LEVEL 3 PARENT, LLC, 10-Q filed on 8/4/2022
Quarterly Report
v3.22.2
Cover Page
 6 Months Ended
Jun. 30, 2022
shares
Cover [Abstract]  
Document Type 10-Q
Document Quarterly Report true
Document Period End Date Jun. 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 Q2
v3.22.2
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2022
Jun. 30, 2021
Jun. 30, 2022
Jun. 30, 2021
OPERATING REVENUE        
Operating revenues $ 1,953 $ 1,985 $ 3,899 $ 3,974
OPERATING EXPENSES        
Cost of services and products (exclusive of depreciation and amortization) 836 868 1,687 1,746
Selling, general and administrative 318 273 632 567
Operating expenses - affiliates 162 131 308 238
Depreciation and amortization 405 436 801 873
Total operating expenses 1,721 1,708 3,428 3,424
OPERATING INCOME 232 277 471 550
OTHER (EXPENSE) INCOME        
Interest income - affiliate 15 15 31 33
Interest expense (95) (89) (185) (182)
Other (expense) income, net (14) 6 (21) 10
Total other expense, net (94) (68) (175) (139)
INCOME BEFORE INCOME TAXES 138 209 296 411
Income tax expense 41 62 85 113
NET INCOME 97 147 211 298
Non-Affiliate Revenue        
OPERATING REVENUE        
Operating revenues 1,896 1,929 3,786 3,863
Affiliate Services        
OPERATING REVENUE        
Operating revenues $ 57 $ 56 $ 113 $ 111
v3.22.2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2022
Jun. 30, 2021
Jun. 30, 2022
Jun. 30, 2021
Statement of Comprehensive Income [Abstract]        
NET INCOME $ 97 $ 147 $ 211 $ 298
OTHER COMPREHENSIVE (LOSS) INCOME        
Foreign currency translation adjustments, net of $32, $(4), $42, and $3 tax (184) 80 (115) (8)
Other comprehensive (loss) income, net of tax (184) 80 (115) (8)
COMPREHENSIVE (LOSS) INCOME $ (87) $ 227 $ 96 $ 290
v3.22.2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2022
Jun. 30, 2021
Jun. 30, 2022
Jun. 30, 2021
Statement of Comprehensive Income [Abstract]        
Foreign currency translation adjustments, tax effect $ 32 $ (4) $ 42 $ 3
v3.22.2
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)
$ in Millions
Jun. 30, 2022
Dec. 31, 2021
CURRENT ASSETS    
Cash and cash equivalents $ 154 $ 146
Accounts receivable, less allowance of $37 and $39 580 642
Note receivable - affiliate 1,468 1,468
Assets held for sale 2,865 2,708
Other 263 239
Total current assets 5,330 5,203
Property, plant and equipment, net of accumulated depreciation of $3,547 and $3,202 8,936 9,042
GOODWILL AND OTHER ASSETS    
Goodwill 6,627 6,666
Other intangible assets, net 5,387 5,725
Other, net 1,681 1,459
Total goodwill and other assets 13,695 13,850
TOTAL ASSETS 27,961 28,095
CURRENT LIABILITIES    
Current maturities of long-term debt 28 26
Accounts payable 428 381
Accounts payable - affiliates 77 18
Accrued expenses and other liabilities    
Salaries and benefits 126 176
Income and other taxes 92 83
Current operating lease liabilities 353 299
Other 117 150
Liabilities held for sale 479 435
Current portion of deferred revenue 298 291
Total current liabilities 1,998 1,859
LONG-TERM DEBT 10,383 10,396
DEFERRED REVENUE AND OTHER LIABILITIES    
Deferred revenue 1,442 1,404
Operating lease liabilities 1,134 953
Other 452 474
Total deferred revenue and other liabilities 3,028 2,831
COMMITMENTS AND CONTINGENCIES (Note 8)
MEMBER'S EQUITY    
Member's equity 13,018 13,360
Accumulated other comprehensive loss (466) (351)
Total member's equity 12,552 13,009
TOTAL LIABILITIES AND MEMBER'S EQUITY $ 27,961 $ 28,095
v3.22.2
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - (Parenthetical) - USD ($)
$ in Millions
Jun. 30, 2022
Dec. 31, 2021
Statement of Financial Position [Abstract]    
Allowance for doubtful accounts $ 37 $ 39
Accumulated depreciation $ 3,547 $ 3,202
v3.22.2
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2022
Jun. 30, 2021
Jun. 30, 2022
Jun. 30, 2021
OPERATING ACTIVITIES        
Net income $ 97 $ 147 $ 211 $ 298
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization 405 436 801 873
Deferred income taxes     54 92
Changes in current assets and liabilities:        
Accounts receivable     33 (26)
Accounts payable     (29) (9)
Other assets and liabilities, net     (113) (74)
Other assets and liabilities, affiliate     85 (499)
Changes in other noncurrent assets and liabilities, net     64 13
Other, net     78 (35)
Net cash provided by operating activities     1,184 633
INVESTING ACTIVITIES        
Capital expenditures     (554) (591)
Proceeds from sale of property, plant and equipment and other assets     1 52
Net cash used in investing activities     (553) (539)
FINANCING ACTIVITIES        
Net proceeds from issuance of long-term debt     0 891
Distributions     (553) (25)
Payments of long-term debt     (64) (925)
Other     0 (1)
Net cash used in financing activities     (617) (60)
Net increase in cash, cash equivalents and restricted cash     14 34
Cash, cash equivalents and restricted cash at beginning of period     191 205
Cash, cash equivalents and restricted cash at end of period 205 239 205 239
Supplemental cash flow information:        
Income taxes paid, net     (23) (16)
Interest paid (net of capitalized interest of $8 and $8)     (182) (190)
Cash, cash equivalents and restricted cash:        
Cash and cash equivalents 154 233 154 233
Cash and cash equivalents included in assets held for sale 48 0 48 0
Restricted cash included in Other current assets 1 2 1 2
Restricted cash included in Other, net noncurrent assets 2 4 2 4
Total $ 205 $ 239 $ 205 $ 239
v3.22.2
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) - USD ($)
$ in Millions
 6 Months Ended
Jun. 30, 2022
Jun. 30, 2021
Statement of Cash Flows [Abstract]    
Capitalized interest $ 8 $ 8
v3.22.2
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 income $ 298 298  
Distributions   (25)  
Other comprehensive (loss) income (8)   (8)
Balance at end of period at Jun. 30, 2021 13,170 13,412 (242)
Balance at beginning of period at Mar. 31, 2021   13,290 (322)
MEMBER'S EQUITY      
Net income 147 147  
Distributions   (25)  
Other comprehensive (loss) income 80   80
Balance at end of period at Jun. 30, 2021 13,170 13,412 (242)
Balance at beginning of period at Dec. 31, 2021 13,009 13,360 (351)
MEMBER'S EQUITY      
Net income 211 211  
Distributions   (553)  
Other comprehensive (loss) income (115)   (115)
Balance at end of period at Jun. 30, 2022 12,552 13,018 (466)
Balance at beginning of period at Mar. 31, 2022   13,264 (282)
MEMBER'S EQUITY      
Net income 97 97  
Distributions   (343)  
Other comprehensive (loss) income (184)   (184)
Balance at end of period at Jun. 30, 2022 $ 12,552 $ 13,018 $ (466)
v3.22.2
Background
 6 Months Ended
Jun. 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 six months of the year are not necessarily indicative of the consolidated results of operations and cash flows that might be expected for the entire year. These consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 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 $418 million and $294 million as of June 30, 2022 and December 31, 2021, respectively. Additionally, current operating lease liabilities included the current portion of affiliate operating lease liabilities of $112 million and $82 million as of June 30, 2022 and December 31, 2021, respectively, and operating lease liabilities included the noncurrent portion of affiliate operating lease liabilities of $317 million and $224 million as of June 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 June 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 March 2022, the Financial Accounting Standards Board ("FASB") issued ASU 2022-02, “Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings (“TDR”) and Vintage Disclosures” (“ASU 2022-02”). These amendments eliminate the TDR recognition and measurement guidance, enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. ASU 2020-02 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of June 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 2020-01 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of June 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 June 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 option guidance for a limited time to ease the potential burden in accounting for reference rate reform. Based on our review of our key material contracts through June 30, 2022, we do not expect ASU 2021-01 to have a material impact to our consolidated financial statements.
v3.22.2
Divestiture of Latin American Business
 6 Months Ended
Jun. 30, 2022
Discontinued Operations and Disposal Groups [Abstract]  
Divestiture of 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., closed the sale of Lumen's Latin American business pursuant to a definitive agreement dated July 25, 2021. See Note 11—Subsequent Events for additional information regarding this divestiture.

We do not believe this divestiture represents a strategic shift for Level 3. Therefore, the Latin American business does not meet the criteria to be classified as a discontinued operation. As a result, we continue 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 June 30,Six Months Ended June 30,
2022202120222021
(Dollars in millions)
Pre-tax net income $95 47 178 75 

As of June 30, 2022 in the accompanying consolidated balance sheets, the assets and liabilities of our Latin American business (the "disposal group") are classified as held for sale and are measured at the lower of (i) the carrying value of the disposal group and (ii) the fair value of the disposal group less costs to sell. Effective with the designation of the disposal group as held for sale on July 25, 2021, we suspended recording depreciation of property, plant and equipment and amortization of finite-lived intangible assets and right-of-use assets while these assets are classified as held for sale. We estimate that we would have recorded an additional $48 million and $97 million of depreciation, intangible amortization, and amortization of right-of use assets for the three and six months ended June 30, 2022, respectively if the Latin American business did not meet the held for sale criteria.

As a result of our evaluation of the recoverability of the carrying value of the assets and liabilities held for sale relative to the agreed upon sales price, adjusted for costs to sell, we did not record any estimated loss on disposal during the six months ended June 30, 2022. We re-evaluate the recoverability of the disposal group each reporting period through the disposal date. For information on the August 1, 2022 disposal of the Latin American business, see Note 11—Subsequent Events.
The principal components of the held for sale assets and liabilities as of the dates below are as follows:

June 30, 2022December 31, 2021
(Dollars in millions)
Assets held for sale
Cash and cash equivalents$48 39 
Accounts receivable, less allowance of $2 and $3
94 83 
Other current assets79 81 
Property, plant and equipment, net accumulated depreciation of $431 and $434
1,714 1,591 
Goodwill (1)
720 713 
Customer relationships and other intangibles, net130 126 
Other non-current assets80 75 
Total assets held for sale$2,865 2,708 
Liabilities held for sale
Accounts payable$110 101 
Salaries and benefits21 23 
Income and other taxes37 27 
Current portion of deferred revenue27 26 
Other current liabilities7 7 
Deferred income taxes, net149 129 
Other non-current liabilities128 122 
Total liabilities held for sale$479 435 
______________________________________________________________________
(1)    The assignment of goodwill was based on the relative fair value of the disposal group and the portion of the remaining reporting unit.
v3.22.2
Goodwill, Customer Relationships and Other Intangible Assets
 6 Months Ended
Jun. 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:
June 30, 2022December 31, 2021
(Dollars in millions)
Goodwill$6,627 6,666 
Customer relationships, less accumulated amortization of $3,096 and $2,779
$4,977 5,325 
Capitalized software, less accumulated amortization of $368 and $349
401 378 
Trade names, less accumulated amortization of $122 and $109
9 22 
Total other intangible assets, net$5,387 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 June 30, 2022:
(Dollars in millions)
As of December 31, 2021 (1)
$6,666 
Effect of foreign currency exchange rate changes(39)
As of June 30, 2022 (1)
$6,627 
_______________________________________________________________________________
(1)Goodwill at June 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 June 30, 2022 and 2021 totaled $186 million and $216 million, respectively, and for the six months ended June 30, 2022 and 2021, totaled $378 million and $427 million, respectively. As of June 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. As a result of reclassifying our Latin American business as being held for sale on our June 30, 2022 consolidated balance sheet, the amounts presented below do not include the future amortization of the intangible assets for the business to be divested. See Note 2—Recently Completed Divestiture of the Latin American Business for more information.
(Dollars in millions)
2022 (remaining six months)$367 
2023716 
2024712 
2025687 
2026643 
v3.22.2
Revenue Recognition
 6 Months Ended
Jun. 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 six months ended June 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:
Three Months Ended June 30, 2022Three Months Ended June 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$283 (126)157 283 (127)156 
IP and Data Services883 — 883 888 — 888 
Fiber Infrastructure Services403 (57)346 401 (55)346 
Voice and Other327 (4)323 357 (3)354 
Affiliate Services57 (57)— 56 (56)— 
Total revenue$1,953 (244)1,709 1,985 (241)1,744 

Six Months Ended June 30, 2022Six Months Ended June 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$560 (254)306 563 (254)309 
IP and Data Services1,769 — 1,769 1,769 — 1,769 
Fiber Infrastructure Services794 (111)683 798 (108)690 
Voice and Other663 (8)655 733 (5)728 
Affiliate Services113 (113)— 111 (111)— 
Total revenue$3,899 (486)3,413 3,974 (478)3,496 
_____________________________________________________________________
(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 June 30, 2022 and 2021, our gross rental income was $203 million and $202 million, which represents approximately 10% of our operating revenue for both periods. For the six months ended June 30, 2022 and 2021, our gross rental income was $406 million and $399 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 June 30, 2022 and December 31, 2021:
June 30, 2022December 31, 2021
(Dollars in millions)
Customer receivables (1)
$577 640 
Contract assets (2)
33 35 
Contract liabilities (3)
254 247 
_____________________________________________________________________
(1)Reflects gross customer receivables of $614 million and $679 million, net of allowance for credit losses of $37 million and $39 million, at June 30, 2022 and December 31, 2021, respectively. As of June 30, 2022 and December 31, 2021, these amounts exclude customer receivables reclassified as held for sale of $94 million and $83 million respectively.
(2)As of June 30, 2022 and December 31, 2021, no amounts have been reclassified as held for sale.
(3)As of June 30, 2022 and December 31, 2021, amounts exclude contract liabilities reclassified as held for sale of $59 million and $58 million respectively.

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 six months ended June 30, 2022, we recognized $23 million and $108 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 six months ended June 30, 2021, we recognized $28 million and $121 million, respectively, of revenue that was included in contract liabilities of $385 million as of January 1, 2021.

Performance Obligations

As of June 30, 2022, we expect to recognize approximately $3.7 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 84% 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 June 30, 2022Three Months Ended June 30, 2021
Acquisition Costs
Fulfillment Costs (1)
Acquisition CostsFulfillment Costs
(Dollars in millions)
Beginning of period balance$77 100 75 123 
Costs incurred14 22 15 23 
Amortization(13)(20)(15)(22)
Change in contract costs held for sale (1)
— (1)— — 
End of period balance$78 101 75 124 

Six Months Ended
June 30, 2022		Six Months Ended
June 30, 2021
Acquisition Costs
Fulfillment Costs (1)
Acquisition CostsFulfillment Costs
(Dollars in millions)
Beginning of period balance$76 99 78 122 
Costs incurred29 43 29 46 
Amortization(27)(40)(32)(44)
Change in contract costs held for sale (1)
— (1)— — 
End of period balance$78 101 75 124 
(1)The beginning balance for both the three and six months ended June 30, 2022 excluded fulfillment costs reclassified as held for sale of $27 million, respectively. The ending balance for June 30, 2022 excluded fulfillment costs reclassified as held for sale of $28 million.

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 an annual basis.
v3.22.2
Credit Losses on Financial Instruments
 6 Months Ended
Jun. 30, 2022
Credit Loss [Abstract]  
Credit Losses on Financial Instruments Credit Losses on Financial Instruments
In accordance with ASC 326, "Financial Instruments - Credit Losses," we aggregate financial assets with similar risk characteristics to align our expected credit losses with the credit quality or deterioration over the life of such assets. We periodically monitor certain risk characteristics within our aggregated financial assets and revise their composition accordingly, to the extent internal and external risk factors change. 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 the allowance for credit losses. The amount of credit loss is sensitive to changes in circumstances and forecasted economic conditions. Our historical credit loss experience, current conditions and forecast of economic conditions may also not be representative of the customers' actual default experience in the future and we may use methodologies that differ from those used by other companies.

The following table presents the activity of our allowance for credit losses for our accounts receivable portfolio:
(Dollars in millions)
Beginning balance at December 31, 2021
$39 
Provision for expected losses7 
Write-offs charged against the allowance(12)
Recoveries collected2 
Change in allowance in assets held for sale (1)
1 
Ending balance at June 30, 2022
$37 
(1)As of June 30, 2022 and December 31, 2021, amount excludes allowance for credit losses classified as held for sale of $2 million and $3 million, respectively. See Note 2—Recently Completed Divestiture of the Latin American Business.
v3.22.2
Long-Term Debt
 6 Months Ended
Jun. 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)
June 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
3,111 3,111 
Senior Notes and other debt:
Senior notes (4)
3.625% - 5.375%
2025 - 2029
5,515 5,515 
Finance leases and other obligationsVariousVarious308 319 
Unamortized premiums, net30 34 
Unamortized debt issuance costs(53)(57)
Total long-term debt10,411 10,422 
Less current maturities(28)(26)
Long-term debt, excluding current maturities$10,383 10,396 
______________________________________________________________________
(1)As of June 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 parent or subsidiary guarantees and liens securing this debt.
(3)The Tranche B 2027 Term Loan had an interest rate of 3.416% and 1.854% as of June 30, 2022 and December 31, 2021, respectively.
(4)This debt is fully and unconditionally guaranteed by certain affiliates of Level 3 Financing, Inc., including Level 3 Parent, LLC and Level 3 Communications, LLC.

Long-Term Debt Maturities

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

(Dollars in millions)
2022 (remaining six months)$17 
202327 
202432 
2025838 
2026811 
2027 and thereafter8,709 
Total long-term debt$10,434 
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 June 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
Fair Value of Financial Instruments
 6 Months Ended
Jun. 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. 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 June 30, 2022 and December 31, 2021, as well as the input level used to determine the fair values indicated below:
June 30, 2022December 31, 2021
Input LevelCarrying AmountFair ValueCarrying AmountFair Value
(Dollars in millions)
Liabilities-Long-term debt, excluding finance leases2$10,103 8,867 10,103 10,090 
v3.22.2
Commitments, Contingencies and Other Items
 6 Months Ended
Jun. 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 June 30, 2022 aggregated to approximately $44 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.

Telephone Consumer Protection Act Litigation

In December 2020, Lumen was named as a defendant in Diana Mey v. CenturyLink Communications, LLC, et al., an action pending in the US District Court for the Northern District of West Virginia alleging violations of the Telephone Consumer Protection Act for delivering unsolicited calls to her mobile phone. She asserts claims on behalf of herself and a putative class of similarly situated persons. The complaint seeks damages, statutory awards, costs and fees, and other relief. We are defending the claims asserted.

Peruvian Tax Litigation

In 2005, the Peruvian tax authorities ("SUNAT") issued tax assessments against one of our Peruvian subsidiaries asserting $26 million of additional income tax withholding and value-added taxes ("VAT"), penalties and interest for calendar years 2001 and 2002 on the basis that the Peruvian subsidiary incorrectly documented its importations. In May 2021, the Company paid the remaining amount on the fractioning regimes entered into by the Company to pay the amount assessed while it was appealed.

We challenged the assessments via administrative and then judicial review processes. In October 2011, the highest administrative review tribunal (the Tribunal) decided the central issue underlying the 2002 assessments in SUNAT's favor. We appealed the Tribunal's decision to the first judicial level, which decided the central issue in favor of Level 3. SUNAT and we filed cross-appeals with the court of appeal. In May 2017, the court of appeal issued a decision reversing the first judicial level. In June 2017, we filed an appeal of the decision to the Supreme Court of Justice, the final judicial level. Oral argument was held before the Supreme Court of Justice in October 2018. A decision on this case is pending.

In October 2013, the Tribunal decided the central issue underlying the 2001 assessments in SUNAT’s favor. We appealed that decision to the first judicial level in Peru, which decided the central issue in favor of SUNAT. In June 2017, we filed an appeal with the court of appeals. In November 2017, the court of appeals issued a decision affirming the first judicial level and we filed an appeal of that decision to the Supreme Court of Justice. In May 2021, the Supreme Court of Justice issued its final decision in favor of the Company. The Company provided additional information to SUNAT regarding 2001 tax payments and, in June 2022, SUNAT notified the Company of its decision regarding the 2001 refund amount. In July 2022, the Company appealed that decision to the Tax Court. The appeal is pending.
Brazilian Tax Claims

The São Paulo and Rio de Janeiro state tax authorities have issued tax assessments against our Brazilian subsidiaries for the Tax on Distribution of Goods and Services (“ICMS”), mainly with respect to revenue from leasing certain assets and revenue from the provision of Internet access services by treating such activities as the provision of communications services, to which the ICMS tax applies. We filed objections to these assessments in both states, arguing, among other things that neither the lease of assets nor the provision of Internet access qualifies as “communication services” subject to ICMS.

We have appealed to the respective state judicial courts the decisions by the respective state administrative courts that rejected our objections to these assessments. In cases in which state lower courts ruled partially in our favor finding that the lease assets are not subject to ICMS, the State appealed those rulings. In other cases, the assessment was affirmed at the first administrative level and we have appealed to the second administrative level. Other assessments are still pending state judicial decisions.

We are vigorously contesting all such assessments in both states and view the assessment of ICMS on revenue from equipment leasing and Internet access to be without merit. We believe these assessments, if upheld, could result in a loss of up to $51 million as of June 30, 2022, in excess of the reserved accruals established for these matters.

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
Accumulated Other Comprehensive Loss
 6 Months Ended
Jun. 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 six months ended June 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— (115)(115)
Net other comprehensive loss— (115)(115)
Balance at June 30, 2022$3 (469)(466)

The table below summarizes changes in accumulated other comprehensive loss recorded on our consolidated balance sheets by component for the six months ended June 30, 2021:
Pension PlansForeign Currency Translation Adjustment and OtherTotal
(Dollars in millions)
Balance at December 31, 2020$(13)(221)(234)
Other comprehensive loss, net of tax— (8)(8)
Net other comprehensive loss— (8)(8)
Balance at June 30, 2021$(13)(229)(242)
v3.22.2
Other Financial Information
 6 Months Ended
Jun. 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:

June 30, 2022December 31, 2021
(Dollars in millions)
Prepaid expenses$132 109 
Contract fulfillment costs49 48 
Contract acquisition costs46 45 
Contract assets26 28 
Other10 9 
Total other current assets$263 239 
_______________________________________________________________________________
(1)As of June 30, 2022 and December 31, 2021, other current assets excludes $79 million and $81 million respectively, that have been reclassified as held for sale.
v3.22.2
Subsequent Events
 6 Months Ended
Jun. 30, 2022
Subsequent Events [Abstract]  
Subsequent Events Subsequent Events
Divestiture of the Latin American Business

On August 1, 2022, we completed the sale of our Latin American business to an affiliate of a fund advised by Stonepeak Partners LP in exchange for cash proceeds of approximately $2.7 billion subject to certain post-closing adjustments. We expect to recognize a gain on the transaction in operating income during the third quarter of 2022. In connection with the sale, Lumen has entered into a transition services agreement under which it will provide to the purchaser various support services and certain long-term agreements under which Lumen and the purchaser will provide to each other various network and other commercial services.

Distributions to Parent

As of the date of this report, $75 million of distributions were made to our parent in the third quarter of 2022.

Tender Offer and Consent Solicitation

On July 25, 2022, Lumen initiated a tender offer to repurchase (i) any and all of $1.575 billion aggregate principal amount of certain of our outstanding Level 3 Financing, Inc. senior notes and (ii) certain other Lumen Technologies, Inc. and affiliated subsidiary senior notes, subject to certain repurchase caps and sublimits and various other terms and conditions. This offer, which was made pursuant to an Offer to Purchase and Consent Solicitation Statement dated July 25, 2022, has an early tender date of August 5, 2022, and will expire on August 19, 2022, unless extended. In addition, we announced a consent solicitation to eliminate substantially all of the restrictive covenants, eliminate certain events of default, and modify certain redemption notice requirements contained in the respective indentures for Level 3 senior notes subject to the tender offer.

Debt Repayment

On August 3, 2022, we repaid approximately $700 million aggregate principal amount of our Tranche B 2027 Term Loan.
v3.22.2
Background (Policies)
 6 Months Ended
Jun. 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 six months of the year are not necessarily indicative of the consolidated results of operations and cash flows that might be expected for the entire year. These consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 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 June 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 March 2022, the Financial Accounting Standards Board ("FASB") issued ASU 2022-02, “Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings (“TDR”) and Vintage Disclosures” (“ASU 2022-02”). These amendments eliminate the TDR recognition and measurement guidance, enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. ASU 2020-02 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of June 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 2020-01 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of June 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 June 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 option guidance for a limited time to ease the potential burden in accounting for reference rate reform. Based on our review of our key material contracts through June 30, 2022, we do not expect ASU 2021-01 to 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 In accordance with ASC 326, "Financial Instruments - Credit Losses," we aggregate financial assets with similar risk characteristics to align our expected credit losses with the credit quality or deterioration over the life of such assets. We periodically monitor certain risk characteristics within our aggregated financial assets and revise their composition accordingly, to the extent internal and external risk factors change. 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
Divestiture of Latin American Business (Tables)
 6 Months Ended
Jun. 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 June 30,Six Months Ended June 30,
2022202120222021
(Dollars in millions)
Pre-tax net income $95 47 178 75 
The principal components of the held for sale assets and liabilities as of the dates below are as follows:

June 30, 2022December 31, 2021
(Dollars in millions)
Assets held for sale
Cash and cash equivalents$48 39 
Accounts receivable, less allowance of $2 and $3
94 83 
Other current assets79 81 
Property, plant and equipment, net accumulated depreciation of $431 and $434
1,714 1,591 
Goodwill (1)
720 713 
Customer relationships and other intangibles, net130 126 
Other non-current assets80 75 
Total assets held for sale$2,865 2,708 
Liabilities held for sale
Accounts payable$110 101 
Salaries and benefits21 23 
Income and other taxes37 27 
Current portion of deferred revenue27 26 
Other current liabilities7 7 
Deferred income taxes, net149 129 
Other non-current liabilities128 122 
Total liabilities held for sale$479 435 
______________________________________________________________________
(1)    The assignment of goodwill was based on the relative fair value of the disposal group and the portion of the remaining reporting unit.
v3.22.2
Goodwill, Customer Relationships and Other Intangible Assets (Tables)
 6 Months Ended
Jun. 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:
June 30, 2022December 31, 2021
(Dollars in millions)
Goodwill$6,627 6,666 
Customer relationships, less accumulated amortization of $3,096 and $2,779
$4,977 5,325 
Capitalized software, less accumulated amortization of $368 and $349
401 378 
Trade names, less accumulated amortization of $122 and $109
9 22 
Total other intangible assets, net$5,387 5,725 
Schedule of goodwill
The following table shows the rollforward of goodwill from December 31, 2021 through June 30, 2022:
(Dollars in millions)
As of December 31, 2021 (1)
$6,666 
Effect of foreign currency exchange rate changes(39)
As of June 30, 2022 (1)
$6,627 
_______________________________________________________________________________
(1)Goodwill at June 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. As a result of reclassifying our Latin American business as being held for sale on our June 30, 2022 consolidated balance sheet, the amounts presented below do not include the future amortization of the intangible assets for the business to be divested. See Note 2—Recently Completed Divestiture of the Latin American Business for more information.
(Dollars in millions)
2022 (remaining six months)$367 
2023716 
2024712 
2025687 
2026643 
v3.22.2
Revenue Recognition (Tables)
 6 Months Ended
Jun. 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 six months ended June 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:
Three Months Ended June 30, 2022Three Months Ended June 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$283 (126)157 283 (127)156 
IP and Data Services883 — 883 888 — 888 
Fiber Infrastructure Services403 (57)346 401 (55)346 
Voice and Other327 (4)323 357 (3)354 
Affiliate Services57 (57)— 56 (56)— 
Total revenue$1,953 (244)1,709 1,985 (241)1,744 

Six Months Ended June 30, 2022Six Months Ended June 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$560 (254)306 563 (254)309 
IP and Data Services1,769 — 1,769 1,769 — 1,769 
Fiber Infrastructure Services794 (111)683 798 (108)690 
Voice and Other663 (8)655 733 (5)728 
Affiliate Services113 (113)— 111 (111)— 
Total revenue$3,899 (486)3,413 3,974 (478)3,496 
_____________________________________________________________________
(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 June 30, 2022 and December 31, 2021:
June 30, 2022December 31, 2021
(Dollars in millions)
Customer receivables (1)
$577 640 
Contract assets (2)
33 35 
Contract liabilities (3)
254 247 
_____________________________________________________________________
(1)Reflects gross customer receivables of $614 million and $679 million, net of allowance for credit losses of $37 million and $39 million, at June 30, 2022 and December 31, 2021, respectively. As of June 30, 2022 and December 31, 2021, these amounts exclude customer receivables reclassified as held for sale of $94 million and $83 million respectively.
(2)As of June 30, 2022 and December 31, 2021, no amounts have been reclassified as held for sale.
(3)As of June 30, 2022 and December 31, 2021, amounts exclude contract liabilities reclassified as held for sale of $59 million and $58 million respectively.
Capitalized contract cost
The following table provides changes in our contract acquisition costs and fulfillment costs:
Three Months Ended June 30, 2022Three Months Ended June 30, 2021
Acquisition Costs
Fulfillment Costs (1)
Acquisition CostsFulfillment Costs
(Dollars in millions)
Beginning of period balance$77 100 75 123 
Costs incurred14 22 15 23 
Amortization(13)(20)(15)(22)
Change in contract costs held for sale (1)
— (1)— — 
End of period balance$78 101 75 124 

Six Months Ended
June 30, 2022		Six Months Ended
June 30, 2021
Acquisition Costs
Fulfillment Costs (1)
Acquisition CostsFulfillment Costs
(Dollars in millions)
Beginning of period balance$76 99 78 122 
Costs incurred29 43 29 46 
Amortization(27)(40)(32)(44)
Change in contract costs held for sale (1)
— (1)— — 
End of period balance$78 101 75 124 
(1)The beginning balance for both the three and six months ended June 30, 2022 excluded fulfillment costs reclassified as held for sale of $27 million, respectively. The ending balance for June 30, 2022 excluded fulfillment costs reclassified as held for sale of $28 million.
v3.22.2
Credit Losses on Financial Instruments (Tables)
 6 Months Ended
Jun. 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
$39 
Provision for expected losses7 
Write-offs charged against the allowance(12)
Recoveries collected2 
Change in allowance in assets held for sale (1)
1 
Ending balance at June 30, 2022
$37 
(1)As of June 30, 2022 and December 31, 2021, amount excludes allowance for credit losses classified as held for sale of $2 million and $3 million, respectively. See Note 2—Recently Completed Divestiture of the Latin American Business
v3.22.2
Long-Term Debt (Tables)
 6 Months Ended
Jun. 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)
June 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
3,111 3,111 
Senior Notes and other debt:
Senior notes (4)
3.625% - 5.375%
2025 - 2029
5,515 5,515 
Finance leases and other obligationsVariousVarious308 319 
Unamortized premiums, net30 34 
Unamortized debt issuance costs(53)(57)
Total long-term debt10,411 10,422 
Less current maturities(28)(26)
Long-term debt, excluding current maturities$10,383 10,396 
______________________________________________________________________
(1)As of June 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 parent or subsidiary guarantees and liens securing this debt.
(3)The Tranche B 2027 Term Loan had an interest rate of 3.416% and 1.854% as of June 30, 2022 and December 31, 2021, respectively.
(4)This debt is fully and unconditionally guaranteed by certain affiliates of Level 3 Financing, Inc., including Level 3 Parent, LLC and Level 3 Communications, LLC.
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 June 30, 2022 (excluding unamortized premiums, net, unamortized debt issuance costs, and intercompany debt), maturing during the following years:
(Dollars in millions)
2022 (remaining six months)$17 
202327 
202432 
2025838 
2026811 
2027 and thereafter8,709 
Total long-term debt$10,434 
v3.22.2
Fair Value of Financial Instruments (Tables)
 6 Months Ended
Jun. 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 June 30, 2022 and December 31, 2021, as well as the input level used to determine the fair values indicated below:
June 30, 2022December 31, 2021
Input LevelCarrying AmountFair ValueCarrying AmountFair Value
(Dollars in millions)
Liabilities-Long-term debt, excluding finance leases2$10,103 8,867 10,103 10,090 
v3.22.2
Accumulated Other Comprehensive Loss (Tables)
 6 Months Ended
Jun. 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 six months ended June 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— (115)(115)
Net other comprehensive loss— (115)(115)
Balance at June 30, 2022$3 (469)(466)

The table below summarizes changes in accumulated other comprehensive loss recorded on our consolidated balance sheets by component for the six months ended June 30, 2021:
Pension PlansForeign Currency Translation Adjustment and OtherTotal
(Dollars in millions)
Balance at December 31, 2020$(13)(221)(234)
Other comprehensive loss, net of tax— (8)(8)
Net other comprehensive loss— (8)(8)
Balance at June 30, 2021$(13)(229)(242)
v3.22.2
Other Financial Information (Tables)
 6 Months Ended
Jun. 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:

June 30, 2022December 31, 2021
(Dollars in millions)
Prepaid expenses$132 109 
Contract fulfillment costs49 48 
Contract acquisition costs46 45 
Contract assets26 28 
Other10 9 
Total other current assets$263 239 
_______________________________________________________________________________
(1)As of June 30, 2022 and December 31, 2021, other current assets excludes $79 million and $81 million respectively, that have been reclassified as held for sale.
v3.22.2
Background - Basis of Presentation (Details) - USD ($)
$ in Millions
Jun. 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 $ 353 $ 299
Operating lease liabilities 1,134 953
Affiliates    
Lessee, Lease, Description [Line Items]    
Operating lease assets 418 294
Current operating lease liabilities 112 82
Operating lease liabilities $ 317 $ 224
v3.22.2
Background - Segments (Details)
 6 Months Ended
Jun. 30, 2022
segment
Accounting Policies [Abstract]  
Number of reportable segments 1
v3.22.2
Divestiture of Latin American Business - Additional Information (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2022
Jun. 30, 2021
Jun. 30, 2022
Jun. 30, 2021
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]        
Depreciation and amortization $ 405 $ 436 $ 801 $ 873
Disposal Group, Held-for-sale, Not Discontinued Operations        
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]        
Depreciation and amortization $ 48   $ 97  
v3.22.2
Divestiture of Latin American Business - Pre-tax Net Income (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2022
Jun. 30, 2021
Jun. 30, 2022
Jun. 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 $ 95 $ 47 $ 178 $ 75
v3.22.2
Divestiture of Latin American Business - Components of Held for Sale Assets and Liabilities (Details) - USD ($)
$ in Millions
Jun. 30, 2022
Dec. 31, 2021
Jun. 30, 2021
Assets held for sale      
Cash and cash equivalents $ 48   $ 0
Other current assets reclassified as held for sale 79 $ 81  
Disposal Group, Held-for-sale, Not Discontinued Operations      
Liabilities held for sale      
Allowance for doubtful accounts 2 3  
Disposal Group, Held-for-sale, Not Discontinued Operations | Latin American Business      
Assets held for sale      
Cash and cash equivalents 48 39  
Accounts receivable, less allowance of $2 and $3 94 83  
Other current assets reclassified as held for sale 79 81  
Property, plant and equipment, net accumulated depreciation of $431 and $434 1,714 1,591  
Goodwill 720 713  
Customer relationships and other intangibles, net 130 126  
Other non-current assets 80 75  
Total assets held for sale 2,865 2,708  
Liabilities held for sale      
Accounts payable 110 101  
Salaries and benefits 21 23  
Income and other taxes 37 27  
Current portion of deferred revenue 27 26  
Other current liabilities 7 7  
Deferred income taxes, net 149 129  
Other non-current liabilities 128 122  
Total liabilities held for sale 479 435  
Allowance for doubtful accounts 2 3  
Accumulated depreciation $ 431 $ 434  
v3.22.2
Goodwill, Customer Relationships and Other Intangible Assets - Schedule of Goodwill and Other Intangible Assets (Details) - USD ($)
$ in Millions
Jun. 30, 2022
Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]    
Goodwill $ 6,627 $ 6,666
Other intangible assets, net 5,387 5,725
Customer relationships    
Finite-Lived Intangible Assets [Line Items]    
Other intangible assets, net 4,977 5,325
Accumulated amortization 3,096 2,779
Capitalized software    
Finite-Lived Intangible Assets [Line Items]    
Other intangible assets, net 401 378
Accumulated amortization 368 349
Trade names    
Finite-Lived Intangible Assets [Line Items]    
Other intangible assets, net 9 22
Accumulated amortization $ 122 $ 109
v3.22.2
Goodwill, Customer Relationships and Other Intangible Assets - Additional Information (Details)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2022
USD ($)
Jun. 30, 2021
USD ($)
Jun. 30, 2022
USD ($)
reporting_unit
Jun. 30, 2021
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]        
Number of reporting units | reporting_unit     1  
Acquired finite-lived intangible asset amortization expense $ 186 $ 216 $ 378 $ 427
Intangible assets, gross, including goodwill $ 15,600   $ 15,600  
v3.22.2
Goodwill, Customer Relationships and Other Intangible Assets - Goodwill Activity (Details) - USD ($)
$ in Millions
 6 Months Ended
Jun. 30, 2022
Dec. 31, 2021
Goodwill [Roll Forward]    
As of December 31, 2021 $ 6,666  
Effect of foreign currency exchange rate changes (39)  
As of June 30, 2022 6,627  
Goodwill, accumulated impairment loss $ 3,600 $ 3,600
v3.22.2
Goodwill, Customer Relationships and Other Intangible Assets - Amortization Expense (Details)
$ in Millions
Jun. 30, 2022
USD ($)
Estimated amortization expense of finite-lived acquisition-related intangible assets  
2022 (remaining six months) $ 367
2023 716
2024 712
2025 687
2026 $ 643
v3.22.2
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2022
Jun. 30, 2021
Jun. 30, 2022
Jun. 30, 2021
Disaggregation of Revenue [Line Items]        
Total revenues $ 1,953 $ 1,985 $ 3,899 $ 3,974
Adjustments for non-ASC 606 revenue (244) (241) (486) (478)
Total revenue from contracts with customers 1,709 1,744 3,413 3,496
Compute and Application Services        
Disaggregation of Revenue [Line Items]        
Total revenues 283 283 560 563
Adjustments for non-ASC 606 revenue (126) (127) (254) (254)
Total revenue from contracts with customers 157 156 306 309
IP and Data Services        
Disaggregation of Revenue [Line Items]        
Total revenues 883 888 1,769 1,769
Adjustments for non-ASC 606 revenue 0 0 0 0
Total revenue from contracts with customers 883 888 1,769 1,769
Fiber Infrastructure Services        
Disaggregation of Revenue [Line Items]        
Total revenues 403 401 794 798
Adjustments for non-ASC 606 revenue (57) (55) (111) (108)
Total revenue from contracts with customers 346 346 683 690
Voice and Other        
Disaggregation of Revenue [Line Items]        
Total revenues 327 357 663 733
Adjustments for non-ASC 606 revenue (4) (3) (8) (5)
Total revenue from contracts with customers 323 354 655 728
Affiliate Services        
Disaggregation of Revenue [Line Items]        
Total revenues 57 56 113 111
Adjustments for non-ASC 606 revenue (57) (56) (113) (111)
Total revenue from contracts with customers $ 0 $ 0 $ 0 $ 0
v3.22.2
Revenue Recognition - Operating Lease Income (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2022
Jun. 30, 2021
Jun. 30, 2022
Jun. 30, 2021
Revenue from Contract with Customer [Abstract]        
Rental income $ 203 $ 202 $ 406 $ 399
Percent of operating revenue 10.00% 10.00% 10.00% 10.00%
v3.22.2
Revenue Recognition - Customer Receivables and Contract Balances (Details) - USD ($)
$ in Millions
Jun. 30, 2022
Jan. 01, 2022
Dec. 31, 2021
Jan. 01, 2021
Capitalized Contract Cost [Line Items]        
Customer receivables $ 577   $ 640  
Contract assets 33   35  
Contract liabilities 254 $ 305 247 $ 385
Accounts receivable, gross 614   679  
Allowance for credit losses 37   39  
Disposal Group, Held-for-sale, Not Discontinued Operations        
Capitalized Contract Cost [Line Items]        
Customer receivables 94   83  
Contract assets 0   0  
Contract liabilities $ 59   $ 58  
v3.22.2
Revenue Recognition - Additional Information - Customer Receivables and Contract Balances (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2022
Jun. 30, 2021
Jun. 30, 2022
Jun. 30, 2021
Jan. 01, 2022
Dec. 31, 2021
Jan. 01, 2021
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]              
Revenue recognized $ 23 $ 28 $ 108 $ 121      
Contract liabilities $ 254   $ 254   $ 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
Revenue Recognition - Additional Information - Remaining Performance Obligation (Details)
$ in Billions
Jun. 30, 2022
USD ($)
Revenue from Contract with Customer [Abstract]  
Remaining performance obligation $ 3.7
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation, percentage 84.00%
Expected timing of satisfaction, period 2 years 6 months
v3.22.2
Revenue Recognition - Contract Cost (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2022
Jun. 30, 2021
Jun. 30, 2022
Jun. 30, 2021
Acquisition Costs        
Capitalized Contract Cost [Roll Forward]        
Beginning of period balance $ 77 $ 75 $ 76 $ 78
Costs incurred 14 15 29 29
Amortization (13) (15) (27) (32)
Change in contract costs held for sale (1) 0 0 0 0
End of period balance 78 75 78 75
Fulfillment Costs (1)        
Capitalized Contract Cost [Roll Forward]        
Beginning of period balance 100 123 99 122
Costs incurred 22 23 43 46
Amortization (20) (22) (40) (44)
Change in contract costs held for sale (1) (1) 0 (1) 0
End of period balance 101 124 101 124
Fulfillment Costs (1) | Discontinued Operations, Held-for-sale        
Capitalized Contract Cost [Roll Forward]        
Beginning of period balance $ 27   $ 27  
End of period balance   $ 28   $ 28
v3.22.2
Revenue Recognition - Additional Information - Contract Costs (Details)
 6 Months Ended
Jun. 30, 2022
Business Customers | Weighted Average  
Contract Costs [Line Items]  
Length of customer life 34 months
v3.22.2
Credit Losses on Financial Instruments (Details) - USD ($)
$ in Millions
 6 Months Ended
Jun. 30, 2022
Dec. 31, 2021
Financing Receivable, Allowance for Credit Loss [Roll Forward]    
Beginning balance at December 31, 2021 $ 39  
Provision for expected losses 7  
Write-offs charged against the allowance (12)  
Recoveries collected 2  
Change in allowance in assets held for sale (1) 1  
Ending balance at June 30, 2022 37  
Disposal Group, Held-for-sale, Not Discontinued Operations    
Financing Receivable, Allowance for Credit Loss [Roll Forward]    
Allowance for doubtful accounts $ 2 $ 3
v3.22.2
Long-Term Debt - Schedule of Long Term Debt (Details) - USD ($)
$ in Millions
 6 Months Ended
Jun. 30, 2022
Dec. 31, 2021
Long-term debt    
Long-term debt, gross $ 10,434  
Unamortized premiums, net 30 $ 34
Unamortized debt issuance costs (53) (57)
Long-term Debt and Lease Obligation, Including Current Maturities, Total 10,411 10,422
Less current maturities (28) (26)
Long-term debt, excluding current maturities 10,383 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 2025-2029    
Long-term debt    
Long-term debt, gross $ 5,515 5,515
Senior notes | Senior Notes Maturing 2025-2029 | Minimum    
Long-term debt    
Stated interest rate 3.625%  
Senior notes | Senior Notes Maturing 2025-2029 | Maximum    
Long-term debt    
Stated interest rate 5.375%  
Term loan | Tranche B 2027 Term Loan    
Long-term debt    
Long-term debt, gross $ 3,111 $ 3,111
Effective percentage 3.416% 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 $ 308 $ 319
v3.22.2
Long-Term Debt - Debt Maturities (Details)
$ in Millions
Jun. 30, 2022
USD ($)
Debt Disclosure [Abstract]  
2022 (remaining six months) $ 17
2023 27
2024 32
2025 838
2026 811
2027 and thereafter 8,709
Total long-term debt $ 10,434
v3.22.2
Long-Term Debt - Additional Information (Details)
 6 Months Ended
Jun. 30, 2022
Long-term debt  
Redemption price, percentage 101.00%
v3.22.2
Fair Value of Financial Instruments (Details) - Fair Value, Measurements, Recurring - Significant Other Observable Inputs (Level 2) - USD ($)
$ in Millions
Jun. 30, 2022
Dec. 31, 2021
Carrying Amount    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis    
Liabilities-Long-term debt, excluding finance leases $ 10,103 $ 10,103
Fair Value    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis    
Liabilities-Long-term debt, excluding finance leases $ 8,867 $ 10,090
v3.22.2
Commitments, Contingencies and Other Items (Details)
 6 Months Ended
Jun. 30, 2022
USD ($)
subsidiary
patent
Loss Contingencies [Line Items]  
Estimated litigation liability $ 44,000,000
Number of patents allegedly infringed | patent 1
Unfavorable Regulatory Action  
Loss Contingencies [Line Items]  
Estimate of possible loss $ 300,000
Peruvian Tax Litigation, Before Interest | Pending Litigation  
Loss Contingencies [Line Items]  
Number of subsidiaries with tax assessment | subsidiary 1
Asserted claim $ 26,000,000
Brazilian Tax Claims | Maximum  
Loss Contingencies [Line Items]  
Estimate of possible loss $ 51,000,000
v3.22.2
Accumulated Other Comprehensive Loss (Details) - USD ($)
$ in Millions
 6 Months Ended
Jun. 30, 2022
Jun. 30, 2021
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Balance at beginning of period $ 13,009  
Other comprehensive loss, net of tax (115) $ (8)
Net other comprehensive loss (115) (8)
Balance at end of period 12,552 13,170
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
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 (115) (8)
Net other comprehensive loss (115) (8)
Balance at end of period (469) (229)
Total    
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Balance at beginning of period (351) (234)
Balance at end of period $ (466) $ (242)
v3.22.2
Other Financial Information (Details) - USD ($)
$ in Millions
Jun. 30, 2022
Dec. 31, 2021
Prepaid Expense and Other Assets, Current [Abstract]    
Prepaid expenses $ 132 $ 109
Contract assets 26 28
Other 10 9
Total other current assets 263 239
Other current assets reclassified as held for sale 79 81
Fulfillment Costs (1)    
Prepaid Expense and Other Assets, Current [Abstract]    
Contract costs 49 48
Acquisition Costs    
Prepaid Expense and Other Assets, Current [Abstract]    
Contract costs $ 46 $ 45
v3.22.2
Subsequent Events (Details) - USD ($)
$ in Millions
 1 Months Ended 6 Months Ended
Aug. 03, 2022
Aug. 04, 2022
Jun. 30, 2022
Jun. 30, 2021
Aug. 01, 2022
Jul. 25, 2022
Subsequent Event [Line Items]            
Payments of long-term debt     $ 64 $ 925    
Subsequent Event            
Subsequent Event [Line Items]            
Payments of Distributions to Affiliates   $ 75        
Subsequent Event | Level 3 Parent, LLC            
Subsequent Event [Line Items]            
Debt Instrument, Repurchase Amount           $ 1,575
Subsequent Event | Level 3 Financing, Inc. | Tranche B 2027 Term Loan | Term loan            
Subsequent Event [Line Items]            
Payments of long-term debt $ 700          
Subsequent Event | Disposal Group, Held-for-sale, Not Discontinued Operations | Latin American Business | Level 3 Parent, LLC            
Subsequent Event [Line Items]            
Cash consideration for disposal of business         $ 2,700