risk percentage 43.00%
Workforce Subject to Collective-Bargaining Arrangements Expiring within One Year  
Labor Union Contracts  
Concentration risk percentage 0.00%