LEVEL 3 PARENT, LLC, 10-Q filed on 11/5/2024
Quarterly Report
v3.24.3
Cover Page
 9 Months Ended
Sep. 30, 2024
shares
Cover [Abstract]  
Document Type 10-Q
Document Quarterly Report true
Document Period End Date Sep. 30, 2024
Document Transition Report false
Entity File Number 001-35134
Entity Registrant Name LEVEL 3 PARENT, LLC
Entity Incorporation, State or Country Code DE
Entity Tax Identification Number 47-0210602
Entity Address, Address Line One 931 14th Street,
Entity Address, City or Town Denver,
Entity Address, State or Province CO
Entity Address, Postal Zip Code 80202-2994
City Area Code 720
Local Phone Number 888-1000
Entity Current Reporting Status No
Entity Interactive Data Current Yes
Entity Filer Category Non-accelerated Filer
Entity Small Business false
Entity Emerging Growth Company false
Entity Shell Company false
Entity Common Stock, Shares Outstanding 0
Entity Central Index Key 0000794323
Amendment Flag false
Current Fiscal Year End Date --12-31
Document Fiscal Year Focus 2024
Document Fiscal Period Focus Q3
v3.24.3
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
OPERATING REVENUE        
Operating revenues $ 1,593 $ 1,763 $ 4,783 $ 5,311
OPERATING EXPENSES        
Cost of services and products (exclusive of depreciation and amortization) 691 779 2,021 2,281
Selling, general and administrative 264 342 890 946
Net loss on sale of business 0 28 17 113
Operating expenses - affiliates 282 172 782 571
Depreciation and amortization 342 354 1,069 1,056
Goodwill impairment 0 0 0 1,970
Total operating expenses 1,579 1,675 4,779 6,937
OPERATING INCOME (LOSS) 14 88 4 (1,626)
OTHER (EXPENSE) INCOME        
Interest expense (226) (123) (595) (336)
Net gain on early retirement of debt (Note 5) 0 0 54 0
Other income (expense), net 57 (39) 68 (27)
Total other expense, net (94) (146) (301) (316)
LOSS BEFORE INCOME TAXES (80) (58) (297) (1,942)
Income tax benefit (24) (13) (76) (14)
NET LOSS (56) (45) (221) (1,928)
Non-Affiliates        
OPERATING REVENUE        
Operating revenues 1,530 1,706 4,600 5,144
Affiliates        
OPERATING REVENUE        
Operating revenues 63 57 183 167
OTHER (EXPENSE) INCOME        
Interest income - affiliate $ 75 $ 16 $ 172 $ 47
v3.24.3
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Statement of Comprehensive Income [Abstract]        
NET LOSS $ (56) $ (45) $ (221) $ (1,928)
Foreign currency translation adjustments, net of $—, $5, $— and $(3) tax 5 (14) 3 (2)
Other comprehensive income (loss), net of tax 5 (14) 3 (2)
COMPREHENSIVE LOSS $ (51) $ (59) $ (218) $ (1,930)
v3.24.3
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) (Parenthetical) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Statement of Comprehensive Income [Abstract]        
Foreign currency translation adjustments, tax $ 0 $ 5 $ 0 $ (3)
v3.24.3
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
CURRENT ASSETS    
Cash and cash equivalents $ 2,131 $ 2,017
Other 230 244
Total current assets 5,628 4,272
Property, plant and equipment, net of accumulated depreciation of $4,020 and $3,665 7,602 7,398
OTHER ASSETS    
Customer relationships and other intangible assets, net 3,725 4,237
Other, net 1,250 1,346
Total other assets 4,975 5,583
TOTAL ASSETS 18,205 17,253
CURRENT LIABILITIES    
Current maturities of long-term debt 35 31
Accrued expenses and other liabilities    
Salaries and benefits 163 195
Income and other taxes 125 105
Current operating lease liabilities 270 288
Interest 198 82
Other 56 78
Current portion of deferred revenue 449 300
Total current liabilities 1,630 1,508
LONG-TERM DEBT 10,167 8,952
DEFERRED REVENUE AND OTHER LIABILITIES    
Deferred revenue 3,194 1,623
Operating lease liabilities 751 845
Other 611 709
Total deferred revenue and other liabilities 4,556 3,177
COMMITMENTS AND CONTINGENCIES (Note 9)
MEMBER'S EQUITY    
Member's equity 1,877 3,644
Accumulated other comprehensive loss (25) (28)
Total member's equity 1,852 3,616
TOTAL LIABILITIES AND MEMBER'S EQUITY 18,205 17,253
Non-Affiliates    
CURRENT ASSETS    
Accounts receivable, less allowance 569 545
CURRENT LIABILITIES    
Accounts payable 334 392
Affiliates    
CURRENT ASSETS    
Accounts receivable, less allowance 30 0
Notes receivable - affiliate 2,668 1,466
CURRENT LIABILITIES    
Accounts payable 0 37
Accrued expenses and other liabilities    
Current operating lease liabilities 115 129
DEFERRED REVENUE AND OTHER LIABILITIES    
Operating lease liabilities $ 144 $ 201
v3.24.3
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - (Parenthetical) - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
Statement of Financial Position [Abstract]    
Allowance for doubtful accounts $ 12 $ 13
Accumulated depreciation $ 4,020 $ 3,665
v3.24.3
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
OPERATING ACTIVITIES        
Net loss $ (56) $ (45) $ (221) $ (1,928)
Adjustments to reconcile net loss to net cash provided by operating activities:        
Depreciation and amortization 342 354 1,069 1,056
Net loss on sale of business     17 113
Goodwill impairment 0 0 0 1,970
Deferred income taxes     (76) (20)
Net gain on early retirement of debt 0 0 (54) 0
Changes in current assets and liabilities:        
Accounts receivable     (31) (41)
Accounts payable     (81) (30)
Change in deferred revenue     1,571 134
Changes in other noncurrent assets and liabilities, net     158 (33)
Other, net     (13) 5
Net cash provided by operating activities     2,488 1,233
INVESTING ACTIVITIES        
Capital expenditures     (762) (785)
Proceeds from sale of business     15 3
Proceeds from sale of property, plant and equipment and other assets     28 25
Other, net     0 (12)
Net cash used in investing activities     (1,921) (769)
FINANCING ACTIVITIES        
Net proceeds from issuance of long-term debt     1,325 0
Distributions     (1,756) (411)
Contributions     210 0
Payments of long-term debt     (23) (28)
Debt issuance and extinguishment costs and related fees     (210) (13)
Net cash used in financing activities     (454) (452)
Net increase in cash, cash equivalents and restricted cash     113 12
Cash, cash equivalents and restricted cash at beginning of period     2,020 164
Cash, cash equivalents and restricted cash at end of period 2,133 176 2,133 176
Supplemental cash flow information:        
Income taxes paid, net     (2) (7)
Interest paid (net of capitalized interest of $23 and $15)     (440) (302)
Supplemental non-cash information regarding financing activities:        
Issuance of senior secured notes as part of exchange offers (Note 5)     0 924
Cash, cash equivalents and restricted cash:        
Cash and cash equivalents 2,131 146 2,131 146
Cash and cash equivalents and restricted cash included in assets held for sale 0 28 0 28
Restricted cash included in Other current assets 1 0 1 0
Restricted cash included in Other, net noncurrent assets 1 2 1 2
Total $ 2,133 $ 176 2,133 176
Non-Affiliates        
Changes in current assets and liabilities:        
Other assets and liabilities, net     210 12
Affiliates        
Changes in current assets and liabilities:        
Other assets and liabilities, net     (61) (5)
INVESTING ACTIVITIES        
Increase in notes receivable - affiliate     $ (1,202) $ 0
v3.24.3
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Statement of Cash Flows [Abstract]    
Capitalized interest $ 23 $ 15
v3.24.3
CONSOLIDATED STATEMENTS OF MEMBER'S EQUITY (UNAUDITED) - USD ($)
$ in Millions
Total
MEMBER'S EQUITY
ACCUMULATED OTHER COMPREHENSIVE LOSS
Balance at beginning of period at Dec. 31, 2022   $ 7,119 $ (344)
MEMBER'S EQUITY      
Net loss $ (1,928) (1,928)  
Distributions   (1,335)  
Contributions   0  
Other   39  
Other comprehensive income (loss) (2)   (2)
Balance at end of period at Sep. 30, 2023 3,549 3,895 (346)
Balance at beginning of period at Jun. 30, 2023   4,192 (332)
MEMBER'S EQUITY      
Net loss (45) (45)  
Distributions   (250)  
Contributions   0  
Other   (2)  
Other comprehensive income (loss) (14)   (14)
Balance at end of period at Sep. 30, 2023 3,549 3,895 (346)
Balance at beginning of period at Dec. 31, 2023 3,616 3,644 (28)
MEMBER'S EQUITY      
Net loss (221) (221)  
Distributions   (1,756)  
Contributions   210  
Other   0  
Other comprehensive income (loss) 3   3
Balance at end of period at Sep. 30, 2024 1,852 1,877 (25)
Balance at beginning of period at Jun. 30, 2024   1,933 (30)
MEMBER'S EQUITY      
Net loss (56) (56)  
Distributions   0  
Contributions   0  
Other   0  
Other comprehensive income (loss) 5   5
Balance at end of period at Sep. 30, 2024 $ 1,852 $ 1,877 $ (25)
v3.24.3
Background
 9 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Background
Note 1—Background

General

We are a facilities-based technology and communications company that provides a broad array of integrated products and services to our domestic and global business customers. We operate one of the world’s most interconnected networks. Our platform empowers our customers to swiftly adjust digital programs to meet immediate demands, create efficiencies, accelerate market access and reduce costs, which allows our customers to rapidly evolve their IT programs to address dynamic changes. Our specific products and services are detailed in Note 3—Revenue Recognition.

During 2022 and 2023, we divested components of our business, referenced herein as the Europe, Middle East and Africa ("EMEA") business, divested November 1, 2023 and the Latin American business, divested August 1, 2022. Refer to Note 2—Divestitures of the Latin American and EMEA Businesses in our Annual Report on Form 10-K for the year ended December 31, 2023 for more information on these divestitures. As we determined that neither of these divestitures represented a strategic shift for Level 3, they did not meet the criteria to be treated as discontinued operations and we continued to report our operating results for both of the divested businesses in our consolidated operating results through their respective disposal dates.

Basis of Presentation

Our consolidated balance sheet as of December 31, 2023, which was derived from our audited consolidated financial statements, and our unaudited interim consolidated financial statements provided herein have been prepared in accordance with the instructions for Form 10-Q. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). However, in our opinion, the disclosures made therein are adequate to make the information presented not misleading. We believe these consolidated financial statements include all normal recurring adjustments necessary to fairly present the results for the interim periods. The consolidated results of operations and cash flows for the first nine months of the year are not necessarily indicative of the consolidated results of operations and cash flows that might be expected for the entire year. These consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023.

The accompanying consolidated financial statements include our accounts and the accounts of our subsidiaries in which we have a controlling interest. Intercompany amounts and transactions with our consolidated subsidiaries have been eliminated. Transactions with our non-consolidated affiliates (Lumen Technologies and its other subsidiaries, referred to herein as affiliates) have not been eliminated.

Operating lease assets are included in Other, net under Other Assets on our consolidated balance sheets. Other, net includes affiliate operating lease assets of $248 million and $311 million as of September 30, 2024 and December 31, 2023, respectively. Additionally, current operating lease liabilities included the current portion of affiliate operating lease liabilities of $115 million and $129 million as of September 30, 2024 and December 31, 2023, respectively, and operating lease liabilities included the noncurrent portion of affiliate operating lease liabilities of $144 million and $201 million as of September 30, 2024 and December 31, 2023, respectively.
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 loss for any period.

During 2023, we identified errors in our previously reported consolidated financial statements related to accounts receivable and accounts payable. The errors were the result of understated revenues from one of our legacy mainframe billing systems and understated network expenses for periods prior to 2021. Notwithstanding this evaluation, we revised certain line items on our December 31, 2022 consolidated balance sheet in prior periods for these errors, which resulted in a decrease to our member's equity by $23 million, reflected in our January 1, 2023 and September 30, 2023 member's equity in our consolidated statements of member's equity in this report. Refer to Note 1—Background and Summary of Significant Accounting Policies to the consolidated financial statements and accompanying notes in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2023 for more information.

Segments

Our operations are integrated into and reported as part of Lumen Technologies' operations. Lumen's chief operating decision maker ("CODM") is our CODM. The CODM reviews our financial information on an aggregate basis only in connection with our quarterly and annual reports that we file with the SEC. Consequently, we do not provide our discrete financial information to the CODM on a regular basis. As such, we have one reportable segment.

Change in Accounting Estimate

During the first quarter of 2024, we updated our analysis of economic lives of owned fiber network assets. As of January 1, 2024, we extended the estimated economic life and depreciation period of such assets from 25 years to 30 years to better reflect the physical life of the assets that we have experienced and absence of technological changes that would replace fiber. The change in accounting estimate decreased depreciation expense by approximately $6 million, $5 million net of tax, and $20 million, $15 million net of tax, respectively, for the three and nine months ended September 30, 2024.

Summary of Significant Accounting Policies

Refer to the significant accounting policies described in Note 1—Background and Summary of Significant Accounting Policies to the consolidated financial statements and accompanying notes in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2023.

Recently Adopted Accounting Pronouncements

Supplier Finance Programs

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

Credit Losses

On January 1, 2023, we adopted ASU 2022-02, “Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings (“TDR”) and Vintage Disclosures” (“ASU 2022-02”). The ASU eliminates the TDR recognition and measurement guidance, enhances existing disclosure requirements, and introduces new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. The adoption of ASU 2022-02 did not have a material impact on our consolidated financial statements.
Adoption of Other ASU With No Impact

On January 1, 2024, we adopted ASU 2023-01, “Leases (Topic 842): Common Control Arrangements”, and ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The adoption of these ASUs did not have an impact on our consolidated financial statements.

Recently Issued Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). This ASU requires public business entities to annually (i) disclose specific categories in the rate reconciliation and (ii) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate).” ASU 2023-09 will become effective for us in fiscal year 2025 and early adoption is permitted. As of September 30, 2024, we have not early adopted this ASU and are currently evaluating its impact on our consolidated financial statements, including our annual disclosure within our Income Taxes note.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). This ASU is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. This ASU will become effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. As of September 30, 2024, we have not early adopted this ASU and are currently evaluating its impact on our consolidated financial statements.
v3.24.3
Goodwill, Customer Relationships and Other Intangible Assets
 9 Months Ended
Sep. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill, Customer Relationships and Other Intangible Assets
Note 2—Goodwill, Customer Relationships and Other Intangible Assets

Customer relationships and other intangible assets consisted of the following:
September 30, 2024
December 31, 2023
(Dollars in millions)
Customer relationships, less accumulated amortization of $4,361 and $3,896
$3,347 3,810 
Capitalized software, less accumulated amortization of $443 and $419
378 427 
Total customer relationships and other intangible assets, net$3,725 4,237 

As of September 30, 2024 and December 31, 2023, the gross carrying amount of customer relationships and capitalized software was $8.5 billion and $8.6 billion, respectively.

We recorded goodwill upon Lumen's 2017 acquisition of us, in which the purchase price exceeded the fair value of the net assets acquired. Prior to becoming fully impaired in the second quarter of 2023, we were 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 were 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 was October 31, at which date we assessed goodwill at our reporting unit. In reviewing the criteria for reporting units, we have determined that we are one reporting unit.
Second Quarter 2023 Goodwill Impairment Analysis

During the second quarter of 2023, the Company determined circumstances existed indicating it was more likely than not that the carrying value of our reporting unit exceeded its fair value. Given the continued erosion in Lumen's market capitalization, we determined our quantitative impairment analysis would estimate the fair value of our reporting unit using only the market approach. Applying this approach, we utilized company comparisons and analyst reports within the telecommunications industry which supported a range of fair values derived from annualized revenue and Earnings Before Interest, Tax, Depreciation and Amortization ("EBITDA") multiples between 1.5x and 4.3x and 4.6x and 10.5x, respectively. The revenue and EBITDA multiples were below these comparable market multiples. For the three months ended June 30, 2023, based on our assessment performed as described above, we concluded the estimated fair value was less than our carrying value of equity. As a result, our goodwill became fully impaired and we recorded a non-cash, non-tax-deductible goodwill impairment charge of $2.0 billion for the three months ended June 30, 2023.

The market approach that we used in the quarter ended June 30, 2023 incorporated estimates and assumptions related to the forecasted results for the remainder of the year, including revenues, expenses, and the achievement of certain strategic initiatives. In developing the market multiples, we considered observed trends of our industry participants. Our assessment included many factors that required significant judgment. Alternative interpretations of these factors could have resulted in different conclusions regarding the size of our impairments.

Total amortization expense for finite-lived intangible assets for the three months ended September 30, 2024 and 2023 totaled $177 million and $184 million, respectively, and for the nine months ended September 30, 2024 and 2023 totaled $558 million and $540 million, respectively.

We estimate that future total amortization expense for finite-lived intangible assets will be as follows:
(Dollars in millions)
2024 (remaining three months)$166 
2025653 
2026641 
2027600 
2028557 
2029 and thereafter1,108 
Total finite-lived intangible assets future amortization expense$3,725 
v3.24.3
Revenue Recognition
 9 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
Revenue Recognition
Note 3—Revenue Recognition

We categorize our products and services revenue among the following categories:
•Grow, which includes existing and emerging products and services in which we are significantly investing, including our colocation, conduit, dark fiber, Edge Cloud, IP, managed security, software-defined wide area networks ("SD WAN"), Unified Communications and Collaboration ("UC&C") and wavelengths services;
•Nurture, which includes our more mature offerings, including ethernet and VPN data networks services;
•Harvest, which includes our legacy services managed for cash flow, including Time Division Multiplexing ("TDM") voice, and private line services;
•Other, which includes primarily managed and professional service solutions and content delivery network ("CDN") revenue, prior to the sale of substantially all of our CDN contracts in late 2023; and
•Affiliate Services, which include communications services provided to our affiliates that we also provide to our external customers.
From time to time, we may change the categorization of our products and services.

Disaggregated Revenue by Service Offering

The following tables provide disaggregation of revenue from contracts with customers based on service offering for the three and nine months ended September 30, 2024 and 2023. It also provides the amount of revenue that is not subject to ASC 606, but is instead governed by other accounting standards. The amounts in the tables below include the EMEA business revenue prior to it being sold on November 1, 2023. See Note 2—Divestitures of the Latin American and EMEA Businesses in our Annual Report on Form 10-K for the year ended December 31, 2023 for additional information on these divestitures.

Three Months Ended September 30, 2024Three Months Ended September 30, 2023
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)
Grow$943 (164)779 991 (151)840 
Nurture376 (3)373 427 (3)424 
Harvest191 — 191 239 — 239 
Other20 — 20 49 — 49 
Affiliate Services63 (63)— 57 (57)— 
Total revenue$1,593 (230)1,363 1,763 (211)1,552 

Nine Months Ended September 30, 2024Nine Months Ended September 30, 2023
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)
Grow$2,793 (441)2,352 2,953 (465)2,488 
Nurture1,145 (11)1,134 1,293 (11)1,282 
Harvest570 — 570 747 — 747 
Other92 — 92 151 — 151 
Affiliate Services183 (183)— 167 (167)— 
Total revenue$4,783 (635)4,148 5,311 (643)4,668 
_____________________________________________________________________
(1) Includes lease revenue which is not within the scope of ASC 606.

Operating Lease Revenue

We lease various dark fiber (including conduit), office facilities, colocation facilities, switching facilities, other network sites and service equipment 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 September 30, 2024 and 2023, our gross rental revenue was $182 million and $170 million, respectively, which represented approximately 11% and 10%, respectively, of our operating revenue. For the nine months ended September 30, 2024 and 2023, our gross rental revenue was $500 million and $525 million, respectively, which represented approximately 10% respectively, of our operating revenue for both the nine months ended September 30, 2024 and 2023.
Customer Receivables and Contract Balances

The following table provides balances of customer receivables, contract assets and contract liabilities as of September 30, 2024 and December 31, 2023:
September 30, 2024December 31, 2023
(Dollars in millions)
Customer receivables, less allowance of $12 and $13
$568 544 
Contract assets
7 8 
Contract liabilities
250 222 

Contract liabilities are consideration we have received from our customers or billed in advance of providing the goods or services promised in the future. We defer recognizing this consideration 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 and nine months ended September 30, 2024, we recognized $16 million and $98 million, respectively, of revenue that was included in contract liabilities of $222 million as of January 1, 2024. During the three and nine months ended September 30, 2023, we recognized $21 million and $119 million, respectively, of revenue that was included in contract liabilities of $281 million as of January 1, 2023, including contract liabilities that were classified as held for sale.

Performance Obligations

As of September 30, 2024, we expect to recognize approximately $4.2 billion of revenue in the future related to performance obligations associated with existing customer contracts that are partially or wholly unsatisfied. As of September 30, 2024, the transaction price related to unsatisfied performance obligations that are expected to be recognized for the remainder of 2024, 2025 and thereafter was $583 million, $1.8 billion and $1.9 billion, respectively.

These amounts exclude (i) the value of unsatisfied performance obligations for contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed (for example, uncommitted usage or non-recurring charges associated with professional or technical services to be completed) 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 September 30, 2024Three Months Ended September 30, 2023
Acquisition CostsFulfillment CostsAcquisition CostsFulfillment Costs
(Dollars in millions)
Beginning of period balance(1)
$70 116 69 102 
Costs incurred12 24 12 24 
Amortization(12)(20)(14)(18)
End of period balance(3)
$70 120 67 108 
Nine Months Ended September 30, 2024Nine Months Ended September 30, 2023
Acquisition CostsFulfillment CostsAcquisition CostsFulfillment Costs
(Dollars in millions)
Beginning of period balance(2)
$70 97 76 106 
Costs incurred36 76 39 68 
Amortization(36)(53)(44)(52)
Change in contract costs held for sale— — (4)(14)
End of period balance(3)
$70 120 67 108 
______________________________________________________________________
(1)Beginning of period balance for the three months ended September 30, 2023 excludes $10 million of acquisition costs and $14 million of fulfillment costs classified as held for sale related to the EMEA business.
(2)Beginning of period balance for the nine months ended September 30, 2023 excludes $6 million of acquisition costs and no fulfillment costs classified as held for sale related to the EMEA business.
(3)End of period balance for the three and nine months ended September 30, 2023 excludes $10 million of acquisition costs and $14 million fulfillment costs classified as held for sale related to the EMEA business.

Acquisition costs include commission fees paid to employees as a result of obtaining contracts. Fulfillment costs include third party and internal costs associated with the provision, installation and activation of services to customers, including labor and materials consumed for these activities.

We amortize deferred acquisition and fulfillment costs based on the transfer of services on a straight-line basis over the average expected contract life of approximately 36 months for our business customers. We include amortized fulfillment costs in Cost of services and products and amortized acquisition costs in Selling, general and administrative in our consolidated statements of operations. We include the amount of these deferred costs that are anticipated to be amortized in the next twelve months in Other under Current Assets on our consolidated balance sheets. We include the amount of deferred costs expected to be amortized beyond the next twelve months in Other under Deferred Revenue and Other Liabilities on our consolidated balance sheets. We assess deferred acquisition and fulfillment costs for impairment on a quarterly basis.
v3.24.3
Credit Losses on Financial Instruments
 9 Months Ended
Sep. 30, 2024
Credit Loss [Abstract]  
Credit Losses on Financial Instruments
Note 4—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 for our accounts receivable portfolio:

(Dollars in millions)
Beginning balance at December 31, 2023
$13 
Provision for expected losses5 
Write-offs charged against the allowance(9)
Recoveries collected3 
Ending balance at September 30, 2024
$12 
v3.24.3
Long-Term Debt and Credit Facilities
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Long-Term Debt and Credit Facilities
Note 5—Long-Term Debt and Credit Facilities

At September 30, 2024, all of our outstanding debt (excluding finance leases) had been incurred by Level 3 Financing. The following table reflects our consolidated long-term debt, including finance leases and other obligations, unamortized discounts and premiums, net and unamortized debt issuance costs, but excluding intercompany debt:
Interest Rates (1)
Maturities (1)
September 30, 2024December 31, 2023
(Dollars in millions)
Level 3 Financing, Inc.
Secured Senior Debt:(2)
New Facilities:
Term Loan B-1(3)
SOFR + 6.56%
2029$1,199 — 
Term Loan B-2(3)
SOFR + 6.56%
20301,199 — 
Former Facility(4)
SOFR + 1.75%
202712 2,411 
First Lien Notes(5)
10.500% to 11.000%
2029 - 2030
3,846 925 
Second Lien Notes
3.875% to 10.000%
2029 - 2032
2,579 — 
Former Senior Notes
3.400% - 3.875%
2027 - 2029
— 1,500 
Unsecured Senior Notes:
Senior notes (6)
3.400% - 4.625%
2027 - 2029
1,508 3,940 
Finance leases and other obligationsVariousVarious238 259 
Unamortized (discounts) premiums, net(233)2 
Unamortized debt issuance costs(146)(54)
Total long-term debt10,202 8,983 
Less current maturities(35)(31)
Long-term debt, excluding current maturities$10,167 8,952 
______________________________________________________________________
(1)As of September 30, 2024. All references to "SOFR" refer to the Secured Overnight Financing Rate.
(2)As discussed further below in this Note, the debt listed under the caption “Senior Secured Debt” is secured by assets of Level 3 Financing and guaranteed on a secured basis by certain of its affiliates. As discussed further in footnote 6, we reclassified in the "September 30, 2024" column of the table above certain notes that were secured prior to the Effective Date (as defined below) from "secured" to "unsecured" in light of amendments that released such prior security interests.
(3)The Term Loan B-1 and B-2 each had an interest rate of 11.838% as of September 30, 2024.
(4)Reflects Level 3 Tranche B 2027 Term Loan issued under a predecessor facility, which had an interest rate of 7.111% and 7.220% as of September 30, 2024 and December 31, 2023, respectively.
(5)Includes Level 3 Financing's 10.500% Senior Secured Notes due 2030 issued in early 2023, the terms of which have been amended to be consistent with Level 3 Financing's first lien notes issued on March 22, 2024.
(6)The total debt for these notes at September 30, 2024 includes the remaining aggregate principal amount due under Level 3 Financing's former senior secured notes, the terms of which were amended on March 22, 2024 to release the security interests relating thereto.
Long-Term Debt Maturities

Set forth below is the aggregate principal amount of our long-term debt as of September 30, 2024 (excluding unamortized (discounts) premiums, net, unamortized debt issuance costs, and intercompany debt), maturing during the following years:

(Dollars in millions)
2024 (remaining three months)$10 
202537 
202635 
2027150 
2028507 
2029 and thereafter9,842 
Total long-term debt$10,581 
Impact of Recent Debt Transactions

Exchange Offers

Pursuant to exchange offers that commenced on September 3, 2024 (the "Exchange Offers"), on September 24, 2024, Level 3 Financing issued approximately $350 million aggregate principal amount of its newly-issued 10.0% Second Lien Notes due 2032 in exchange for $357 million aggregate principal amount of two series of its outstanding senior unsecured notes maturing in 2027 (which were concurrently cancelled). These transactions reduced the aggregate principal amount of Level 3 Financing's consolidated indebtedness by approximately $7 million.

Consistent with FASB ASC Topic 470 Debt, (“ASC 470”), the Company is required to analyze whether the Exchange Offers constituted (i) an extinguishment of debt, which requires borrowers to record a gain or loss for the difference between the net carrying value of the old derecognized debt and the fair value of the new debt, or (ii) a debt modification, which results in no gain or loss and requires borrowers to establish a new effective interest rate based on the carrying value of the debt and revised cash flow. The Company has determined that the Exchange Offers constituted a debt modification consistent with ASC 470 and recorded no gain or loss.

The following table sets forth the aggregate principal amount of each series of senior unsecured notes of Level 3 Financing exchanged and retired on September 24, 2024 in connection with the Exchange Offers:

Debt
Aggregate Principal Amount (in millions)
Level 3 Financing, Inc.
3.400% senior secured notes due 2027 (unsecured)
$77 
4.625% senior notes due 2027
280 
Total
$357 

TSA Transactions

On March 22, 2024 (the "Effective Date"), Lumen Technologies, Level 3 Financing, Qwest and a group of creditors holding a majority of our consolidated debt completed transactions contemplated under the amended and restated transaction support agreement ("TSA") that such parties entered into on January 22, 2024 (the "TSA Transactions"), including the termination, repayment or exchange of previous commitments and debt of Level 3 Financing and the issuance of new term loan facilities and notes by Level 3 Financing.
The following table sets forth the aggregate principal amount of (i) former debt of Level 3 Financing exchanged for new Level 3 Financing debt and (ii) new debt issued by Level 3 in exchange for former Level 3 debt (except as otherwise noted), in each case during the first quarter of 2024 in connection with the TSA Transactions:

Former notes or facility exchanged
New notes or facility issued
Aggregate principal amount exchanged/issued (in millions)(1)
Term Loan B
Term Loan B-1, B-2
$2,398 
3.400% Senior Notes due 2027
10.500% First Lien Notes due 2029
668 
3.875% Senior Notes due 2029
10.750% First Lien Notes due 2029
678 
4.625% Senior Notes due 2027
4.875% Second Lien Notes due 2029
606 
4.250% Senior Notes due 2028
4.500% Second Lien Notes due 2030
712 
3.625% Senior Notes due 2029
3.875% Second Lien Notes due 2030
458 
3.750% Senior Notes due 2029
4.000% Second Lien Notes due 2031
453 
n/a
11.000% First Lien Notes due 2029(2)
1,575 
Total$7,548 
______________________________________________________________________
(1)See our long-term debt table above for information on the amount of former debt that remains outstanding as of September 30, 2024.
(2)Issued for cash and the other consideration.

In evaluating the terms of the TSA Transactions, we determined that for certain of our creditors the new debt instruments were substantially different than pre-existing debt and therefore constituted a non-cash extinguishment of old debt of $2.6 billion and establishment of new debt for which we recorded a gain on extinguishment in the first quarter of 2024. This new debt was recorded at fair value generating a reduction to debt of $261 million which was included in our aggregate Net gain on early retirement of debt of $54 million, recognized in other income (expense), net in our consolidated statement of operations for the nine months ended September 30, 2024. The remaining creditors’ debt was not substantially different under the terms of the TSA Transactions and was treated under modification accounting rules. In conjunction with the TSA Transactions, we paid $209 million in lender fees and $112 million in additional third-party costs. Of these amounts, $157 million lender fees were an offset to the gain on extinguishment and $61 million in third-party costs were recorded to Selling, general and administrative expense in our consolidated statement of operations for the nine months ended September 30, 2024. In accordance with GAAP provisions for modification and extinguishment accounting, $52 million in lender fees and $51 million in third-party costs, respectively, were capitalized and will be amortized over the terms of the newly-issued indebtedness.

Level 3 Financing Credit Agreement

Amounts outstanding under Level 3 Financing's new Credit Agreement dated March 22, 2024 may be prepaid at any time, subject to a premium of (i) 2.00% of the aggregate principal amount if prepaid on or prior to the 12-month anniversary of the Effective Date and (ii) 1.00% of the aggregate principal amount if prepaid after the 12-month anniversary of the Effective Date and on or prior to the 24-month anniversary of the Effective Date. The facilities established under the new Credit Agreement require Level 3 Financing to make certain specified mandatory prepayments upon the occurrence of certain transactions.

Level 3 Guarantees of Lumen Credit Agreements

Lumen’s obligations under its Superpriority Revolving/Term A Credit Agreement dated as of March 22, 2024 (the “RCF/TLA Credit Agreement”) are unsecured, but Level 3 Parent, Level 3 Financings and certain of Level 3 Financing's subsidiaries (collectively, the "Level 3 Collateral Guarantors") have provided or, in certain cases after receiving necessary regulatory approvals, will provide an unconditional guarantee of payment of up to $150 million of Lumen’s obligations under both of the revolving credit facilities created under the RCF/TLA Credit Agreement. Certain of such guarantees will be secured by a lien on substantially all of the assets of the applicable Level 3 Collateral Guarantors. The guarantee by the Level 3 Collateral Guarantors may be reduced or terminated under certain circumstances.
Senior Notes

The Company’s consolidated indebtedness at September 30, 2024 included (i) first and second lien secured notes issued by Level 3 Financing and (ii) senior unsecured notes issued by Level 3 Financing. All of these notes carry fixed interest rates and all principal is due on the notes’ respective maturity dates, which rates and maturity dates are summarized in the table above. Level 3 Financing generally can redeem the notes, at its option, in whole or in part, (i) pursuant to a fixed schedule of pre-established redemption prices, (ii) pursuant to a “make whole” redemption price or (iii) under certain other specified limited conditions.

Certain Guarantees and Security Interests

Level 3 Financing’s obligations under its new Credit Agreement are secured by a first lien on substantially all of its assets (subject, in certain cases, to receipt of necessary regulatory approvals). In addition, the other Level 3 Collateral Guarantors have provided or, in certain cases after receiving necessary regulatory approvals, will provide an unconditional guarantee of payment of Level 3 Financing’s obligations under its new Credit Agreement secured by a lien on substantially all of their assets.

Level 3 Financing’s obligations under its first lien notes are secured by a first lien on substantially all of its assets (subject, in certain cases, to receipt of necessary regulatory approvals), and are guaranteed by the other Level 3 Collateral Guarantors (or, for certain such guarantors, will be guaranteed upon the receipt of required regulatory approvals) on the same basis as the guarantees provided by such entities under the Level 3 Financing's new credit facilities. Level 3 Financing’s obligations under its second lien notes are secured by a second lien on substantially all of its assets (subject, in certain cases, to receipt of necessary regulatory approvals), and are guaranteed by the other Level 3 Collateral Guarantors (or, for certain such guarantors, will be guaranteed upon the receipt of required regulatory approvals) on the same basis as the guarantees provided by such entities under Level 3 Financing's new credit facilities, except the lien securing such guarantees is a second lien.

Level 3 Financing's obligations under its unsecured notes are guaranteed on an unsecured basis by the same affiliated entities that guarantee Level 3 Financing's new Credit Agreement and secured notes.

Supplier Finance Program

Pursuant to our purchase of network equipment under a supplier finance program implemented in 2021 with one of our key equipment vendors, we are obligated to make quarterly installment payments over a 5-year period and pay annual interest of 1.25% on unpaid balances. The first unsecured quarterly payment was due April 27, 2022, with remaining quarterly payments due through the end of the term on July 1, 2026. The supplier also agreed to certain milestone performance and other provisions that could result in us earning credits to be applied by us towards future equipment purchases. As of September 30, 2024 and December 31, 2023, we have received approximately $21 million and $15 million of credits and our outstanding obligations under the plan was $44 million and $55 million, respectively. As of September 30, 2024, $20 million was included in current maturities of long-term debt and $24 million was included in long-term debt.

Covenants

Level 3 Financing's new Credit Agreement and first and second lien secured notes contain various representations and extensive affirmative and negative covenants. Such covenants include, among other things and subject to certain significant exceptions, restrictions on their ability to declare or pay dividends, repay certain other indebtedness, create liens, incur additional indebtedness, make investments, dispose of assets and merge or consolidate with any other person. Also, under certain circumstances in connection with a “change of control” of Level 3 Parent or Level 3 Financing, Level 3 Financing will be required to make an offer to repurchase each series of its outstanding senior notes at a price of 101% of the principal amount redeemed, plus accrued and unpaid interest.

Compliance

As of September 30, 2024, we believe we were in compliance with the provisions and financial covenants contained in our debt agreements in all material respects.
v3.24.3
Severance
 9 Months Ended
Sep. 30, 2024
Restructuring and Related Activities [Abstract]  
Severance
Note 6—Severance

Periodically, we reduce our workforce and accrue liabilities for the related severance costs. These workforce reductions result primarily from the progression or completion of our post-acquisition integration plans, increased competitive pressures, cost reduction initiatives, process improvements through automation and reduced workloads due to reduced demand for certain services.

During April 2024, we reduced our workforce by approximately 7% as a part of our efforts to change our workforce composition to reflect our ongoing transformation and cost reduction opportunities that align with our shapeshifting and focus on our strategic priorities. As a result of this plan, we incurred severance and related costs of approximately $37 million during the second quarter of 2024. We have not incurred, and do not expect to incur, material impairment or exit costs related to this workforce reduction.

Changes in our accrued liabilities for severance expenses were as follows:

Severance

(Dollars in millions)
December 31, 2023$13 
Accrued to expense40 
Payments, net(44)
September 30, 2024$9 
v3.24.3
Fair Value of Financial Instruments
 9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments
Note 7—Fair Value of Financial Instruments

Our financial instruments consist of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, notes receivable-affiliate and long-term debt (excluding finance leases and other obligations) and certain indemnification obligations. Due to their short-term nature, the carrying amounts of our cash and cash equivalents, restricted cash, accounts receivable, notes receivable-affiliate and accounts payable approximate their fair values.

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

We determined the fair values of our long-term debt, including the current portion, based primarily 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 are 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 September 30, 2024 and December 31, 2023, as well as the input level used to determine the fair values indicated below:
September 30, 2024December 31, 2023
Input LevelCarrying AmountFair ValueCarrying AmountFair Value
(Dollars in millions)
Liabilities-Long-term debt, excluding finance leases2$9,964 9,842 8,724 6,418 
Indemnifications related to the sale of the Latin American business(1)
387 84 86 86 
_______________________________________________________________________________
(1)Nonrecurring fair value is measured as of August 1, 2022.
v3.24.3
Affiliate Transactions
 9 Months Ended
Sep. 30, 2024
Related Party Transactions [Abstract]  
Affiliate Transactions
Note 8—Affiliate Transactions

We provide competitive local exchange carrier telecommunications services to our affiliates that we also provide to external customers. We believe these services are priced consistent with non-regulated rates charged to external customers. These services are billed directly to our affiliates and recognized as affiliate revenue on our consolidated statements of operations.

Whenever possible, costs are incurred directly by our affiliates for the services they use. When such costs are not directly incurred, they are allocated among all affiliates based upon the most reasonable method, first using cost causative measures, or, if no cost causative measure is available, using a general allocator. Unlike certain other affiliates of Lumen Technologies, we do not operate as a shared service company to our affiliates and therefore any allocated affiliate revenue we earn reduces the affiliate charges incurred by us and is presented on a net basis within Operating expenses – affiliates on our consolidated statements of operations. From time to time, we may adjust the basis for allocating the costs of a shared service among affiliates. Any such changes in allocation methodologies are generally applied prospectively.

We also purchase services from our affiliates, including telecommunication services, insurance, flight services, and other support services such as legal, regulatory, finance, administration and executive support. Our affiliates charge us for those services using the allocation methodologies described above.

On March 22, 2024, we entered into a $1.2 billion secured revolving credit facility with Lumen Technologies with an 11% interest rate per annum. The principal amount is payable upon demand by us and prepayable by Lumen Technologies at any time, but no later than May 31, 2030, which maturity date may be extended for two additional one-year periods. The facility has covenants and is subject to other limitations, including a collateral agreement.

On March 22, 2024, we amended and restated our unsecured credit facility with Lumen Technologies pursuant to which Lumen Technologies may borrow up to $1.825 billion from us. As of September 30, 2024, the interest rate was 11.32% per annum and is subject to certain adjustments as set forth in the facility (SOFR + 6%). The principal amount is payable upon demand by us and prepayable by Lumen Technologies at any time prior to maturity. The facility has covenants and is subject to other limitations. On September 24, 2024, we further amended and restated this facility to extend the maturity date to November 30, 2032, which may be extended for two additional one-year periods.

As of September 30, 2024, Lumen Technologies owed us approximately $2.7 billion, $1.2 billion of which was due under the above-mentioned secured revolving credit facility and approximately $1.5 billion of which was due under the above-mentioned unsecured revolving credit facility. As of December 31, 2023, Lumen Technologies owed us approximately $1.5 billion under the above-mentioned unsecured revolving credit facility.

In the first quarter of 2024, we made a distribution of cash to Lumen Technologies in the amount of approximately $1.8 billion, thereby reducing equity by the same amount, which was partially offset by a contribution from Lumen Technologies of $210 million, thereby increasing equity by the same amount.
v3.24.3
Commitments, Contingencies and Other Items
 9 Months Ended
Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments, Contingencies and Other Items
Note 9—Commitments, Contingencies and Other Items

We are subject to various claims, legal proceedings and other contingent liabilities, including the matters described below, which individually or in the aggregate could materially affect our financial condition, future results of operations or cash flows.
We review our litigation accrual liabilities on a quarterly basis, but in accordance with applicable accounting guidelines only establish accrual liabilities when losses are deemed probable and reasonably estimable and only revise previously established accrual liabilities when warranted by changes in circumstances, in each case based on then-available information. As such, as of any given date we could have exposure to losses under proceedings as to which no liability has been accrued or as to which the accrued liability is inadequate. Subject to these limitations, at September 30, 2024 and December 31, 2023 we had accrued $36 million and $38 million, respectively, in the aggregate for our litigation and non-income tax contingencies which is included in Other under Current Liabilities or Other under Deferred Revenue and Other Liabilities in our consolidated balance sheets as of such date. We cannot at this time estimate the reasonably possible loss or range of loss, if any, in excess of this $36 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.

Latin American Tax Litigation and Claims

In connection with the 2022 divestiture of our Latin American business, the purchaser assumed responsibility for the Brazilian tax claims described in our prior periodic reports filed with the SEC. We agreed to indemnify the purchaser for amounts paid with respect to the Brazilian tax claims. The value of this indemnification and others associated with the Latin American business divestiture are included in the indemnification amount as disclosed in Note 7—Fair Value of Financial Instruments.

Huawei Network Deployment Investigations

Level 3 has received requests from the following federal agencies for information relating to the use of equipment manufactured by Huawei Technologies Company ("Huawei") in Lumen’s networks.

•DOJ. Lumen has received a civil investigative demand from the U.S. Department of Justice in the course of a False Claims Act investigation alleging that Lumen Technologies, Inc. and Lumen Technologies Government Solutions, Inc. failed to comply with certain specified requirements in federal contracts concerning their use of Huawei equipment. 

•FCC. The FCC’s Enforcement Bureau issued a Letter of Inquiry to Lumen Technologies, Inc. regarding its written certifications to the FCC that Lumen has complied with FCC rules governing the use of resources derived from the High Cost Program, Lifeline Program, Rural Health Care Program, E-Rate Program, Emergency Broadband Benefit Program, and the Affordable Connectivity Program. Under these programs, federal funds may not be used to facilitate the deployment or maintenance of equipment or services provided by Huawei, a company that the FCC has determined poses a national security threat to the integrity of U.S. communications networks or the communications supply chain.

•Team Telecom. The Committee for the Assessment of Foreign Participation in the United States Telecommunications Service Sector (comprised of the U.S. Attorney General, and the Secretaries of the Department of Homeland Security, and the Department of Defense), commonly referred to as Team Telecom, issued questions and requests for information relating to Lumen’s FCC licenses and its use of Huawei equipment.

Other Proceedings, Disputes and Contingencies

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

We are currently defending several patent infringement lawsuits asserted against us by non-practicing entities which are seeking substantial recoveries. These cases have progressed to various stages and one or more may go to trial within the next twelve months if they are not otherwise resolved. Where applicable, we are seeking full or partial indemnification from our vendors and suppliers.
We are subject to various foreign, federal, state and local environmental protection and health and safety laws. From time to time, we are subject to judicial and administrative proceedings brought by various governmental authorities under these laws. Several such proceedings are currently pending, but none is reasonably expected to exceed $300,000 in fines and penalties. In addition, in the past we acquired companies that operated certain manufacturing companies in the first part of the 1900s. Under applicable environmental laws, we could be named as a potentially responsible party for a share of the remediation of environmental conditions arising from the historical operations of our predecessors.

The outcomes of these other proceedings described under this heading are 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 our contingencies. For additional information on our contingencies, see Note 16—Commitments, Contingencies and Other Items to the consolidated financial statements included in Item 8 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2023. The ultimate outcome of the above-described matters may differ materially from the outcomes anticipated, estimated, projected or implied by us in certain of our statements appearing above in this Note, and proceedings we currently consider immaterial may ultimately affect us materially.
v3.24.3
Accumulated Other Comprehensive Loss
 9 Months Ended
Sep. 30, 2024
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Accumulated Other Comprehensive Loss
Note 10—Accumulated Other Comprehensive Loss

The table below summarizes changes in accumulated other comprehensive loss recorded on our consolidated balance sheets by component for the nine months ended September 30, 2024:
Pension PlansForeign Currency Translation Adjustment and OtherTotal
(Dollars in millions)
Balance at December 31, 2023$(1)(27)(28)
Other comprehensive income, net of tax— 3 3 
Net other comprehensive income— 3 3 
Balance at September 30, 2024$(1)(24)(25)

The table below summarizes changes in accumulated other comprehensive loss recorded on our consolidated balance sheets by component for the nine months ended September 30, 2023:

Pension PlansForeign Currency Translation Adjustment and OtherTotal
(Dollars in millions)
Balance at December 31, 2022$21 (365)(344)
Other comprehensive loss, net of tax— (2)(2)
Net other comprehensive loss— (2)(2)
Balance at September 30, 2023$21 (367)(346)
v3.24.3
Other Financial Information
 9 Months Ended
Sep. 30, 2024
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Other Financial Information
Note 11—Other Financial Information

Other Current Assets
The following table presents details of other current assets reflected on our consolidated balance sheets:

September 30, 2024December 31, 2023

(Dollars in millions)
Prepaid expenses$117 123 
Contract fulfillment costs56 50 
Contract acquisition costs39 40 
Contract assets6 6 
Other12 25 
Total other current assets
$230 244 
v3.24.3
Background (Policies)
 9 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Basis of Presentation
Basis of Presentation

Our consolidated balance sheet as of December 31, 2023, which was derived from our audited consolidated financial statements, and our unaudited interim consolidated financial statements provided herein have been prepared in accordance with the instructions for Form 10-Q. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). However, in our opinion, the disclosures made therein are adequate to make the information presented not misleading. We believe these consolidated financial statements include all normal recurring adjustments necessary to fairly present the results for the interim periods. The consolidated results of operations and cash flows for the first nine months of the year are not necessarily indicative of the consolidated results of operations and cash flows that might be expected for the entire year. These consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023.

The accompanying consolidated financial statements include our accounts and the accounts of our subsidiaries in which we have a controlling interest. Intercompany amounts and transactions with our consolidated subsidiaries have been eliminated. Transactions with our non-consolidated affiliates (Lumen Technologies and its other subsidiaries, referred to herein as affiliates) have not been eliminated.
Segments
Segments

Our operations are integrated into and reported as part of Lumen Technologies' operations. Lumen's chief operating decision maker ("CODM") is our CODM. The CODM reviews our financial information on an aggregate basis only in connection with our quarterly and annual reports that we file with the SEC. Consequently, we do not provide our discrete financial information to the CODM on a regular basis. As such, we have one reportable segment.
Recently Adopted and Issued Accounting Pronouncements
Recently Adopted Accounting Pronouncements

Supplier Finance Programs

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

Credit Losses

On January 1, 2023, we adopted ASU 2022-02, “Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings (“TDR”) and Vintage Disclosures” (“ASU 2022-02”). The ASU eliminates the TDR recognition and measurement guidance, enhances existing disclosure requirements, and introduces new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. The adoption of ASU 2022-02 did not have a material impact on our consolidated financial statements.
Adoption of Other ASU With No Impact

On January 1, 2024, we adopted ASU 2023-01, “Leases (Topic 842): Common Control Arrangements”, and ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The adoption of these ASUs did not have an impact on our consolidated financial statements.

Recently Issued Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). This ASU requires public business entities to annually (i) disclose specific categories in the rate reconciliation and (ii) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate).” ASU 2023-09 will become effective for us in fiscal year 2025 and early adoption is permitted. As of September 30, 2024, we have not early adopted this ASU and are currently evaluating its impact on our consolidated financial statements, including our annual disclosure within our Income Taxes note.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). This ASU is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. This ASU will become effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. As of September 30, 2024, we have not early adopted this ASU and are currently evaluating its impact on our consolidated financial statements.
Operating Lease Revenue
Operating Lease Revenue

We lease various dark fiber (including conduit), office facilities, colocation facilities, switching facilities, other network sites and service equipment to third parties under operating leases. Lease and sublease revenue are included in Operating Revenue in our consolidated statements of operations.
v3.24.3
Goodwill, Customer Relationships and Other Intangible Assets (Tables)
 9 Months Ended
Sep. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of goodwill, customer relationships and other intangible assets
Customer relationships and other intangible assets consisted of the following:
September 30, 2024
December 31, 2023
(Dollars in millions)
Customer relationships, less accumulated amortization of $4,361 and $3,896
$3,347 3,810 
Capitalized software, less accumulated amortization of $443 and $419
378 427 
Total customer relationships and other intangible assets, net$3,725 4,237 
Schedule of estimated amortization expense for intangible assets
We estimate that future total amortization expense for finite-lived intangible assets will be as follows:
(Dollars in millions)
2024 (remaining three months)$166 
2025653 
2026641 
2027600 
2028557 
2029 and thereafter1,108 
Total finite-lived intangible assets future amortization expense$3,725 
v3.24.3
Revenue Recognition (Tables)
 9 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
Disaggregation of revenue
The following tables provide disaggregation of revenue from contracts with customers based on service offering for the three and nine months ended September 30, 2024 and 2023. It also provides the amount of revenue that is not subject to ASC 606, but is instead governed by other accounting standards. The amounts in the tables below include the EMEA business revenue prior to it being sold on November 1, 2023. See Note 2—Divestitures of the Latin American and EMEA Businesses in our Annual Report on Form 10-K for the year ended December 31, 2023 for additional information on these divestitures.

Three Months Ended September 30, 2024Three Months Ended September 30, 2023
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)
Grow$943 (164)779 991 (151)840 
Nurture376 (3)373 427 (3)424 
Harvest191 — 191 239 — 239 
Other20 — 20 49 — 49 
Affiliate Services63 (63)— 57 (57)— 
Total revenue$1,593 (230)1,363 1,763 (211)1,552 

Nine Months Ended September 30, 2024Nine Months Ended September 30, 2023
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)
Grow$2,793 (441)2,352 2,953 (465)2,488 
Nurture1,145 (11)1,134 1,293 (11)1,282 
Harvest570 — 570 747 — 747 
Other92 — 92 151 — 151 
Affiliate Services183 (183)— 167 (167)— 
Total revenue$4,783 (635)4,148 5,311 (643)4,668 
_____________________________________________________________________
(1) Includes lease revenue which is 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 September 30, 2024 and December 31, 2023:
September 30, 2024December 31, 2023
(Dollars in millions)
Customer receivables, less allowance of $12 and $13
$568 544 
Contract assets
7 8 
Contract liabilities
250 222 
Capitalized contract cost
The following tables provide changes in our contract acquisition costs and fulfillment costs:
Three Months Ended September 30, 2024Three Months Ended September 30, 2023
Acquisition CostsFulfillment CostsAcquisition CostsFulfillment Costs
(Dollars in millions)
Beginning of period balance(1)
$70 116 69 102 
Costs incurred12 24 12 24 
Amortization(12)(20)(14)(18)
End of period balance(3)
$70 120 67 108 
Nine Months Ended September 30, 2024Nine Months Ended September 30, 2023
Acquisition CostsFulfillment CostsAcquisition CostsFulfillment Costs
(Dollars in millions)
Beginning of period balance(2)
$70 97 76 106 
Costs incurred36 76 39 68 
Amortization(36)(53)(44)(52)
Change in contract costs held for sale— — (4)(14)
End of period balance(3)
$70 120 67 108 
______________________________________________________________________
(1)Beginning of period balance for the three months ended September 30, 2023 excludes $10 million of acquisition costs and $14 million of fulfillment costs classified as held for sale related to the EMEA business.
(2)Beginning of period balance for the nine months ended September 30, 2023 excludes $6 million of acquisition costs and no fulfillment costs classified as held for sale related to the EMEA business.
(3)End of period balance for the three and nine months ended September 30, 2023 excludes $10 million of acquisition costs and $14 million fulfillment costs classified as held for sale related to the EMEA business.
v3.24.3
Credit Losses on Financial Instruments (Tables)
 9 Months Ended
Sep. 30, 2024
Credit Loss [Abstract]  
Activity in allowance for credit losses
The following table presents the activity of our allowance for credit losses for our accounts receivable portfolio:

(Dollars in millions)
Beginning balance at December 31, 2023
$13 
Provision for expected losses5 
Write-offs charged against the allowance(9)
Recoveries collected3 
Ending balance at September 30, 2024
$12 
v3.24.3
Long-Term Debt and Credit Facilities (Tables)
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Schedule of long-term debt The following table reflects our consolidated long-term debt, including finance leases and other obligations, unamortized discounts and premiums, net and unamortized debt issuance costs, but excluding intercompany debt:
Interest Rates (1)
Maturities (1)
September 30, 2024December 31, 2023
(Dollars in millions)
Level 3 Financing, Inc.
Secured Senior Debt:(2)
New Facilities:
Term Loan B-1(3)
SOFR + 6.56%
2029$1,199 — 
Term Loan B-2(3)
SOFR + 6.56%
20301,199 — 
Former Facility(4)
SOFR + 1.75%
202712 2,411 
First Lien Notes(5)
10.500% to 11.000%
2029 - 2030
3,846 925 
Second Lien Notes
3.875% to 10.000%
2029 - 2032
2,579 — 
Former Senior Notes
3.400% - 3.875%
2027 - 2029
— 1,500 
Unsecured Senior Notes:
Senior notes (6)
3.400% - 4.625%
2027 - 2029
1,508 3,940 
Finance leases and other obligationsVariousVarious238 259 
Unamortized (discounts) premiums, net(233)2 
Unamortized debt issuance costs(146)(54)
Total long-term debt10,202 8,983 
Less current maturities(35)(31)
Long-term debt, excluding current maturities$10,167 8,952 
______________________________________________________________________
(1)As of September 30, 2024. All references to "SOFR" refer to the Secured Overnight Financing Rate.
(2)As discussed further below in this Note, the debt listed under the caption “Senior Secured Debt” is secured by assets of Level 3 Financing and guaranteed on a secured basis by certain of its affiliates. As discussed further in footnote 6, we reclassified in the "September 30, 2024" column of the table above certain notes that were secured prior to the Effective Date (as defined below) from "secured" to "unsecured" in light of amendments that released such prior security interests.
(3)The Term Loan B-1 and B-2 each had an interest rate of 11.838% as of September 30, 2024.
(4)Reflects Level 3 Tranche B 2027 Term Loan issued under a predecessor facility, which had an interest rate of 7.111% and 7.220% as of September 30, 2024 and December 31, 2023, respectively.
(5)Includes Level 3 Financing's 10.500% Senior Secured Notes due 2030 issued in early 2023, the terms of which have been amended to be consistent with Level 3 Financing's first lien notes issued on March 22, 2024.
(6)The total debt for these notes at September 30, 2024 includes the remaining aggregate principal amount due under Level 3 Financing's former senior secured notes, the terms of which were amended on March 22, 2024 to release the security interests relating thereto.
Schedule of aggregate future contractual maturities of long-term debt and capital leases (excluding discounts)
Set forth below is the aggregate principal amount of our long-term debt as of September 30, 2024 (excluding unamortized (discounts) premiums, net, unamortized debt issuance costs, and intercompany debt), maturing during the following years:
(Dollars in millions)
2024 (remaining three months)$10 
202537 
202635 
2027150 
2028507 
2029 and thereafter9,842 
Total long-term debt$10,581 
Schedule of debt issuances
The following table sets forth the aggregate principal amount of each series of senior unsecured notes of Level 3 Financing exchanged and retired on September 24, 2024 in connection with the Exchange Offers:

Debt
Aggregate Principal Amount (in millions)
Level 3 Financing, Inc.
3.400% senior secured notes due 2027 (unsecured)
$77 
4.625% senior notes due 2027
280 
Total
$357 
Schedule of debt exchanges and issuances
The following table sets forth the aggregate principal amount of (i) former debt of Level 3 Financing exchanged for new Level 3 Financing debt and (ii) new debt issued by Level 3 in exchange for former Level 3 debt (except as otherwise noted), in each case during the first quarter of 2024 in connection with the TSA Transactions:

Former notes or facility exchanged
New notes or facility issued
Aggregate principal amount exchanged/issued (in millions)(1)
Term Loan B
Term Loan B-1, B-2
$2,398 
3.400% Senior Notes due 2027
10.500% First Lien Notes due 2029
668 
3.875% Senior Notes due 2029
10.750% First Lien Notes due 2029
678 
4.625% Senior Notes due 2027
4.875% Second Lien Notes due 2029
606 
4.250% Senior Notes due 2028
4.500% Second Lien Notes due 2030
712 
3.625% Senior Notes due 2029
3.875% Second Lien Notes due 2030
458 
3.750% Senior Notes due 2029
4.000% Second Lien Notes due 2031
453 
n/a
11.000% First Lien Notes due 2029(2)
1,575 
Total$7,548 
______________________________________________________________________
(1)See our long-term debt table above for information on the amount of former debt that remains outstanding as of September 30, 2024.
(2)Issued for cash and the other consideration.
v3.24.3
Severance (Tables)
 9 Months Ended
Sep. 30, 2024
Restructuring and Related Activities [Abstract]  
Change in accrued liabilities for severance expenses
Changes in our accrued liabilities for severance expenses were as follows:

Severance

(Dollars in millions)
December 31, 2023$13 
Accrued to expense40 
Payments, net(44)
September 30, 2024$9 
v3.24.3
Fair Value of Financial Instruments (Tables)
 9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Schedule of carrying amounts and estimated fair values of long-term debt, excluding capital lease obligations, and input levels to determine fair values
The following table presents the carrying amounts and estimated fair values of our financial liabilities as of September 30, 2024 and December 31, 2023, as well as the input level used to determine the fair values indicated below:
September 30, 2024December 31, 2023
Input LevelCarrying AmountFair ValueCarrying AmountFair Value
(Dollars in millions)
Liabilities-Long-term debt, excluding finance leases2$9,964 9,842 8,724 6,418 
Indemnifications related to the sale of the Latin American business(1)
387 84 86 86 
_______________________________________________________________________________
(1)Nonrecurring fair value is measured as of August 1, 2022.
v3.24.3
Accumulated Other Comprehensive Loss (Tables)
 9 Months Ended
Sep. 30, 2024
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Schedule of accumulated other comprehensive loss
The table below summarizes changes in accumulated other comprehensive loss recorded on our consolidated balance sheets by component for the nine months ended September 30, 2024:
Pension PlansForeign Currency Translation Adjustment and OtherTotal
(Dollars in millions)
Balance at December 31, 2023$(1)(27)(28)
Other comprehensive income, net of tax— 3 3 
Net other comprehensive income— 3 3 
Balance at September 30, 2024$(1)(24)(25)

The table below summarizes changes in accumulated other comprehensive loss recorded on our consolidated balance sheets by component for the nine months ended September 30, 2023:

Pension PlansForeign Currency Translation Adjustment and OtherTotal
(Dollars in millions)
Balance at December 31, 2022$21 (365)(344)
Other comprehensive loss, net of tax— (2)(2)
Net other comprehensive loss— (2)(2)
Balance at September 30, 2023$21 (367)(346)
v3.24.3
Other Financial Information (Tables)
 9 Months Ended
Sep. 30, 2024
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Schedule of components other current assets
The following table presents details of other current assets reflected on our consolidated balance sheets:

September 30, 2024December 31, 2023

(Dollars in millions)
Prepaid expenses$117 123 
Contract fulfillment costs56 50 
Contract acquisition costs39 40 
Contract assets6 6 
Other12 25 
Total other current assets
$230 244 
v3.24.3
Background - Basis of Presentation (Details) - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
Lessee, Lease, Description [Line Items]    
Operating lease, right-of-use asset, Statement of Financial Position [Extensible Enumeration] Other, net Other, net
Current operating lease liabilities $ 270 $ 288
Operating lease liabilities 751 845
Affiliates    
Lessee, Lease, Description [Line Items]    
Operating lease assets 248 311
Current operating lease liabilities 115 129
Operating lease liabilities $ 144 $ 201
v3.24.3
Background - Segments (Details)
 9 Months Ended
Sep. 30, 2024
segment
Accounting Policies [Abstract]  
Number of reportable segments 1
v3.24.3
Background - Change in Accounting Estimates and Correction of Immaterial Errors (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2024
Jan. 01, 2024
Dec. 31, 2023
Sep. 30, 2023
Jan. 01, 2023
Change in Accounting Estimate [Line Items]            
Member's equity $ 1,877 $ 1,877   $ 3,644    
Change in Accounting Method Accounted for as Change in Estimate            
Change in Accounting Estimate [Line Items]            
Depreciation (6) (5)        
Depreciation, net $ (20) $ (15)        
Fiber Network Assets            
Change in Accounting Estimate [Line Items]            
Useful life     30 years 25 years    
Correction of Error from Understatement of Revenues and Network Expenses Prior to 2021            
Change in Accounting Estimate [Line Items]            
Member's equity         $ (23) $ (23)
v3.24.3
Goodwill, Customer Relationships and Other Intangible Assets - Schedule of Goodwill and Other Intangible Assets (Details) - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]    
Customer relationships and other intangible assets, net $ 3,725 $ 4,237
Customer relationships    
Finite-Lived Intangible Assets [Line Items]    
Customer relationships and other intangible assets, net 3,347 3,810
Accumulated amortization 4,361 3,896
Capitalized software    
Finite-Lived Intangible Assets [Line Items]    
Customer relationships and other intangible assets, net 378 427
Accumulated amortization $ 443 $ 419
v3.24.3
Goodwill, Customer Relationships and Other Intangible Assets - Additional Information (Details)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
USD ($)
Sep. 30, 2023
USD ($)
Jun. 30, 2023
USD ($)
Sep. 30, 2024
USD ($)
segment
Sep. 30, 2023
USD ($)
Dec. 31, 2023
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]            
Intangible assets, gross $ 8,500     $ 8,500   $ 8,600
Number of reportable segments | segment       1    
Goodwill impairment 0 $ 0 $ 2,000 $ 0 $ 1,970  
Acquired finite-lived intangible asset amortization expense $ 177 $ 184   $ 558 $ 540  
Maximum | Revenue Multiple            
Goodwill [Line Items]            
Goodwill impairment, measurement input     4.3      
Maximum | EBITDA Multiple            
Goodwill [Line Items]            
Goodwill impairment, measurement input     10.5      
Minimum | Revenue Multiple            
Goodwill [Line Items]            
Goodwill impairment, measurement input     1.5      
Minimum | EBITDA Multiple            
Goodwill [Line Items]            
Goodwill impairment, measurement input     4.6      
v3.24.3
Goodwill, Customer Relationships and Other Intangible Assets - Amortization Expense (Details) - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
Estimated amortization expense of finite-lived acquisition-related intangible assets    
2024 (remaining three months) $ 166  
2025 653  
2026 641  
2027 600  
2028 557  
2029 and thereafter 1,108  
Total finite-lived intangible assets future amortization expense $ 3,725 $ 4,237
v3.24.3
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Disaggregation of Revenue [Line Items]        
Total revenues $ 1,593 $ 1,763 $ 4,783 $ 5,311
Adjustments for non-ASC 606 revenue (230) (211) (635) (643)
Total revenue from contracts with customers 1,363 1,552 4,148 4,668
Grow        
Disaggregation of Revenue [Line Items]        
Total revenues 943 991 2,793 2,953
Adjustments for non-ASC 606 revenue (164) (151) (441) (465)
Total revenue from contracts with customers 779 840 2,352 2,488
Nurture        
Disaggregation of Revenue [Line Items]        
Total revenues 376 427 1,145 1,293
Adjustments for non-ASC 606 revenue (3) (3) (11) (11)
Total revenue from contracts with customers 373 424 1,134 1,282
Harvest        
Disaggregation of Revenue [Line Items]        
Total revenues 191 239 570 747
Adjustments for non-ASC 606 revenue 0 0 0 0
Total revenue from contracts with customers 191 239 570 747
Other        
Disaggregation of Revenue [Line Items]        
Total revenues 20 49 92 151
Adjustments for non-ASC 606 revenue 0 0 0 0
Total revenue from contracts with customers 20 49 92 151
Affiliate Services        
Disaggregation of Revenue [Line Items]        
Total revenues 63 57 183 167
Adjustments for non-ASC 606 revenue (63) (57) (183) (167)
Total revenue from contracts with customers $ 0 $ 0 $ 0 $ 0
v3.24.3
Revenue Recognition - Operating Lease Revenue (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Revenue from Contract with Customer [Abstract]        
Rental income $ 182 $ 170 $ 500 $ 525
Percent of operating revenue 11.00% 10.00% 10.00% 10.00%
v3.24.3
Revenue Recognition - Customer Receivables and Contract Balances (Details) - USD ($)
$ in Millions
Sep. 30, 2024
Jan. 01, 2024
Dec. 31, 2023
Jan. 01, 2023
Revenue from Contract with Customer [Abstract]        
Customer receivables $ 568   $ 544  
Contract assets 7   8  
Contract liabilities 250 $ 222 222 $ 281
Allowance for doubtful accounts $ 12   $ 13  
v3.24.3
Revenue Recognition - Additional Information - Customer Receivables and Contract Balances (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Jan. 01, 2024
Dec. 31, 2023
Jan. 01, 2023
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]              
Revenue recognized $ 16 $ 21 $ 98 $ 119      
Contract liabilities $ 250   $ 250   $ 222 $ 222 $ 281
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        
v3.24.3
Revenue Recognition - Additional Information - Remaining Performance Obligation (Details)
$ in Millions
Sep. 30, 2024
USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation $ 4,200
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation $ 583
Expected timing of satisfaction, period 3 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation $ 1,800
Expected timing of satisfaction, period 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation $ 1,900
Expected timing of satisfaction, period 1 year
v3.24.3
Revenue Recognition - Contract Cost (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Contract acquisition costs        
Capitalized Contract Cost        
Beginning of period balance $ 70,000,000 $ 69,000,000 $ 70,000,000 $ 76,000,000
Costs incurred 12,000,000 12,000,000 36,000,000 39,000,000
Amortization (12,000,000) (14,000,000) (36,000,000) (44,000,000)
Change in contract costs held for sale     0 (4,000,000)
End of period balance 70,000,000 67,000,000 70,000,000 67,000,000
Contract acquisition costs | Disposal Group, Held-for-sale, Not Discontinued Operations | EMEA Business        
Capitalized Contract Cost        
Beginning of period balance   10,000,000   6,000,000
End of period balance   10,000,000   10,000,000
Contract fulfillment costs        
Capitalized Contract Cost        
Beginning of period balance 116,000,000 102,000,000 97,000,000 106,000,000
Costs incurred 24,000,000 24,000,000 76,000,000 68,000,000
Amortization (20,000,000) (18,000,000) (53,000,000) (52,000,000)
Change in contract costs held for sale     0 (14,000,000)
End of period balance $ 120,000,000 108,000,000 $ 120,000,000 108,000,000
Contract fulfillment costs | Disposal Group, Held-for-sale, Not Discontinued Operations | EMEA Business        
Capitalized Contract Cost        
Beginning of period balance   14,000,000   0
End of period balance   $ 14,000,000   $ 14,000,000
v3.24.3
Revenue Recognition - Additional Information - Contract Costs (Details)
 9 Months Ended
Sep. 30, 2024
Business Customers | Weighted Average  
Capitalized Contract Cost [Line Items]  
Length of customer life 36 months
v3.24.3
Credit Losses on Financial Instruments (Details)
$ in Millions
 9 Months Ended
Sep. 30, 2024
USD ($)
Financing Receivable, Allowance for Credit Loss  
Beginning balance at December 31, 2022 $ 13
Provision for expected losses 5
Write-offs charged against the allowance (9)
Recoveries collected 3
Ending balance at September 30, 2024 $ 12
v3.24.3
Long-Term Debt and Credit Facilities - Schedule of Long Term Debt (Details) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2024
Dec. 31, 2023
Long-term debt    
Finance leases and other obligations $ 238 $ 259
Unamortized (discounts) premiums, net (233) 2
Unamortized debt issuance costs (146) (54)
Total long-term debt 10,202 8,983
Less current maturities (35) (31)
Long-term debt, excluding current maturities $ 10,167 8,952
Term loan | Term Loan B-1    
Long-term debt    
Basis spread on variable rate (as a percent) 6.56%  
Long-term debt, gross $ 1,199 0
Long-term debt, weighted average interest rate 11.838%  
Term loan | Term Loan B-2    
Long-term debt    
Basis spread on variable rate (as a percent) 6.56%  
Long-term debt, gross $ 1,199 0
Long-term debt, weighted average interest rate 11.838%  
Term loan | Former Facility    
Long-term debt    
Basis spread on variable rate (as a percent) 1.75%  
Long-term debt, gross $ 12 $ 2,411
Long-term debt, weighted average interest rate 7.111% 7.22%
Senior notes | First Lien Notes    
Long-term debt    
Long-term debt, gross $ 3,846 $ 925
Senior notes | First Lien Notes | Minimum    
Long-term debt    
Stated interest rate 10.50%  
Senior notes | First Lien Notes | Maximum    
Long-term debt    
Stated interest rate 11.00%  
Senior notes | Second Lien Notes    
Long-term debt    
Long-term debt, gross $ 2,579 0
Senior notes | Second Lien Notes | Minimum    
Long-term debt    
Stated interest rate 3.875%  
Senior notes | Second Lien Notes | Maximum    
Long-term debt    
Stated interest rate 10.00%  
Senior notes | Former Senior Notes    
Long-term debt    
Long-term debt, gross $ 0 1,500
Senior notes | Former Senior Notes | Minimum    
Long-term debt    
Stated interest rate 3.40%  
Senior notes | Former Senior Notes | Maximum    
Long-term debt    
Stated interest rate 3.875%  
Senior notes | Senior Notes Maturing 2027-2029    
Long-term debt    
Long-term debt, gross $ 1,508 $ 3,940
Senior notes | Senior Notes Maturing 2027-2029 | Minimum    
Long-term debt    
Stated interest rate 3.40%  
Senior notes | Senior Notes Maturing 2027-2029 | Maximum    
Long-term debt    
Stated interest rate 4.625%  
Senior notes | 10.500% Senior Secured Notes Due 2030    
Long-term debt    
Stated interest rate   10.50%
v3.24.3
Long-Term Debt and Credit Facilities - Debt Maturities (Details)
$ in Millions
Sep. 30, 2024
USD ($)
Debt Disclosure [Abstract]  
2024 (remaining three months) $ 10
2025 37
2026 35
2027 150
2028 507
2029 and thereafter 9,842
Total long-term debt $ 10,581
v3.24.3
Long-Term Debt and Credit Facilities - Exchange Offers, Additional Information (Details)
$ in Millions
Sep. 24, 2024
USD ($)
numberOfSeries
Sep. 30, 2024
USD ($)
Jun. 30, 2024
USD ($)
Long-term debt      
Debt instrument, face amount     $ 7,548
Reduction in aggregate principal amount $ 7    
Senior notes      
Long-term debt      
Debt instrument, face amount   $ 357  
Senior notes | 10.000% Second Lien Notes Due 2032      
Long-term debt      
Debt instrument, face amount $ 350    
Stated interest rate 10.00%    
Senior notes | Senior Unsecured Notes Due 2027      
Long-term debt      
Debt instrument, face amount $ 357    
Debt instrument, number of series | numberOfSeries 2    
v3.24.3
Long-Term Debt and Credit Facilities - Debt Issuances (Details) - USD ($)
$ in Millions
Sep. 30, 2024
Jun. 30, 2024
Long-term debt    
Debt instrument, face amount   $ 7,548
Senior notes    
Long-term debt    
Debt instrument, face amount $ 357  
Senior notes | 3.400% senior secured notes due 2027 (unsecured)    
Long-term debt    
Stated interest rate 3.40%  
Debt instrument, face amount $ 77  
Senior notes | 4.625% senior notes due 2027    
Long-term debt    
Stated interest rate 4.625%  
Debt instrument, face amount $ 280  
v3.24.3
Long-Term Debt and Credit Facilities - Exchanges and Issuances (Details) - USD ($)
$ in Millions
Sep. 30, 2024
Jun. 30, 2024
Long-term debt    
Aggregate principal amount   $ 7,548
Term loan | Term Loan B-1 And B-2    
Long-term debt    
Aggregate principal amount   $ 2,398
Senior notes    
Long-term debt    
Aggregate principal amount $ 357  
Senior notes | 4.625% Senior Notes Due 2027    
Long-term debt    
Stated interest rate 4.625%  
Aggregate principal amount $ 280  
Senior notes | 10.500% First Lien Notes Due 2029    
Long-term debt    
Stated interest rate   10.50%
Aggregate principal amount   $ 668
Senior notes | 10.750% First Lien Notes Due 2029    
Long-term debt    
Stated interest rate   10.75%
Aggregate principal amount   $ 678
Senior notes | 4.875% First Lien Notes Due 2029    
Long-term debt    
Stated interest rate   4.875%
Aggregate principal amount   $ 606
Senior notes | 4.500% Second Lien Notes Due 2029    
Long-term debt    
Stated interest rate   4.50%
Aggregate principal amount   $ 712
Senior notes | 3.875% Second Lien Notes Due 2030    
Long-term debt    
Stated interest rate   3.875%
Aggregate principal amount   $ 458
Senior notes | 4.000% Second Lien Notes Due 2031    
Long-term debt    
Stated interest rate   4.00%
Aggregate principal amount   $ 453
Senior notes | 11.000% First Lien Notes Due 2029    
Long-term debt    
Stated interest rate   11.00%
Aggregate principal amount   $ 1,575
Senior notes | 3.400% Senior Notes Due 2027    
Long-term debt    
Stated interest rate   3.40%
Senior notes | 3.875% Senior Notes Due 2029    
Long-term debt    
Stated interest rate   3.875%
Senior notes | 4.625% Senior Notes Due 2027    
Long-term debt    
Stated interest rate   4.625%
Senior notes | 4.250% Senior Notes Due 2028    
Long-term debt    
Stated interest rate   4.25%
Senior notes | 3.625% Senior Notes Due 2029    
Long-term debt    
Stated interest rate   3.625%
Senior notes | 3.750% Senior Notes Due 2029    
Long-term debt    
Stated interest rate   3.75%
v3.24.3
Long-Term Debt and Credit Facilities - Additional Information (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Mar. 22, 2024
Long-term debt          
Amount of debt extinguished     $ 2,600    
Reduction in debt resulting from extinguishment of debt     261    
Gain on extinguishment of debt $ 0 $ 0 54 $ 0  
Lender fees paid     209    
Third party costs paid     112    
Capitalized lender fees 52   52    
Capitalized third party costs 51   $ 51    
Redemption price, percentage     101.00%    
Financial Guarantee          
Long-term debt          
Maximum guaranteed amount $ 150   $ 150    
Prepaid on or prior to the 12-month anniversary of the effective date          
Long-term debt          
Prepayment premium, rate         2.00%
Prepaid after the 12-month anniversary and on or prior to the 24-month anniversary of the effective date          
Long-term debt          
Prepayment premium, rate         1.00%
Gain (Loss) on Extinguishment of Debt          
Long-term debt          
Lender fees recognized as expense     157    
Operating Expense          
Long-term debt          
Third party costs expensed     $ 61    
v3.24.3
Long-Term Debt and Credit Facilities - Supplier Finance Programs (Details) - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
Debt Disclosure [Abstract]    
Payment period 5 years  
Annual interest rate 1.25%  
Supplier finance program, credit $ 21 $ 15
Supplier finance program 44 $ 55
Supplier finance program, current maturities 20  
Supplier finance program, noncurrent $ 24  
v3.24.3
Severance - Additional Information (Details) - Severance - Workforce Reduction
$ in Millions
 1 Months Ended
Apr. 30, 2024
USD ($)
Restructuring Cost and Reserve [Line Items]  
Percentage of workforce eliminated 7.00%
Restructuring costs $ 37
v3.24.3
Severance - Change in Accrued Liabilities for Severance Expenses (Details) - Severance
$ in Millions
 9 Months Ended
Sep. 30, 2024
USD ($)
Restructuring Reserve [Roll Forward]  
December 31, 2023 $ 13
Accrued to expense 40
Payments, net (44)
September 30, 2024 $ 9
v3.24.3
Fair Value of Financial Instruments (Details) - Fair Value, Measurements, Recurring - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
Level 2 | Carrying Amount    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis    
Liabilities-Long-term debt, excluding finance leases $ 9,964 $ 8,724
Level 2 | Fair Value    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis    
Liabilities-Long-term debt, excluding finance leases 9,842 6,418
Level 3 | Carrying Amount    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis    
Indemnifications related to the sale of the Latin American business 87 86
Level 3 | Fair Value    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis    
Indemnifications related to the sale of the Latin American business $ 84 $ 86
v3.24.3
Affiliate Transactions (Details)
$ in Millions
 3 Months Ended 9 Months Ended
Mar. 22, 2024
USD ($)
extension_period
Jun. 30, 2024
USD ($)
Sep. 30, 2024
USD ($)
Dec. 31, 2023
USD ($)
Related Party Transaction [Line Items]        
Distributions   $ 1,800    
Contributions   $ 210    
Affiliates        
Related Party Transaction [Line Items]        
Notes receivable - affiliate     $ 2,668 $ 1,466
Affiliates | Lumen Technologies, Inc.        
Related Party Transaction [Line Items]        
Notes receivable - affiliate     $ 2,700  
Affiliates | Lumen Technologies, Inc. | Unsecured Debt | Unsecured Credit Facility        
Related Party Transaction [Line Items]        
Principal amount $ 1,825      
Stated interest rate     11.32%  
Maturity period, number of extensions | extension_period 2      
Basis spread on variable rate (as a percent)     6.00%  
Maturity period 1 year      
Amount outstanding     $ 1,500  
Affiliates | Lumen Technologies, Inc. | Revolving Credit Facility        
Related Party Transaction [Line Items]        
Principal amount $ 1,200   $ 1,200 $ 1,500
Affiliates | Lumen Technologies, Inc. | Revolving Credit Facility | Line of Credit        
Related Party Transaction [Line Items]        
Stated interest rate 11.00%      
Maturity period, number of extensions | extension_period 2      
Maturity period 1 year      
v3.24.3
Commitments, Contingencies and Other Items (Details)
 9 Months Ended
Sep. 30, 2024
USD ($)
patent
Dec. 31, 2023
USD ($)
Commitments and Contingencies Disclosure [Abstract]    
Estimated litigation liability $ 36,000,000 $ 38,000,000
Number of patents allegedly infringed | patent 1  
Unfavorable Regulatory Action    
Loss Contingencies [Line Items]    
Estimate of possible loss (not expected to exceed) $ 300,000  
v3.24.3
Accumulated Other Comprehensive Loss (Details) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
AOCI Attributable to Parent, Net of Tax    
Balance at beginning of period $ 3,616  
Other comprehensive income (loss), net of tax 3 $ (2)
Net other comprehensive income (loss) 3 (2)
Balance at end of period 1,852 3,549
Pension Plans    
AOCI Attributable to Parent, Net of Tax    
Balance at beginning of period (1) 21
Other comprehensive income (loss), net of tax 0 0
Net other comprehensive income (loss) 0 0
Balance at end of period (1) 21
Foreign Currency Translation Adjustment and Other    
AOCI Attributable to Parent, Net of Tax    
Balance at beginning of period (27) (365)
Other comprehensive income (loss), net of tax 3 (2)
Net other comprehensive income (loss) 3 (2)
Balance at end of period (24) (367)
Total    
AOCI Attributable to Parent, Net of Tax    
Balance at beginning of period (28) (344)
Balance at end of period $ (25) $ (346)
v3.24.3
Other Financial Information (Details) - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
Prepaid Expense and Other Assets, Current [Abstract]    
Prepaid expenses $ 117 $ 123
Contract assets 6 6
Other 12 25
Total other current assets 230 244
Contract fulfillment costs    
Prepaid Expense and Other Assets, Current [Abstract]    
Contract costs 56 50
Contract acquisition costs    
Prepaid Expense and Other Assets, Current [Abstract]    
Contract costs $ 39 $ 40