LEVEL 3 PARENT, LLC, 10-Q filed on 11/3/2022
Quarterly Report
v3.22.2.2
Cover Page
 9 Months Ended
Sep. 30, 2022
shares
Cover [Abstract]  
Document Type 10-Q
Document Quarterly Report true
Document Period End Date Sep. 30, 2022
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 1025 Eldorado Blvd.,
Entity Address, City or Town Broomfield,
Entity Address, State or Province CO
Entity Address, Postal Zip Code 80021-8869
City Area Code 720
Local Phone Number 888-1000
Entity Current Reporting Status Yes
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 2022
Document Fiscal Period Focus Q3
v3.22.2.2
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
OPERATING REVENUE        
Operating revenues $ 1,819 $ 1,990 $ 5,718 $ 5,964
OPERATING EXPENSES        
Cost of services and products (exclusive of depreciation and amortization) 785 897 2,472 2,643
Selling, general and administrative 269 305 901 872
Gain on sale of business (119) 0 (119) 0
Operating expenses - affiliates 173 116 481 354
Depreciation and amortization 377 431 1,178 1,304
Total operating expenses 1,485 1,749 4,913 5,173
OPERATING INCOME 334 241 805 791
OTHER (EXPENSE) INCOME        
Interest income - affiliate 19 16 50 49
Interest expense (99) (90) (284) (272)
Other (expense) income, net (4) (9) (25) 1
Total other expense, net (84) (83) (259) (222)
INCOME BEFORE INCOME TAXES 250 158 546 569
Income tax expense 312 37 397 150
NET (LOSS) INCOME (62) 121 149 419
Non-Affiliate Revenue        
OPERATING REVENUE        
Operating revenues 1,762 1,934 5,548 5,797
Affiliate Services        
OPERATING REVENUE        
Operating revenues $ 57 $ 56 $ 170 $ 167
v3.22.2.2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Statement of Comprehensive Income [Abstract]        
NET (LOSS) INCOME $ (62) $ 121 $ 149 $ 419
OTHER COMPREHENSIVE LOSS        
Reclassification of realized loss on foreign currency translation to gain on sale of business, net of $—, $—, $—, and $— tax 112 0 112 0
Foreign currency translation adjustments, net of $28, $13, $70, and $16 tax (114) (93) (229) (101)
Other comprehensive loss, net of tax (2) (93) (117) (101)
COMPREHENSIVE (LOSS) INCOME $ (64) $ 28 $ 32 $ 318
v3.22.2.2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED) (Parenthetical) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Statement of Comprehensive Income [Abstract]        
Reclassification of realized loss on foreign currency translation to gain on sale of business, tax $ 0 $ 0 $ 0 $ 0
Foreign currency translation adjustments, tax $ 28 $ 13 $ 70 $ 16
v3.22.2.2
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)
$ in Millions
Sep. 30, 2022
Dec. 31, 2021
CURRENT ASSETS    
Cash and cash equivalents $ 130 $ 146
Accounts receivable, less allowance of $27 and $39 596 642
Note receivable - affiliate 1,468 1,468
Assets held for sale 10 2,708
Other 251 239
Total current assets 2,455 5,203
Property, plant and equipment, net of accumulated depreciation of $3,649 and $3,202 8,918 9,042
GOODWILL AND OTHER ASSETS    
Goodwill 6,598 6,666
Other intangible assets, net 5,218 5,725
Other, net 1,614 1,459
Total goodwill and other assets 13,430 13,850
TOTAL ASSETS 24,803 28,095
CURRENT LIABILITIES    
Current maturities of long-term debt 26 26
Accounts payable 431 381
Accounts payable - affiliates 46 18
Accrued expenses and other liabilities    
Salaries and benefits 161 176
Income and other taxes 98 83
Current operating lease liabilities 358 299
Other 94 150
Liabilities held for sale 0 435
Current portion of deferred revenue 307 291
Total current liabilities 1,521 1,859
LONG-TERM DEBT 8,079 10,396
DEFERRED REVENUE AND OTHER LIABILITIES    
Deferred revenue 1,489 1,404
Operating lease liabilities 1,077 953
Other 807 474
Total deferred revenue and other liabilities 3,373 2,831
COMMITMENTS AND CONTINGENCIES (Note 8)
MEMBER'S EQUITY    
Member's equity 12,298 13,360
Accumulated other comprehensive loss (468) (351)
Total member's equity 11,830 13,009
TOTAL LIABILITIES AND MEMBER'S EQUITY $ 24,803 $ 28,095
v3.22.2.2
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - (Parenthetical) - USD ($)
$ in Millions
Sep. 30, 2022
Dec. 31, 2021
Statement of Financial Position [Abstract]    
Allowance for doubtful accounts $ 27 $ 39
Accumulated depreciation $ 3,649 $ 3,202
v3.22.2.2
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
OPERATING ACTIVITIES        
Net (loss) income $ (62) $ 121 $ 149 $ 419
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization 377 431 1,178 1,304
Gain on sale of business     (119) 0
Deferred income taxes     367 122
Net gain on early retirement of debt     (9) 0
Changes in current assets and liabilities:        
Accounts receivable     2 (41)
Accounts payable     (37) (34)
Other assets and liabilities, net     (141) (74)
Other assets and liabilities, affiliate     81 (780)
Changes in other noncurrent assets and liabilities, net     117 33
Other, net     99 (8)
Net cash provided by operating activities     1,687 941
INVESTING ACTIVITIES        
Capital expenditures     (877) (874)
Proceeds from sale of business     2,707 0
Proceeds from sale of property, plant and equipment and other assets     2 52
Net cash provided by (used in) investing activities     1,832 (822)
FINANCING ACTIVITIES        
Net proceeds from issuance of long-term debt     0 891
Distributions     (1,210) (25)
Payments of long-term debt     (2,367) (932)
Other     0 (1)
Net cash used in financing activities     (3,577) (67)
Net (decrease) increase in cash, cash equivalents and restricted cash     (58) 52
Cash, cash equivalents and restricted cash at beginning of period     191 205
Cash, cash equivalents and restricted cash at end of period 133 257 133 257
Supplemental cash flow information:        
Income taxes paid, net     (4) (23)
Interest paid (net of capitalized interest of $12 and $11)     (326) (304)
Cash, cash equivalents and restricted cash:        
Cash and cash equivalents 130 215 130 215
Cash and cash equivalents included in assets held for sale 0 36 0 36
Restricted cash included in Other current assets 1 2 1 2
Restricted cash included in Other, net noncurrent assets 2 4 2 4
Total $ 133 $ 257 $ 133 $ 257
v3.22.2.2
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Statement of Cash Flows [Abstract]    
Capitalized interest $ 12 $ 11
v3.22.2.2
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, 2020   $ 13,139 $ (234)
MEMBER'S EQUITY      
Net (loss) income $ 419 419  
Distributions   (25)  
Other   (1)  
Other comprehensive loss (101)   (101)
Balance at end of period at Sep. 30, 2021 13,197 13,532 (335)
Balance at beginning of period at Jun. 30, 2021   13,412 (242)
MEMBER'S EQUITY      
Net (loss) income 121 121  
Distributions   0  
Other   (1)  
Other comprehensive loss (93)   (93)
Balance at end of period at Sep. 30, 2021 13,197 13,532 (335)
Balance at beginning of period at Dec. 31, 2021 13,009 13,360 (351)
MEMBER'S EQUITY      
Net (loss) income 149 149  
Distributions   (1,210)  
Other   (1)  
Other comprehensive loss (117)   (117)
Balance at end of period at Sep. 30, 2022 11,830 12,298 (468)
Balance at beginning of period at Jun. 30, 2022   13,018 (466)
MEMBER'S EQUITY      
Net (loss) income (62) (62)  
Distributions   (657)  
Other   (1)  
Other comprehensive loss (2)   (2)
Balance at end of period at Sep. 30, 2022 $ 11,830 $ 12,298 $ (468)
v3.22.2.2
Background
 9 Months Ended
Sep. 30, 2022
Accounting Policies [Abstract]  
Background Background
General

We are an international facilities-based technology communications provider (that is, a provider that owns or leases a substantial portion of the property, plant and equipment necessary to provide our services) of a broad range of integrated communications services. We created our communications network by constructing our own assets and through a combination of purchasing other companies and purchasing or leasing facilities from others. We designed our network to provide communications services that employ and take advantage of rapidly improving underlying optical, Internet Protocol, computing and storage technologies.

Basis of Presentation

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

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 goodwill and other assets on our consolidated balance sheets. Other, net included affiliate operating lease assets of $411 million and $294 million as of September 30, 2022 and December 31, 2021, respectively. Additionally, current operating lease liabilities included the current portion of affiliate operating lease liabilities of $116 million and $82 million as of September 30, 2022 and December 31, 2021, respectively, and operating lease liabilities included the noncurrent portion of affiliate operating lease liabilities of $307 million and $224 million as of September 30, 2022 and December 31, 2021, respectively.

Segments

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

Refer to the significant accounting policies described in Note 1 — Background and Summary of Significant Accounting Policies to the consolidated financial statements and accompanying notes in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2021.

Recently Adopted Accounting Pronouncements

Government Assistance

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

Leases

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

Debt

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

Investments

On January 1, 2021, we adopted ASU 2020-01, “Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)” ("ASU 2020-01”). This ASU, among other things, clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments - Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. As of September 30, 2022, we determined there was no application or discontinuation of the equity method during the reporting periods covered by this report. The adoption of ASU 2020-01 did not have a material impact to our consolidated financial statements.

Income Taxes

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

Recently Issued Accounting Pronouncements

In September 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-04, “Liabilities-Supplier Finance Program (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations” (“ASU 2022-04”). These amendments require that a company that uses a supplier finance program in connection with the purchase of goods or services disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, program activity during the period, changes from period to period and potential magnitude of program transactions. ASU 2022-04 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of September 30, 2022, we are reviewing our supplier finance agreements to determine the impact to disclosures in our consolidated financial statements.
In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions” (“ASU 2022-03”). These amendments clarify that a contractual restriction on the sales of an investment in equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. ASU 2022-03 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of September 30, 2022, we do not expect ASU 2022-03 to have an impact to our consolidated financial statements.

In March 2022, the FASB issued ASU 2022-02, “Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings (“TDR”) and Vintage Disclosures” (“ASU 2022-02”). These amendments eliminate the TDR recognition and measurement guidance, enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. ASU 2022-02 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of September 30, 2022, we do not expect ASU 2022-02 to have an impact to our consolidated financial statements.

In March 2022, the FASB issued ASU 2022-01, “Derivatives and Hedging (Topic 815): Fair Value Hedging-Portfolio Layer Method” (ASU 2022-01). The ASU expands the current single-layer method to allow multiple hedged layers of a single closed portfolio under the method. ASU 2022-01 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of September 30, 2022, we do not expect ASU 2022-01 to have an impact to our consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”), which requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. ASU 2021-08 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of September 30, 2022, we do not expect ASU 2021-08 to have an impact to our consolidated financial statements.

In January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848): Scope" ("ASU 2021-01"), which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU 2021-01 also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. These amendments may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. ASU 2021-01 provides optional expedients for a limited time to ease the potential burden in accounting for reference rate reform. Based on our review of our key material contracts through September 30, 2022, ASU 2021-01 does not have a material impact to our consolidated financial statements.
v3.22.2.2
Recently Completed Divestiture of the Latin American Business
 9 Months Ended
Sep. 30, 2022
Discontinued Operations and Disposal Groups [Abstract]  
Recently Completed Divestiture of the Latin American Business Recently Completed Divestiture of the Latin American Business
On August 1, 2022, affiliates of Level 3 Parent, LLC, an indirect wholly-owned subsidiary of Lumen Technologies, Inc., sold Lumen's Latin American business pursuant to a definitive agreement dated July 25, 2021 for pre-tax cash proceeds of approximately $2.7 billion, subject to certain post-closing adjustments.

During both the three and nine months ended September 30, 2022, we recorded a $119 million pre-tax gain on disposal associated with the sale of our Latin American business. This gain is reflected as operating income within the consolidated statements of operations.

In connection with the sale, Lumen has entered into a transition services agreement under which it will provide to the purchaser various support services. In addition, Lumen and the purchaser entered into commercial agreements whereby they will provide each other various network and other commercial services. Lumen also agreed to indemnify the purchaser for certain matters for which future cash payments by Lumen could be required. Lumen has estimated the fair value of these indemnifications to be $86 million, which is included in other long-term liabilities in our consolidated balance sheet and has reduced our gain on the sale accordingly.

We do not believe this divestiture represented a strategic shift for Level 3. Therefore, the Latin American business did not meet the criteria to be classified as a discontinued operation. As a result, we continued to report our operating results for the Latin American business in our consolidated operating results through the disposal date. The pre-tax net income of the Latin American business is estimated to be as follows in the table below:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(Dollars in millions)
Pre-tax net income (1)
$19 62 197 137 
_______________________________________________________________________________
(1)The pre-tax net income includes operating results prior to the close of the sale of the business on August 1, 2022

The Latin American business was included in our continuing operations and classified as assets and liabilities held for sale on our consolidated balance sheets through the closing of the transaction on August 1, 2022. As a result of closing the transaction, we derecognized $2.4 billion of net assets, the principal components of which were as follows:

August 1, 2022
(Dollars in millions)
Assets
Cash and cash equivalents$40 
Accounts receivable, less allowance of $3
105 
Other current assets86 
Property, plant and equipment, net accumulated depreciation of $447
1,703 
Goodwill(1)
719 
Customer relationships and other intangibles, net140 
Other non-current assets70 
Total assets$2,863 
Liabilities
Accounts payable$105 
Income and other taxes42 
Other current liabilities59 
Deferred income taxes, net154 
Other non-current liabilities122 
Total liabilities$482 
______________________________________________________________________
(1)    The assignment of goodwill was based on the relative fair value of the disposal group and the portion of the remaining reporting unit prior to the disposal group being classified as held for sale.
v3.22.2.2
Goodwill, Customer Relationships and Other Intangible Assets
 9 Months Ended
Sep. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill, Customer Relationships and Other Intangible Assets Goodwill, Customer Relationships and Other Intangible Assets
Goodwill, customer relationships and other intangible assets consisted of the following:
September 30, 2022December 31, 2021
(Dollars in millions)
Goodwill$6,598 6,666 
Customer relationships, less accumulated amortization of $3,245 and $2,779
$4,804 5,325 
Capitalized software, less accumulated amortization of $380 and $349
412 378 
Trade names, less accumulated amortization of $129 and $109
2 22 
Total other intangible assets, net$5,218 5,725 
Our goodwill was derived from Lumen's acquisition of us where the purchase price exceeded the fair value of the net assets acquired.

We assess our goodwill for impairment annually, or under certain circumstances, more frequently, such as when events or changes in circumstances indicate there may be impairment. We are required to write down the value of goodwill only when our assessment determines the carrying value of equity of our reporting unit exceeds its fair value. Our annual impairment assessment date for goodwill is October 31, at which date we assess goodwill at our reporting unit. In reviewing the criteria for reporting units, we have determined that we are one reporting unit.

The following table shows the rollforward of goodwill from December 31, 2021 through September 30, 2022:
(Dollars in millions)
As of December 31, 2021 (1)
$6,666 
Effect of foreign currency exchange rate changes(68)
As of September 30, 2022 (1)
$6,598 
_______________________________________________________________________________
(1)Goodwill at September 30, 2022 and December 31, 2021 is net of accumulated impairment loss of $3.6 billion.

Total amortization expense for finite-lived intangible assets for the three months ended September 30, 2022 and 2021 totaled $187 million and $210 million, respectively, and for the nine months ended September 30, 2022 and 2021, totaled $565 million and $637 million, respectively. As of September 30, 2022, the gross carrying amount of goodwill, customer relationships, capitalized software, indefinite-life and other intangible assets was $15.6 billion.

We estimate that total amortization expense for intangible assets for the years ending December 31, 2022 through 2026 will be as provided in the table below.
(Dollars in millions)
2022 (remaining three months)$182 
2023718 
2024714 
2025689 
2026646 
v3.22.2.2
Revenue Recognition
 9 Months Ended
Sep. 30, 2022
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition
We categorize our products and services and related revenue among the following categories:
•Compute and Application Services, which include our Edge Cloud services, IT solutions, Unified Communications and Collaboration ("UC&C"), data center, content delivery network ("CDN") and managed security services;
•IP and Data Services, which include Ethernet, IP, and VPN data networks, including software-defined wide area networks ("SD WAN") based services, Dynamic Connections and Hyper WAN;
•Fiber Infrastructure Services, which include dark fiber, optical services and equipment;
•Voice and Other, which include Time Division Multiplexing ("TDM") voice, private line and other legacy services; and
•Affiliate Services, which include communications services provided to our affiliates that we also provide to our external customers.
Disaggregated Revenue by Service Offering

The following table provides disaggregation of revenue from contracts with customers based on service offering for the nine months ended September 30, 2022 and 2021. It also shows 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 Latin American business revenues prior to it being sold on August 1, 2022.:

Three Months Ended September 30, 2022Three Months Ended September 30, 2021
Total Revenue
Adjustments for Non-ASC 606 Revenue(1)
Total Revenue from Contracts with CustomersTotal Revenue
Adjustments for Non-ASC 606 Revenue(1)
Total Revenue from Contracts with Customers
(Dollars in millions)
Compute and Application Services$235 (100)135 287 (126)161 
IP and Data Services831 — 831 890 — 890 
Fiber Infrastructure Services381 (54)327 412 (56)356 
Voice and Other315 (3)312 345 (3)342 
Affiliate Services57 (57)— 56 (56)— 
Total revenue$1,819 (214)1,605 1,990 (241)1,749 

Nine Months Ended September 30, 2022Nine Months Ended September 30, 2021
Total Revenue
Adjustments for Non-ASC 606 Revenue (1)
Total Revenue from Contracts with CustomersTotal Revenue
Adjustments for Non-ASC 606 Revenue (1)
Total Revenue from Contracts with Customers
(Dollars in millions)
Compute and Application Services$795 (354)441 850 (380)470 
IP and Data Services2,600 — 2,600 2,659 — 2,659 
Fiber Infrastructure Services1,175 (165)1,010 1,210 (164)1,046 
Voice and Other978 (11)967 1,078 (8)1,070 
Affiliate Services170 (170)— 167 (167)— 
Total revenue$5,718 (700)5,018 5,964 (719)5,245 
_____________________________________________________________________
(1) Includes lease revenue which is not within the scope of ASC 606.

Operating Lease Income

We lease various dark fiber, 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, 2022 and 2021, our gross rental income was $175 million and $202 million, which represents approximately 10% of our operating revenue for both periods. For the nine months ended September 30, 2022 and 2021, our gross rental income was $581 million and $601 million, which represents approximately 10% of our operating revenue for both periods.
Customer Receivables and Contract Balances

The following table provides balances of customer receivables, contract assets and contract liabilities, net of amounts reclassified as held for sale as of September 30, 2022 and December 31, 2021:
September 30, 2022December 31, 2021
(Dollars in millions)
Customer receivables (1)
$593 640 
Contract assets (2)
30 35 
Contract liabilities (3)
287 247 
_____________________________________________________________________
(1)Reflects gross customer receivables of $620 million and $679 million, net of allowance for credit losses of $27 million and $39 million, at September 30, 2022 and December 31, 2021, respectively. As of December 31, 2021, this amount excludes customer receivables classified as held for sale of $83 million.
(2)As of December 31, 2021, no amounts have been classified as held for sale.
(3)As of December 31, 2021, amount excludes contract liabilities classified as held for sale of $58 million.

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 and liabilities held for sale in our consolidated balance sheets. During the three and nine months ended September 30, 2022, we recognized $20 million and $128 million, respectively, of revenue that was included in contract liabilities of $305 million as of January 1, 2022, including contract liabilities that were classified as held for sale. During the three and nine months ended September 30, 2021, we recognized $30 million and $151 million, respectively, of revenue that was included in contract liabilities of $385 million as of January 1, 2021.

Performance Obligations

As of September 30, 2022, we expect to recognize approximately $3.8 billion of revenue in the future related to performance obligations associated with existing customer contracts that are partially or wholly unsatisfied. We expect to recognize approximately 80% of this revenue through 2024, with the balance recognized thereafter.

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), (ii) contracts that are classified as leasing arrangements that are not subject to ASC 606 and (iii) the value of unsatisfied performance obligations for contracts which relate to our recently completed divestiture.
Contract Costs

The following table provides changes in our contract acquisition costs and fulfillment costs:
Three Months Ended September 30, 2022Three Months Ended September 30, 2021
Acquisition Costs
Fulfillment Costs (1)
Acquisition CostsFulfillment Costs
(Dollars in millions)
Beginning of period balance$78 101 75 124 
Costs incurred16 20 15 22 
Amortization(14)(17)(14)(21)
Change in contract costs held for sale (1)
— 1 — (27)
End of period balance$80 105 76 98 

Nine Months Ended
September 30, 2022		Nine Months Ended
September 30, 2021
Acquisition Costs
Fulfillment Costs (1)
Acquisition CostsFulfillment Costs
(Dollars in millions)
Beginning of period balance$76 99 78 122 
Costs incurred45 63 44 68 
Amortization(41)(57)(46)(65)
Change in contract costs held for sale (1)
— — — (27)
End of period balance$80 105 76 98 
(1)The beginning of period balance for the three and nine months ended September 30, 2022 excluded fulfillment costs classified as held for sale of $28 million and $27 million, respectively.

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.

Deferred acquisition and fulfillment costs are amortized based on the transfer of services on a straight-line basis over the average expected contract life of approximately 34 months for our business customers. Amortized fulfillment costs are included in cost of services and products, and amortized acquisition costs are included in selling, general and administrative expenses in our consolidated statements of operations. The amount of these deferred costs that are anticipated to be amortized in the next 12 months are included in other current assets on our consolidated balance sheets. The amount of deferred costs expected to be amortized beyond 12 months is included in other non-current assets on our consolidated balance sheets. Deferred acquisition and fulfillment costs are assessed for impairment on a quarterly basis.
v3.22.2.2
Credit Losses on Financial Instruments
 9 Months Ended
Sep. 30, 2022
Credit Loss [Abstract]  
Credit Losses on Financial Instruments Credit Losses on Financial Instruments
To assess our expected credit losses on financial instruments, we aggregate financial assets with similar risk characteristics to monitor their credit quality or deterioration over the life of such assets. We periodically monitor certain risk characteristics within our aggregated financial assets and revise their composition accordingly, to the extent internal and external risk factors change. We separately evaluate financial assets that do not share risk characteristics with other financial assets. Our financial assets measured at amortized cost primarily consist of accounts receivable.

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

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

The assessment of the correlation between historical observed default rates, current conditions and forecasted economic conditions requires judgment. Alternative interpretations of these factors could have resulted in different conclusions regarding our allowance for credit losses. The amount of credit loss is sensitive to changes in circumstances and forecasted economic conditions. Our historical credit loss experience, current conditions and forecast of economic conditions may also not be representative of the customers' actual default experience in the future and we may use methodologies that differ from those used by other companies.

The following table presents the activity of our allowance for credit losses for our accounts receivable portfolio:
(Dollars in millions)
Beginning balance at December 31, 2021(1)
$39 
Provision for expected losses2 
Write-offs charged against the allowance(17)
Recoveries collected2 
Foreign currency exchange rate change adjustment1 
Ending balance at September 30, 2022
$27 
(1)As of December 31, 2021, amount excludes allowance for credit losses classified as held for sale of $3 million. See Note 2—Recently Completed Divestiture of the Latin American Business.
v3.22.2.2
Long-Term Debt
 9 Months Ended
Sep. 30, 2022
Debt Disclosure [Abstract]  
Long-Term Debt Long-Term Debt
The following chart 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, 2022December 31, 2021
(Dollars in millions)
Level 3 Financing, Inc.
Senior Secured Debt: (2)
Senior notes
3.400% - 3.875%
2027 - 2029
$1,500 1,500 
Tranche B 2027 Term Loan (3)
LIBOR + 1.75%
2027
2,411 3,111 
Senior Notes and other debt:
Senior notes (4)
3.625% - 4.625%
2027 - 2029
3,940 5,515 
Finance leases and other obligationsVariousVarious301 319 
Unamortized premiums, net3 34 
Unamortized debt issuance costs(50)(57)
Total long-term debt8,105 10,422 
Less current maturities(26)(26)
Long-term debt, excluding current maturities$8,079 10,396 
______________________________________________________________________
(1)As of September 30, 2022.
(2)See Note 7—Long-Term Debt in our Annual Report on Form 10-K for the year ended December 31, 2021 for a description of certain affiliate guarantees and liens securing this debt.
(3)The Tranche B 2027 Term Loan had an interest rate of 4.865% and 1.854% as of September 30, 2022 and December 31, 2021, respectively.
(4)See Note 7—Long-Term Debt in our Annual Report on Form 10-K for the year ended December 31, 2021 for a description of guarantees provided by certain affiliates of Level 3 Financing, Inc.

Long-Term Debt Maturities

Set forth below is the aggregate principal amount of our long-term debt as of September 30, 2022 (excluding unamortized premiums, net, unamortized debt issuance costs, and intercompany debt), maturing during the following years:

(Dollars in millions)
2022 (remaining three months)$8 
202327 
202432 
202538 
202636 
2027 and thereafter8,011 
Total long-term debt$8,152 
Debt Repayment

During the nine months ended September 30, 2022, we repaid the following aggregate principal amount of indebtedness through a combination of tender offers, redemptions, and repayments. These transactions resulted in a net gain of $9 million.

DebtPeriod of Repayment(Dollars in millions)
Tranche B 2027 Term LoanQ3 2022$700 
5.375% Senior Notes due 2025
Q3 2022800 
5.250% Senior Notes due 2026
Q3 2022775 
Total Debt Repayments$2,275 

Covenants

The term loan and senior notes of Level 3 Financing, Inc. contain 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, engage in transactions with their affiliates including Lumen Technologies and its other subsidiaries, dispose of assets and merge or consolidate with any other person. Also, in connection with a "change of control" of Level 3 Parent, LLC, or Level 3 Financing, Inc., Level 3 Financing will be required to offer to repurchase or repay certain of its long-term debt at a price of 101% of the principal amount of debt repurchased or repaid, plus accrued and unpaid interest.

Certain of Lumen's and our debt instruments contain cross-acceleration provisions.

Compliance

As of September 30, 2022, we believe we were in compliance with the provisions and financial covenants contained in our debt agreements in all material respects.
v3.22.2.2
Fair Value of Financial Instruments
 9 Months Ended
Sep. 30, 2022
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments Fair Value of Financial Instruments
Our financial instruments consist of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, note 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, note 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, 2022 and December 31, 2021, as well as the input level used to determine the fair values indicated below:
September 30, 2022December 31, 2021
Input LevelCarrying AmountFair ValueCarrying AmountFair Value
(Dollars in millions)
Liabilities-Long-term debt, excluding finance leases2$7,804 6,572 10,103 10,090 
Indemnifications related to the sale of the Latin American business3$86 86 — — 
v3.22.2.2
Commitments, Contingencies and Other Items
 9 Months Ended
Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]  
Commitments, Contingencies and Other Items Commitments, Contingencies and Other Items
We are subject to various claims, legal proceedings and other contingent liabilities, including the matters described below, which individually or in the aggregate could materially affect our financial condition, future results of operations or cash flows. As a matter of course, we are prepared to both litigate these matters to judgment as needed, as well as to evaluate and consider reasonable settlement opportunities.

Irrespective of its merits, litigation may be both lengthy and disruptive to our operations and could cause significant expenditure and diversion of management attention. We review our litigation accrual liabilities on a quarterly basis, but in accordance with applicable accounting guidelines only establish accrual liabilities when losses are deemed probable and reasonably estimable and only revise previously established accrual liabilities when warranted by changes in circumstances, in each case based on then-available information. As such, as of any given date we could have exposure to losses under proceedings as to which no liability has been accrued or as to which the accrued liability is inadequate. Amounts accrued for our litigation and non-income tax contingencies at September 30, 2022 aggregated to approximately $24 million and are included in other current liabilities, other liabilities, or liabilities held for sale in our consolidated balance sheet as of such date. The establishment of an accrual does not mean that actual funds have been set aside to satisfy a given contingency. Thus, the resolution of a particular contingency for the amount accrued could have no effect on our results of operations but nonetheless could have an adverse effect on our cash flows.

Latin American Tax Litigation and Claims

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

Other Proceedings, Disputes and Contingencies

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

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

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

The matters listed in this Note do not reflect all of our contingencies. For additional information on our contingencies, see Note 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, 2021. The ultimate outcome of the above-described matters may differ materially from the outcomes anticipated, estimated, projected or implied by us in certain of our statements appearing above in this Note, and proceedings currently viewed as immaterial by us may ultimately materially impact us.
v3.22.2.2
Accumulated Other Comprehensive Loss
 9 Months Ended
Sep. 30, 2022
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Accumulated Other Comprehensive Loss 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, 2022:
Pension PlansForeign Currency Translation Adjustment and OtherTotal
(Dollars in millions)
Balance at December 31, 2021$3 (354)(351)
Other comprehensive loss, net of tax— (229)(229)
Amounts reclassified from accumulated other comprehensive (loss) income$— 112 112 
Net other comprehensive loss— (117)(117)
Balance at September 30, 2022$3 (471)(468)
The tables below present further information about our reclassifications out of accumulated other comprehensive (loss) income by component for the three and nine months ended September 30, 2022:

Three and Nine Months Ended September 30, 2022Decrease (Increase)
in Net Income		Affected Line Item in Consolidated Statement of Operations
 (Dollars in millions) 
Reclassification of realized loss on foreign currency translation to gain on sale of business$112 Gain on sale of business
Income tax benefit— Income tax expense
Net of tax$112 

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, 2021:

Pension PlansForeign Currency Translation Adjustment and OtherTotal
(Dollars in millions)
Balance at December 31, 2020$(13)(221)(234)
Other comprehensive loss, net of tax— (101)(101)
Net other comprehensive loss— (101)(101)
Balance at September 30, 2021$(13)(322)(335)
v3.22.2.2
Other Financial Information
 9 Months Ended
Sep. 30, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Other Financial Information Other Financial Information
Other Current Assets

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

September 30, 2022December 31, 2021
(Dollars in millions)
Prepaid expenses$127 109 
Contract fulfillment costs48 48 
Contract acquisition costs47 45 
Contract assets23 28 
Other6 9 
Total other current assets$251 239 
_______________________________________________________________________________
(1)As of December 31, 2021, other current assets excluded $81 million that had been classified as held for sale.
v3.22.2.2
Subsequent Events
 9 Months Ended
Sep. 30, 2022
Subsequent Events [Abstract]  
Subsequent Events Subsequent Events
Pending Divestiture of our European, Middle Eastern and African Business

On November 2, 2022, affiliates of Level 3 Parent, LLC entered into an exclusive arrangement to divest our operations in Europe, the Middle East and Africa (the “EMEA business”) to Colt Technology Services Group Limited, a portfolio company of Fidelity Investments, in exchange for $1.8 billion in cash, subject to certain working capital and other purchase price adjustments. We expect to close the transaction as early as late 2023, following completion of a consultation process under French law required prior to execution of the purchase agreement and receipt of all requisite regulatory approvals in the U.S. and certain countries where the EMEA business operates, as well as the satisfaction of other customary conditions. Upon being executed following the French consultation process, the purchase agreement will contain various customary covenants for transactions of this type, including various indemnities.
v3.22.2.2
Background (Policies)
 9 Months Ended
Sep. 30, 2022
Accounting Policies [Abstract]  
Basis of Presentation
Basis of Presentation

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

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

Government Assistance

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

Leases

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

Debt

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

Investments

On January 1, 2021, we adopted ASU 2020-01, “Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)” ("ASU 2020-01”). This ASU, among other things, clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments - Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. As of September 30, 2022, we determined there was no application or discontinuation of the equity method during the reporting periods covered by this report. The adoption of ASU 2020-01 did not have a material impact to our consolidated financial statements.

Income Taxes

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

Recently Issued Accounting Pronouncements

In September 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-04, “Liabilities-Supplier Finance Program (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations” (“ASU 2022-04”). These amendments require that a company that uses a supplier finance program in connection with the purchase of goods or services disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, program activity during the period, changes from period to period and potential magnitude of program transactions. ASU 2022-04 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of September 30, 2022, we are reviewing our supplier finance agreements to determine the impact to disclosures in our consolidated financial statements.
In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions” (“ASU 2022-03”). These amendments clarify that a contractual restriction on the sales of an investment in equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. ASU 2022-03 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of September 30, 2022, we do not expect ASU 2022-03 to have an impact to our consolidated financial statements.

In March 2022, the FASB issued ASU 2022-02, “Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings (“TDR”) and Vintage Disclosures” (“ASU 2022-02”). These amendments eliminate the TDR recognition and measurement guidance, enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. ASU 2022-02 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of September 30, 2022, we do not expect ASU 2022-02 to have an impact to our consolidated financial statements.

In March 2022, the FASB issued ASU 2022-01, “Derivatives and Hedging (Topic 815): Fair Value Hedging-Portfolio Layer Method” (ASU 2022-01). The ASU expands the current single-layer method to allow multiple hedged layers of a single closed portfolio under the method. ASU 2022-01 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of September 30, 2022, we do not expect ASU 2022-01 to have an impact to our consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”), which requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. ASU 2021-08 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of September 30, 2022, we do not expect ASU 2021-08 to have an impact to our consolidated financial statements.

In January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848): Scope" ("ASU 2021-01"), which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU 2021-01 also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. These amendments may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. ASU 2021-01 provides optional expedients for a limited time to ease the potential burden in accounting for reference rate reform. Based on our review of our key material contracts through September 30, 2022, ASU 2021-01 does not have a material impact to our consolidated financial statements.
Goodwill We assess our goodwill for impairment annually, or under certain circumstances, more frequently, such as when events or changes in circumstances indicate there may be impairment. We are required to write down the value of goodwill only when our assessment determines the carrying value of equity of our reporting unit exceeds its fair value. Our annual impairment assessment date for goodwill is October 31, at which date we assess goodwill at our reporting unit.
Operating Lease Income
Operating Lease Income

We lease various dark fiber, 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.
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.
v3.22.2.2
Recently Completed Divestiture of the Latin American Business (Tables)
 9 Months Ended
Sep. 30, 2022
Discontinued Operations and Disposal Groups [Abstract]  
Components of pre-tax income and held for sale assets and liabilities The pre-tax net income of the Latin American business is estimated to be as follows in the table below:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(Dollars in millions)
Pre-tax net income (1)
$19 62 197 137 
_______________________________________________________________________________
(1)The pre-tax net income includes operating results prior to the close of the sale of the business on August 1, 2022
As a result of closing the transaction, we derecognized $2.4 billion of net assets, the principal components of which were as follows:
August 1, 2022
(Dollars in millions)
Assets
Cash and cash equivalents$40 
Accounts receivable, less allowance of $3
105 
Other current assets86 
Property, plant and equipment, net accumulated depreciation of $447
1,703 
Goodwill(1)
719 
Customer relationships and other intangibles, net140 
Other non-current assets70 
Total assets$2,863 
Liabilities
Accounts payable$105 
Income and other taxes42 
Other current liabilities59 
Deferred income taxes, net154 
Other non-current liabilities122 
Total liabilities$482 
______________________________________________________________________
(1)    The assignment of goodwill was based on the relative fair value of the disposal group and the portion of the remaining reporting unit prior to the disposal group being classified as held for sale.
v3.22.2.2
Goodwill, Customer Relationships and Other Intangible Assets (Tables)
 9 Months Ended
Sep. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of goodwill, customer relationships and other intangible assets
Goodwill, customer relationships and other intangible assets consisted of the following:
September 30, 2022December 31, 2021
(Dollars in millions)
Goodwill$6,598 6,666 
Customer relationships, less accumulated amortization of $3,245 and $2,779
$4,804 5,325 
Capitalized software, less accumulated amortization of $380 and $349
412 378 
Trade names, less accumulated amortization of $129 and $109
2 22 
Total other intangible assets, net$5,218 5,725 
Schedule of goodwill
The following table shows the rollforward of goodwill from December 31, 2021 through September 30, 2022:
(Dollars in millions)
As of December 31, 2021 (1)
$6,666 
Effect of foreign currency exchange rate changes(68)
As of September 30, 2022 (1)
$6,598 
_______________________________________________________________________________
(1)Goodwill at September 30, 2022 and December 31, 2021 is net of accumulated impairment loss of $3.6 billion.
Schedule of estimated amortization expense for intangible assets We estimate that total amortization expense for intangible assets for the years ending December 31, 2022 through 2026 will be as provided in the table below.
(Dollars in millions)
2022 (remaining three months)$182 
2023718 
2024714 
2025689 
2026646 
v3.22.2.2
Revenue Recognition (Tables)
 9 Months Ended
Sep. 30, 2022
Revenue from Contract with Customer [Abstract]  
Disaggregation of revenue
The following table provides disaggregation of revenue from contracts with customers based on service offering for the nine months ended September 30, 2022 and 2021. It also shows 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 Latin American business revenues prior to it being sold on August 1, 2022.:

Three Months Ended September 30, 2022Three Months Ended September 30, 2021
Total Revenue
Adjustments for Non-ASC 606 Revenue(1)
Total Revenue from Contracts with CustomersTotal Revenue
Adjustments for Non-ASC 606 Revenue(1)
Total Revenue from Contracts with Customers
(Dollars in millions)
Compute and Application Services$235 (100)135 287 (126)161 
IP and Data Services831 — 831 890 — 890 
Fiber Infrastructure Services381 (54)327 412 (56)356 
Voice and Other315 (3)312 345 (3)342 
Affiliate Services57 (57)— 56 (56)— 
Total revenue$1,819 (214)1,605 1,990 (241)1,749 

Nine Months Ended September 30, 2022Nine Months Ended September 30, 2021
Total Revenue
Adjustments for Non-ASC 606 Revenue (1)
Total Revenue from Contracts with CustomersTotal Revenue
Adjustments for Non-ASC 606 Revenue (1)
Total Revenue from Contracts with Customers
(Dollars in millions)
Compute and Application Services$795 (354)441 850 (380)470 
IP and Data Services2,600 — 2,600 2,659 — 2,659 
Fiber Infrastructure Services1,175 (165)1,010 1,210 (164)1,046 
Voice and Other978 (11)967 1,078 (8)1,070 
Affiliate Services170 (170)— 167 (167)— 
Total revenue$5,718 (700)5,018 5,964 (719)5,245 
_____________________________________________________________________
(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, net of amounts reclassified as held for sale as of September 30, 2022 and December 31, 2021:
September 30, 2022December 31, 2021
(Dollars in millions)
Customer receivables (1)
$593 640 
Contract assets (2)
30 35 
Contract liabilities (3)
287 247 
_____________________________________________________________________
(1)Reflects gross customer receivables of $620 million and $679 million, net of allowance for credit losses of $27 million and $39 million, at September 30, 2022 and December 31, 2021, respectively. As of December 31, 2021, this amount excludes customer receivables classified as held for sale of $83 million.
(2)As of December 31, 2021, no amounts have been classified as held for sale.
(3)As of December 31, 2021, amount excludes contract liabilities classified as held for sale of $58 million.
Capitalized contract cost
The following table provides changes in our contract acquisition costs and fulfillment costs:
Three Months Ended September 30, 2022Three Months Ended September 30, 2021
Acquisition Costs
Fulfillment Costs (1)
Acquisition CostsFulfillment Costs
(Dollars in millions)
Beginning of period balance$78 101 75 124 
Costs incurred16 20 15 22 
Amortization(14)(17)(14)(21)
Change in contract costs held for sale (1)
— 1 — (27)
End of period balance$80 105 76 98 

Nine Months Ended
September 30, 2022		Nine Months Ended
September 30, 2021
Acquisition Costs
Fulfillment Costs (1)
Acquisition CostsFulfillment Costs
(Dollars in millions)
Beginning of period balance$76 99 78 122 
Costs incurred45 63 44 68 
Amortization(41)(57)(46)(65)
Change in contract costs held for sale (1)
— — — (27)
End of period balance$80 105 76 98 
(1)The beginning of period balance for the three and nine months ended September 30, 2022 excluded fulfillment costs classified as held for sale of $28 million and $27 million, respectively.
v3.22.2.2
Credit Losses on Financial Instruments (Tables)
 9 Months Ended
Sep. 30, 2022
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, 2021(1)
$39 
Provision for expected losses2 
Write-offs charged against the allowance(17)
Recoveries collected2 
Foreign currency exchange rate change adjustment1 
Ending balance at September 30, 2022
$27 
(1)As of December 31, 2021, amount excludes allowance for credit losses classified as held for sale of $3 million. See Note 2—Recently Completed Divestiture of the Latin American Business
v3.22.2.2
Long-Term Debt (Tables)
 9 Months Ended
Sep. 30, 2022
Debt Disclosure [Abstract]  
Schedule of long-term debt
The following chart 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, 2022December 31, 2021
(Dollars in millions)
Level 3 Financing, Inc.
Senior Secured Debt: (2)
Senior notes
3.400% - 3.875%
2027 - 2029
$1,500 1,500 
Tranche B 2027 Term Loan (3)
LIBOR + 1.75%
2027
2,411 3,111 
Senior Notes and other debt:
Senior notes (4)
3.625% - 4.625%
2027 - 2029
3,940 5,515 
Finance leases and other obligationsVariousVarious301 319 
Unamortized premiums, net3 34 
Unamortized debt issuance costs(50)(57)
Total long-term debt8,105 10,422 
Less current maturities(26)(26)
Long-term debt, excluding current maturities$8,079 10,396 
______________________________________________________________________
(1)As of September 30, 2022.
(2)See Note 7—Long-Term Debt in our Annual Report on Form 10-K for the year ended December 31, 2021 for a description of certain affiliate guarantees and liens securing this debt.
(3)The Tranche B 2027 Term Loan had an interest rate of 4.865% and 1.854% as of September 30, 2022 and December 31, 2021, respectively.
(4)See Note 7—Long-Term Debt in our Annual Report on Form 10-K for the year ended December 31, 2021 for a description of guarantees provided by certain affiliates of Level 3 Financing, Inc.
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, 2022 (excluding unamortized premiums, net, unamortized debt issuance costs, and intercompany debt), maturing during the following years:
(Dollars in millions)
2022 (remaining three months)$8 
202327 
202432 
202538 
202636 
2027 and thereafter8,011 
Total long-term debt$8,152 
Schedule of debt repayment
During the nine months ended September 30, 2022, we repaid the following aggregate principal amount of indebtedness through a combination of tender offers, redemptions, and repayments. These transactions resulted in a net gain of $9 million.

DebtPeriod of Repayment(Dollars in millions)
Tranche B 2027 Term LoanQ3 2022$700 
5.375% Senior Notes due 2025
Q3 2022800 
5.250% Senior Notes due 2026
Q3 2022775 
Total Debt Repayments$2,275 
v3.22.2.2
Fair Value of Financial Instruments (Tables)
 9 Months Ended
Sep. 30, 2022
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, 2022 and December 31, 2021, as well as the input level used to determine the fair values indicated below:
September 30, 2022December 31, 2021
Input LevelCarrying AmountFair ValueCarrying AmountFair Value
(Dollars in millions)
Liabilities-Long-term debt, excluding finance leases2$7,804 6,572 10,103 10,090 
Indemnifications related to the sale of the Latin American business3$86 86 — — 
v3.22.2.2
Accumulated Other Comprehensive Loss (Tables)
 9 Months Ended
Sep. 30, 2022
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, 2022:
Pension PlansForeign Currency Translation Adjustment and OtherTotal
(Dollars in millions)
Balance at December 31, 2021$3 (354)(351)
Other comprehensive loss, net of tax— (229)(229)
Amounts reclassified from accumulated other comprehensive (loss) income$— 112 112 
Net other comprehensive loss— (117)(117)
Balance at September 30, 2022$3 (471)(468)
The tables below present further information about our reclassifications out of accumulated other comprehensive (loss) income by component for the three and nine months ended September 30, 2022:

Three and Nine Months Ended September 30, 2022Decrease (Increase)
in Net Income		Affected Line Item in Consolidated Statement of Operations
 (Dollars in millions) 
Reclassification of realized loss on foreign currency translation to gain on sale of business$112 Gain on sale of business
Income tax benefit— Income tax expense
Net of tax$112 

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, 2021:

Pension PlansForeign Currency Translation Adjustment and OtherTotal
(Dollars in millions)
Balance at December 31, 2020$(13)(221)(234)
Other comprehensive loss, net of tax— (101)(101)
Net other comprehensive loss— (101)(101)
Balance at September 30, 2021$(13)(322)(335)
Reclassification out of accumulated other comprehensive income
The tables below present further information about our reclassifications out of accumulated other comprehensive (loss) income by component for the three and nine months ended September 30, 2022:

Three and Nine Months Ended September 30, 2022Decrease (Increase)
in Net Income		Affected Line Item in Consolidated Statement of Operations
 (Dollars in millions) 
Reclassification of realized loss on foreign currency translation to gain on sale of business$112 Gain on sale of business
Income tax benefit— Income tax expense
Net of tax$112 
v3.22.2.2
Other Financial Information (Tables)
 9 Months Ended
Sep. 30, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Schedule of components other current assets
The following table presents details of other current assets reflected in our consolidated balance sheets:

September 30, 2022December 31, 2021
(Dollars in millions)
Prepaid expenses$127 109 
Contract fulfillment costs48 48 
Contract acquisition costs47 45 
Contract assets23 28 
Other6 9 
Total other current assets$251 239 
_______________________________________________________________________________
(1)As of December 31, 2021, other current assets excluded $81 million that had been classified as held for sale.
v3.22.2.2
Background - Basis of Presentation (Details) - USD ($)
$ in Millions
Sep. 30, 2022
Dec. 31, 2021
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 $ 358 $ 299
Operating lease liabilities 1,077 953
Affiliates    
Lessee, Lease, Description [Line Items]    
Operating lease assets 411 294
Current operating lease liabilities 116 82
Operating lease liabilities $ 307 $ 224
v3.22.2.2
Background - Segments (Details)
 9 Months Ended
Sep. 30, 2022
segment
Accounting Policies [Abstract]  
Number of reportable segments 1
v3.22.2.2
Recently Completed Divestiture of the Latin American Business - Additional Information (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Aug. 01, 2022
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Pre-tax gain on disposal of business $ 119 $ 0 $ 119 $ 0  
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Latin American Business          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Pre-tax gain on disposal of business 119   119    
Fair value of indemnification $ 86   $ 86    
Total assets         $ 2,400
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Latin American Business | Level 3 Parent, LLC          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Cash consideration for disposal of business         $ 2,700
v3.22.2.2
Recently Completed Divestiture of the Latin American Business - Pre-tax Net Income (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Disposal Group, Held-for-sale, Not Discontinued Operations        
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]        
Pre-tax net income $ 19 $ 62 $ 197 $ 137
v3.22.2.2
Recently Completed Divestiture of the Latin American Business - Components of Held for Sale Assets and Liabilities (Details) - USD ($)
$ in Millions
Sep. 30, 2022
Dec. 31, 2021
Sep. 30, 2021
Assets      
Cash and cash equivalents $ 0   $ 36
Other current assets   $ 81  
Disposal Group, Held-for-sale, Not Discontinued Operations      
Liabilities      
Allowance for doubtful accounts   $ 3  
Disposal Group, Held-for-sale, Not Discontinued Operations | Latin American Business      
Assets      
Cash and cash equivalents 40    
Accounts receivable, less allowance of $3 105    
Other current assets 86    
Property, plant and equipment, net accumulated depreciation of $447 1,703    
Goodwill 719    
Customer relationships and other intangibles, net 140    
Other non-current assets 70    
Total assets 2,863    
Liabilities      
Accounts payable 105    
Income and other taxes 42    
Other current liabilities 59    
Deferred income taxes, net 154    
Other non-current liabilities 122    
Total liabilities 482    
Allowance for doubtful accounts 3    
Accumulated depreciation $ 447    
v3.22.2.2
Goodwill, Customer Relationships and Other Intangible Assets - Schedule of Goodwill and Other Intangible Assets (Details) - USD ($)
$ in Millions
Sep. 30, 2022
Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]    
Goodwill $ 6,598 $ 6,666
Other intangible assets, net 5,218 5,725
Customer relationships    
Finite-Lived Intangible Assets [Line Items]    
Other intangible assets, net 4,804 5,325
Accumulated amortization 3,245 2,779
Capitalized software    
Finite-Lived Intangible Assets [Line Items]    
Other intangible assets, net 412 378
Accumulated amortization 380 349
Trade names    
Finite-Lived Intangible Assets [Line Items]    
Other intangible assets, net 2 22
Accumulated amortization $ 129 $ 109
v3.22.2.2
Goodwill, Customer Relationships and Other Intangible Assets - Additional Information (Details)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2022
USD ($)
Sep. 30, 2021
USD ($)
Sep. 30, 2022
USD ($)
reporting_unit
Sep. 30, 2021
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]        
Number of reporting units | reporting_unit     1  
Acquired finite-lived intangible asset amortization expense $ 187 $ 210 $ 565 $ 637
Intangible assets, gross, including goodwill $ 15,600   $ 15,600  
v3.22.2.2
Goodwill, Customer Relationships and Other Intangible Assets - Goodwill Activity (Details) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Goodwill [Roll Forward]    
As of December 31, 2021 $ 6,666  
Effect of foreign currency exchange rate changes (68)  
As of September 30, 2022 6,598  
Goodwill, accumulated impairment loss $ 3,600 $ 3,600
v3.22.2.2
Goodwill, Customer Relationships and Other Intangible Assets - Amortization Expense (Details)
$ in Millions
Sep. 30, 2022
USD ($)
Estimated amortization expense of finite-lived acquisition-related intangible assets  
2022 (remaining three months) $ 182
2023 718
2024 714
2025 689
2026 $ 646
v3.22.2.2
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Disaggregation of Revenue [Line Items]        
Total revenues $ 1,819 $ 1,990 $ 5,718 $ 5,964
Adjustments for non-ASC 606 revenue (214) (241) (700) (719)
Total revenue from contracts with customers 1,605 1,749 5,018 5,245
Compute and Application Services        
Disaggregation of Revenue [Line Items]        
Total revenues 235 287 795 850
Adjustments for non-ASC 606 revenue (100) (126) (354) (380)
Total revenue from contracts with customers 135 161 441 470
IP and Data Services        
Disaggregation of Revenue [Line Items]        
Total revenues 831 890 2,600 2,659
Adjustments for non-ASC 606 revenue 0 0 0 0
Total revenue from contracts with customers 831 890 2,600 2,659
Fiber Infrastructure Services        
Disaggregation of Revenue [Line Items]        
Total revenues 381 412 1,175 1,210
Adjustments for non-ASC 606 revenue (54) (56) (165) (164)
Total revenue from contracts with customers 327 356 1,010 1,046
Voice and Other        
Disaggregation of Revenue [Line Items]        
Total revenues 315 345 978 1,078
Adjustments for non-ASC 606 revenue (3) (3) (11) (8)
Total revenue from contracts with customers 312 342 967 1,070
Affiliate Services        
Disaggregation of Revenue [Line Items]        
Total revenues 57 56 170 167
Adjustments for non-ASC 606 revenue (57) (56) (170) (167)
Total revenue from contracts with customers $ 0 $ 0 $ 0 $ 0
v3.22.2.2
Revenue Recognition - Operating Lease Income (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Revenue from Contract with Customer [Abstract]        
Rental income $ 175 $ 202 $ 581 $ 601
Percent of operating revenue 10.00% 10.00% 10.00% 10.00%
v3.22.2.2
Revenue Recognition - Customer Receivables and Contract Balances (Details) - USD ($)
$ in Millions
Sep. 30, 2022
Jan. 01, 2022
Dec. 31, 2021
Jan. 01, 2021
Capitalized Contract Cost [Line Items]        
Customer receivables $ 593   $ 640  
Contract assets 30   35  
Contract liabilities 287 $ 305 247 $ 385
Accounts receivable, gross 620   679  
Allowance for credit losses $ 27   39  
Disposal Group, Held-for-sale, Not Discontinued Operations        
Capitalized Contract Cost [Line Items]        
Customer receivables     83  
Contract assets     0  
Contract liabilities     $ 58  
v3.22.2.2
Revenue Recognition - Additional Information - Customer Receivables and Contract Balances (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Jan. 01, 2022
Dec. 31, 2021
Jan. 01, 2021
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]              
Revenue recognized $ 20 $ 30 $ 128 $ 151      
Contract liabilities $ 287   $ 287   $ 305 $ 247 $ 385
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        
v3.22.2.2
Revenue Recognition - Additional Information - Remaining Performance Obligation (Details)
$ in Billions
Sep. 30, 2022
USD ($)
Revenue from Contract with Customer [Abstract]  
Remaining performance obligation $ 3.8
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation, percentage 80.00%
Expected timing of satisfaction, period 2 years 3 months
v3.22.2.2
Revenue Recognition - Contract Cost (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Acquisition Costs        
Capitalized Contract Cost [Roll Forward]        
Beginning of period balance $ 78 $ 75 $ 76 $ 78
Costs incurred 16 15 45 44
Amortization (14) (14) (41) (46)
Change in contract costs held for sale 0 0 0 0
End of period balance 80 76 80 76
Fulfillment Costs        
Capitalized Contract Cost [Roll Forward]        
Beginning of period balance 101 124 99 122
Costs incurred 20 22 63 68
Amortization (17) (21) (57) (65)
Change in contract costs held for sale 1 (27) 0 (27)
End of period balance 105 $ 98 105 $ 98
Fulfillment Costs | Discontinued Operations, Held-for-sale        
Capitalized Contract Cost [Roll Forward]        
Beginning of period balance $ 28   $ 27  
v3.22.2.2
Revenue Recognition - Additional Information - Contract Costs (Details)
 9 Months Ended
Sep. 30, 2022
Business Customers | Weighted Average  
Contract Costs [Line Items]  
Length of customer life 34 months
v3.22.2.2
Credit Losses on Financial Instruments (Details) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Financing Receivable, Allowance for Credit Loss [Roll Forward]    
Beginning balance at December 31, 2021 $ 39  
Provision for expected losses 2  
Write-offs charged against the allowance (17)  
Recoveries collected 2  
Foreign currency exchange rate change adjustment 1  
Ending balance at September 30, 2022 $ 27  
Disposal Group, Held-for-sale, Not Discontinued Operations    
Financing Receivable, Allowance for Credit Loss [Roll Forward]    
Allowance for doubtful accounts   $ 3
v3.22.2.2
Long-Term Debt - Schedule of Long Term Debt (Details) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Long-term debt    
Long-term debt, gross $ 8,152  
Unamortized premiums, net 3 $ 34
Unamortized debt issuance costs (50) (57)
Total long-term debt 8,105 10,422
Less current maturities (26) (26)
Long-term debt, excluding current maturities 8,079 10,396
Senior notes | Senior Notes Maturing 2027-2029    
Long-term debt    
Long-term debt, gross $ 1,500 1,500
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 3.875%  
Senior notes | Senior Notes Maturing 2027-2029    
Long-term debt    
Long-term debt, gross $ 3,940 5,515
Senior notes | Senior Notes Maturing 2027-2029 | Minimum    
Long-term debt    
Stated interest rate 3.625%  
Senior notes | Senior Notes Maturing 2027-2029 | Maximum    
Long-term debt    
Stated interest rate 4.625%  
Term loan | Tranche B 2027 Term Loan    
Long-term debt    
Long-term debt, gross $ 2,411 $ 3,111
Effective percentage 4.865% 1.854%
Term loan | Tranche B 2027 Term Loan | LIBOR    
Long-term debt    
Basis spread on variable rate 1.75%  
Finance leases and other obligations    
Long-term debt    
Long-term debt, gross $ 301 $ 319
v3.22.2.2
Long-Term Debt - Debt Maturities (Details)
$ in Millions
Sep. 30, 2022
USD ($)
Debt Disclosure [Abstract]  
2022 (remaining three months) $ 8
2023 27
2024 32
2025 38
2026 36
2027 and thereafter 8,011
Total long-term debt $ 8,152
v3.22.2.2
Long-Term Debt - Additional Information (Details) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Debt Disclosure [Abstract]    
Gain from extinguishment of debt $ 9 $ 0
Redemption price, percentage 101.00%  
v3.22.2.2
Long-Term Debt - Schedule of Debt Repayments (Details)
$ in Millions
 9 Months Ended
Sep. 30, 2022
USD ($)
Long-term debt  
Repayments of debt $ 2,275
Term loan | Tranche B 2027 Term Loan  
Long-term debt  
Repayments of debt $ 700
Senior notes | 5.375% Senior Notes due 2025  
Long-term debt  
Stated interest rate 5.375%
Repayments of debt $ 800
Senior notes | 5.250% Senior Notes due 2026  
Long-term debt  
Stated interest rate 5.25%
Repayments of debt $ 775
v3.22.2.2
Fair Value of Financial Instruments (Details) - USD ($)
$ in Millions
Sep. 30, 2022
Dec. 31, 2021
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 $ 86 $ 0
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 86 0
Fair Value, Measurements, Recurring | Level 2 | Carrying Amount    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis    
Liabilities-Long-term debt, excluding finance leases 7,804 10,103
Fair Value, Measurements, Recurring | Level 2 | Fair Value    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis    
Liabilities-Long-term debt, excluding finance leases $ 6,572 $ 10,090
v3.22.2.2
Commitments, Contingencies and Other Items (Details)
 9 Months Ended
Sep. 30, 2022
USD ($)
patent
Commitments and Contingencies Disclosure [Abstract]  
Estimated litigation liability $ 24,000,000
Number of patents allegedly infringed | patent 1
Unfavorable Regulatory Action  
Loss Contingencies [Line Items]  
Estimate of possible loss $ 300,000
v3.22.2.2
Accumulated Other Comprehensive Loss - AOCI Activity (Details) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Balance at beginning of period $ 13,009  
Other comprehensive loss, net of tax (229) $ (101)
Amounts reclassified from accumulated other comprehensive (loss) income 112  
Net other comprehensive loss (117) (101)
Balance at end of period 11,830 13,197
Defined Benefit Plan | Pension Plans    
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Balance at beginning of period 3 (13)
Other comprehensive loss, net of tax 0 0
Amounts reclassified from accumulated other comprehensive (loss) income 0  
Net other comprehensive loss 0 0
Balance at end of period 3 (13)
Foreign Currency Translation Adjustment and Other    
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Balance at beginning of period (354) (221)
Other comprehensive loss, net of tax (229) (101)
Amounts reclassified from accumulated other comprehensive (loss) income 112  
Net other comprehensive loss (117) (101)
Balance at end of period (471) (322)
Total    
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Balance at beginning of period (351) (234)
Balance at end of period $ (468) $ (335)
v3.22.2.2
Accumulated Other Comprehensive Loss - Reclassifications (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Reclassifications out of accumulated other comprehensive income loss by component        
Gain on sale of business $ (119) $ 0 $ (119) $ 0
Income tax expense 312 37 397 150
Net of tax 62 $ (121) (149) $ (419)
Decrease (Increase) in Net Income | Foreign currency translation        
Reclassifications out of accumulated other comprehensive income loss by component        
Gain on sale of business 112   112  
Income tax expense 0   0  
Net of tax $ 112   $ 112  
v3.22.2.2
Other Financial Information (Details) - USD ($)
$ in Millions
Sep. 30, 2022
Dec. 31, 2021
Prepaid Expense and Other Assets, Current [Abstract]    
Prepaid expenses $ 127 $ 109
Contract assets 23 28
Other 6 9
Total other current assets 251 239
Other current assets reclassified as held for sale   81
Fulfillment Costs    
Prepaid Expense and Other Assets, Current [Abstract]    
Contract costs 48 48
Acquisition Costs    
Prepaid Expense and Other Assets, Current [Abstract]    
Contract costs $ 47 $ 45
v3.22.2.2
Subsequent Events (Details)
$ in Billions
Nov. 02, 2022
USD ($)
Subsequent Event | Discontinued Operations, Disposed of by Sale | EMEA Business  
Subsequent Event [Line Items]  
Cash consideration for disposal of business $ 1.8