QWEST CORP, 10-Q filed on 5/5/2022
Quarterly Report
v3.22.1
Cover - shares
 3 Months Ended
Mar. 31, 2022
May 05, 2022
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Mar. 31, 2022  
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 2022  
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  
v3.22.1
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
OPERATING REVENUE    
Total operating revenue $ 1,656 $ 1,792
OPERATING EXPENSES    
Cost of services and products (exclusive of depreciation and amortization) 408 439
Selling, general and administrative 109 107
Operating expenses—affiliates 176 194
Depreciation and amortization 210 317
Total operating expenses 903 1,057
OPERATING INCOME 753 735
OTHER (EXPENSE) INCOME    
Interest expense (27) (48)
Interest expense—affiliate, net (24) (31)
Other income (expense), net 5 (6)
Total other expense, net (46) (85)
INCOME BEFORE INCOME TAX EXPENSE 707 650
Income tax expense 179 168
NET INCOME 528 482
Non-affiliate services    
OPERATING REVENUE    
Total operating revenue 1,075 1,170
Affiliate Services [Member]    
OPERATING REVENUE    
Total operating revenue $ 581 $ 622
v3.22.1
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Millions
Mar. 31, 2022
Dec. 31, 2021
CURRENT ASSETS    
Cash and cash equivalents $ 9 $ 2
Accounts receivable, less allowance of $36 and $38 279 301
Advances to affiliates 482 0
Other 191 187
Total current assets 961 490
Property, plant and equipment, net of accumulated depreciation of $7,043 and $6,879 8,184 8,180
GOODWILL AND OTHER ASSETS    
Goodwill 9,360 9,360
Other intangible assets, net 186 199
Other, net 137 141
Total goodwill and other assets 9,683 9,700
TOTAL ASSETS 18,828 18,370
CURRENT LIABILITIES    
Accounts payable 220 206
Advances from affiliates 0 55
Note payable - affiliate 1,215 1,187
Accrued expenses and other liabilities    
Salaries and benefits 113 138
Income and other taxes 116 94
Other 147 182
Current portion of deferred revenue 174 174
Total current liabilities 1,985 2,036
LONG-TERM DEBT 2,155 2,156
DEFERRED CREDITS AND OTHER LIABILITIES    
Deferred income taxes, net 1,274 1,276
Affiliate obligations, net 594 597
Other 657 670
Total deferred credits and other liabilities 2,525 2,543
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 2,113 1,585
Total stockholder's equity 12,163 11,635
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 18,828 $ 18,370
v3.22.1
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Millions
Mar. 31, 2022
Dec. 31, 2021
Statement of Financial Position [Abstract]    
Accounts receivable, allowance $ 36 $ 38
PP&E, accumulated depreciation $ 7,043 $ 6,879
Common stock, share issued (in shares) 1 1
Common stock, share outstanding (in shares) 1 1
v3.22.1
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
OPERATING ACTIVITIES    
Net income $ 528 $ 482
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 210 317
Deferred income taxes (2) (7)
Provision for uncollectible accounts 7 7
Accrued interest on affiliate note 28 28
Net loss on early retirement of debt 0 8
Changes in current assets and liabilities:    
Accounts receivable 15 17
Accounts payable (33) (7)
Accrued income and other taxes 22 30
Other current assets and liabilities, net (56) (64)
Changes in other noncurrent assets and liabilities, net (5) (14)
Changes in affiliate obligations, net (29) 5
Other, net 2 12
Net cash provided by operating activities 687 814
INVESTING ACTIVITIES    
Capital expenditures (144) (219)
Payments for advances to affiliates (482)  
Proceeds from collection of advances to affiliates   0
Proceeds from sale of property, plant and equipment and other assets 1 8
Net cash used in investing activities (625) (211)
FINANCING ACTIVITIES    
Payments of long-term debt 0 (235)
Dividends paid 0 (300)
Changes in advances from affiliates (55) (72)
Net cash used in financing activities (55) (607)
Net increase (decrease) in cash, cash equivalents and restricted cash 7 (4)
Cash, cash equivalents and restricted cash at beginning of period 4 15
Cash, cash equivalents and restricted cash at end of period 11 11
Supplemental cash flow information:    
Income taxes paid, net (178) (172)
Interest paid (net of capitalized interest of $6 and $5) (31) (37)
Cash, cash equivalents and restricted cash:    
Cash and cash equivalents 9 10
Restricted cash - noncurrent 2 1
Total $ 11 $ 11
v3.22.1
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Statement of Cash Flows [Abstract]    
Interest paid, capitalized interest $ 6 $ 5
v3.22.1
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY - USD ($)
$ in Millions
Total
COMMON STOCK
RETAINED EARNINGS
Balance at beginning of period at Dec. 31, 2020   $ 10,050 $ 48
Increase (Decrease) in Stockholder's Equity      
Net income $ 482   482
Dividends declared and paid to Qwest Services Corporation (300)   (300)
Balance at end of period at Mar. 31, 2021 10,280 10,050 230
Balance at beginning of period at Dec. 31, 2021 11,635 10,050 1,585
Increase (Decrease) in Stockholder's Equity      
Net income 528   528
Dividends declared and paid to Qwest Services Corporation 0   0
Balance at end of period at Mar. 31, 2022 $ 12,163 $ 10,050 $ 2,113
v3.22.1
Background
 3 Months Ended
Mar. 31, 2022
Accounting Policies [Abstract]  
Background Background
General

We are an integrated communications company engaged primarily in providing a broad array of communications services to our mass markets and business 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, 2021, which was derived from our audited consolidated financial statements, and our unaudited interim consolidated financial statements provided herein have been prepared in accordance with the instructions for Form 10-Q. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). However, in our opinion, the disclosures made therein are adequate to make the information presented not misleading. We believe these consolidated financial statements include all normal recurring adjustments necessary to fairly present the results for the interim periods. The consolidated results of operations and cash flows for the first 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, 2021.

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.

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, 2021.

Recently Adopted Accounting Pronouncements

Government Assistance

On January 1, 2022, we adopted Accounting Standards Update ("ASU") 2021-10, "Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance" ("ASU 2020-10"). This ASU increases transparency in financial reporting by requiring business entities to disclose information about certain types of government assistance they receive. The ASU only impacts annual financial statement note disclosures. Therefore, the adoption of ASU 2021-10 did not have a material impact to our consolidated financial statements.

Leases

On January 1, 2022, we adopted ASU 2021-05, “Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments” (“ASU 2021-05”). This ASU (i) amends the lease classification requirements for lessors to align them with practice under ASC Topic 840, (ii) provides criteria for lessors to classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease; and (iii) when a lease is classified as operating, the lessor does not recognize a net investment in the lease, does not derecognize the underlying asset, and, therefore, does not recognize a selling profit or loss. The adoption of ASU 2021-05 did not have a material impact to our consolidated financial statements.

Debt

On January 1, 2021, we adopted ASU 2020-09, “Debt (Topic 470) Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762” (“ASU 2020-09”). This ASU amends and supersedes various SEC guidance to reflect SEC Release No. 33-10762, which includes amendments to the financial disclosure requirements applicable to registered debt offerings that include credit enhancements, such as subsidiary guarantees. The adoption of ASU 2020-09 did not have a material impact to our consolidated financial statements.

Investments

On January 1, 2021, we adopted ASU 2020-01, “Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)” (ASU 2020-01”). This ASU, among other things, clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments - Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. As of March 31, 2022, we determined there was no application or discontinuation of the equity method during the reporting periods covered by this report. The adoption of ASU 2020-01 did not have an impact to our consolidated financial statements.

Income Taxes

On January 1, 2021, we adopted ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”).This ASU removes certain exceptions for investments, intra-period allocations and interim calculations, and adds guidance to reduce complexity in accounting for income taxes. The adoption of ASU 2019-12 did not have a material impact to our consolidated financial statements.
Recently Issued Accounting Pronouncements

In March 2022, the Financial Accounting Standards Board ("FASB") issued ASU 2022-02, “Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings (“TDR”) and Vintage Disclosures” (“ASU 2022-02”). These amendments eliminate the TDR recognition and measurement guidance and enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. ASU 2020-02 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of March 31, 2022, we do not expect ASU 2022-02 to have an impact to our consolidated financial statements.

In March 2022, the FASB issued ASU 2022-01, “Derivatives and Hedging (Topic 815): Fair Value Hedging-Portfolio Layer Method” (ASU 2022-01). The ASU expands the current single-layer method to allow multiple hedged layers of a single closed portfolio under the method. ASU 2020-01 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of March 31, 2022, we do not expect ASU 2022-01 to have an impact to our consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”), which requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. ASU 2021-08 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of March 31, 2022, we do not expect ASU 2021-08 to have an impact to our consolidated financial statements.

In January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848): Scope" ("ASU 2021-01"), which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU 2021-01 also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. These amendments may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. ASU 2021-01 provides option guidance for a limited time to ease the potential burden in accounting for reference rate reform. Based on our review of our key material contracts through March 31, 2022, we do not expect ASU 2021-01 to have a material impact to our consolidated financial statements.
v3.22.1
Goodwill, Customer Relationships and Other Intangible Assets
 3 Months Ended
Mar. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill, Customer Relationships and Other Intangible Assets Goodwill, Customer Relationships and Other Intangible Assets
Goodwill, customer relationships and other intangible assets consisted of the following:
March 31, 2022December 31, 2021
(Dollars in millions)
Goodwill$9,360 9,360 
Customer relationships, less accumulated amortization of $— and $5,699 (1)
$— — 
Other intangible assets, less accumulated amortization of $1,877 and $1,876
186 199 
Total other intangible assets, net$186 199 
_______________________________________________________________________________
(1)Customer relationships with a gross carrying value of $5.7 billion became fully amortized during 2021 and were retired during the first quarter of 2022.

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 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, 2022, 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, 2022 and 2021 totaled $19 million and $110 million, respectively.

We estimate that total amortization expense for intangible assets for the years ending December 31, 2022 through 2026 will be as follows:
(Dollars in millions)
2022 (remaining nine months)$56 
202359 
202430 
202512 
20267 
v3.22.1
Revenue Recognition
 3 Months Ended
Mar. 31, 2022
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition
We categorize our products, services and revenue among the following categories:
•Voice and Other, which include primarily local voice services, private line and other legacy services. This category also includes federal and state support payments. These support payments are government subsidies designed to compensate us for providing certain broadband and communications services in high-cost areas or at discounts to low-income, educational, and healthcare customers. This revenue included Connect America Fund Phase II ("CAF II") support payments, which we received through December 31, 2021, when the program ended.

•Fiber Infrastructure Services, which include high speed, fiber-based and lower speed DSL-based broadband services to residential and small business customers, and optical network services;

•IP and Data Services, which consist primarily of Ethernet 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, network support and technical services.

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, 2022Three Months Ended March 31, 2021
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)
Voice and Other$460 (59)401 543 (85)458 
Fiber Infrastructure498 (34)464 504 (31)473 
IP and Data Services 117 — 117 123 — 123 
Affiliate Services581 (11)570 622 (3)619 
Total Revenue$1,656 (104)1,552 1,792 (119)1,673 
____________________________________________________________________
(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, 2022 and 2021, our gross rental income was $88 million and $79 million, which represents approximately 5% and 4%, respectively, of our operating revenue for the three months ended March 31, 2022 and 2021.

Customer Receivables and Contract Balances

The following table provides balances of customer receivables, contract assets and contract liabilities as of March 31, 2022 and December 31, 2021:
March 31, 2022December 31, 2021
 (Dollars in millions)
Customer receivables (1)
$266 298 
Contract assets10 10 
Contract liabilities324 317 
______________________________________________________________________
(1)Reflects gross customer receivables, including gross affiliate receivables, of $293 million and $328 million, net of allowance for credit losses of $27 million and $30 million, at March 31, 2022 and December 31, 2021, 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 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, 2022 and 2021, we recognized $150 million and $163 million, respectively, of revenue that was included in contract liabilities of $317 million and $300 million as of January 1, 2022 and January 1, 2021, respectively.

Performance Obligations

As of March 31, 2022, our estimated revenue expected to be recognized in the future related to performance obligations associated with existing customer contracts that are partially or wholly unsatisfied is approximately $176 million. We expect to recognize approximately 100% of this revenue through 2024.

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, 2022Three Months Ended March 31, 2021
Acquisition CostsFulfillment CostsAcquisition CostsFulfillment Costs
 (Dollars in millions)
Beginning of period balance$64 47 73 54 
Costs incurred13 9 11 6 
Amortization(14)(9)(15)(8)
End of period balance$63 47 69 52 

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 32 months for mass markets customers and average contract life of 30 months for business customers. Amortized fulfillment costs are included in cost of services and products and amortized acquisition costs are included in selling, general and administrative expenses in our consolidated statements of operations. The amount of these deferred costs that are anticipated to be amortized in the next 12 months are included in other current assets on our consolidated balance sheets. The amount of deferred costs expected to be amortized beyond the next 12 months is included in other non-current assets on our consolidated balance sheets. Deferred acquisition and fulfillment costs are assessed for impairment on an annual basis.
v3.22.1
Credit Losses on Financial Instruments
 3 Months Ended
Mar. 31, 2022
Credit Loss [Abstract]  
Credit Losses on Financial Instruments Credit Losses on Financial Instruments
In accordance with ASC 326, "Financial Instruments - Credit Losses," we aggregate financial assets with similar risk characteristics to align our expected credit losses with the 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. Financial assets that do not share risk characteristics with other financial assets are evaluated separately. 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 changes caused by COVID-19 or other 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 the 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, 2022:
BusinessMass MarketsTotal
(Dollars in millions)
As of December 31, 2021$19 19 38 
Provision for expected losses3 4 7 
Write-offs charged against the allowance(3)(6)(9)
Ending balance at March 31, 2022$19 17 36 
v3.22.1
Long-Term Debt and Note Payable - Affiliate
 3 Months Ended
Mar. 31, 2022
Debt Disclosure [Abstract]  
Long-Term Debt and Note Payable - Affiliate Long-Term Debt and Note Payable - Affiliate
The following chart reflects (i) the consolidated long-term debt of Qwest Corporation and its subsidiaries, including finance lease and other obligations, unamortized premiums, net, unamortized debt issuance costs and (ii) note payable - affiliate:
Interest Rates (1)
Maturities (1)
March 31, 2022December 31, 2021
   (Dollars in millions)
Senior notes
6.500% - 7.750%
2025 - 2057$1,986 1,986 
Term loan (2)
LIBOR + 2.00%
2027215 215 
Finance lease and other obligationsVariousVarious2 2 
Unamortized premiums, net  6 6 
Unamortized debt issuance costs(54)(53)
Total long-term debt  2,155 2,156 
Note payable - affiliate4.728%2022$1,215 1,187 
_______________________________________________________________________________
(1)As of March 31, 2022.
(2)Qwest Corporation's Term Loan had interest rates of 2.460% and 2.110% as of March 31, 2022 and December 31, 2021, respectively.
Long-Term Debt Maturities

Set forth below is the aggregate principal amount of our long-term debt as of March 31, 2022 (excluding unamortized premiums, net, unamortized debt issuance costs and note payable-affiliate) maturing during the following years:
(Dollars in millions)
2022 (remaining nine months)$— 
2023— 
2024— 
2025250 
2026— 
2027 and thereafter1,953 
Total long-term debt$2,203 

Note Payable - Affiliate

Qwest Corporation is currently indebted to an affiliate of our ultimate parent company, Lumen Technologies, Inc., under a revolving promissory note that provides Qwest Corporation with a funding commitment of up to $965 million in aggregate principal amount (the "Intercompany Note"). The outstanding principal balance owed by Qwest Corporation under the Intercompany Note and the accrued interest thereon is due and payable on demand, but if no demand is made, then on June 30, 2022. 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. As of March 31, 2022 and December 31, 2021, the Intercompany Note is reflected on our consolidated balance sheets as a current liability under "Note payable - affiliate". In accordance with the terms of the Intercompany Note, interest shall be assessed on June 30th and December 31st (an "Interest Period"). Any assessed interest for an Interest Period that remains unpaid on the last day of the subsequent Interest Period is to be capitalized on such date and is to begin accruing interest. Through March 31, 2022, $251 million of such interest has been capitalized since entering into the Intercompany Note. As of March 31, 2022, $14 million of accrued interest is reflected in other current liabilities on our consolidated balance sheet.

Compliance

As of March 31, 2022, we believe we were in compliance with the financial covenants contained in our material debt agreements in all material respects.

Other

For additional information on our long-term debt and credit facilities, see Note 6—Long-Term Debt and Note Payable - Affiliate to our consolidated financial statements in Item 8 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2021.
v3.22.1
Fair Value Disclosure
 3 Months Ended
Mar. 31, 2022
Fair Value Disclosures [Abstract]  
Fair Value Disclosure Fair Value DisclosureOur 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 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, 2022 and December 31, 2021, as well as the input level used to determine the fair values indicated below:
  March 31, 2022December 31, 2021
 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 2,219 2,154 2,298 
v3.22.1
Commitments, Contingencies and Other Items
 3 Months Ended
Mar. 31, 2022
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.

Irrespective of its merits, litigation may be both lengthy and disruptive to our operations and could cause significant expenditure and diversion of management attention. We review our litigation accrual liabilities on a quarterly basis, but in accordance with applicable accounting guidelines only establish accrual liabilities when losses are deemed probable and reasonably estimable and only revise previously-established accrual liabilities when warranted by changes in circumstances, in each case based on then-available information. As such, as of any given date we could have exposure to losses under proceedings as to which no liability has been accrued or as to which the accrued liability is inadequate. Amounts accrued for our litigation and non-income tax contingencies at March 31, 2022 aggregated to approximately $19 million and are included in “Other” current liabilities and “Other Liabilities” in our consolidated balance sheet as of such date. The establishment of an accrual does not mean that actual funds have been set aside to satisfy a given contingency. Thus, the resolution of a particular contingency for the amount accrued could have no effect on our results of operations but nonetheless could have an adverse effect on our cash flows.
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.

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, 2021. The ultimate outcome of the above-described matters may differ materially from the outcomes anticipated, estimated, projected or implied by us in certain of our statements appearing above in this Note, and proceedings currently viewed as immaterial by us may ultimately materially impact us.
v3.22.1
Dividends
 3 Months Ended
Mar. 31, 2022
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, 2022 we paid no dividends to QSC and $300 million during the three months ended March 31, 2021. Dividends paid are reflected on our consolidated statements of cash flows as financing activities.
v3.22.1
Other Financial Information
 3 Months Ended
Mar. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Other Financial Information Other Financial Information
Other Current Assets

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

March 31, 2022December 31, 2021
(Dollars in millions)
Prepaid expenses$63 50
Contract acquisition costs41 43
Contract fulfillment costs31 31
Receivable for sale of land49 56 
Other77
Total other current assets$191 187

Other Noncurrent Liabilities

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

March 31, 2022December 31, 2021
(Dollars in millions)
Unrecognized tax benefits$439 435
Deferred revenue95 111
Noncurrent operating lease liability59 63
Other64 61
Total other noncurrent liabilities$657 670
v3.22.1
Labor Union Contracts
 3 Months Ended
Mar. 31, 2022
Risks and Uncertainties [Abstract]  
Labor Union Contracts Labor Union Contracts
    
As of March 31, 2022, approximately 44% of our employees were represented by the Communication Workers of America ("CWA") or the International Brotherhood of Electrical Workers ("IBEW"). There are no collective bargaining agreements that are scheduled to expire over the twelve month period ending March 31, 2023. We believe relations with our employees continue to be generally good.
v3.22.1
Background (Policies)
 3 Months Ended
Mar. 31, 2022
Accounting Policies [Abstract]  
Basis of presentation
Basis of Presentation

Our consolidated balance sheet as of December 31, 2021, which was derived from our audited consolidated financial statements, and our unaudited interim consolidated financial statements provided herein have been prepared in accordance with the instructions for Form 10-Q. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). However, in our opinion, the disclosures made therein are adequate to make the information presented not misleading. We believe these consolidated financial statements include all normal recurring adjustments necessary to fairly present the results for the interim periods. The consolidated results of operations and cash flows for the first 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, 2021.

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

Government Assistance

On January 1, 2022, we adopted Accounting Standards Update ("ASU") 2021-10, "Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance" ("ASU 2020-10"). This ASU increases transparency in financial reporting by requiring business entities to disclose information about certain types of government assistance they receive. The ASU only impacts annual financial statement note disclosures. Therefore, the adoption of ASU 2021-10 did not have a material impact to our consolidated financial statements.

Leases

On January 1, 2022, we adopted ASU 2021-05, “Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments” (“ASU 2021-05”). This ASU (i) amends the lease classification requirements for lessors to align them with practice under ASC Topic 840, (ii) provides criteria for lessors to classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease; and (iii) when a lease is classified as operating, the lessor does not recognize a net investment in the lease, does not derecognize the underlying asset, and, therefore, does not recognize a selling profit or loss. The adoption of ASU 2021-05 did not have a material impact to our consolidated financial statements.

Debt

On January 1, 2021, we adopted ASU 2020-09, “Debt (Topic 470) Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762” (“ASU 2020-09”). This ASU amends and supersedes various SEC guidance to reflect SEC Release No. 33-10762, which includes amendments to the financial disclosure requirements applicable to registered debt offerings that include credit enhancements, such as subsidiary guarantees. The adoption of ASU 2020-09 did not have a material impact to our consolidated financial statements.

Investments

On January 1, 2021, we adopted ASU 2020-01, “Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)” (ASU 2020-01”). This ASU, among other things, clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments - Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. As of March 31, 2022, we determined there was no application or discontinuation of the equity method during the reporting periods covered by this report. The adoption of ASU 2020-01 did not have an impact to our consolidated financial statements.

Income Taxes

On January 1, 2021, we adopted ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”).This ASU removes certain exceptions for investments, intra-period allocations and interim calculations, and adds guidance to reduce complexity in accounting for income taxes. The adoption of ASU 2019-12 did not have a material impact to our consolidated financial statements.
Recently Issued Accounting Pronouncements

In March 2022, the Financial Accounting Standards Board ("FASB") issued ASU 2022-02, “Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings (“TDR”) and Vintage Disclosures” (“ASU 2022-02”). These amendments eliminate the TDR recognition and measurement guidance and enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. ASU 2020-02 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of March 31, 2022, we do not expect ASU 2022-02 to have an impact to our consolidated financial statements.

In March 2022, the FASB issued ASU 2022-01, “Derivatives and Hedging (Topic 815): Fair Value Hedging-Portfolio Layer Method” (ASU 2022-01). The ASU expands the current single-layer method to allow multiple hedged layers of a single closed portfolio under the method. ASU 2020-01 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of March 31, 2022, we do not expect ASU 2022-01 to have an impact to our consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”), which requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. ASU 2021-08 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of March 31, 2022, we do not expect ASU 2021-08 to have an impact to our consolidated financial statements.

In January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848): Scope" ("ASU 2021-01"), which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU 2021-01 also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. These amendments may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. ASU 2021-01 provides option guidance for a limited time to ease the potential burden in accounting for reference rate reform. Based on our review of our key material contracts through March 31, 2022, we do not expect ASU 2021-01 to have a material impact to our consolidated financial statements.
Goodwill and intangible assets, goodwill We 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 income
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 In accordance with ASC 326, "Financial Instruments - Credit Losses," we aggregate financial assets with similar risk characteristics to align our expected credit losses with the 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. Financial assets that do not share risk characteristics with other financial assets are evaluated separately. 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 changes caused by COVID-19 or other 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.
v3.22.1
Goodwill, Customer Relationships and Other Intangible Assets (Tables)
 3 Months Ended
Mar. 31, 2022
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, 2022December 31, 2021
(Dollars in millions)
Goodwill$9,360 9,360 
Customer relationships, less accumulated amortization of $— and $5,699 (1)
$— — 
Other intangible assets, less accumulated amortization of $1,877 and $1,876
186 199 
Total other intangible assets, net$186 199 
_______________________________________________________________________________
(1)Customer relationships with a gross carrying value of $5.7 billion became fully amortized during 2021 and were retired during the first quarter of 2022.
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense We estimate that total amortization expense for intangible assets for the years ending December 31, 2022 through 2026 will be as follows:
(Dollars in millions)
2022 (remaining nine months)$56 
202359 
202430 
202512 
20267 
v3.22.1
Revenue Recognition (Tables)
 3 Months Ended
Mar. 31, 2022
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, 2022Three Months Ended March 31, 2021
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)
Voice and Other$460 (59)401 543 (85)458 
Fiber Infrastructure498 (34)464 504 (31)473 
IP and Data Services 117 — 117 123 — 123 
Affiliate Services581 (11)570 622 (3)619 
Total Revenue$1,656 (104)1,552 1,792 (119)1,673 
____________________________________________________________________
(1)Includes regulatory revenue and lease revenue not within the scope of ASC 606.
Contract with customer, asset and liability
The following table provides balances of customer receivables, contract assets and contract liabilities as of March 31, 2022 and December 31, 2021:
March 31, 2022December 31, 2021
 (Dollars in millions)
Customer receivables (1)
$266 298 
Contract assets10 10 
Contract liabilities324 317 
______________________________________________________________________
(1)Reflects gross customer receivables, including gross affiliate receivables, of $293 million and $328 million, net of allowance for credit losses of $27 million and $30 million, at March 31, 2022 and December 31, 2021, respectively.
Capitalized contract cost
The following tables provide changes in our contract acquisition costs and fulfillment costs:

Three Months Ended March 31, 2022Three Months Ended March 31, 2021
Acquisition CostsFulfillment CostsAcquisition CostsFulfillment Costs
 (Dollars in millions)
Beginning of period balance$64 47 73 54 
Costs incurred13 9 11 6 
Amortization(14)(9)(15)(8)
End of period balance$63 47 69 52 
v3.22.1
Credit Losses on Financial Instruments (Tables)
 3 Months Ended
Mar. 31, 2022
Credit Loss [Abstract]  
Financing Receivable, Allowance for Credit Loss The following table presents the activity of our allowance for credit losses by accounts receivable portfolio for the three months ended March 31, 2022:
BusinessMass MarketsTotal
(Dollars in millions)
As of December 31, 2021$19 19 38 
Provision for expected losses3 4 7 
Write-offs charged against the allowance(3)(6)(9)
Ending balance at March 31, 2022$19 17 36 
v3.22.1
Long-Term Debt and Note Payable - Affiliate (Tables)
 3 Months Ended
Mar. 31, 2022
Debt Disclosure [Abstract]  
Schedule of long-term debt
The following chart reflects (i) the consolidated long-term debt of Qwest Corporation and its subsidiaries, including finance lease and other obligations, unamortized premiums, net, unamortized debt issuance costs and (ii) note payable - affiliate:
Interest Rates (1)
Maturities (1)
March 31, 2022December 31, 2021
   (Dollars in millions)
Senior notes
6.500% - 7.750%
2025 - 2057$1,986 1,986 
Term loan (2)
LIBOR + 2.00%
2027215 215 
Finance lease and other obligationsVariousVarious2 2 
Unamortized premiums, net  6 6 
Unamortized debt issuance costs(54)(53)
Total long-term debt  2,155 2,156 
Note payable - affiliate4.728%2022$1,215 1,187 
_______________________________________________________________________________
(1)As of March 31, 2022.
(2)Qwest Corporation's Term Loan had interest rates of 2.460% and 2.110% as of March 31, 2022 and December 31, 2021, respectively.
Schedule of maturities of long-term debt
Set forth below is the aggregate principal amount of our long-term debt as of March 31, 2022 (excluding unamortized premiums, net, unamortized debt issuance costs and note payable-affiliate) maturing during the following years:
(Dollars in millions)
2022 (remaining nine months)$— 
2023— 
2024— 
2025250 
2026— 
2027 and thereafter1,953 
Total long-term debt$2,203 
v3.22.1
Fair Value Disclosure (Tables)
 3 Months Ended
Mar. 31, 2022
Fair Value Disclosures [Abstract]  
Schedule of carrying amounts and estimated fair values of long-term debt, excluding capital lease obligations, and input level to determine fair values
The following table presents the carrying amounts and estimated fair values of our financial liabilities as of March 31, 2022 and December 31, 2021, as well as the input level used to determine the fair values indicated below:
  March 31, 2022December 31, 2021
 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 2,219 2,154 2,298 
v3.22.1
Other Financial Information (Tables)
 3 Months Ended
Mar. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Schedule of components other current assets
The following table presents details of other current assets in our consolidated balance sheets:

March 31, 2022December 31, 2021
(Dollars in millions)
Prepaid expenses$63 50
Contract acquisition costs41 43
Contract fulfillment costs31 31
Receivable for sale of land49 56 
Other77
Total other current assets$191 187
Other Noncurrent Liabilities
The following table presents details of other noncurrent liabilities in our consolidated balance sheets:

March 31, 2022December 31, 2021
(Dollars in millions)
Unrecognized tax benefits$439 435
Deferred revenue95 111
Noncurrent operating lease liability59 63
Other64 61
Total other noncurrent liabilities$657 670
v3.22.1
Accounting Policies - General (Details)
Mar. 31, 2022
state
Accounting Policies [Abstract]  
Number of states in which entity operates 14
v3.22.1
Accounting Policies- Segments (Details)
 3 Months Ended
Mar. 31, 2022
segment
Accounting Policies [Abstract]  
Number of reportable segments 1
v3.22.1
Goodwill, Customer Relationships and Other Intangible Assets - Schedule of Goodwill (Details) - USD ($)
$ in Millions
Mar. 31, 2022
Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]    
Goodwill $ 9,360 $ 9,360
Finite-lived intangible assets, net 186 199
Customer relationships    
Finite-Lived Intangible Assets [Line Items]    
Finite-lived intangible assets, net 0 0
Accumulated amortization 0 5,699
Other Intangible Assets    
Finite-Lived Intangible Assets [Line Items]    
Finite-lived intangible assets, net 186 199
Accumulated amortization 1,877 $ 1,876
Fully Amortized And Retired Customer Relationships    
Finite-Lived Intangible Assets [Line Items]    
Finite-Lived Intangible Assets, Gross $ 5,700  
v3.22.1
Goodwill, Customer Relationships and Other Intangible Assets - Additional Information (Details)
$ in Millions
 3 Months Ended
Mar. 31, 2022
USD ($)
reporting_unit
Mar. 31, 2021
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]    
Number of reporting units | reporting_unit 1  
Intangible assets, gross (including goodwill) $ 11,400  
Amortization of intangible assets $ 19 $ 110
v3.22.1
Goodwill, Customer Relationships and Other Intangible Assets - Schedule of Future Amortization Expense (Details)
$ in Millions
Mar. 31, 2022
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]  
2022 (remaining nine months) $ 56
2023 59
2024 30
2025 12
2026 $ 7
v3.22.1
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Disaggregation of Revenue [Line Items]    
Total Revenue $ 1,656 $ 1,792
Adjustments for non-ASC 606 revenue (104) (119)
Total Revenue from Contracts with Customers 1,552 1,673
Voice and Other [Member]    
Disaggregation of Revenue [Line Items]    
Total Revenue 460 543
Adjustments for non-ASC 606 revenue (59) (85)
Total Revenue from Contracts with Customers 401 458
Fiber Infrastructure [Member]    
Disaggregation of Revenue [Line Items]    
Total Revenue 498 504
Adjustments for non-ASC 606 revenue (34) (31)
Total Revenue from Contracts with Customers 464 473
IP & Data Services [Member]    
Disaggregation of Revenue [Line Items]    
Total Revenue 117 123
Adjustments for non-ASC 606 revenue 0 0
Total Revenue from Contracts with Customers 117 123
Affiliate Services [Member]    
Disaggregation of Revenue [Line Items]    
Total Revenue 581 622
Adjustments for non-ASC 606 revenue (11) (3)
Total Revenue from Contracts with Customers $ 570 $ 619
v3.22.1
Revenue Recognition - Operating Lease Revenue (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Revenue from Contract with Customer [Abstract]    
Lease income $ 88 $ 79
Percent of operating revenue 5.00% 4.00%
v3.22.1
Revenue Recognition - Customer Receivables and Contract Balances (Details) - USD ($)
$ in Millions
Mar. 31, 2022
Dec. 31, 2021
Revenue from Contract with Customer [Abstract]    
Customer receivables $ 266 $ 298
Contract assets 10 10
Contract liabilities 324 317
Accounts receivable, gross 293 328
Allowance for doubtful accounts $ 27 $ 30
v3.22.1
Revenue Recognition - Additional Information - Customer Receivables and Contract Balances (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Dec. 31, 2021
Dec. 31, 2020
Customer Receivables and Contract Balances [Line Items]        
Revenue recognized from prior year contract liability $ 150 $ 163    
Contract liabilities     $ 317 $ 300
Minimum        
Customer Receivables and Contract Balances [Line Items]        
Contract term 1 year      
Maximum        
Customer Receivables and Contract Balances [Line Items]        
Contract term 5 years      
v3.22.1
Revenue Recognition - Additional Information, Performance Obligation (Details)
$ in Millions
Mar. 31, 2022
USD ($)
Revenue from Contract with Customer [Abstract]  
Remaining performance obligation $ 176
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation, percentage 100.00%
Expected timing of satisfaction, period 2 years 9 months
v3.22.1
Revenue Recognition - Contract Costs (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Acquisition Costs    
Capitalized Contract Cost [Line Items]    
Beginning of period balance $ 64 $ 73
Costs incurred 13 11
Amortization (14) (15)
End of period balance 63 69
Fulfillment Costs    
Capitalized Contract Cost [Line Items]    
Beginning of period balance 47 54
Costs incurred 9 6
Amortization (9) (8)
End of period balance $ 47 $ 52
v3.22.1
Revenue Recognition - Additional Information - Contract Costs (Details) - Weighted Average
 3 Months Ended
Mar. 31, 2022
Mass Markets Customers, Average Contract Life  
Contract Costs [Line Items]  
Length of customer life 32 months
Business Customer, Average Contract Life  
Contract Costs [Line Items]  
Length of customer life 30 months
v3.22.1
Credit Losses on Financial Instruments (Details)
$ in Millions
 3 Months Ended
Mar. 31, 2022
USD ($)
Financing Receivable, Allowance for Credit Loss [Roll Forward]  
Beginning balance $ 38
Provision for expected losses 7
Write-offs charged against the allowance (9)
Ending balance 36
Mass Market Portfolio  
Financing Receivable, Allowance for Credit Loss [Roll Forward]  
Beginning balance 19
Provision for expected losses 4
Write-offs charged against the allowance (6)
Ending balance 17
Business Portfolio  
Financing Receivable, Allowance for Credit Loss [Roll Forward]  
Beginning balance 19
Provision for expected losses 3
Write-offs charged against the allowance (3)
Ending balance $ 19
v3.22.1
Long-Term Debt and Note Payable - Affiliate - Schedule of Long Term Debt (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2022
Dec. 31, 2021
Long-term debt    
Long-term debt, gross $ 2,203  
Unamortized premiums, net 6 $ 6
Unamortized debt issuance costs (54) (53)
Total long-term debt 2,155 2,156
Note payable - affiliate 1,215 1,187
Long-term Debt and Lease Obligation, Including Current Maturities, Total 2,155 2,156
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 2.46% 2.11%
Term loan | London Interbank Offered Rate (LIBOR)    
Long-term debt    
Basis spread on variable rate 2.00%  
Finance lease and other obligations    
Long-term debt    
Long-term debt, gross $ 2 $ 2
Note payable - affiliate | Affiliated entity    
Long-term debt    
Note payable - affiliate $ 1,215 $ 1,187
Weighted average interest rate 4.728%  
v3.22.1
Long-Term Debt and Note Payable - Affiliate - Schedule of Debt Maturity (Details)
$ in Millions
Mar. 31, 2022
USD ($)
Debt Disclosure [Abstract]  
2022 (remaining nine months) $ 0
2023 0
2024 0
2025 250
2026 0
2027 and thereafter 1,953
Total long-term debt $ 2,203
v3.22.1
Long-Term Debt and Note Payable - Affiliate - Additional Information (Details) - USD ($)
 3 Months Ended
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2017
Long-term debt      
Note payable - affiliate $ 1,215,000,000 $ 1,187,000,000  
Note payable - affiliate | Affiliated entity      
Long-term debt      
Note payable - affiliate 1,215,000,000 $ 1,187,000,000  
Note payable - affiliate | Affiliated entity | Qwest Corporation      
Long-term debt      
Note payable - affiliate funding commitment     $ 965,000,000
Interest costs capitalized 251,000,000    
Accrued interest on note payable - affiliate $ 14,000,000    
v3.22.1
Fair Value Disclosure (Details) - Fair value measurements, nonrecurring - Fair value inputs, Level 2 - USD ($)
$ in Millions
Mar. 31, 2022
Dec. 31, 2021
Carrying Amount    
Liabilities    
Liabilities—Long-term debt (excluding finance lease and other obligations) $ 2,153 $ 2,154
Fair Value    
Liabilities    
Liabilities—Long-term debt (excluding finance lease and other obligations) $ 2,219 $ 2,298
v3.22.1
Commitments, Contingencies and Other Items (Details)
 3 Months Ended
Mar. 31, 2022
USD ($)
patent
Loss Contingencies [Line Items]  
Estimate of possible loss $ 19,000,000
Loss Contingency, Patents Allegedly Infringed, Number | patent 1
Unfavorable Regulatory Action  
Loss Contingencies [Line Items]  
Estimate of possible loss $ 300,000
v3.22.1
Dividends (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Dividends [Abstract]    
Dividends declared and paid to Qwest Services Corporation $ 0 $ 300
v3.22.1
Other Financial Information- Other Current Assets (Details) - USD ($)
$ in Millions
Mar. 31, 2022
Dec. 31, 2021
Prepaid Expense and Other Assets, Current [Abstract]    
Prepaid expenses $ 63 $ 50
Contract acquisition costs 41 43
Contract fulfillment costs 31 31
Receivable for sale of land 49 56
Other 7 7
Total other current assets $ 191 $ 187
v3.22.1
Other Financial Information - Other Non-current Liabilities (Details) - USD ($)
$ in Millions
Mar. 31, 2022
Dec. 31, 2021
Deferred Credits and Other Liabilities [Abstract]    
Unrecognized tax benefits $ 439 $ 435
Deferred revenue 95 111
Noncurrent operating lease liability 59 63
Other 64 61
Total other noncurrent liabilities $ 657 $ 670
v3.22.1
Labor Union Contracts (Details)
 3 Months Ended
Mar. 31, 2022
Union employees concentration risk | Employees covered under collective bargaining agreements  
Labor Union Contracts  
Concentration risk percentage 44.00%