LEVEL 3 PARENT, LLC, 10-K filed on 2/23/2023
Annual Report
v3.22.4
Cover - USD ($)
 12 Months Ended
Dec. 31, 2022
Jun. 30, 2022
Cover [Abstract]    
Document Type 10-K  
Document Annual Report true  
Document Period End Date Dec. 31, 2022  
Current Fiscal Year End Date --12-31  
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 Well-known Seasoned Issuer No  
Entity Voluntary Filers Yes  
Entity Current Reporting Status No  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
ICFR Auditor Attestation Flag false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding 0  
Documents Incorporated by Reference DOCUMENTS INCORPORATED BY REFERENCE: None.  
Entity Public Float   $ 0
Entity Central Index Key 0000794323  
Amendment Flag false  
Document Fiscal Year Focus 2022  
Document Fiscal Period Focus FY  
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Audit Information
 12 Months Ended
Dec. 31, 2022
Audit Information [Abstract]  
Auditor Name KPMG LLP
Auditor Location Denver, Colorado
Auditor Firm ID 185
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CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Revenues [Abstract]      
Total operating revenue $ 7,493 $ 7,952 $ 7,933
OPERATING EXPENSES      
Cost of services and products (exclusive of depreciation and amortization) 3,229 3,525 3,486
Selling, general and administrative 1,188 1,181 1,226
Gain on sale of business (123) 0 0
Loss on disposal group held for sale 616 0 0
Operating expenses - affiliates 659 497 368
Depreciation and amortization 1,534 1,717 1,689
Goodwill impairment 4,638 0 0
Total operating expenses 11,741 6,920 6,769
OPERATING (LOSS) INCOME (4,248) 1,032 1,164
OTHER (EXPENSE) INCOME      
Interest income - affiliate 62 65 51
Interest expense (374) (361) (393)
Other income, net 23 47 50
Total other expense, net (289) (249) (292)
(LOSS) INCOME BEFORE INCOME TAXES (4,537) 783 872
Income tax expense 256 197 221
NET (LOSS) INCOME (4,793) 586 651
Non-Affiliate Services      
Revenues [Abstract]      
Total operating revenue 7,266 7,729 7,725
Affiliate Services      
Revenues [Abstract]      
Total operating revenue $ 227 $ 223 $ 208
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Statement of Comprehensive Income [Abstract]      
NET (LOSS) INCOME $ (4,793) $ 586 $ 651
OTHER COMPREHENSIVE INCOME (LOSS)      
Reclassification of realized loss on foreign currency translation to gain on sale of business, net of $—, $—, and $— tax 112 0 0
Defined benefit pension plan adjustment, net of $—, $— and $— tax 18 16 (15)
Foreign currency translation adjustment, net of $58, $30 and $(43) tax (123) (133) (40)
Other comprehensive income (loss), net of tax 7 (117) (55)
COMPREHENSIVE (LOSS) INCOME $ (4,786) $ 469 $ 596
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Parenthetical) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Statement of Comprehensive Income [Abstract]      
Reclassification of realized loss on foreign currency translation to gain on sale of business, tax $ 0 $ 0 $ 0
Defined benefit pension plan adjustment, tax effect 0 0 0
Foreign currency translation adjustment, tax $ 58 $ 30 $ (43)
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CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Millions
Dec. 31, 2022
Dec. 31, 2021
CURRENT ASSETS    
Cash and cash equivalents $ 118 $ 146
Accounts receivable, less allowance of $19 and $39 517 642
Note receivable - affiliate 1,468 1,468
Assets held for sale 1,853 2,708
Other 197 239
Total current assets 4,153 5,203
Property, plant and equipment, net of accumulated depreciation $2,875 and $3,202 7,303 9,042
GOODWILL AND OTHER ASSETS    
Goodwill 1,970 6,666
Other intangible assets, net 4,973 5,725
Other, net 1,360 1,459
Total goodwill and other assets 8,303 13,850
TOTAL ASSETS 19,759 28,095
CURRENT LIABILITIES    
Current maturities of long-term debt 26 26
Accounts payable 365 381
Accounts payable - affiliates 70 18
Accrued expenses and other liabilities    
Salaries and benefits 146 176
Income and other taxes 86 83
Current operating lease liabilities 326 299
Other 109 150
Liabilities held for sale 446 435
Current portion of deferred revenue 274 291
Total current liabilities 1,848 1,859
LONG-TERM DEBT 8,070 10,396
DEFERRED REVENUE AND OTHER LIABILITIES    
Deferred revenue 1,420 1,404
Operating lease liabilities 922 953
Other 701 474
Total deferred revenue and other liabilities 3,043 2,831
COMMITMENTS AND CONTINGENCIES (Note 16)
MEMBER'S EQUITY    
Member's equity 7,142 13,360
Accumulated other comprehensive loss (344) (351)
Total member's equity 6,798 13,009
TOTAL LIABILITIES AND MEMBER'S EQUITY $ 19,759 $ 28,095
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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Millions
Dec. 31, 2022
Dec. 31, 2021
Statement of Financial Position [Abstract]    
Allowance for doubtful accounts $ 19 $ 39
Accumulated depreciation $ 2,875 $ 3,202
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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
OPERATING ACTIVITIES      
Net (loss) income $ (4,793) $ 586 $ 651
Adjustments to reconcile net (loss) income to net cash provided by operating activities:      
Depreciation and amortization 1,534 1,717 1,689
Gain on sale of business (123) 0 0
Loss on disposal group held for sale 616 0 0
Goodwill impairment 4,638 0 0
Deferred income taxes 209 166 175
Changes in current assets and liabilities:      
Accounts receivable 10 (72) (63)
Accounts payable (19) (37) (218)
Other assets and liabilities, net (131) (97) (159)
Other assets and liabilities, affiliate 73 (846) 108
Changes in other noncurrent assets and liabilities, net 143 150 71
Other, net 94 3 30
Net cash provided by operating activities 2,251 1,570 2,284
INVESTING ACTIVITIES      
Capital expenditures (1,198) (1,218) (1,432)
Proceeds from sale of business 2,732 0 0
Collections on notes receivable - affiliates 0 0 122
Proceeds from sale of property, plant and equipment and other assets 2 52 137
Net cash provided by (used in) investing activities 1,536 (1,166) (1,173)
FINANCING ACTIVITIES      
Net proceeds from issuance of long-term debt 0 891 2,020
Distributions (1,425) (365) (1,200)
Payments of long-term debt (2,387) (943) (2,060)
Other (2) (1) (4)
Net cash used in financing activities (3,814) (418) (1,244)
Net decrease in cash, cash equivalents and restricted cash (27) (14) (133)
Cash, cash equivalents and restricted cash at beginning of period 191 205 338
Cash, cash equivalents and restricted cash at end of period 164 191 205
Supplemental cash flow information:      
Income taxes paid, net (10) (27) (24)
Interest paid (net of capitalized interest of $16, $15 and $23) (387) (368) (382)
Cash, cash equivalents and restricted cash:      
Cash and cash equivalents 118 146 190
Cash and cash equivalents, and restricted cash included in assets held for sale 44 39 0
Restricted cash included in Other current assets 0 2 3
Restricted cash included in Other, net noncurrent assets 2 4 12
Total $ 164 $ 191 $ 205
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CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Statement of Cash Flows [Abstract]      
Capitalized interest $ 16 $ 15 $ 23
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CONSOLIDATED STATEMENTS OF MEMBER'S EQUITY - USD ($)
$ in Millions
Total
MEMBER'S EQUITY
MEMBER'S EQUITY
Cumulative Effect, Period of Adoption, Adjustment
ACCUMULATED OTHER COMPREHENSIVE LOSS
Balance at beginning of period at Dec. 31, 2019   $ 13,724 $ (3) $ (179)
MEMBER'S EQUITY        
Net (loss) income $ 651 651    
Other comprehensive income (loss)       (55)
Distributions   (1,243)    
Other   10    
Balance at end of period at Dec. 31, 2020   13,139   (234)
MEMBER'S EQUITY        
Accounting Standards Update [Extensible List] Accounting Standards Update 2016-13 [Member]      
Total member's equity $ 12,905     (234)
Net (loss) income 586 586    
Other comprehensive income (loss)       (117)
Distributions   (365)    
Other   0    
Balance at end of period at Dec. 31, 2021   13,360   (351)
MEMBER'S EQUITY        
Total member's equity 13,009     (351)
Net (loss) income (4,793) (4,793)    
Other comprehensive income (loss)       7
Distributions   (1,425)    
Other   0    
Balance at end of period at Dec. 31, 2022   $ 7,142   (344)
MEMBER'S EQUITY        
Total member's equity $ 6,798     $ (344)
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CONSOLIDATED STATEMENTS OF MEMBER'S EQUITY (Parenthetical) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Income tax expense (benefit) $ 256 $ 197 $ 221  
MEMBER'S EQUITY | Cumulative Effect, Period of Adoption, Adjustment        
Income tax expense (benefit)     $ (2) $ (2)
v3.22.4
Background and Summary of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Background and Summary of Significant Accounting Policies Background and Summary of Significant Accounting Policies
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

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.

We reclassified certain prior period amounts to conform to the current period presentation, including our revenue by product and service categories. See Note 4—Revenue Recognition for additional information. These changes had no impact on total operating revenue, total operating expenses or net (loss) income for any period.

Segments

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


Summary of Significant Accounting Policies

Use of Estimates

Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles. These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions we make when accounting for specific items and matters are reasonable, based on information available at the time they are made. These estimates, judgments and assumptions can materially affect the reported amounts of assets, liabilities and components of member's equity as of the dates of the consolidated balance sheets, as well as the reported amounts of revenue, expenses and components of cash flows during the periods presented in our other consolidated financial statements. We also make estimates in our assessments of potential losses in relation to threatened or pending tax and legal matters. See Note 13—Income Taxes and Note 16—Commitments, Contingencies and Other Items for additional information.

For matters not related to income taxes, if a loss contingency is considered probable and the amount can be reasonably estimated, we recognize an expense for the estimated loss. If we have the potential to recover a portion of the estimated loss from a third party, we make a separate assessment of recoverability and reduce the estimated loss if recovery is also deemed probable.
For matters related to income taxes, if we determine that the impact of an uncertain tax position is more likely than not to be sustained upon audit by the relevant taxing authority, then we recognize a benefit for the largest amount that is more likely than not to be sustained. No portion of an uncertain tax position will be recognized if the position has less than a 50% likelihood of being sustained. Interest is recognized on the amount of unrecognized benefit from uncertain tax positions.

For all of these and other matters, actual results could differ materially from our estimates.

Revenue Recognition

We earn most of our consolidated revenue from contracts with customers, primarily through the provision of communications and other services. Revenue from contracts with customers is accounted for under Accounting Standards Codification ("ASC") 606. We also earn revenue from leasing arrangements (primarily fiber capacity and colocation agreements) which are not accounted for under ASC 606.

Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to receive in exchange for those goods or services. Revenue is recognized based on the following five-step model:

•Identification of the contract with a customer;

•Identification of the performance obligations in the contract;

•Determination of the transaction price;

•Allocation of the transaction price to the performance obligations in the contract; and

•Recognition of revenue when, or as, we satisfy a performance obligation.

We provide an array of communications services, including local voice, VPN, Ethernet, data, broadband, private line (including special access), network access, transport, voice, information technology ("IT"), video and other ancillary services. We provide these services to a wide range of businesses, including global, enterprise, wholesale, government, and small and medium business customers. Certain contracts also include the sale of equipment, which is not significant to our business.

We recognize revenue for services when we provide the applicable service or when control of a product is transferred. Recognition of certain payments received in advance of services being provided is deferred. These advance payments may include certain activation and certain installation charges. If the activation and installation charges are not separate performance obligations, we recognize them as revenue over the actual or expected contract term using historical experience, which typically ranges from one to five years depending on the service. In most cases, termination fees or other fees on existing contracts that are negotiated in conjunction with new contracts are deferred and recognized over the new contract term.

For access services, we generally bill fixed monthly charges one month in advance to customers and recognize revenue as service is provided over the contract term in alignment with the customer's receipt of service. For usage and other ancillary services, we generally bill in arrears and recognize revenue as usage or delivery occurs. In most cases, the amount invoiced for our service offerings constitutes the price that would be billed on a standalone basis.

Customer contracts are evaluated to determine whether the performance obligations are separable. If the performance obligations are deemed separable and separate earnings processes exist, the total transaction price that we expect to receive with the customer is allocated to each performance obligation based on its relative standalone selling price. The revenue associated with each performance obligation is then recognized as earned.
We periodically sell transmission capacity on our network. These transactions are generally structured as indefeasible rights of use, commonly referred to as IRUs, which are the exclusive right to use a specified amount of capacity or fiber for a specified term, typically 20 years. In most cases, we account for the cash consideration received on transfers of transmission capacity as ASC 606 revenue, which is adjusted for the time value of money and is recognized ratably over the term of the agreement. Cash consideration received on transfers of dark fiber is accounted for as non-ASC 606 lease revenue, which we also recognize ratably over the term of the agreement. We do not recognize revenue on any contemporaneous exchanges of our transmission capacity assets for other non-owned optical capacity assets.

In connection with offering products and services provided to the end user by third-party vendors, we review the relationship between us, the vendor and the end user to assess whether revenue should be reported on a gross or net basis. In assessing whether revenue should be reported on a gross or net basis, we consider whether we act as a principal in the transaction and control the goods and services used to fulfill the performance obligations associated with the transaction.

We have service level commitments pursuant to contracts with certain of our customers. To the extent that we determine such service levels were not achieved or may not have been achieved, we estimate the amount of credits to be issued and record a corresponding reduction to revenue in the period that the service level commitment was not met or may not be met.

Customer payments are made based on billing schedules included in our customer contracts, which is typically on a monthly basis.

We defer (or capitalize) incremental contract acquisition and fulfillment costs and recognize (or amortize) such costs over the average contract life. Our deferred contract costs for our customers have average amortization periods of approximately 34 months. These deferred costs are periodically monitored to reflect any significant change in assumptions.

See Note 4—Revenue Recognition for additional information.

Affiliate Transactions

We provide services to our affiliates that we also provide to external customers. These services are recognized as operating revenue-affiliates in our consolidated statements of operations. Services provided to us from our affiliates are recognized as operating expenses-affiliates on our consolidated statements of operations. Because of the significance of the services we provide to our affiliates and our affiliates provide to us, the results of operations, financial position and cash flows presented herein are not necessarily indicative of the results of operations, financial position and cash flows we would have achieved had we operated as a stand-alone entity during the periods presented.

We recognize intercompany charges at the amounts billed to us by our affiliates and we recognize intercompany revenue for services we bill to our affiliates. The resulting net balance for transactions between us and our affiliates at the end of each period is reported as accounts receivables - affiliates or accounts payable - affiliates on the accompanying consolidated balance sheets.

From time to time we make distributions to our parent, which reduce our capital resources for debt repayments or other purposes. Distributions are reflected on our consolidated statements of member's equity and our consolidated statements of cash flows reflects distributions made as financing activities.

Our ultimate parent company, Lumen Technologies, is currently indebted to us under a revolving credit facility.

For additional information, see Note 15—Affiliate Transactions.

Legal Costs

In the normal course of our business, we incur costs to hire and retain external legal counsel to advise us on regulatory, litigation and other matters. Subject to certain exceptions, we expense these costs as the related services are received.
Income Taxes

Under Lumen's tax allocation policy, Lumen Technologies treats our consolidated results as if we were a separate taxpayer. Our reported deferred tax assets and liabilities, as discussed below and in Note 13—Income Taxes, are primarily determined as a result of the application of the separate return allocation method and therefore the settlement of these amounts is dependent upon our parent, Lumen Technologies, rather than tax authorities. The policy requires us to pay our tax liabilities in cash based upon our separate return taxable income. We are also included in the combined state tax returns filed by Lumen Technologies and the same payment and allocation policy applies. The provision for income taxes consists of an amount for taxes currently payable, an amount for tax consequences deferred to future periods and adjustments to our liabilities for uncertain tax positions. We record deferred income tax assets and liabilities reflecting future tax consequences attributable to tax NOLs, tax credit carryforwards and differences between the financial statement carrying value of assets and liabilities and the tax basis of those assets and liabilities. Deferred taxes are computed using enacted tax rates expected to apply in the year in which the differences are expected to affect taxable income. The effect on deferred income tax assets and liabilities of a change in tax rate is recognized in earnings in the period that includes the enactment date.

We establish valuation allowances when necessary to reduce deferred income tax assets to the amounts that we believe are more likely than not to be recovered. Each quarter we evaluate the need to retain all or a portion of the valuation allowance on our deferred tax assets. See Note 13—Income Taxes for additional information.

Cash and Cash Equivalents

Cash and cash equivalents include highly liquid investments that are readily convertible into cash and are not subject to significant risk from fluctuations in interest rates. As a result, the value at which cash and cash equivalents are reported in our consolidated financial statements approximates their fair value. In evaluating investments for classification as cash equivalents, we require that individual securities have original maturities of ninety days or less and that individual investment funds have dollar-weighted average maturities of ninety days or less. To preserve capital and maintain liquidity, we invest with financial institutions we deem to be of sound financial condition and in high quality and relatively risk-free investment products. Our cash investment policy limits the concentration of investments with specific financial institutions or among certain products and includes criteria related to credit worthiness of any particular financial institution.

Book overdrafts occur when we have issued checks but they have not yet been presented to our controlled disbursement bank accounts for payment. Disbursement bank accounts allow us to delay funding of issued checks until the checks are presented for payment. Until the issued checks are presented for payment, the book overdrafts are included in accounts payable on our consolidated balance sheet. This activity is included in the operating activities section in our consolidated statements of cash flows. There were no book overdrafts included in accounts payable at December 31, 2022 and 2021, respectively.
Restricted Cash

Restricted cash and securities consist primarily of cash and investments that serve to collateralize our outstanding letters of credit and certain performance and operating obligations. Restricted cash and securities are recorded as current or non-current assets in the consolidated balance sheets depending on the duration of the restriction and the purpose for which the restriction exists. Restricted securities are stated at cost which approximates fair value as of December 31, 2022 and 2021.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable are recognized based upon the amount due from customers for the services provided or at cost for other receivables, less an allowance for credit losses. We use a loss rate method to estimate our allowance for credit losses. For more information on our methodology for estimating our allowance for credit losses, see Note 6—Credit Losses on Financial Instruments.
We generally consider our accounts past due if they are outstanding over 30 days. Our past due accounts are written off against our allowance for credit losses when collection is considered to be not probable. Any recoveries of accounts previously written off are generally recognized as a reduction in bad debt expense in the period received. The carrying value of accounts receivable net of the allowance for credit losses approximates fair value.

Concentration of Credit Risk

We provide communications services to a wide range of wholesale and enterprise customers, ranging from well capitalized global enterprises to small early stage companies primarily in the United States and Europe. Credit risk with respect to accounts receivable is generally diversified due to the large number of entities comprising our customer base and their dispersion across many different industries and geographical regions. We perform ongoing credit evaluations of our customers' financial condition and generally require no collateral from our customers, although letters of credit and deposits are required in certain limited circumstances. We have, from time to time, entered into agreements with value added resellers and other channel partners to reach enterprise markets for voice services. We have policies and procedures in place to evaluate the financial condition of these resellers prior to initiating service to the final customer. We are not able to predict changes in the financial stability of our customers. Any material changes in the financial status of any one or a particular group of customers may cause us to adjust our estimate of the recoverability of receivables and could have a material effect on our results of operation.

Assets Held for Sale

We classify assets and related liabilities as held for sale when: (i) management has committed to a plan to sell the assets, (ii) the net assets are available for immediate sale, (iii) there is an active program to locate a buyer and (iv) the sale and transfer of the net assets is probable within one year. Assets and liabilities held for sale are presented separately on our consolidated balance sheets with a valuation allowance, if necessary, to recognize the net carrying amount at the lower of cost or fair value, less costs to sell. Depreciation of property, plant and equipment and amortization of finite-lived intangible assets and right-of-use assets are not recorded while these assets are classified as held for sale. For each period that assets are classified as being held for sale, they are tested for recoverability. Unless otherwise specified, the amounts and information in the notes presented do not include assets and liabilities that have been classified as held for sale as of December 31, 2022. See Note 2—Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business for additional information.

Property, Plant and Equipment

We record purchased and constructed property, plant and equipment at cost, plus the estimated value of any associated legally or contractually required retirement obligations. We depreciate our property, plant and equipment using the straight-line method. Leasehold improvements are amortized over the shorter of the useful lives of the assets or the expected lease term. Expenditures for maintenance and repairs are expensed as incurred. During the construction phase of network and other internal-use capital projects, we capitalize related employee and interest costs. Property, plant and equipment supplies used internally are carried at average cost, except for significant individual items which are carried at actual cost.

We perform annual internal reviews to evaluate the reasonableness of the depreciable lives for our property, plant and equipment. Our reviews take into account actual usage, the physical condition of our property, plant, and equipment, industry data, and other relevant factors. Our remaining useful life assessments evaluate the possible loss in service value of assets that may precede the physical retirement. Assets shared among many customers may lose service value as those customers reduce their use of the asset. However, the asset is not retired until all customers no longer utilize the asset and we determine there is not alternative use for the asset.

We have asset retirement obligations associated with the legally or contractually required removal of a limited group of property, plant and equipment assets from leased properties and the disposal of certain hazardous materials present in our owned properties. When an asset retirement obligation is identified, usually in association with the acquisition of the asset, we record the fair value of the obligation as a liability. The fair value of the obligation is also capitalized as property, plant and equipment and then amortized over the estimated remaining useful life of the associated asset. Where the removal obligation is not legally binding, the net cost to remove assets is expensed in the period in which the costs are actually incurred.
We review long-lived tangible assets for impairment whenever facts and circumstances indicate that the carrying amounts of the assets may not be recoverable. For assessment purposes, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities, absent a material change in operations. An impairment loss is recognized only if the carrying amount of the asset group is not recoverable and exceeds its estimated fair value. Recoverability of the asset group to be held and used is assessed by comparing the carrying amount of the asset group to the estimated undiscounted future net cash flows expected to be generated by the asset group. If the asset group's carrying value is not recoverable, we recognize an impairment charge for the amount by which the carrying amount of the asset group exceeds its estimated fair value.

Goodwill, Customer Relationships and Other Intangible Assets

Intangible assets arising from business combinations, such as goodwill, customer relationships, capitalized software, trademarks and trade names, are initially recorded at estimated fair value. We amortize customer relationships primarily over an estimated life of 7 to 14 years, using the straight-line method, depending on the type of customer. We amortize capitalized software using the straight-line method over estimated lives ranging up to 7 years. We amortized our other intangible assets over an estimated life of 5 years prior to becoming fully amortized in the fourth quarter of 2022. Other intangible assets not arising from business combinations are initially recorded at cost. Where there are no legal, regulatory, contractual or other factors that would reasonably limit the useful life of an intangible asset, we classify the intangible asset as indefinite-lived and such intangible assets are not amortized.

Internally used software, whether purchased or developed by us, is capitalized and amortized using the straight-line method over its estimated useful life. We have capitalized certain costs associated with software such as costs of employees devoted to software development and external direct costs for materials and services. Costs associated with software to be used for internal purposes are expensed until the point at which the project has reached the development stage. Subsequent additions, modifications or upgrades to internal-use software are capitalized only to the extent that they allow the software to perform a task it previously did not perform. Software maintenance, data conversion and training costs are expensed in the period in which they are incurred. We review the remaining economic lives of our capitalized software annually. Capitalized software is included in other intangible assets, net, in our consolidated balance sheets.

We are required to assess our goodwill for impairment annually, or more frequently if an event occurs or circumstances change that would indicate it is more likely than not the fair value of our reporting unit is less than the carrying value. The impairment assessment is performed at the reporting unit level. We have determined that our operations consist of one reporting unit, consistent with our determination that our business consists of one operating segment. We are required to write-down the value of goodwill in periods in which the carrying amount of our reporting unit's equity exceeds the estimated fair value of the equity of the reporting unit, limited to the goodwill balance.
For more information, see Note 3—Goodwill, Customer Relationships and Other Intangible Assets.

Foreign Currency

Local currencies of our foreign subsidiaries are the functional currencies for financial reporting purposes except for certain foreign subsidiaries, primarily in Latin America prior to the August 1, 2022 sale of our Latin American business. For operations outside the United States that have functional currencies other than the U.S. dollar, assets and liabilities are translated to U.S. dollars at period-end exchange rates, and revenue, expenses and cash flows are translated using average monthly exchange rates. A significant portion of our non-United States subsidiaries use either the British pound or the Euro, or used, prior to the August 1, 2022 sale of our Latin American business, the Brazilian Real, as their functional currency, each of which experienced significant fluctuations against the U.S. dollar during the years ended December 31, 2022, December 31, 2021 and December 31, 2020. We recognize foreign currency translation gains and losses as a component of accumulated other comprehensive loss in member's/stockholders' equity and in our consolidated statements of comprehensive (loss) income in accordance with accounting guidance for foreign currency translation. We consider the majority of our investments in our foreign subsidiaries to be long-term in nature. Our foreign currency transaction gains (losses), including where transactions with our non-United States subsidiaries are not considered to be long-term in nature, are included within other income (expense) in "Other, net" on our consolidated statements of operations.
Recently Adopted Accounting Pronouncements

During 2022, we adopted Accounting Standards Update ("ASU") 2021-10, "Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance” (“ASU 2021-10”) and ASU 2021-05, “Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments” (“ASU 2021-05”). During 2021, we adopted ASU 2020-09, "Debt (Topic 470) Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762" ("ASU 2020-09"), ASU 2020-01, "Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815)" ("ASU 2020-01"), and ASU 2019-12, "Simplifying the Accounting for Income Taxes (Topic 740)" ("ASU 2019-12"). During 2020, we adopted ASU 2016-13, "Measurement of Credit Losses on Financial Instruments” ("ASU 2016-13").

Each of these is described further below.

Government Assistance

On January 1, 2022, we adopted ASU 2021-10. This ASU requires business entities to disclose information about certain types of government assistance they receive. 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. 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. 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. 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 December 31, 2022, we determined there was no application or discontinuation of the equity method during the reporting periods covered in this report. The adoption of ASU 2020-01 did not impact our consolidated financial statements.

Income Taxes

On January 1, 2021, we adopted 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.

Measurement of Credit Losses on Financial Instruments

We adopted ASU 2016-13 on January 1, 2020, and recognized a cumulative adjustment to our accumulated deficit as of the date of adoption of $3 million, net of tax effect of $2 million. Please refer to Note 6—Credit Losses on Financial Instruments for more information.
Recently Issued Accounting Pronouncements

In December 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-06, “Reference Rate Reform (Topic 848) – Deferral of the Sunset Date of Topic 848" ("ASU 2022-06"). These amendments extend the period of time preparers can utilize the reference rate reform relief guidance in Topic 848, which defers the sunset date from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. ASU 2022-06 is effective upon issuance. Based on our review of our key material contracts through December 31, 2022, ASU 2022-06 does not have a material impact to our consolidated financial statements.

In September 2022, the 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. As of December 31, 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 December 31, 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 December 31, 2022, we do not expect ASU 2022-02 to have an impact to our consolidated financial statements.

In March 2022, the FASB issued ASU 2022-01, “Derivatives and Hedging (Topic 815): Fair Value Hedging-Portfolio Layer Method” ("ASU 2022-01"). The ASU expands the current single-layer method to allow multiple hedged layers of a single closed portfolio under the method. ASU 2022-01 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of December 31, 2022, ASU 2022-01 will not 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 December 31, 2022, we do not expect ASU 2021-08 to have an impact to our consolidated financial statements.

In January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848): Scope" ("ASU 2021-01"), which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU 2021-01 also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. These amendments may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. ASU 2021-01 provides 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 December 31, 2022, ASU 2021-01 will not have a material impact to our consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting" ("ASU 2020-04" or "Reference Rate Reform"), designed to ease the burden of accounting for contract modifications related to the global market-wide reference rate transition period. Subject to certain criteria, ASU 2020-04 provides qualifying entities the option to apply expedients and exceptions to contract modifications and hedging accounting relationships made until December 31, 2022. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. ASU 2020-04 provides optional 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 December 31, 2022, we do not expect ASU 2020-04 will have a material impact to our consolidated financial statements.
v3.22.4
Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business
 12 Months Ended
Dec. 31, 2022
Discontinued Operations and Disposal Groups [Abstract]  
Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business
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.

For the year ended December 31, 2022, we recorded a $123 million net 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 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 of August 1, 2022. The pre-tax net income of the Latin American business is estimated to be as follows in the table below:

Years Ended December 31,
2022(1)
20212020
(Dollars in millions)
Latin American business pre-tax net income
$197 214 160 
_______________________________________________________________________________
(1)The pre-tax net income includes operating results prior to the close of the sale of the Latin American 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 held for sale
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 held for sale$2,863 
Liabilities held for sale
Accounts payable$105 
Income and other taxes42 
Other current liabilities59 
Deferred income taxes154 
Other non-current liabilities122 
Total liabilities held for sale$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.

EMEA Business

On November 2, 2022, affiliates of Level 3 Parent, LLC, an indirect wholly-owned subsidiary of Lumen Technologies, Inc., granted an option to Colt Technology Services Group Limited, a portfolio company of Fidelity Investments, to purchase certain of their operations in Europe, the Middle East and Africa (the "EMEA business"), in exchange for $1.8 billion in cash, subject to certain working capital and other purchase price adjustments. Following the completion of a French consultative process, Colt exercised its option and on February 8, 2023, the parties entered into a definitive purchase agreement, which contains various customary covenants for transactions of this type including various indemnities. Level 3 Parent, LLC expects to close the transaction as early as late 2023, following 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.

The actual amount of our net after-tax proceeds from this divestiture could vary substantially from the amounts we currently estimate, particularly if we experience delays in completing the transaction or if any of our other assumptions prove to be incorrect.
We do not believe these divestitures represents a strategic shift for us. Therefore, neither the divested Latin American business, nor the planned divestiture of the EMEA business meet the criteria to be classified as discontinued operations. As a result, we continued to report our operating results for the Latin American business in our consolidated operating results through the disposal date of August 1, 2022, and we will continue to report our operating results for the EMEA business (the "disposal group") in our consolidated operating results until the transaction is closed.

The pre-tax net income of the disposal group is estimated to be and reported as follows in the table below:

Years Ended December 31,
202220212020
(Dollars in millions)
EMEA business pre-tax net loss
$(226)$(98)$(41)

As of December 31, 2022 in the accompanying consolidated balance sheet, the assets and liabilities of our EMEA business are classified as held for sale and measured at the lower of (i) the carrying value when we classified the disposal group as held for sale 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 November 2, 2022, 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 $50 million of depreciation, intangible amortization, and amortization of right-of-use assets for the year ended December 31, 2022 if the EMEA business did not meet the held for sale criteria.

The classification of the EMEA business as held for sale was considered an event or change in circumstance which required an assessment of our goodwill for impairment. We performed a pre-classification and post-classification goodwill impairment test as described further in Note 3—Goodwill, Customer Relationships and Other Intangible Assets. As a result of our impairment tests, we determined the EMEA business disposal group was impaired resulting in a non-cash, non-tax-deductible goodwill impairment charge of $224 million. 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 recorded an estimated loss on disposal of $616 million during the year ended December 31, 2022 in the consolidated statement of operations and a valuation allowance included in assets held for sale on the consolidated balance sheet. We will perform this evaluation each reporting period until disposal and, based on subsequent remeasurements, we will adjust the valuation allowance in assets held for sale (including any gain, limited to the original value).
The principal components of the held for sale assets and liabilities of the EMEA business are as follows:

December 31, 2022
EMEA Business
(Dollars in millions)
Assets held for sale
Cash and cash equivalents$43 
Accounts receivable, less allowance of $5
76 
Other current assets56 
Property, plant and equipment, net accumulated depreciation of $998
1,864 
Goodwill (1)
— 
Customer relationships and other intangibles, net100 
Operating lease assets156 
Valuation allowance on assets held for sale (2)
(616)
Deferred tax assets131 
Other non-current assets32 
Total assets held for sale$1,842 
Liabilities held for sale
Accounts payable$78 
Salaries and benefits23 
Current portion of deferred revenue28 
Current operating lease liabilities33 
Other current liabilities28 
Deferred income taxes38 
Asset retirement obligations30 
Deferred revenue, non-current85 
Operating lease liabilities, non-current103 
Total liabilities held for sale$446 
______________________________________________________________________
(1)    The assignment of goodwill was based on the relative fair value of the disposal group prior to being classified as held for sale. Prior to classification as held for sale, the goodwill was fully impaired as described above.
(2)    Includes the impact of $353 million, primarily related to loss on foreign currency translation, expected to be reclassified out of accumulated other comprehensive loss upon close of the sale.
v3.22.4
Goodwill, Customer Relationships and Other Intangible Assets
 12 Months Ended
Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill, Customer Relationships and Other Intangible Assets Goodwill, Customer Relationships and Other Intangible Assets
Goodwill, customer relationships and other intangible assets consisted of the following:
As of December 31,
2022(1)
2021(1)
(Dollars in millions)
Goodwill$1,970 6,666 
Customer relationships, less accumulated amortization of $3,265 and $2,779
$4,563 5,325 
Capitalized software, less accumulated amortization of $387 and $349
410 378 
Trade names, less accumulated amortization of $130 and $109
— 22 
Total other intangible assets, net$4,973 5,725 
______________________________________________________________________
(1)    These values exclude assets classified as held for sale.

As of December 31, 2022, the gross carrying amount of goodwill, customer relationships, capitalized software and other intangible assets was $10.7 billion.

Our goodwill was derived from Lumen's acquisition of us where the purchase price exceeded the fair value of the net assets acquired.

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

2022 Goodwill Impairment Analyses

As of October 31, 2022, we estimated the fair value of equity of our reporting unit by considering both a market approach and a discounted cash flow method. We discounted the projected cash flows using a rate that represented weighted average cost of capital of 9.4% as of the assessment date, which comprised an after-tax cost of debt of 4.8% and a cost of equity of 14.0%. We utilized company comparisons and analyst reports within the telecommunications industry which at the time of assessment supported a range of fair values derived from annualized revenue and earnings before interest, taxes, depreciation and amortization ("EBITDA") multiples between 1.8x and 4.6x and 4.7x and 10.8x, respectively, resulting in an overall company revenue and EBITDA multiple of 2.5x and 7.1x, respectively. The market approach method includes the use of comparable multiples of publicly traded companies whose services are comparable to ours. The discounted cash flow method is based on the present value of projected cash flows and a terminal value equal to the present value of all normalized cash flows after the projection period. As of October 31, 2022, based on our assessment performed, the carrying value of our equity exceeded our fair value of equity and as a result, we recorded a non-cash, non-tax-deductible goodwill impairment charge of approximately $4.4 billion at October 31, 2022.
The classification of held for sale related to the EMEA business as described in Note 2—Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business, was considered an event or change in circumstance which required an assessment of our goodwill for impairment as of October 31, 2022. We performed a pre-announcement goodwill impairment test described above to determine whether there was an impairment prior to the classification of these assets as held for sale and to determine the November 2, 2022 fair values to be utilized for goodwill allocation regarding the disposal group to be classified as assets held for sale. We also performed a post-announcement goodwill impairment test using our estimated post-divestiture cash flows and carrying value of equity to evaluate whether the fair value that will remain following the divestiture exceeds the carrying value of the equity after classification of assets held for sale. We concluded no impairment existed following the divestiture.

Separate from the annual, pre-announcement and post-announcement goodwill assessments discussed above, we performed an assessment of our EMEA business disposal group for impairment using the purchase price compared to the carrying value of the EMEA business net assets. As a result, we concluded the EMEA business disposal group was impaired, resulting in a non-cash, non-tax-deductible goodwill impairment charge of $224 million. See Note 2—Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business for additional information regarding the purchase price, carrying value, and impairment for goodwill of the EMEA business.

2021 Goodwill Impairment Analyses

At October 31, 2021, we estimated the fair value of equity by considering both a market approach and a discounted cash flow method. As of October 31, 2021, based on our assessment performed, the estimated fair value of our equity exceeded our carrying value of equity by approximately 14%. We concluded that the goodwill was not impaired as of October 31, 2021.

The classification of held for sale assets, as described in Note 2—Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business, was considered an event or change in circumstance which required an assessment of our goodwill for impairment as of July 31, 2021. We performed a pre-classification goodwill impairment test to determine whether there was an impairment prior to the reclassification and to determine the July 31, 2021 fair values to be utilized for goodwill allocation to the Latin American business to be reclassified as assets held for sale. We concluded it is more likely than not that the fair value of our reporting unit exceeded the carrying value of equity of our reporting unit at July 31, 2021. We also performed a post-reclassification goodwill impairment test using our estimated post-divestiture cash flows and carrying value of equity to evaluate whether the fair value of our reporting unit that will remain following the divestiture exceeds the carrying value of the equity of the reporting unit after reclassification of assets held for sale.

At July 31, 2021, we estimated the fair value of equity by considering both a market approach and a discounted cash flow methodology. The market approach includes the use of comparable multiples of publicly traded companies whose services are comparable to ours. The discounted cash flow methodology is based on the present value of projected cash flows and a terminal value equal to the present value of all normalized cash flows after the projection period. As of July 31, 2021, based on our assessment performed, the estimated fair value of our equity exceeded our carrying value of equity by approximately 17%. We concluded that we did not have any impairment as of July 31, 2021.

2020 Goodwill Impairment Analyses

At October 31, 2020, we estimated the fair value of equity by considering both a market approach and a discounted cash flow method. As of October 31, 2020, based on our assessment performed, the estimated fair value of our equity exceeded our carrying value of equity by approximately 17%. We concluded that the goodwill was not impaired as of October 31, 2020.
The following table shows the rollforward of goodwill from December 31, 2020 through December 31, 2022:
(Dollars in millions)
As of December 31, 2020 (1)
$7,405 
Classified as held for sale (2)
(713)
Effect of foreign currency exchange rate changes and other(26)
As of December 31, 2021 (1)
6,666 
Effect of foreign currency exchange rate changes and other(58)
Impairment(4,638)
As of December 31, 2022 (1)
$1,970 
_______________________________________________________________________________
(1)Goodwill at December 31, 2022, December 31, 2021, December 31, 2020 is net of accumulated impairment loss of $8.2 billion, $3.6 billion and $3.7 billion, respectively. The change in accumulated impairment losses at December 31, 2021 is the result of amounts classified as held for sale related to the divestiture of our Latin American business. The change in accumulated impairment losses at December 31, 2022 is partially the result of the impairments discussed above and the result of amounts classified as held for sale related to our planned divestiture of our EMEA business.
(2)Represents the amount of goodwill, net of accumulated impairment loss classified as held for sale related to our Latin American business divestiture. See Note 2—Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business for more information.

Total amortization expense for finite-lived intangible assets for the years ended December 31, 2022, 2021 and 2020 was $744 million, $843 million and $838 million, respectively. As of December 31, 2022, the weighted average remaining useful lives of our finite-lived intangible assets was approximately 7 years in total; 8 years for customer relationships, and 4 years for capitalized software.

We estimate that total amortization expense for intangible assets for the years ending 2023 through 2027 will be as provided in the table below. As a result of classifying our EMEA business as being held for sale on our December 31, 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—Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business for more information.
(Dollars in millions)
2023$681 
2024677 
2025658 
2026646 
2027600 
v3.22.4
Revenue Recognition
 12 Months Ended
Dec. 31, 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.
From time to time, we may change the categorization of our products and services.

Disaggregated Revenue by Service Offering

The following tables provide disaggregation of revenue from contracts with customers based on service offering for the years ended December 31, 2022, 2021 and 2020. 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:
Year Ended December 31, 2022
Total Revenue
Adjustments for Non-ASC 606 Revenue (1)
Total Revenue from Contracts with Customers
(Dollars in millions)
Compute and Application Services $1,025 (445)580 
IP and Data Services3,405 — 3,405 
Fiber Infrastructure Services 1,560 (221)1,339 
Voice and Other 1,276 (14)1,262 
Affiliate Services227 (227)— 
Total Revenue$7,493 (907)6,586 
Timing of revenue:
Goods transferred at a point in time$4 
Services performed over time6,582 
Total revenue from contracts with customers$6,586 
Year Ended December 31, 2021
Total Revenue
Adjustments for Non-ASC 606 Revenue (1)
Total Revenue from Contracts with Customers
(Dollars in millions)
Compute and Application Services$1,141 (504)637 
IP and Data Services3,555 — 3,555 
Fiber Infrastructure Services1,612 (220)1,392 
Voice and Other1,421 (12)1,409 
Affiliate Services223 (223)— 
Total Revenue$7,952 (959)6,993 
Timing of revenue:
Goods transferred at a point in time$13 
Services performed over time6,980 
Total revenue from contracts with customers$6,993 

Year Ended December 31, 2020
Total Revenue
Adjustments for Non-ASC 606 Revenue (1)
Total Revenue from Contracts with Customers
(Dollars in millions)
Compute and Application Services$1,098 (494)604 
IP and Data Services3,522 — 3,522 
Fiber Infrastructure Services1,507 (209)1,298 
Voice and Other1,598 (8)1,590 
Affiliate Services208 (208)— 
Total Revenue$7,933 (919)7,014 
Timing of revenue:
Goods transferred at a point in time$15 
Services performed over time6,999 
Total revenue from contracts with customers$7,014 
_______________________________________________________________
(1)     Includes lease revenue which is not within the scope of ASC 606.
We do not have any single external customer that comprises more than 10% of our total consolidated operating revenue. Substantially all of our consolidated revenue comes from customers located in the United States.

Customer Receivables and Contract Balances

The following table provides balances of customer receivables, contract assets and contract liabilities, net of amounts classified as held for sale as of December 31, 2022 and 2021:
December 31, 2022December 31, 2021
(Dollars in millions)
Customer receivables (1)
$515 640 
Contract assets (2)
13 35 
Contract liabilities (3)
222 247 
_______________________________________________________________________________
(1)Reflects gross customer receivables of $534 million and $679 million, net of allowance for credit losses of $19 million and $39 million, as of December 31, 2022 and 2021, respectively. These amounts exclude customer receivables, net, classified as held for sale of $76 million at December 31, 2022 (related to the EMEA business) and $83 million at December 31, 2021 (related to the Latin American business).
(2)These amounts exclude contract assets classified as held for sale of $16 million at December 31, 2022 (related to the EMEA business). There were no contract assets classified as held for sale related to the Latin American business at December 31, 2021.
(3)These amounts exclude contract liabilities classified as held for sale of $59 million at December 31, 2022 (related to the EMEA business) and $58 million at December 31, 2021 (related to the Latin American business).

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 years ended December 31, 2022 and 2021, we recognized $148 million and $182 million, respectively, of revenue that was included in contract liabilities of $305 million and $385 million as of January 1, 2022 and 2021, respectively, including contract liabilities that were classified as held for sale.

Performance Obligations

As of December 31, 2022, we expect to recognize approximately $4.0 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 87% of this revenue through 2025, 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 and planned divestiture of the EMEA business.
Contract Costs

The following tables provide changes in our contract acquisition costs and fulfillment costs for the years ended:
Year Ended December 31, 2022
Acquisition CostsFulfillment Costs
(Dollars in millions)
Beginning of period balance$76 99 
Costs incurred61 83 
Amortization(55)(76)
Classified as held for sale (1)
(6)— 
End of period balance$76 106 
Year Ended December 31, 2021
Acquisition CostsFulfillment Costs
(Dollars in millions)
Beginning of period balance$78 122 
Costs incurred58 90 
Amortization(60)(86)
Classified as held for sale (1)
— (27)
End of period balance$76 99 
_____________________________________________________________________
(1)     Represents the amounts classified as held for sale related to our planned divestiture. See Note 2—Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business.

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

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.
v3.22.4
Leases
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Leases Leases
We primarily lease to or from third parties various office facilities, colocation facilities, equipment and transmission capacity. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.

We determine if an arrangement is a lease at inception and whether that lease meets the classification criteria of a finance or operating lease. Lease-related assets, or right-of-use assets, are recognized at the lease commencement date at amounts equal to the respective lease liabilities. Lease-related liabilities are recognized at the present value of the remaining contractual fixed lease payments, discounted using our incremental borrowing rates. As part of the present value calculation for the lease liabilities, we use an incremental borrowing rate as the rates implicit in the leases are not readily determinable. The incremental borrowing rates used for lease accounting are based on our unsecured rates, adjusted to approximate the rates at which we could borrow on a collateralized basis over a term similar to the recognized lease term. We apply the incremental borrowing rates to lease components using a portfolio approach based upon the length of the lease term and the reporting entity in which the lease resides. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred. Operating lease assets are included in other, net under goodwill and other assets on our consolidated balance sheets.

Some of our lease arrangements contain lease components, non-lease components (including common-area maintenance costs) and executory costs (including real estate taxes and insurance costs). We generally account for each component separately based on the estimated standalone price of each component. For colocation leases, we account for the lease and non-lease components as a single lease component.

Many of our lease agreements contain renewal options; however, we do not recognize right-of-use assets or lease liabilities for renewal periods unless it is determined that we are reasonably certain of renewing the lease at inception or when a triggering event occurs. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain to be exercised. Our lease agreements do not generally contain any material residual value guarantees or material restrictive covenants.

Lease expense consisted of the following:
Years Ended December 31,
202220212020
(Dollars in millions)
Operating and short-term lease cost$348 368 440 
Finance lease cost:
Amortization of right-of-use assets25 24 19 
Interest on lease liability11 12 11 
Total finance lease cost36 36 30 
Total lease cost$384 404 470 

We lease various equipment, office facilities, retail outlets, switching facilities and other network sites or components. These leases, with few exceptions, provide for renewal options and rent escalations that are either fixed or based on the consumer price index. Any rent abatements, along with rent escalations, are included in the computation of rent expense calculated on a straight-line basis over the lease term. The lease term for most leases includes the initial non-cancelable term plus any term under renewal options that are reasonably assured.
During the year ended December 31, 2021 we rationalized our lease footprint and ceased using 13 underutilized leased property locations. We determined that we no longer needed the leased space and, due to the limited remaining term on the contracts, concluded that we had neither the intent nor ability to sublease the properties. For the year ended December 31, 2021 we incurred accelerated lease costs of approximately $15 million. We did not further rationalize our lease footprint or incur material accelerated lease costs during the year ended December 31, 2022. However, in conjunction with our plans to continue to reduce costs, we expect to continue our real estate rationalization efforts and expect to incur additional accelerated lease costs in future periods.

For the years ended December 31, 2022, 2021 and 2020, our gross rental expense, including the accelerated lease costs discussed above, was $384 million, $404 million and $470 million, respectively. We also received sublease rental income for the years ended December 31, 2022, 2021 and 2020 of $14 million, $12 million and $8 million, respectively.

Supplemental consolidated balance sheet information and other information related to leases:
Years Ended December 31,
LeasesClassification on the Balance Sheet20222021
(Dollars in millions)
Assets
Operating lease assets
Other, net (1)
$1,168 1,182 
Finance lease assetsProperty, plant and equipment, net of accumulated depreciation241 231 
Total leased assets $1,409 1,413 
Liabilities
Current
Operating
Current operating lease liabilities (2)
$326 299 
FinanceCurrent maturities of long-term debt14 16 
Noncurrent
Operating
Operating lease liabilities (3)
922 953 
FinanceLong-term debt210 226 
Total lease liabilities $1,472 1,494 
Weighted-average remaining lease term (years)
Operating leases 6.76.9
Finance leases 10.911.1
Weighted-average discount rate
Operating leases 5.23 %4.79 %
Finance leases 4.97 %4.81 %
_______________________________________________________________________________
(1) Includes affiliate operating lease assets of $391 million and $294 million as of December 31, 2022 and 2021, respectively.
(2) Includes current portion of affiliate operating lease liabilities of $125 million and $82 million as of December 31, 2022 and 2021, respectively.
(3) Includes noncurrent portion of affiliate operating lease liabilities of $286 million and $224 million as of December 31, 2022 and 2021, respectively.
At December 31, 2022, we classified certain operating lease assets and liabilities related to the EMEA business as held for sale and discontinued recording amortization on the related right-of-use assets upon this classification. These operating and finance lease assets and liabilities held for sale are not reflected in the above or throughout the disclosures within this note. See Note 2—Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business for more information.

Supplemental unaudited consolidated cash flow statement information related to leases:
Years Ended December 31,
20222021
(Dollars in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases$346 360 
Operating cash flows for finance leases11 12 
Financing cash flows for finance leases84 38 
Supplemental lease cash flow disclosures:
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities381 380 
Right-of-use assets obtained in exchange for new finance lease liabilities$70 28 
As of December 31, 2022, maturities of lease liabilities were as follows:
 Operating LeasesFinance Leases
 (Dollars in millions)
2023$379 25 
2024274 25 
2025228 26 
2026168 26 
202792 27 
Thereafter359 164 
Total lease payments1,500 293 
Less: interest(252)(69)
Total1,248 224 
Less: current portion(326)(14)
Long-term portion$922 210 

As of December 31, 2022, we had no material operating or finance leases that had not yet commenced.

Operating Lease Income

We lease various office facilities, colocation facilities and dark fiber to third parties under operating leases. Lease and sublease income are included in operating revenue in the consolidated statements of operations. See "Revenue Recognition" in Note 1—Background and Summary of Significant Accounting Policies.

For the years ended December 31, 2022, 2021 and 2020 our gross rental income was $746 million, $802 million and $760 million, respectively, which represents 10% of our operating revenue for each of the years ended December 31, 2022, 2021 and 2020.
Leases Leases
We primarily lease to or from third parties various office facilities, colocation facilities, equipment and transmission capacity. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.

We determine if an arrangement is a lease at inception and whether that lease meets the classification criteria of a finance or operating lease. Lease-related assets, or right-of-use assets, are recognized at the lease commencement date at amounts equal to the respective lease liabilities. Lease-related liabilities are recognized at the present value of the remaining contractual fixed lease payments, discounted using our incremental borrowing rates. As part of the present value calculation for the lease liabilities, we use an incremental borrowing rate as the rates implicit in the leases are not readily determinable. The incremental borrowing rates used for lease accounting are based on our unsecured rates, adjusted to approximate the rates at which we could borrow on a collateralized basis over a term similar to the recognized lease term. We apply the incremental borrowing rates to lease components using a portfolio approach based upon the length of the lease term and the reporting entity in which the lease resides. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred. Operating lease assets are included in other, net under goodwill and other assets on our consolidated balance sheets.

Some of our lease arrangements contain lease components, non-lease components (including common-area maintenance costs) and executory costs (including real estate taxes and insurance costs). We generally account for each component separately based on the estimated standalone price of each component. For colocation leases, we account for the lease and non-lease components as a single lease component.

Many of our lease agreements contain renewal options; however, we do not recognize right-of-use assets or lease liabilities for renewal periods unless it is determined that we are reasonably certain of renewing the lease at inception or when a triggering event occurs. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain to be exercised. Our lease agreements do not generally contain any material residual value guarantees or material restrictive covenants.

Lease expense consisted of the following:
Years Ended December 31,
202220212020
(Dollars in millions)
Operating and short-term lease cost$348 368 440 
Finance lease cost:
Amortization of right-of-use assets25 24 19 
Interest on lease liability11 12 11 
Total finance lease cost36 36 30 
Total lease cost$384 404 470 

We lease various equipment, office facilities, retail outlets, switching facilities and other network sites or components. These leases, with few exceptions, provide for renewal options and rent escalations that are either fixed or based on the consumer price index. Any rent abatements, along with rent escalations, are included in the computation of rent expense calculated on a straight-line basis over the lease term. The lease term for most leases includes the initial non-cancelable term plus any term under renewal options that are reasonably assured.
During the year ended December 31, 2021 we rationalized our lease footprint and ceased using 13 underutilized leased property locations. We determined that we no longer needed the leased space and, due to the limited remaining term on the contracts, concluded that we had neither the intent nor ability to sublease the properties. For the year ended December 31, 2021 we incurred accelerated lease costs of approximately $15 million. We did not further rationalize our lease footprint or incur material accelerated lease costs during the year ended December 31, 2022. However, in conjunction with our plans to continue to reduce costs, we expect to continue our real estate rationalization efforts and expect to incur additional accelerated lease costs in future periods.

For the years ended December 31, 2022, 2021 and 2020, our gross rental expense, including the accelerated lease costs discussed above, was $384 million, $404 million and $470 million, respectively. We also received sublease rental income for the years ended December 31, 2022, 2021 and 2020 of $14 million, $12 million and $8 million, respectively.

Supplemental consolidated balance sheet information and other information related to leases:
Years Ended December 31,
LeasesClassification on the Balance Sheet20222021
(Dollars in millions)
Assets
Operating lease assets
Other, net (1)
$1,168 1,182 
Finance lease assetsProperty, plant and equipment, net of accumulated depreciation241 231 
Total leased assets $1,409 1,413 
Liabilities
Current
Operating
Current operating lease liabilities (2)
$326 299 
FinanceCurrent maturities of long-term debt14 16 
Noncurrent
Operating
Operating lease liabilities (3)
922 953 
FinanceLong-term debt210 226 
Total lease liabilities $1,472 1,494 
Weighted-average remaining lease term (years)
Operating leases 6.76.9
Finance leases 10.911.1
Weighted-average discount rate
Operating leases 5.23 %4.79 %
Finance leases 4.97 %4.81 %
_______________________________________________________________________________
(1) Includes affiliate operating lease assets of $391 million and $294 million as of December 31, 2022 and 2021, respectively.
(2) Includes current portion of affiliate operating lease liabilities of $125 million and $82 million as of December 31, 2022 and 2021, respectively.
(3) Includes noncurrent portion of affiliate operating lease liabilities of $286 million and $224 million as of December 31, 2022 and 2021, respectively.
At December 31, 2022, we classified certain operating lease assets and liabilities related to the EMEA business as held for sale and discontinued recording amortization on the related right-of-use assets upon this classification. These operating and finance lease assets and liabilities held for sale are not reflected in the above or throughout the disclosures within this note. See Note 2—Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business for more information.

Supplemental unaudited consolidated cash flow statement information related to leases:
Years Ended December 31,
20222021
(Dollars in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases$346 360 
Operating cash flows for finance leases11 12 
Financing cash flows for finance leases84 38 
Supplemental lease cash flow disclosures:
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities381 380 
Right-of-use assets obtained in exchange for new finance lease liabilities$70 28 
As of December 31, 2022, maturities of lease liabilities were as follows:
 Operating LeasesFinance Leases
 (Dollars in millions)
2023$379 25 
2024274 25 
2025228 26 
2026168 26 
202792 27 
Thereafter359 164 
Total lease payments1,500 293 
Less: interest(252)(69)
Total1,248 224 
Less: current portion(326)(14)
Long-term portion$922 210 

As of December 31, 2022, we had no material operating or finance leases that had not yet commenced.

Operating Lease Income

We lease various office facilities, colocation facilities and dark fiber to third parties under operating leases. Lease and sublease income are included in operating revenue in the consolidated statements of operations. See "Revenue Recognition" in Note 1—Background and Summary of Significant Accounting Policies.

For the years ended December 31, 2022, 2021 and 2020 our gross rental income was $746 million, $802 million and $760 million, respectively, which represents 10% of our operating revenue for each of the years ended December 31, 2022, 2021 and 2020.
Leases Leases
We primarily lease to or from third parties various office facilities, colocation facilities, equipment and transmission capacity. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.

We determine if an arrangement is a lease at inception and whether that lease meets the classification criteria of a finance or operating lease. Lease-related assets, or right-of-use assets, are recognized at the lease commencement date at amounts equal to the respective lease liabilities. Lease-related liabilities are recognized at the present value of the remaining contractual fixed lease payments, discounted using our incremental borrowing rates. As part of the present value calculation for the lease liabilities, we use an incremental borrowing rate as the rates implicit in the leases are not readily determinable. The incremental borrowing rates used for lease accounting are based on our unsecured rates, adjusted to approximate the rates at which we could borrow on a collateralized basis over a term similar to the recognized lease term. We apply the incremental borrowing rates to lease components using a portfolio approach based upon the length of the lease term and the reporting entity in which the lease resides. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred. Operating lease assets are included in other, net under goodwill and other assets on our consolidated balance sheets.

Some of our lease arrangements contain lease components, non-lease components (including common-area maintenance costs) and executory costs (including real estate taxes and insurance costs). We generally account for each component separately based on the estimated standalone price of each component. For colocation leases, we account for the lease and non-lease components as a single lease component.

Many of our lease agreements contain renewal options; however, we do not recognize right-of-use assets or lease liabilities for renewal periods unless it is determined that we are reasonably certain of renewing the lease at inception or when a triggering event occurs. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain to be exercised. Our lease agreements do not generally contain any material residual value guarantees or material restrictive covenants.

Lease expense consisted of the following:
Years Ended December 31,
202220212020
(Dollars in millions)
Operating and short-term lease cost$348 368 440 
Finance lease cost:
Amortization of right-of-use assets25 24 19 
Interest on lease liability11 12 11 
Total finance lease cost36 36 30 
Total lease cost$384 404 470 

We lease various equipment, office facilities, retail outlets, switching facilities and other network sites or components. These leases, with few exceptions, provide for renewal options and rent escalations that are either fixed or based on the consumer price index. Any rent abatements, along with rent escalations, are included in the computation of rent expense calculated on a straight-line basis over the lease term. The lease term for most leases includes the initial non-cancelable term plus any term under renewal options that are reasonably assured.
During the year ended December 31, 2021 we rationalized our lease footprint and ceased using 13 underutilized leased property locations. We determined that we no longer needed the leased space and, due to the limited remaining term on the contracts, concluded that we had neither the intent nor ability to sublease the properties. For the year ended December 31, 2021 we incurred accelerated lease costs of approximately $15 million. We did not further rationalize our lease footprint or incur material accelerated lease costs during the year ended December 31, 2022. However, in conjunction with our plans to continue to reduce costs, we expect to continue our real estate rationalization efforts and expect to incur additional accelerated lease costs in future periods.

For the years ended December 31, 2022, 2021 and 2020, our gross rental expense, including the accelerated lease costs discussed above, was $384 million, $404 million and $470 million, respectively. We also received sublease rental income for the years ended December 31, 2022, 2021 and 2020 of $14 million, $12 million and $8 million, respectively.

Supplemental consolidated balance sheet information and other information related to leases:
Years Ended December 31,
LeasesClassification on the Balance Sheet20222021
(Dollars in millions)
Assets
Operating lease assets
Other, net (1)
$1,168 1,182 
Finance lease assetsProperty, plant and equipment, net of accumulated depreciation241 231 
Total leased assets $1,409 1,413 
Liabilities
Current
Operating
Current operating lease liabilities (2)
$326 299 
FinanceCurrent maturities of long-term debt14 16 
Noncurrent
Operating
Operating lease liabilities (3)
922 953 
FinanceLong-term debt210 226 
Total lease liabilities $1,472 1,494 
Weighted-average remaining lease term (years)
Operating leases 6.76.9
Finance leases 10.911.1
Weighted-average discount rate
Operating leases 5.23 %4.79 %
Finance leases 4.97 %4.81 %
_______________________________________________________________________________
(1) Includes affiliate operating lease assets of $391 million and $294 million as of December 31, 2022 and 2021, respectively.
(2) Includes current portion of affiliate operating lease liabilities of $125 million and $82 million as of December 31, 2022 and 2021, respectively.
(3) Includes noncurrent portion of affiliate operating lease liabilities of $286 million and $224 million as of December 31, 2022 and 2021, respectively.
At December 31, 2022, we classified certain operating lease assets and liabilities related to the EMEA business as held for sale and discontinued recording amortization on the related right-of-use assets upon this classification. These operating and finance lease assets and liabilities held for sale are not reflected in the above or throughout the disclosures within this note. See Note 2—Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business for more information.

Supplemental unaudited consolidated cash flow statement information related to leases:
Years Ended December 31,
20222021
(Dollars in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases$346 360 
Operating cash flows for finance leases11 12 
Financing cash flows for finance leases84 38 
Supplemental lease cash flow disclosures:
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities381 380 
Right-of-use assets obtained in exchange for new finance lease liabilities$70 28 
As of December 31, 2022, maturities of lease liabilities were as follows:
 Operating LeasesFinance Leases
 (Dollars in millions)
2023$379 25 
2024274 25 
2025228 26 
2026168 26 
202792 27 
Thereafter359 164 
Total lease payments1,500 293 
Less: interest(252)(69)
Total1,248 224 
Less: current portion(326)(14)
Long-term portion$922 210 

As of December 31, 2022, we had no material operating or finance leases that had not yet commenced.

Operating Lease Income

We lease various office facilities, colocation facilities and dark fiber to third parties under operating leases. Lease and sublease income are included in operating revenue in the consolidated statements of operations. See "Revenue Recognition" in Note 1—Background and Summary of Significant Accounting Policies.

For the years ended December 31, 2022, 2021 and 2020 our gross rental income was $746 million, $802 million and $760 million, respectively, which represents 10% of our operating revenue for each of the years ended December 31, 2022, 2021 and 2020.
v3.22.4
Credit Losses on Financial Instruments
 12 Months Ended
Dec. 31, 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:
Years Ended December 31,
20222021
(Dollars in millions)
Balance at beginning of period$39 45 
Provision for expected losses4 19 
Write-offs charged against the allowance(22)(27)
Recoveries collected3 5 
Classified as held for sale (1)
(5)(3)
Foreign currency exchange rate changes adjustment— — 
Balance at end of period$19 39 
______________________________________________________________________ 
(1)     Represents the amounts classified as held for sale related to our planned and completed divestitures. See Note 2—Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business.

For the year ended December 31, 2022, we decreased our allowance for credit losses primarily due to higher write-off activity. For the year ended December 31, 2021, we decreased our allowance for credit losses primarily due to higher write-off activity during 2021, along with lower receivable balances.
v3.22.4
Long-Term Debt
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Long-Term Debt Long-Term Debt
The following table reflects our consolidated long-term debt, including finance leases and other obligations, unamortized discounts and premiums, net and unamortized debt issuance costs, but excluding intercompany debt:

Interest Rates (1)
Maturities (1)
December 31, 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 obligationsVariousVarious291 319 
Unamortized premiums, net3 34 
Unamortized debt issuance costs(49)(57)
Total long-term debt8,096 10,422 
Less current maturities(26)(26)
Long-term debt, excluding current maturities$8,070 10,396 
_______________________________________________________________________________
(1)As of December 31, 2022.
(2)See the remainder of this Note for a description of certain affiliate guarantees and liens securing this debt.
(3)The Tranche B 2027 Term Loan had an interest rate of 6.134% and 1.854% as of December 31, 2022 and December 31, 2021, respectively.
(4)See the remainder of this Note for a description of guarantees provided by certain affiliates of Level 3 Financing, Inc.
New Issuances

On January 13, 2021, Level 3 Financing, Inc. issued $900 million aggregate principal amount of its 3.750% Sustainability-Linked Senior Notes due 2029 (the "Sustainability-Linked Notes"). The net proceeds were used, together with cash on hand, to redeem certain of its outstanding senior note indebtedness. See "—Redemption of Senior Notes" below. The Sustainability-Linked Notes are guaranteed by Level 3 Parent, LLC and Level 3 Communications, LLC.

Repayments

2022

During 2022, we used available cash to repay the following aggregate principal amounts of indebtedness through a combination of tender offers, redemptions and repayments. These transactions resulted in a net gain of $8 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 

2021

On February 12, 2021, Level 3 Financing, Inc. redeemed all $900 million aggregate principal amount of its outstanding 5.375% Senior Notes due 2024. This transaction resulted in a gain of $16 million.

Interest Expense

Interest expense includes interest on total long-term debt. The following table presents the amount of gross interest expense, net of capitalized interest:
 Years Ended December 31,
 202220212020
 (Dollars in millions)
Interest expense:   
Gross interest expense$390 376 416 
Capitalized interest(16)(15)(23)
Total interest expense$374 361 393 

Senior Secured Term Loan

As of December 31, 2022, Level 3 Financing, Inc. owed $2.4 billion under a senior secured Tranche B 2027 Term Loan, which matures on March 1, 2027. The Tranche B 2027 Term Loan carries an interest rate, in the case of base rate borrowings, equal to (i) the greater of the Prime Rate, the Federal Funds Effective Rate plus 50 basis points, or LIBOR plus 100 basis points (with all such terms and calculations as defined or further specified in the credit agreement) plus (ii) 0.75% per annum. Any Eurodollar borrowings under the Tranche B 2027 Term Loan bear interest at LIBOR plus 1.75% per annum.
The Tranche B 2027 Term Loan requires certain specified mandatory prepayments in connection with certain asset sales and other transactions, subject to certain significant exceptions. The obligations of Level 3 Financing, Inc. under the Tranche B 2027 Term Loan were, subject to certain exceptions, secured by certain assets of Level 3 Parent, LLC and certain of its material domestic subsidiaries. Also, Level 3 Parent, LLC and certain of its subsidiaries have guaranteed the obligations of Level 3 Financing, Inc. under the Tranche B 2027 Term Loan. Additional secured term loans or revolving credit may in the future be extended to Level 3 Financing, Inc. under its credit agreement dated as of March 13, 2007, as amended on November 29, 2019.

Senior Notes

All of the notes of Level 3 Financing, Inc. reflected in the table above pay interest at fixed rates semiannually and allow for the redemption of the notes at the option of the issuer, in whole or in part, (i) pursuant to a fixed schedule of pre-established redemption prices, (ii) pursuant to a “make whole” redemption price or (iii) under certain other specified limited circumstances in connection with certain sales of equity securities. For purposes of early redemption, all of the notes reflected in the table above allow for the redemption of the notes at the option of the issuer upon not less than 10 or more than 60 days prior notice. For specific details of these features and requirements, including the applicable premiums and timing, refer to the indentures setting forth the specific terms of each respective series of the senior notes of Level 3 Financing, Inc.

The Level 3 Financing, Inc. secured senior notes are secured by a pledge of substantially all of its assets and guaranteed on a secured basis by the same domestic subsidiaries that guarantee its Term B 2027 Term Loan. The remaining senior notes issued by Level 3 Financing, Inc. are guaranteed on an unsecured basis by its parent, Level 3 Parent, LLC, and one of its subsidiaries.

Long-Term Debt Maturities

Set forth below is the aggregate principal amount of our long-term debt as of December 31, 2022 (excluding unamortized premiums, net, unamortized debt issuance costs and intercompany debt) maturing during the following years. As a result of classifying our EMEA business as held for sale on our December 31, 2022 consolidated balance sheet, the amounts presented below do not include maturities of the finance lease obligations of that business. See Note 2—Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business:
(Dollars in millions)
2023$26 
202432 
202537 
202636 
20274,181 
2028 and thereafter3,830 
Total long-term debt$8,142 

Letters of Credit

It is customary for us to use various financial instruments in the normal course of business. These instruments include letters of credit. Letters of credit are conditional commitments issued on our behalf in accordance with specified terms and conditions. As of December 31, 2022 and 2021, we had outstanding letters of credit or other similar obligations of approximately $3 million and $9 million, respectively, of which $3 million and $5 million were collateralized by restricted cash. None of our conditional commitments under our outstanding letters of credit are reflected as debt on our balance sheets.
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, 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.

The debt covenants applicable to us and our subsidiaries could have a material adverse effect on their ability to operate or expand their respective businesses, to pursue strategic transactions, to transfer cash to or engage in transactions with their unconsolidated affiliates, or to otherwise pursue their plans and strategies.

Certain of Lumen's and our debt instruments contain cross acceleration provisions. When present, these provisions could have a wider impact on liquidity than might otherwise arise from a default or acceleration of a single debt instrument.

Our ability to comply with the financial covenants in our debt instruments could be adversely impacted by a wide variety of events, including unforeseen contingencies, many of which are beyond our control.

Compliance

As of December 31, 2022 and December 31, 2021, we believe we were in compliance with the provisions and financial covenants contained in our debt agreements in all material respects.
v3.22.4
Accounts Receivable
 12 Months Ended
Dec. 31, 2022
Receivables [Abstract]  
Accounts Receivable Accounts Receivable
The following table presents details of our accounts receivable balances:
Years Ended December 31,
20222021
(Dollars in millions)
Trade receivables$440 495 
Earned and unbilled receivables94 184 
Other2 2 
Total accounts receivable536 681 
Less: allowance for credit losses(19)(39)
Accounts receivable, less allowance$517 642 

We are exposed to concentrations of credit risk from our customers and other telecommunications service providers. We generally do not require collateral to secure our receivable balances.

The following table presents details of our allowance for credit losses:
Beginning BalanceAdditionsDeductionsEnding Balance
(Dollars in millions)
2022$39 4 (24)19 
202145 19 (25)39 
2020(1)
13 41 (9)45 
_______________________________________________________________________________
(1)On January 1, 2020, we adopted ASU 2016-13 "Measurement of Credit Losses on Financial Instruments" and recognized a cumulative adjustment to our accumulated deficit as of the date of adoption of $3 million, net of a $2 million tax effect. This adjustment is included within "Deductions". Please refer to Note 6—Credit Losses on Financial Instruments for more information.
v3.22.4
Property, Plant and Equipment
 12 Months Ended
Dec. 31, 2022
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment Property, Plant and Equipment
Net property, plant and equipment is composed of the following:
Depreciable LivesAs of December 31,
20222021
(Dollars in millions)
LandN/A$202 305 
Fiber conduit and other outside plant (1)
15-45 years
4,133 5,531 
Central office and other network electronics (2)
7-10 years
2,977 3,280 
Support assets (3)
3-30 years
2,145 2,504 
Construction-in-progress (4)
N/A721 624 
Gross property, plant and equipment10,178 12,244 
Accumulated depreciation(2,875)(3,202)
Net property, plant and equipment$7,303 9,042 
_______________________________________________________________________________
(1)Fiber, conduit and other outside plant consists of fiber and metallic cable, conduit, poles and other supporting structures.
(2)Central office and other network electronics consists of circuit and packet switches, routers, transmission electronics and electronics providing service to customers.
(3)Support assets consist of buildings, data centers, computers and other administrative and support equipment.
(4)Construction in progress includes construction and property of the aforementioned categories that has not been placed in service as it is still under construction.

At December 31, 2022, we classified $1.9 billion of certain property, plant and equipment, net, related to our EMEA business as held for sale and discontinued recording depreciation on this disposal group as of November 2, 2022. At December 31, 2021, we had $1.6 billion of certain property, plant and equipment, net related to our Latin American business classified as held for sale, which was subsequently sold on August 1, 2022. See Note 2—Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business for more information.

Depreciation expense was $790 million, $874 million and $851 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Asset Retirement Obligations

As of December 31, 2022 and 2021, our asset retirement obligations consisted primarily of restoration requirements for leased facilities. We recognize our estimate of the fair value of our asset retirement obligations in the period incurred in other long-term liabilities. The fair value of the asset retirement obligation is also capitalized as property, plant and equipment and then depreciated over the estimated remaining useful life of the associated asset.
The following table provides asset retirement obligation activity:
Years Ended December 31,
20222021
(Dollars in millions)
Balance at beginning of period$121 122 
Accretion expense5 5 
Liabilities settled(7)(10)
Change in estimate(4)7 
Classified as held for sale (1)
(30)(3)
Balance at end of period$85 121 
_______________________________________________________________________________
(1)Represents the amounts classified as held for sale related to our divestitures. See Note 2—Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business.

The changes in estimate referred to in the table above was offset against gross property, plant and equipment.
v3.22.4
Employee Benefits
 12 Months Ended
Dec. 31, 2022
Retirement Benefits [Abstract]  
Employee Benefits Employee Benefits
Defined Contribution Plans

Lumen Technologies sponsors a qualified defined contribution plan covering substantially all of our employees. Under this plan, employees may contribute a percentage of their annual compensation up to certain maximums, as defined by the plan and by the Internal Revenue Service ("IRS"). Currently, we match a percentage of our employee's contributions in cash. We recognized $31 million, $31 million and $29 million in expense related to this plan for the years ended December 31, 2022, 2021, and 2020, respectively.

Other defined contribution plans we sponsored are individually not significant. On an aggregate basis, the expense we recorded relating to these plans was approximately $8 million for each of the years ended December 31, 2022, 2021, and 2020.

Defined Benefit Plans

We have certain contributory and non-contributory employee pension plans, which are not significant to our financial position or operating results. We recognize in our balance sheet the funded status of our defined benefit post-retirement plans, which is measured as the difference between the fair value of the plan assets and the plan benefit obligations. We are also required to recognize changes in the funded status within accumulated other comprehensive income, net of tax, to the extent such changes are not recognized in earnings as components of periodic net benefit cost. The fair value of the plan assets was $112 million and $75 million as of December 31, 2022 and 2021, respectively. The total plan benefit obligations were $102 million and $92 million as of December 31, 2022 and 2021, respectively. Therefore, the plan was fully funded as of December 31, 2022 and the net unfunded status was $17 million as of December 31, 2021.
v3.22.4
Share-based Compensation
 12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
Share-based Compensation Stock-based Compensation
Stock-based compensation expenses are included in cost of services and products, and selling, general, and administrative expenses in our consolidated statements of operations.

For the years ended December 31, 2022, 2021 and 2020, we recorded stock-based compensation expense of approximately $43 million, $47 million and $78 million, respectively.
v3.22.4
Fair Value of Financial Instruments
 12 Months Ended
Dec. 31, 2022
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments Fair Value of Financial InstrumentsOur 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 December 31, 2022 and 2021, as well as the input level used to determine the fair values indicated below:

As of December 31,
20222021
Input LevelCarrying AmountFair ValueCarrying AmountFair Value
(Dollars in million)
Liabilities-Long-term debt, excluding finance leases and other obligations2$7,805 6,581 10,103 10,090 
Indemnifications related to the sale of the Latin American business3$86 86 — — 
v3.22.4
Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of the income tax expense are as follows:
Years Ended December 31,
202220212020
(Dollars in millions)
Federal
Current$— — — 
Deferred271 125 162 
State and local
Current21 12 22 
Deferred4 28 42 
Foreign
Current26 16 19 
Deferred(66)16 (24)
Total income tax expense$256 197 221 
Years Ended December 31,
202220212020
(Dollars in millions)
Income tax expense was allocated as follows:
Income tax expense in the consolidated statements of operations:
Attributable to income$256 197 221 
Member's equity:
Tax effect of the change in accumulated other comprehensive loss$(58)(30)43 

The following is a reconciliation from the statutory federal income tax rate to our effective income tax rate:

Years Ended December 31,
202220212020
(Percentage of pre-tax income)
Statutory federal income tax rate21.0 %21.0 %21.0 %
State income taxes, net of federal income tax benefit(0.3)%4.1 %5.8 %
Goodwill impairment(21.4)%— %— %
Tax law changes— %— %(1.5)%
Divestiture of business(1)
(5.1)%— %— %
Net foreign income tax0.2 %1.6 %0.9 %
Research and development credits0.1 %(0.4)%(0.6)%
Other, net(0.1)%(1.1)%(0.3)%
Effective income tax rate(5.6)%25.2 %25.3 %
_______________________________________________________________________________
(1)Includes Global Intangible Low-Taxes Income ("GILTI") incurred as a result of the sale of our Latin American business.

For the year ended December 31, 2022, the effective tax rate is (5.6)% compared to 25.2% and 25.3% for the years ended December 31, 2021 and 2020, respectively. The effective tax rate for the year ended December 31, 2022 includes a $969 million unfavorable impact of non-deductible goodwill impairment and a $256 million unfavorable impact related to incurring GILTI as a result of the sale of our Latin American business.
The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows:
As of December 31,
20222021
(Dollars in millions)
Deferred tax assets
Deferred revenue$261 306 
Net operating loss carry forwards1,680 3,191 
Property, plant and equipment92 71 
Other448 267 
Gross deferred tax assets2,481 3,835 
Less valuation allowance(303)(1,103)
Net deferred tax assets2,178 2,732 
Deferred tax liabilities
Deferred revenue(5)(14)
Property, plant and equipment(1,142)(1,295)
Intangible assets(1,328)(1,539)
Other(58)(20)
Gross deferred tax liabilities(2,533)(2,868)
Net deferred tax liabilities$(355)(136)

Of the $355 million and $136 million net deferred tax liabilities as of December 31, 2022 and 2021, respectively, $387 million and $212 million is reflected as a long-term liability, in other on our consolidated balance sheets and $32 million and $76 million is reflected as a net noncurrent deferred tax asset, in other, net on our consolidated balance sheets.

As of December 31, 2022, we had gross federal NOLs net of uncertain tax positions of $6.4 billion, which will expire between 2027 and 2037 if unused, and state NOLs net of uncertain tax positions of $6.1 billion.

We establish valuation allowances when necessary to reduce the deferred tax assets to amounts we expect to realize. As of December 31, 2022, a valuation allowance of $303 million was recorded as it is more likely than not that this amount of net operating loss and tax credit carryforwards will not be utilized prior to expiration. Our valuation allowance as of December 31, 2022 and 2021 is primarily related to federal capital loss carry forwards and state NOL carryforwards.

A reconciliation of the change in our gross unrecognized tax benefits (excluding both interest and any related federal benefit) from January 1 to December 31 for 2022 and 2021 is as follows:
20222021
(Dollars in millions)
Unrecognized tax benefits at beginning of period$876 923 
Tax positions of current year netted against deferred tax assets(34)— 
Tax positions of prior periods netted against deferred tax assets— (49)
Decrease in tax positions taken in the prior period(2)— 
Increase in tax positions taken in the current period3 4 
Decrease due to settlement/payments— (2)
Decrease from the lapse of statute of limitations(30)— 
Unrecognized tax benefits at end of period$813 876 
The total amount (including interest and any related federal benefit) of unrecognized tax benefits that, if recognized, would impact the effective income tax rate was $5 million and $34 million for the years ended December 31, 2022 and 2021, respectively.

Our policy is to reflect interest expense associated with unrecognized tax benefits in income tax expense. We had accrued interest (presented before related tax benefits) of approximately $1 million and $5 million as of December 31, 2022 and 2021, respectively.

We, or at least one of our affiliates, file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2002. The Internal Revenue Service and state and local taxing authorities reserve the right to audit any period where net operating loss carry forwards are available.

Based on our current assessment of various factors, including (i) the potential outcomes of these ongoing examinations, (ii) the expiration of statute of limitations for specific jurisdictions, (iii) the negotiated settlement of certain disputed issues, and (iv) the administrative practices of applicable taxing jurisdictions, it is reasonably possible that the related unrecognized tax benefits for uncertain tax positions previously taken may increase by up to $3 million within the next 12 months. The actual amount of such increase, if any, will depend on several future developments and events, many of which are outside our control.
v3.22.4
Geographic and Customer Concentrations
 12 Months Ended
Dec. 31, 2022
Revenues [Abstract]  
Geographic and Customer Concentrations Geographic and Customer Concentrations
The following tables present total assets as of the years ended December 31, 2022 and 2021 as well as operating revenue for the years ended December 31, 2022, 2021 and 2020 by geographic region:
Total Assets
As of December 31,
20222021
(Dollars in millions)
North America$18,061 23,296 
Europe, Middle East and Africa1,698 2,830 
Latin America— 1,969 
Total$19,759 28,095 

Revenue
Years Ended December 31,
202220212020
(Dollars in millions)
North America$6,256 6,365 6,411 
Europe, Middle East and Africa734 805 785 
Latin America(1)
503 782 737 
Total$7,493 7,952 7,933 
_______________________________________________________________________________
(1)Includes revenue prior to closing the sale of the Latin American business on August 1, 2022.

A relatively small number of customers account for a significant percentage of our revenue. Our top ten customers accounted for approximately 15%, 17% and 16% of our total operating revenue for the years ended December 31, 2022, 2021 and 2020, respectively.
v3.22.4
Affiliate Transactions
 12 Months Ended
Dec. 31, 2022
Related Party Transactions [Abstract]  
Affiliate Transactions Affiliate Transactions
We provide telecommunications services to our affiliates that we also provide to external customers.

Whenever possible, costs are directly assigned to our affiliates for the services they use. If costs cannot be directly assigned, they are allocated among all affiliates based upon cost causative measures; or if no cost causative measure is available, these costs are allocated based on a general allocator. These cost allocation methodologies are reasonable. From time to time, we adjust the basis for allocating the costs of a shared service among affiliates. Such changes in allocation methodologies are generally billed prospectively.

We also purchase services from our affiliates including telecommunication services, insurance, flight services and other support services such as legal, regulatory, finance and accounting, tax, human resources and executive support.

We have a revolving credit facility that we extended to Lumen Technologies, Inc. under which we had $1.5 billion of outstanding affiliate notes receivable as of December 31, 2022 and 2021. As of December 31, 2022, the interest rate for this facility was 4.250% per annum and is subject to certain adjustments as set forth in the facility. The principal amount is payable upon demand by us and prepayable by Lumen Technologies at any time, but no later than October 15, 2025, which maturity date may be extended for two additional one-year periods. The facility has covenants, including a maximum total leverage ratio, and is subject to other limitations.

Subsequent Event

As of the date of this report, $60 million of distributions were made to our parent in the first quarter of 2023.
v3.22.4
Commitments, Contingencies and Other Items
 12 Months Ended
Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
Commitments, Contingencies and Other Items Commitments, Contingencies and Other Items
We are subject to various claims, legal proceedings and other contingent liabilities, including the matters described below, which individually or in the aggregate could materially affect our financial condition, future results of operations or cash flows. As a matter of course, we are prepared to both litigate these matters to judgment as needed, as well as to evaluate and consider reasonable settlement opportunities.

Irrespective of its merits, litigation may be both lengthy and disruptive to our operations and could cause significant expenditure and diversion of management attention. We review our litigation accrual liabilities on a quarterly basis, but in accordance with applicable accounting guidelines only establish accrual liabilities when losses are deemed probable and reasonably estimable and only revise previously established accrual liabilities when warranted by changes in circumstances, in each case based on then-available information. As such, as of any given date we could have exposure to losses under proceedings as to which no liability has been accrued or as to which the accrued liability is inadequate. Amounts accrued for our litigation and non-income tax contingencies at December 31, 2022 and December 31, 2021 aggregated to approximately $40 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 12—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. 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.

Environmental Contingencies

In connection with largely historical operations, we have responded to or been notified of potential environmental liability at approximately 175 properties. We are engaged in addressing or have litigated environmental liabilities at many of those properties. We could potentially be held liable, jointly, or severally, and without regard to fault, for the costs of investigation and remediation of these sites. The discovery of additional environmental liabilities or changes in existing environmental requirements could have a material adverse effect on our business.

Right-of-Way

As of December 31, 2022, our future rental commitments for right-of-way ("ROW") agreements were as follows:
Future Rental Commitments and ROW Agreements
(Dollars in millions)
2023$113 
202449 
202543 
202641 
202740 
2028 and thereafter360 
Total future minimum payments$646 
Purchase Commitments

We have several commitments primarily for marketing activities and support services from a variety of vendors to be used in the ordinary course of business totaling $355 million as of December 31, 2022. Of this amount, we expect to purchase $138 million in 2023, $119 million in 2024 through 2025, $33 million in 2026 through 2027 and $65 million in 2028 and thereafter. These amounts do not represent our entire anticipated purchases in the future, but represent only those items for which we were contractually committed as of December 31, 2022.

Amounts included in the Right-of-Way table and in the purchase commitments disclosed above are inclusive of contractual obligations related to our EMEA business to be divested.
v3.22.4
Accumulated Other Comprehensive Loss
 12 Months Ended
Dec. 31, 2022
Equity [Abstract]  
Accumulated Other Comprehensive Loss Accumulated Other Comprehensive Loss
The table below summarizes changes in accumulated other comprehensive (loss) recorded on our consolidated balance sheet by component for the years ended December 31, 2021 and December 31, 2022:
Pension PlansForeign Currency Translation Adjustments and OtherTotal
(Dollars in millions)
Balance at December 31, 2020$(13)(221)(234)
Other comprehensive loss, net of tax16 (133)(117)
Net other comprehensive loss16 (133)(117)
Balance at December 31, 2021$3 (354)(351)
Other comprehensive income (loss), net of tax18 (123)(105)
Amounts reclassified in accumulated other comprehensive (loss) income— 112 112 
Net other comprehensive income (loss)18 (11)7 
Balance at December 31, 2022$21 (365)(344)

The tables below present further information about our reclassifications out of accumulated other comprehensive (loss) income by component for the year ended December 31, 2022:

Year Ended December 31, 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 
v3.22.4
Other Financial Information
 12 Months Ended
Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [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:

As of December 31,
20222021
(Dollars in millions)
Prepaid expenses$99 109 
Contract fulfillment costs44 48 
Contract acquisition costs42 45 
Contract assets10 28 
Other2 9 
Total other current assets (1)
$197 239 
_______________________________________________________________________________
(1)Excludes $56 million of other current assets related to the EMEA business that were classified as held for sale as of December 31, 2022 and $81 million of other current assets related to the Latin American business that were classified as held for sale as of December 31, 2021
v3.22.4
Background and Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
General
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
Basis of Presentation

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.
We reclassified certain prior period amounts to conform to the current period presentation, including our revenue by product and service categories.
Segments SegmentsOur operations are integrated into and reported as part of Lumen Technologies. Lumen's chief operating decision maker ("CODM") is our CODM but reviews our financial information on an aggregate basis only in connection with our quarterly and annual reports that we file with the SEC. Consequently, we do not provide our discrete financial information to the CODM on a regular basis.
Use of Estimates
Use of Estimates

Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles. These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions we make when accounting for specific items and matters are reasonable, based on information available at the time they are made. These estimates, judgments and assumptions can materially affect the reported amounts of assets, liabilities and components of member's equity as of the dates of the consolidated balance sheets, as well as the reported amounts of revenue, expenses and components of cash flows during the periods presented in our other consolidated financial statements. We also make estimates in our assessments of potential losses in relation to threatened or pending tax and legal matters. See Note 13—Income Taxes and Note 16—Commitments, Contingencies and Other Items for additional information.

For matters not related to income taxes, if a loss contingency is considered probable and the amount can be reasonably estimated, we recognize an expense for the estimated loss. If we have the potential to recover a portion of the estimated loss from a third party, we make a separate assessment of recoverability and reduce the estimated loss if recovery is also deemed probable.
For matters related to income taxes, if we determine that the impact of an uncertain tax position is more likely than not to be sustained upon audit by the relevant taxing authority, then we recognize a benefit for the largest amount that is more likely than not to be sustained. No portion of an uncertain tax position will be recognized if the position has less than a 50% likelihood of being sustained. Interest is recognized on the amount of unrecognized benefit from uncertain tax positions.

For all of these and other matters, actual results could differ materially from our estimates.
Revenue Recognition
Revenue Recognition

We earn most of our consolidated revenue from contracts with customers, primarily through the provision of communications and other services. Revenue from contracts with customers is accounted for under Accounting Standards Codification ("ASC") 606. We also earn revenue from leasing arrangements (primarily fiber capacity and colocation agreements) which are not accounted for under ASC 606.

Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to receive in exchange for those goods or services. Revenue is recognized based on the following five-step model:

•Identification of the contract with a customer;

•Identification of the performance obligations in the contract;

•Determination of the transaction price;

•Allocation of the transaction price to the performance obligations in the contract; and

•Recognition of revenue when, or as, we satisfy a performance obligation.

We provide an array of communications services, including local voice, VPN, Ethernet, data, broadband, private line (including special access), network access, transport, voice, information technology ("IT"), video and other ancillary services. We provide these services to a wide range of businesses, including global, enterprise, wholesale, government, and small and medium business customers. Certain contracts also include the sale of equipment, which is not significant to our business.

We recognize revenue for services when we provide the applicable service or when control of a product is transferred. Recognition of certain payments received in advance of services being provided is deferred. These advance payments may include certain activation and certain installation charges. If the activation and installation charges are not separate performance obligations, we recognize them as revenue over the actual or expected contract term using historical experience, which typically ranges from one to five years depending on the service. In most cases, termination fees or other fees on existing contracts that are negotiated in conjunction with new contracts are deferred and recognized over the new contract term.

For access services, we generally bill fixed monthly charges one month in advance to customers and recognize revenue as service is provided over the contract term in alignment with the customer's receipt of service. For usage and other ancillary services, we generally bill in arrears and recognize revenue as usage or delivery occurs. In most cases, the amount invoiced for our service offerings constitutes the price that would be billed on a standalone basis.

Customer contracts are evaluated to determine whether the performance obligations are separable. If the performance obligations are deemed separable and separate earnings processes exist, the total transaction price that we expect to receive with the customer is allocated to each performance obligation based on its relative standalone selling price. The revenue associated with each performance obligation is then recognized as earned.
We periodically sell transmission capacity on our network. These transactions are generally structured as indefeasible rights of use, commonly referred to as IRUs, which are the exclusive right to use a specified amount of capacity or fiber for a specified term, typically 20 years. In most cases, we account for the cash consideration received on transfers of transmission capacity as ASC 606 revenue, which is adjusted for the time value of money and is recognized ratably over the term of the agreement. Cash consideration received on transfers of dark fiber is accounted for as non-ASC 606 lease revenue, which we also recognize ratably over the term of the agreement. We do not recognize revenue on any contemporaneous exchanges of our transmission capacity assets for other non-owned optical capacity assets.

In connection with offering products and services provided to the end user by third-party vendors, we review the relationship between us, the vendor and the end user to assess whether revenue should be reported on a gross or net basis. In assessing whether revenue should be reported on a gross or net basis, we consider whether we act as a principal in the transaction and control the goods and services used to fulfill the performance obligations associated with the transaction.

We have service level commitments pursuant to contracts with certain of our customers. To the extent that we determine such service levels were not achieved or may not have been achieved, we estimate the amount of credits to be issued and record a corresponding reduction to revenue in the period that the service level commitment was not met or may not be met.

Customer payments are made based on billing schedules included in our customer contracts, which is typically on a monthly basis.
We defer (or capitalize) incremental contract acquisition and fulfillment costs and recognize (or amortize) such costs over the average contract life. Our deferred contract costs for our customers have average amortization periods of approximately 34 months. These deferred costs are periodically monitored to reflect any significant change in assumptions.
Affiliate Transactions
Affiliate Transactions

We provide services to our affiliates that we also provide to external customers. These services are recognized as operating revenue-affiliates in our consolidated statements of operations. Services provided to us from our affiliates are recognized as operating expenses-affiliates on our consolidated statements of operations. Because of the significance of the services we provide to our affiliates and our affiliates provide to us, the results of operations, financial position and cash flows presented herein are not necessarily indicative of the results of operations, financial position and cash flows we would have achieved had we operated as a stand-alone entity during the periods presented.

We recognize intercompany charges at the amounts billed to us by our affiliates and we recognize intercompany revenue for services we bill to our affiliates. The resulting net balance for transactions between us and our affiliates at the end of each period is reported as accounts receivables - affiliates or accounts payable - affiliates on the accompanying consolidated balance sheets.

From time to time we make distributions to our parent, which reduce our capital resources for debt repayments or other purposes. Distributions are reflected on our consolidated statements of member's equity and our consolidated statements of cash flows reflects distributions made as financing activities.

Our ultimate parent company, Lumen Technologies, is currently indebted to us under a revolving credit facility.

For additional information, see Note 15—Affiliate Transactions.
Legal Costs
Legal Costs

In the normal course of our business, we incur costs to hire and retain external legal counsel to advise us on regulatory, litigation and other matters. Subject to certain exceptions, we expense these costs as the related services are received.
Income Taxes
Income Taxes

Under Lumen's tax allocation policy, Lumen Technologies treats our consolidated results as if we were a separate taxpayer. Our reported deferred tax assets and liabilities, as discussed below and in Note 13—Income Taxes, are primarily determined as a result of the application of the separate return allocation method and therefore the settlement of these amounts is dependent upon our parent, Lumen Technologies, rather than tax authorities. The policy requires us to pay our tax liabilities in cash based upon our separate return taxable income. We are also included in the combined state tax returns filed by Lumen Technologies and the same payment and allocation policy applies. The provision for income taxes consists of an amount for taxes currently payable, an amount for tax consequences deferred to future periods and adjustments to our liabilities for uncertain tax positions. We record deferred income tax assets and liabilities reflecting future tax consequences attributable to tax NOLs, tax credit carryforwards and differences between the financial statement carrying value of assets and liabilities and the tax basis of those assets and liabilities. Deferred taxes are computed using enacted tax rates expected to apply in the year in which the differences are expected to affect taxable income. The effect on deferred income tax assets and liabilities of a change in tax rate is recognized in earnings in the period that includes the enactment date.
We establish valuation allowances when necessary to reduce deferred income tax assets to the amounts that we believe are more likely than not to be recovered. Each quarter we evaluate the need to retain all or a portion of the valuation allowance on our deferred tax assets.
Cash and Cash Equivalents
Cash and Cash Equivalents

Cash and cash equivalents include highly liquid investments that are readily convertible into cash and are not subject to significant risk from fluctuations in interest rates. As a result, the value at which cash and cash equivalents are reported in our consolidated financial statements approximates their fair value. In evaluating investments for classification as cash equivalents, we require that individual securities have original maturities of ninety days or less and that individual investment funds have dollar-weighted average maturities of ninety days or less. To preserve capital and maintain liquidity, we invest with financial institutions we deem to be of sound financial condition and in high quality and relatively risk-free investment products. Our cash investment policy limits the concentration of investments with specific financial institutions or among certain products and includes criteria related to credit worthiness of any particular financial institution.
Book overdrafts occur when we have issued checks but they have not yet been presented to our controlled disbursement bank accounts for payment. Disbursement bank accounts allow us to delay funding of issued checks until the checks are presented for payment. Until the issued checks are presented for payment, the book overdrafts are included in accounts payable on our consolidated balance sheet. This activity is included in the operating activities section in our consolidated statements of cash flows.
Restricted Cash
Restricted Cash

Restricted cash and securities consist primarily of cash and investments that serve to collateralize our outstanding letters of credit and certain performance and operating obligations. Restricted cash and securities are recorded as current or non-current assets in the consolidated balance sheets depending on the duration of the restriction and the purpose for which the restriction exists. Restricted securities are stated at cost which approximates fair value as of December 31, 2022 and 2021.
Accounts Receivable and Allowance for Credit Losses
Accounts Receivable and Allowance for Credit Losses

Accounts receivable are recognized based upon the amount due from customers for the services provided or at cost for other receivables, less an allowance for credit losses. We use a loss rate method to estimate our allowance for credit losses. For more information on our methodology for estimating our allowance for credit losses, see Note 6—Credit Losses on Financial Instruments.
We generally consider our accounts past due if they are outstanding over 30 days. Our past due accounts are written off against our allowance for credit losses when collection is considered to be not probable. Any recoveries of accounts previously written off are generally recognized as a reduction in bad debt expense in the period received. The carrying value of accounts receivable net of the allowance for credit losses approximates fair value.
Concentration of Credit Risk Concentration of Credit RiskWe provide communications services to a wide range of wholesale and enterprise customers, ranging from well capitalized global enterprises to small early stage companies primarily in the United States and Europe. Credit risk with respect to accounts receivable is generally diversified due to the large number of entities comprising our customer base and their dispersion across many different industries and geographical regions. We perform ongoing credit evaluations of our customers' financial condition and generally require no collateral from our customers, although letters of credit and deposits are required in certain limited circumstances. We have, from time to time, entered into agreements with value added resellers and other channel partners to reach enterprise markets for voice services. We have policies and procedures in place to evaluate the financial condition of these resellers prior to initiating service to the final customer. We are not able to predict changes in the financial stability of our customers. Any material changes in the financial status of any one or a particular group of customers may cause us to adjust our estimate of the recoverability of receivables and could have a material effect on our results of operation.
Assets Held for Sale Assets Held for SaleWe classify assets and related liabilities as held for sale when: (i) management has committed to a plan to sell the assets, (ii) the net assets are available for immediate sale, (iii) there is an active program to locate a buyer and (iv) the sale and transfer of the net assets is probable within one year. Assets and liabilities held for sale are presented separately on our consolidated balance sheets with a valuation allowance, if necessary, to recognize the net carrying amount at the lower of cost or fair value, less costs to sell. Depreciation of property, plant and equipment and amortization of finite-lived intangible assets and right-of-use assets are not recorded while these assets are classified as held for sale. For each period that assets are classified as being held for sale, they are tested for recoverability. Unless otherwise specified, the amounts and information in the notes presented do not include assets and liabilities that have been classified as held for sale as of December 31, 2022.
Property, Plant and Equipment
Property, Plant and Equipment

We record purchased and constructed property, plant and equipment at cost, plus the estimated value of any associated legally or contractually required retirement obligations. We depreciate our property, plant and equipment using the straight-line method. Leasehold improvements are amortized over the shorter of the useful lives of the assets or the expected lease term. Expenditures for maintenance and repairs are expensed as incurred. During the construction phase of network and other internal-use capital projects, we capitalize related employee and interest costs. Property, plant and equipment supplies used internally are carried at average cost, except for significant individual items which are carried at actual cost.

We perform annual internal reviews to evaluate the reasonableness of the depreciable lives for our property, plant and equipment. Our reviews take into account actual usage, the physical condition of our property, plant, and equipment, industry data, and other relevant factors. Our remaining useful life assessments evaluate the possible loss in service value of assets that may precede the physical retirement. Assets shared among many customers may lose service value as those customers reduce their use of the asset. However, the asset is not retired until all customers no longer utilize the asset and we determine there is not alternative use for the asset.

We have asset retirement obligations associated with the legally or contractually required removal of a limited group of property, plant and equipment assets from leased properties and the disposal of certain hazardous materials present in our owned properties. When an asset retirement obligation is identified, usually in association with the acquisition of the asset, we record the fair value of the obligation as a liability. The fair value of the obligation is also capitalized as property, plant and equipment and then amortized over the estimated remaining useful life of the associated asset. Where the removal obligation is not legally binding, the net cost to remove assets is expensed in the period in which the costs are actually incurred.
We review long-lived tangible assets for impairment whenever facts and circumstances indicate that the carrying amounts of the assets may not be recoverable. For assessment purposes, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities, absent a material change in operations. An impairment loss is recognized only if the carrying amount of the asset group is not recoverable and exceeds its estimated fair value. Recoverability of the asset group to be held and used is assessed by comparing the carrying amount of the asset group to the estimated undiscounted future net cash flows expected to be generated by the asset group. If the asset group's carrying value is not recoverable, we recognize an impairment charge for the amount by which the carrying amount of the asset group exceeds its estimated fair value.
Goodwill, Customer Relationships and Other Intangible Assets
Goodwill, Customer Relationships and Other Intangible Assets

Intangible assets arising from business combinations, such as goodwill, customer relationships, capitalized software, trademarks and trade names, are initially recorded at estimated fair value. We amortize customer relationships primarily over an estimated life of 7 to 14 years, using the straight-line method, depending on the type of customer. We amortize capitalized software using the straight-line method over estimated lives ranging up to 7 years. We amortized our other intangible assets over an estimated life of 5 years prior to becoming fully amortized in the fourth quarter of 2022. Other intangible assets not arising from business combinations are initially recorded at cost. Where there are no legal, regulatory, contractual or other factors that would reasonably limit the useful life of an intangible asset, we classify the intangible asset as indefinite-lived and such intangible assets are not amortized.

Internally used software, whether purchased or developed by us, is capitalized and amortized using the straight-line method over its estimated useful life. We have capitalized certain costs associated with software such as costs of employees devoted to software development and external direct costs for materials and services. Costs associated with software to be used for internal purposes are expensed until the point at which the project has reached the development stage. Subsequent additions, modifications or upgrades to internal-use software are capitalized only to the extent that they allow the software to perform a task it previously did not perform. Software maintenance, data conversion and training costs are expensed in the period in which they are incurred. We review the remaining economic lives of our capitalized software annually. Capitalized software is included in other intangible assets, net, in our consolidated balance sheets.

We are required to assess our goodwill for impairment annually, or more frequently if an event occurs or circumstances change that would indicate it is more likely than not the fair value of our reporting unit is less than the carrying value. The impairment assessment is performed at the reporting unit level. We have determined that our operations consist of one reporting unit, consistent with our determination that our business consists of one operating segment. We are required to write-down the value of goodwill in periods in which the carrying amount of our reporting unit's equity exceeds the estimated fair value of the equity of the reporting unit, limited to the goodwill balance.
Foreign Currency
Foreign Currency

Local currencies of our foreign subsidiaries are the functional currencies for financial reporting purposes except for certain foreign subsidiaries, primarily in Latin America prior to the August 1, 2022 sale of our Latin American business. For operations outside the United States that have functional currencies other than the U.S. dollar, assets and liabilities are translated to U.S. dollars at period-end exchange rates, and revenue, expenses and cash flows are translated using average monthly exchange rates. A significant portion of our non-United States subsidiaries use either the British pound or the Euro, or used, prior to the August 1, 2022 sale of our Latin American business, the Brazilian Real, as their functional currency, each of which experienced significant fluctuations against the U.S. dollar during the years ended December 31, 2022, December 31, 2021 and December 31, 2020. We recognize foreign currency translation gains and losses as a component of accumulated other comprehensive loss in member's/stockholders' equity and in our consolidated statements of comprehensive (loss) income in accordance with accounting guidance for foreign currency translation. We consider the majority of our investments in our foreign subsidiaries to be long-term in nature. Our foreign currency transaction gains (losses), including where transactions with our non-United States subsidiaries are not considered to be long-term in nature, are included within other income (expense) in "Other, net" on our consolidated statements of operations.
Recently Adopted and Recently Issued Accounting Pronouncements
Recently Adopted Accounting Pronouncements

During 2022, we adopted Accounting Standards Update ("ASU") 2021-10, "Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance” (“ASU 2021-10”) and ASU 2021-05, “Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments” (“ASU 2021-05”). During 2021, we adopted ASU 2020-09, "Debt (Topic 470) Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762" ("ASU 2020-09"), ASU 2020-01, "Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815)" ("ASU 2020-01"), and ASU 2019-12, "Simplifying the Accounting for Income Taxes (Topic 740)" ("ASU 2019-12"). During 2020, we adopted ASU 2016-13, "Measurement of Credit Losses on Financial Instruments” ("ASU 2016-13").

Each of these is described further below.

Government Assistance

On January 1, 2022, we adopted ASU 2021-10. This ASU requires business entities to disclose information about certain types of government assistance they receive. 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. 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. 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. 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 December 31, 2022, we determined there was no application or discontinuation of the equity method during the reporting periods covered in this report. The adoption of ASU 2020-01 did not impact our consolidated financial statements.

Income Taxes

On January 1, 2021, we adopted 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.

Measurement of Credit Losses on Financial Instruments

We adopted ASU 2016-13 on January 1, 2020, and recognized a cumulative adjustment to our accumulated deficit as of the date of adoption of $3 million, net of tax effect of $2 million. Please refer to Note 6—Credit Losses on Financial Instruments for more information.
Recently Issued Accounting Pronouncements

In December 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-06, “Reference Rate Reform (Topic 848) – Deferral of the Sunset Date of Topic 848" ("ASU 2022-06"). These amendments extend the period of time preparers can utilize the reference rate reform relief guidance in Topic 848, which defers the sunset date from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. ASU 2022-06 is effective upon issuance. Based on our review of our key material contracts through December 31, 2022, ASU 2022-06 does not have a material impact to our consolidated financial statements.

In September 2022, the 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. As of December 31, 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 December 31, 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 December 31, 2022, we do not expect ASU 2022-02 to have an impact to our consolidated financial statements.

In March 2022, the FASB issued ASU 2022-01, “Derivatives and Hedging (Topic 815): Fair Value Hedging-Portfolio Layer Method” ("ASU 2022-01"). The ASU expands the current single-layer method to allow multiple hedged layers of a single closed portfolio under the method. ASU 2022-01 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted. As of December 31, 2022, ASU 2022-01 will not 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 December 31, 2022, we do not expect ASU 2021-08 to have an impact to our consolidated financial statements.

In January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848): Scope" ("ASU 2021-01"), which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU 2021-01 also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. These amendments may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. ASU 2021-01 provides 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 December 31, 2022, ASU 2021-01 will not have a material impact to our consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting" ("ASU 2020-04" or "Reference Rate Reform"), designed to ease the burden of accounting for contract modifications related to the global market-wide reference rate transition period. Subject to certain criteria, ASU 2020-04 provides qualifying entities the option to apply expedients and exceptions to contract modifications and hedging accounting relationships made until December 31, 2022. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. ASU 2020-04 provides optional 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 December 31, 2022, we do not expect ASU 2020-04 will have a material impact to our consolidated financial statements.
v3.22.4
Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business (Tables)
 12 Months Ended
Dec. 31, 2022
Discontinued Operations and Disposal Groups [Abstract]  
Components of pre-tax net 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:
Years Ended December 31,
2022(1)
20212020
(Dollars in millions)
Latin American business pre-tax net income
$197 214 160 
_______________________________________________________________________________
(1)The pre-tax net income includes operating results prior to the close of the sale of the Latin American business on August 1, 2022
August 1, 2022
(Dollars in millions)
Assets held for sale
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 held for sale$2,863 
Liabilities held for sale
Accounts payable$105 
Income and other taxes42 
Other current liabilities59 
Deferred income taxes154 
Other non-current liabilities122 
Total liabilities held for sale$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.
The pre-tax net income of the disposal group is estimated to be and reported as follows in the table below:

Years Ended December 31,
202220212020
(Dollars in millions)
EMEA business pre-tax net loss
$(226)$(98)$(41)
The principal components of the held for sale assets and liabilities of the EMEA business are as follows:

December 31, 2022
EMEA Business
(Dollars in millions)
Assets held for sale
Cash and cash equivalents$43 
Accounts receivable, less allowance of $5
76 
Other current assets56 
Property, plant and equipment, net accumulated depreciation of $998
1,864 
Goodwill (1)
— 
Customer relationships and other intangibles, net100 
Operating lease assets156 
Valuation allowance on assets held for sale (2)
(616)
Deferred tax assets131 
Other non-current assets32 
Total assets held for sale$1,842 
Liabilities held for sale
Accounts payable$78 
Salaries and benefits23 
Current portion of deferred revenue28 
Current operating lease liabilities33 
Other current liabilities28 
Deferred income taxes38 
Asset retirement obligations30 
Deferred revenue, non-current85 
Operating lease liabilities, non-current103 
Total liabilities held for sale$446 
______________________________________________________________________
(1)    The assignment of goodwill was based on the relative fair value of the disposal group prior to being classified as held for sale. Prior to classification as held for sale, the goodwill was fully impaired as described above.
(2)    Includes the impact of $353 million, primarily related to loss on foreign currency translation, expected to be reclassified out of accumulated other comprehensive loss upon close of the sale.
v3.22.4
Goodwill, Customer Relationships and Other Intangible Assets (Tables)
 12 Months Ended
Dec. 31, 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:
As of December 31,
2022(1)
2021(1)
(Dollars in millions)
Goodwill$1,970 6,666 
Customer relationships, less accumulated amortization of $3,265 and $2,779
$4,563 5,325 
Capitalized software, less accumulated amortization of $387 and $349
410 378 
Trade names, less accumulated amortization of $130 and $109
— 22 
Total other intangible assets, net$4,973 5,725 
______________________________________________________________________
(1)    These values exclude assets classified as held for sale.
Schedule of goodwill
The following table shows the rollforward of goodwill from December 31, 2020 through December 31, 2022:
(Dollars in millions)
As of December 31, 2020 (1)
$7,405 
Classified as held for sale (2)
(713)
Effect of foreign currency exchange rate changes and other(26)
As of December 31, 2021 (1)
6,666 
Effect of foreign currency exchange rate changes and other(58)
Impairment(4,638)
As of December 31, 2022 (1)
$1,970 
_______________________________________________________________________________
(1)Goodwill at December 31, 2022, December 31, 2021, December 31, 2020 is net of accumulated impairment loss of $8.2 billion, $3.6 billion and $3.7 billion, respectively. The change in accumulated impairment losses at December 31, 2021 is the result of amounts classified as held for sale related to the divestiture of our Latin American business. The change in accumulated impairment losses at December 31, 2022 is partially the result of the impairments discussed above and the result of amounts classified as held for sale related to our planned divestiture of our EMEA business.
(2)Represents the amount of goodwill, net of accumulated impairment loss classified as held for sale related to our Latin American business divestiture. See Note 2—Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business for more information.
Schedule of estimated amortization expense of intangible asset
We estimate that total amortization expense for intangible assets for the years ending 2023 through 2027 will be as provided in the table below. As a result of classifying our EMEA business as being held for sale on our December 31, 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—Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business for more information.
(Dollars in millions)
2023$681 
2024677 
2025658 
2026646 
2027600 
v3.22.4
Revenue Recognition (Tables)
 12 Months Ended
Dec. 31, 2022
Revenue from Contract with Customer [Abstract]  
Disaggregation of revenue
The following tables provide disaggregation of revenue from contracts with customers based on service offering for the years ended December 31, 2022, 2021 and 2020. 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:
Year Ended December 31, 2022
Total Revenue
Adjustments for Non-ASC 606 Revenue (1)
Total Revenue from Contracts with Customers
(Dollars in millions)
Compute and Application Services $1,025 (445)580 
IP and Data Services3,405 — 3,405 
Fiber Infrastructure Services 1,560 (221)1,339 
Voice and Other 1,276 (14)1,262 
Affiliate Services227 (227)— 
Total Revenue$7,493 (907)6,586 
Timing of revenue:
Goods transferred at a point in time$4 
Services performed over time6,582 
Total revenue from contracts with customers$6,586 
Year Ended December 31, 2021
Total Revenue
Adjustments for Non-ASC 606 Revenue (1)
Total Revenue from Contracts with Customers
(Dollars in millions)
Compute and Application Services$1,141 (504)637 
IP and Data Services3,555 — 3,555 
Fiber Infrastructure Services1,612 (220)1,392 
Voice and Other1,421 (12)1,409 
Affiliate Services223 (223)— 
Total Revenue$7,952 (959)6,993 
Timing of revenue:
Goods transferred at a point in time$13 
Services performed over time6,980 
Total revenue from contracts with customers$6,993 

Year Ended December 31, 2020
Total Revenue
Adjustments for Non-ASC 606 Revenue (1)
Total Revenue from Contracts with Customers
(Dollars in millions)
Compute and Application Services$1,098 (494)604 
IP and Data Services3,522 — 3,522 
Fiber Infrastructure Services1,507 (209)1,298 
Voice and Other1,598 (8)1,590 
Affiliate Services208 (208)— 
Total Revenue$7,933 (919)7,014 
Timing of revenue:
Goods transferred at a point in time$15 
Services performed over time6,999 
Total revenue from contracts with customers$7,014 
_______________________________________________________________
(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 classified as held for sale as of December 31, 2022 and 2021:
December 31, 2022December 31, 2021
(Dollars in millions)
Customer receivables (1)
$515 640 
Contract assets (2)
13 35 
Contract liabilities (3)
222 247 
_______________________________________________________________________________
(1)Reflects gross customer receivables of $534 million and $679 million, net of allowance for credit losses of $19 million and $39 million, as of December 31, 2022 and 2021, respectively. These amounts exclude customer receivables, net, classified as held for sale of $76 million at December 31, 2022 (related to the EMEA business) and $83 million at December 31, 2021 (related to the Latin American business).
(2)These amounts exclude contract assets classified as held for sale of $16 million at December 31, 2022 (related to the EMEA business). There were no contract assets classified as held for sale related to the Latin American business at December 31, 2021.
(3)These amounts exclude contract liabilities classified as held for sale of $59 million at December 31, 2022 (related to the EMEA business) and $58 million at December 31, 2021 (related to the Latin American business).
Capitalized contract cost
The following tables provide changes in our contract acquisition costs and fulfillment costs for the years ended:
Year Ended December 31, 2022
Acquisition CostsFulfillment Costs
(Dollars in millions)
Beginning of period balance$76 99 
Costs incurred61 83 
Amortization(55)(76)
Classified as held for sale (1)
(6)— 
End of period balance$76 106 
Year Ended December 31, 2021
Acquisition CostsFulfillment Costs
(Dollars in millions)
Beginning of period balance$78 122 
Costs incurred58 90 
Amortization(60)(86)
Classified as held for sale (1)
— (27)
End of period balance$76 99 
_____________________________________________________________________
(1)     Represents the amounts classified as held for sale related to our planned divestiture. See Note 2—Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business.
v3.22.4
Leases (Tables)
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Lease, cost
Lease expense consisted of the following:
Years Ended December 31,
202220212020
(Dollars in millions)
Operating and short-term lease cost$348 368 440 
Finance lease cost:
Amortization of right-of-use assets25 24 19 
Interest on lease liability11 12 11 
Total finance lease cost36 36 30 
Total lease cost$384 404 470 
Supplemental unaudited consolidated cash flow statement information related to leases:
Years Ended December 31,
20222021
(Dollars in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases$346 360 
Operating cash flows for finance leases11 12 
Financing cash flows for finance leases84 38 
Supplemental lease cash flow disclosures:
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities381 380 
Right-of-use assets obtained in exchange for new finance lease liabilities$70 28 
Assets and liabilities
Supplemental consolidated balance sheet information and other information related to leases:
Years Ended December 31,
LeasesClassification on the Balance Sheet20222021
(Dollars in millions)
Assets
Operating lease assets
Other, net (1)
$1,168 1,182 
Finance lease assetsProperty, plant and equipment, net of accumulated depreciation241 231 
Total leased assets $1,409 1,413 
Liabilities
Current
Operating
Current operating lease liabilities (2)
$326 299 
FinanceCurrent maturities of long-term debt14 16 
Noncurrent
Operating
Operating lease liabilities (3)
922 953 
FinanceLong-term debt210 226 
Total lease liabilities $1,472 1,494 
Weighted-average remaining lease term (years)
Operating leases 6.76.9
Finance leases 10.911.1
Weighted-average discount rate
Operating leases 5.23 %4.79 %
Finance leases 4.97 %4.81 %
_______________________________________________________________________________
(1) Includes affiliate operating lease assets of $391 million and $294 million as of December 31, 2022 and 2021, respectively.
(2) Includes current portion of affiliate operating lease liabilities of $125 million and $82 million as of December 31, 2022 and 2021, respectively.
(3) Includes noncurrent portion of affiliate operating lease liabilities of $286 million and $224 million as of December 31, 2022 and 2021, respectively.
Lessee, operating lease, liability, maturity
As of December 31, 2022, maturities of lease liabilities were as follows:
 Operating LeasesFinance Leases
 (Dollars in millions)
2023$379 25 
2024274 25 
2025228 26 
2026168 26 
202792 27 
Thereafter359 164 
Total lease payments1,500 293 
Less: interest(252)(69)
Total1,248 224 
Less: current portion(326)(14)
Long-term portion$922 210 
Finance lease, liability, maturity
As of December 31, 2022, maturities of lease liabilities were as follows:
 Operating LeasesFinance Leases
 (Dollars in millions)
2023$379 25 
2024274 25 
2025228 26 
2026168 26 
202792 27 
Thereafter359 164 
Total lease payments1,500 293 
Less: interest(252)(69)
Total1,248 224 
Less: current portion(326)(14)
Long-term portion$922 210 
v3.22.4
Credit Losses on Financial Instruments (Tables)
 12 Months Ended
Dec. 31, 2022
Credit Loss [Abstract]  
Allowance for credit losses on financing receivables
The following table presents the activity of our allowance for credit losses for our accounts receivable portfolio:
Years Ended December 31,
20222021
(Dollars in millions)
Balance at beginning of period$39 45 
Provision for expected losses4 19 
Write-offs charged against the allowance(22)(27)
Recoveries collected3 5 
Classified as held for sale (1)
(5)(3)
Foreign currency exchange rate changes adjustment— — 
Balance at end of period$19 39 
______________________________________________________________________ 
(1)     Represents the amounts classified as held for sale related to our planned and completed divestitures. See Note 2—Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business.
The following table presents details of our allowance for credit losses:
Beginning BalanceAdditionsDeductionsEnding Balance
(Dollars in millions)
2022$39 4 (24)19 
202145 19 (25)39 
2020(1)
13 41 (9)45 
_______________________________________________________________________________
(1)On January 1, 2020, we adopted ASU 2016-13 "Measurement of Credit Losses on Financial Instruments" and recognized a cumulative adjustment to our accumulated deficit as of the date of adoption of $3 million, net of a $2 million tax effect. This adjustment is included within "Deductions". Please refer to Note 6—Credit Losses on Financial Instruments for more information.
v3.22.4
Long-Term Debt (Tables)
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Schedule of long-term debt
The following table reflects our consolidated long-term debt, including finance leases and other obligations, unamortized discounts and premiums, net and unamortized debt issuance costs, but excluding intercompany debt:

Interest Rates (1)
Maturities (1)
December 31, 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 obligationsVariousVarious291 319 
Unamortized premiums, net3 34 
Unamortized debt issuance costs(49)(57)
Total long-term debt8,096 10,422 
Less current maturities(26)(26)
Long-term debt, excluding current maturities$8,070 10,396 
_______________________________________________________________________________
(1)As of December 31, 2022.
(2)See the remainder of this Note for a description of certain affiliate guarantees and liens securing this debt.
(3)The Tranche B 2027 Term Loan had an interest rate of 6.134% and 1.854% as of December 31, 2022 and December 31, 2021, respectively.
(4)See the remainder of this Note for a description of guarantees provided by certain affiliates of Level 3 Financing, Inc.
Schedule of debt repayments
During 2022, we used available cash to repay the following aggregate principal amounts of indebtedness through a combination of tender offers, redemptions and repayments. These transactions resulted in a net gain of $8 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 
Schedule of amount of gross interest expense, net of capitalized interest The following table presents the amount of gross interest expense, net of capitalized interest:
 Years Ended December 31,
 202220212020
 (Dollars in millions)
Interest expense:   
Gross interest expense$390 376 416 
Capitalized interest(16)(15)(23)
Total interest expense$374 361 393 
Schedule of aggregate future contractual maturities of long-term debt and capital leases (excluding unamortized premiums)
Set forth below is the aggregate principal amount of our long-term debt as of December 31, 2022 (excluding unamortized premiums, net, unamortized debt issuance costs and intercompany debt) maturing during the following years. As a result of classifying our EMEA business as held for sale on our December 31, 2022 consolidated balance sheet, the amounts presented below do not include maturities of the finance lease obligations of that business. See Note 2—Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business:
(Dollars in millions)
2023$26 
202432 
202537 
202636 
20274,181 
2028 and thereafter3,830 
Total long-term debt$8,142 
v3.22.4
Accounts Receivable (Tables)
 12 Months Ended
Dec. 31, 2022
Receivables [Abstract]  
Schedule of accounts receivable
The following table presents details of our accounts receivable balances:
Years Ended December 31,
20222021
(Dollars in millions)
Trade receivables$440 495 
Earned and unbilled receivables94 184 
Other2 2 
Total accounts receivable536 681 
Less: allowance for credit losses(19)(39)
Accounts receivable, less allowance$517 642 
Allowance for credit losses on financing receivables
The following table presents the activity of our allowance for credit losses for our accounts receivable portfolio:
Years Ended December 31,
20222021
(Dollars in millions)
Balance at beginning of period$39 45 
Provision for expected losses4 19 
Write-offs charged against the allowance(22)(27)
Recoveries collected3 5 
Classified as held for sale (1)
(5)(3)
Foreign currency exchange rate changes adjustment— — 
Balance at end of period$19 39 
______________________________________________________________________ 
(1)     Represents the amounts classified as held for sale related to our planned and completed divestitures. See Note 2—Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business.
The following table presents details of our allowance for credit losses:
Beginning BalanceAdditionsDeductionsEnding Balance
(Dollars in millions)
2022$39 4 (24)19 
202145 19 (25)39 
2020(1)
13 41 (9)45 
_______________________________________________________________________________
(1)On January 1, 2020, we adopted ASU 2016-13 "Measurement of Credit Losses on Financial Instruments" and recognized a cumulative adjustment to our accumulated deficit as of the date of adoption of $3 million, net of a $2 million tax effect. This adjustment is included within "Deductions". Please refer to Note 6—Credit Losses on Financial Instruments for more information.
v3.22.4
Property, Plant and Equipment (Tables)
 12 Months Ended
Dec. 31, 2022
Property, Plant and Equipment [Abstract]  
Property, plant and equipment
Net property, plant and equipment is composed of the following:
Depreciable LivesAs of December 31,
20222021
(Dollars in millions)
LandN/A$202 305 
Fiber conduit and other outside plant (1)
15-45 years
4,133 5,531 
Central office and other network electronics (2)
7-10 years
2,977 3,280 
Support assets (3)
3-30 years
2,145 2,504 
Construction-in-progress (4)
N/A721 624 
Gross property, plant and equipment10,178 12,244 
Accumulated depreciation(2,875)(3,202)
Net property, plant and equipment$7,303 9,042 
_______________________________________________________________________________
(1)Fiber, conduit and other outside plant consists of fiber and metallic cable, conduit, poles and other supporting structures.
(2)Central office and other network electronics consists of circuit and packet switches, routers, transmission electronics and electronics providing service to customers.
(3)Support assets consist of buildings, data centers, computers and other administrative and support equipment.
(4)Construction in progress includes construction and property of the aforementioned categories that has not been placed in service as it is still under construction.
Schedule of change in asset retirement obligation
The following table provides asset retirement obligation activity:
Years Ended December 31,
20222021
(Dollars in millions)
Balance at beginning of period$121 122 
Accretion expense5 5 
Liabilities settled(7)(10)
Change in estimate(4)7 
Classified as held for sale (1)
(30)(3)
Balance at end of period$85 121 
_______________________________________________________________________________
(1)Represents the amounts classified as held for sale related to our divestitures. See Note 2—Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business.
v3.22.4
Fair Value of Financial Instruments (Tables)
 12 Months Ended
Dec. 31, 2022
Fair Value Disclosures [Abstract]  
Fair value measurement inputs and valuation techniques
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.
Schedule of fair value of liabilities measured on a recurring basis
The following table presents the carrying amounts and estimated fair values of our financial liabilities as of December 31, 2022 and 2021, as well as the input level used to determine the fair values indicated below:

As of December 31,
20222021
Input LevelCarrying AmountFair ValueCarrying AmountFair Value
(Dollars in million)
Liabilities-Long-term debt, excluding finance leases and other obligations2$7,805 6,581 10,103 10,090 
Indemnifications related to the sale of the Latin American business3$86 86 — — 
v3.22.4
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Components of income tax expense (benefit)
The components of the income tax expense are as follows:
Years Ended December 31,
202220212020
(Dollars in millions)
Federal
Current$— — — 
Deferred271 125 162 
State and local
Current21 12 22 
Deferred4 28 42 
Foreign
Current26 16 19 
Deferred(66)16 (24)
Total income tax expense$256 197 221 
Schedule of income before income tax, domestic and foreign
Years Ended December 31,
202220212020
(Dollars in millions)
Income tax expense was allocated as follows:
Income tax expense in the consolidated statements of operations:
Attributable to income$256 197 221 
Member's equity:
Tax effect of the change in accumulated other comprehensive loss$(58)(30)43 
Schedule of effective income tax rate reconciliation
The following is a reconciliation from the statutory federal income tax rate to our effective income tax rate:

Years Ended December 31,
202220212020
(Percentage of pre-tax income)
Statutory federal income tax rate21.0 %21.0 %21.0 %
State income taxes, net of federal income tax benefit(0.3)%4.1 %5.8 %
Goodwill impairment(21.4)%— %— %
Tax law changes— %— %(1.5)%
Divestiture of business(1)
(5.1)%— %— %
Net foreign income tax0.2 %1.6 %0.9 %
Research and development credits0.1 %(0.4)%(0.6)%
Other, net(0.1)%(1.1)%(0.3)%
Effective income tax rate(5.6)%25.2 %25.3 %
_______________________________________________________________________________
(1)Includes Global Intangible Low-Taxes Income ("GILTI") incurred as a result of the sale of our Latin American business.
Deferred tax assets and liabilities
The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows:
As of December 31,
20222021
(Dollars in millions)
Deferred tax assets
Deferred revenue$261 306 
Net operating loss carry forwards1,680 3,191 
Property, plant and equipment92 71 
Other448 267 
Gross deferred tax assets2,481 3,835 
Less valuation allowance(303)(1,103)
Net deferred tax assets2,178 2,732 
Deferred tax liabilities
Deferred revenue(5)(14)
Property, plant and equipment(1,142)(1,295)
Intangible assets(1,328)(1,539)
Other(58)(20)
Gross deferred tax liabilities(2,533)(2,868)
Net deferred tax liabilities$(355)(136)
Schedule of unrecognized tax benefits
A reconciliation of the change in our gross unrecognized tax benefits (excluding both interest and any related federal benefit) from January 1 to December 31 for 2022 and 2021 is as follows:
20222021
(Dollars in millions)
Unrecognized tax benefits at beginning of period$876 923 
Tax positions of current year netted against deferred tax assets(34)— 
Tax positions of prior periods netted against deferred tax assets— (49)
Decrease in tax positions taken in the prior period(2)— 
Increase in tax positions taken in the current period3 4 
Decrease due to settlement/payments— (2)
Decrease from the lapse of statute of limitations(30)— 
Unrecognized tax benefits at end of period$813 876 
v3.22.4
Geographic and Customer Concentrations (Tables)
 12 Months Ended
Dec. 31, 2022
Revenues [Abstract]  
Schedule of operating revenues by geographic region
The following tables present total assets as of the years ended December 31, 2022 and 2021 as well as operating revenue for the years ended December 31, 2022, 2021 and 2020 by geographic region:
Total Assets
As of December 31,
20222021
(Dollars in millions)
North America$18,061 23,296 
Europe, Middle East and Africa1,698 2,830 
Latin America— 1,969 
Total$19,759 28,095 

Revenue
Years Ended December 31,
202220212020
(Dollars in millions)
North America$6,256 6,365 6,411 
Europe, Middle East and Africa734 805 785 
Latin America(1)
503 782 737 
Total$7,493 7,952 7,933 
_______________________________________________________________________________
(1)Includes revenue prior to closing the sale of the Latin American business on August 1, 2022.
v3.22.4
Commitments, Contingencies and Other Items (Tables)
 12 Months Ended
Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
Schedule of future rental commitments for right-of-way agreements
As of December 31, 2022, our future rental commitments for right-of-way ("ROW") agreements were as follows:
Future Rental Commitments and ROW Agreements
(Dollars in millions)
2023$113 
202449 
202543 
202641 
202740 
2028 and thereafter360 
Total future minimum payments$646 
v3.22.4
Accumulated Other Comprehensive Loss (Tables)
 12 Months Ended
Dec. 31, 2022
Equity [Abstract]  
Schedule of accumulated other comprehensive income (loss)
The table below summarizes changes in accumulated other comprehensive (loss) recorded on our consolidated balance sheet by component for the years ended December 31, 2021 and December 31, 2022:
Pension PlansForeign Currency Translation Adjustments and OtherTotal
(Dollars in millions)
Balance at December 31, 2020$(13)(221)(234)
Other comprehensive loss, net of tax16 (133)(117)
Net other comprehensive loss16 (133)(117)
Balance at December 31, 2021$3 (354)(351)
Other comprehensive income (loss), net of tax18 (123)(105)
Amounts reclassified in accumulated other comprehensive (loss) income— 112 112 
Net other comprehensive income (loss)18 (11)7 
Balance at December 31, 2022$21 (365)(344)
Reclassification out of accumulated other comprehensive (loss) income
The tables below present further information about our reclassifications out of accumulated other comprehensive (loss) income by component for the year ended December 31, 2022:

Year Ended December 31, 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 
v3.22.4
Other Financial Information (Tables)
 12 Months Ended
Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Other Current Assets
The following table presents details of other current assets reflected in our consolidated balance sheets:

As of December 31,
20222021
(Dollars in millions)
Prepaid expenses$99 109 
Contract fulfillment costs44 48 
Contract acquisition costs42 45 
Contract assets10 28 
Other2 9 
Total other current assets (1)
$197 239 
_______________________________________________________________________________
(1)Excludes $56 million of other current assets related to the EMEA business that were classified as held for sale as of December 31, 2022 and $81 million of other current assets related to the Latin American business that were classified as held for sale as of December 31, 2021
v3.22.4
Background and Summary of Significant Accounting Policies (Details)
$ in Millions
 12 Months Ended
Dec. 31, 2022
USD ($)
reporting_unit
segment
numberOfSegment
Dec. 31, 2021
USD ($)
Dec. 31, 2020
USD ($)
Dec. 31, 2019
USD ($)
Description of Business        
Number of reportable segments | numberOfSegment 1      
Bank overdrafts $ 0 $ 0    
Accounts receivable, period past due 30 days      
Number of reporting units | reporting_unit 1      
Number of operating segments | segment 1      
Income tax expense (benefit) $ 256 197 $ 221  
Member's equity        
Description of Business        
Partners' capital $ 7,142 $ 13,360 13,139 $ 13,724
Cumulative Effect, Period of Adoption, Adjustment | Member's equity        
Description of Business        
Partners' capital       (3)
Income tax expense (benefit)     $ (2) $ (2)
Capitalized software        
Description of Business        
Finite-lived intangible assets, useful life 7 years      
Other        
Description of Business        
Finite-lived intangible assets, useful life 5 years      
Minimum        
Description of Business        
Contract term 1 year      
Minimum | Customer relationships        
Description of Business        
Finite-lived intangible assets, useful life 7 years      
Maximum        
Description of Business        
Contract term 5 years      
Period company may receive up front payments for services to be provided in the future (in years) 20 years      
Maximum | Customer relationships        
Description of Business        
Finite-lived intangible assets, useful life 14 years      
Weighted Average | Consumer Customers        
Description of Business        
Length of customer life 34 months      
v3.22.4
Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business - Additional Information (Details) - USD ($)
$ in Millions
 12 Months Ended
Oct. 31, 2022
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Nov. 02, 2022
Aug. 01, 2022
Jul. 25, 2021
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]              
Gain on disposal of business   $ (616) $ 0 $ 0      
Depreciation and amortization   1,534 1,717 1,689      
Goodwill impairment   4,638 $ 0 $ 0      
Disposal Group, Held-for-sale              
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]              
Depreciation and amortization   50          
Disposal Group, Held-for-sale | Latin American Business              
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]              
Cash consideration for disposal of business             $ 2,700
Total assets held for sale           $ 2,863  
Disposal Group, Held-for-sale | EMEA Business              
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]              
Cash consideration for disposal of business         $ 1,800    
Gain on disposal of business   (616)          
Goodwill impairment $ 224            
Total assets held for sale   1,842          
Disposal Group, Disposed of by Sale | Latin American Business              
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]              
Gain on disposal of business   123          
Fair value of indemnification   $ 86          
Total assets held for sale           $ 2,400  
v3.22.4
Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business - Pre-tax Net Income (Loss) (Details) - Disposal Group, Held-for-sale - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Latin American Business      
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]      
Pre-tax net income (loss) $ 197 $ 214 $ 160
EMEA Business      
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]      
Pre-tax net income (loss) $ (226) $ (98) $ (41)
v3.22.4
Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business - Components of Held for Sale Assets and Liabilities (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Aug. 01, 2022
Dec. 31, 2021
Dec. 31, 2020
Assets held for sale        
Cash and cash equivalents $ 44   $ 39 $ 0
Other current assets 56   $ 81  
Disposal Group, Held-for-sale | Latin American Business        
Assets held for sale        
Cash and cash equivalents   $ 40    
Accounts receivable, less allowance   105    
Other current assets   86    
Property, plant and equipment, net accumulated depreciation   1,703    
Goodwill   719    
Customer relationships and other intangibles, net   140    
Other non-current assets   70    
Total assets held for sale   2,863    
Accounts receivable, allowance   3    
Property, plant and equipment, accumulated depreciation   447    
Liabilities held for sale        
Accounts payable   105    
Income and other taxes   42    
Other current liabilities   59    
Deferred income taxes   154    
Other non-current liabilities   122    
Total liabilities held for sale   $ 482    
Disposal Group, Held-for-sale | EMEA Business        
Assets held for sale        
Cash and cash equivalents 43      
Accounts receivable, less allowance 76      
Other current assets 56      
Property, plant and equipment, net accumulated depreciation 1,864      
Goodwill 0      
Customer relationships and other intangibles, net 100      
Operating lease assets 156      
Valuation allowance on assets held for sale (616)      
Deferred tax assets 131      
Other non-current assets 32      
Total assets held for sale 1,842      
Accounts receivable, allowance 5      
Property, plant and equipment, accumulated depreciation 998      
Liabilities held for sale        
Accounts payable 78      
Salaries and benefits 23      
Current portion of deferred revenue 28      
Current operating lease liabilities 33      
Other current liabilities 28      
Deferred income taxes 38      
Asset retirement obligations 30      
Deferred revenue, non-current 85      
Operating lease liabilities, non-current 103      
Total liabilities held for sale 446      
Loss on foreign currency translation $ 353      
v3.22.4
Goodwill, Customer Relationships and Other Intangible Assets - Schedule of Goodwill and Intangible Assets (Details) - USD ($)
$ in Millions
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Finite-Lived and Indefinite-Lived Intangible Assets      
Goodwill $ 1,970 $ 6,666 $ 7,405
Finite lived intangible assets, net 4,973 5,725  
Customer relationships      
Finite-Lived and Indefinite-Lived Intangible Assets      
Finite lived intangible assets, net 4,563 5,325  
Accumulated amortization 3,265 2,779  
Capitalized software      
Finite-Lived and Indefinite-Lived Intangible Assets      
Finite lived intangible assets, net 410 378  
Accumulated amortization 387 349  
Trade names      
Finite-Lived and Indefinite-Lived Intangible Assets      
Finite lived intangible assets, net 0 22  
Accumulated amortization $ 130 $ 109  
v3.22.4
Goodwill, Customer Relationships and Other Intangible Assets - Additional Information (Details)
$ in Millions
 12 Months Ended
Oct. 31, 2022
USD ($)
Dec. 31, 2022
USD ($)
reporting_unit
Dec. 31, 2021
USD ($)
Dec. 31, 2020
USD ($)
Oct. 31, 2021
Jul. 31, 2021
Oct. 31, 2020
Acquired Finite-Lived Intangible Assets [Line Items]              
Intangible assets and goodwill   $ 10,700          
Number of reporting units | reporting_unit   1          
Weighted average cost of capital (as a percent) 9.40%            
After-tax cost of debt (as a percent) 4.80%            
Cost of equity (as a percent) 14.00%            
Goodwill impairment   $ 4,638 $ 0 $ 0      
Goodwill impairment (as a percent)         14.00% 17.00% 17.00%
Acquired finite-lived intangible asset amortization expense   $ 744 $ 843 $ 838      
Acquired finite-lived intangible assets, weighted average useful life   7 years          
Customer relationships              
Acquired Finite-Lived Intangible Assets [Line Items]              
Acquired finite-lived intangible assets, weighted average useful life   8 years          
Capitalized software              
Acquired Finite-Lived Intangible Assets [Line Items]              
Acquired finite-lived intangible assets, weighted average useful life   4 years          
Disposal Group, Held-for-sale | EMEA Business              
Acquired Finite-Lived Intangible Assets [Line Items]              
Goodwill impairment $ 224            
North America Business              
Acquired Finite-Lived Intangible Assets [Line Items]              
Goodwill impairment $ 4,400            
Revenue Multiple              
Acquired Finite-Lived Intangible Assets [Line Items]              
Goodwill impairment, measurement input 2.5            
Revenue Multiple | Minimum              
Acquired Finite-Lived Intangible Assets [Line Items]              
Goodwill impairment, measurement input 1.8            
Revenue Multiple | Maximum              
Acquired Finite-Lived Intangible Assets [Line Items]              
Goodwill impairment, measurement input 4.6            
EBITDA Multiple              
Acquired Finite-Lived Intangible Assets [Line Items]              
Goodwill impairment, measurement input 7.1            
EBITDA Multiple | Minimum              
Acquired Finite-Lived Intangible Assets [Line Items]              
Goodwill impairment, measurement input 4.7            
EBITDA Multiple | Maximum              
Acquired Finite-Lived Intangible Assets [Line Items]              
Goodwill impairment, measurement input 10.8            
v3.22.4
Goodwill, Customer Relationships and Other Intangible Assets - Goodwill Activity (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Goodwill [Roll Forward]      
Goodwill, beginning balance $ 6,666 $ 7,405  
Reclassified as held for sale   (713)  
Effect of foreign currency exchange rate changes and other (58) (26)  
Goodwill impairment (4,638) 0 $ 0
Goodwill, ending balance 1,970 6,666 7,405
Goodwill, accumulated impairment loss $ 8,200 $ 3,600 $ 3,700
v3.22.4
Goodwill, Customer Relationships and Other Intangible Assets - Future Amortization Expense (Details)
$ in Millions
Dec. 31, 2022
USD ($)
Estimated amortization expense of acquired finite-lived intangible asset  
2023 $ 681
2024 677
2025 658
2026 646
2027 $ 600
v3.22.4
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Disaggregation of Revenue [Line Items]      
Total Revenue $ 7,493 $ 7,952 $ 7,933
Adjustments for Non-ASC 606 Revenue (907) (959) (919)
Total Revenue from Contracts with Customers 6,586 6,993 7,014
Transferred at Point in Time      
Disaggregation of Revenue [Line Items]      
Total Revenue from Contracts with Customers 4 13 15
Transferred over Time      
Disaggregation of Revenue [Line Items]      
Total Revenue from Contracts with Customers 6,582 6,980 6,999
Compute and Application Services      
Disaggregation of Revenue [Line Items]      
Total Revenue 1,025 1,141 1,098
Adjustments for Non-ASC 606 Revenue (445) (504) (494)
Total Revenue from Contracts with Customers 580 637 604
IP and Data Services      
Disaggregation of Revenue [Line Items]      
Total Revenue 3,405 3,555 3,522
Adjustments for Non-ASC 606 Revenue 0 0 0
Total Revenue from Contracts with Customers 3,405 3,555 3,522
Fiber Infrastructure Services      
Disaggregation of Revenue [Line Items]      
Total Revenue 1,560 1,612 1,507
Adjustments for Non-ASC 606 Revenue (221) (220) (209)
Total Revenue from Contracts with Customers 1,339 1,392 1,298
Voice and Other      
Disaggregation of Revenue [Line Items]      
Total Revenue 1,276 1,421 1,598
Adjustments for Non-ASC 606 Revenue (14) (12) (8)
Total Revenue from Contracts with Customers 1,262 1,409 1,590
Affiliate Services      
Disaggregation of Revenue [Line Items]      
Total Revenue 227 223 208
Adjustments for Non-ASC 606 Revenue (227) (223) (208)
Total Revenue from Contracts with Customers $ 0 $ 0 $ 0
v3.22.4
Revenue Recognition - Customer Receivables and Contract Balances (Details) - USD ($)
$ in Millions
Dec. 31, 2022
Dec. 31, 2021
Capitalized Contract Cost [Line Items]    
Customer receivables $ 515 $ 640
Contract assets 13 35
Contract liabilities 222 247
Accounts receivable, gross 534 679
Allowance for credit loss 19 39
Disposal Group, Held-for-sale | EMEA Business    
Capitalized Contract Cost [Line Items]    
Customer receivables 76  
Contract assets 16  
Contract liabilities $ 59  
Disposal Group, Held-for-sale | Latin American Business    
Capitalized Contract Cost [Line Items]    
Customer receivables   83
Contract assets   0
Contract liabilities   $ 58
v3.22.4
Revenue Recognition - Additional Information (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Jan. 01, 2022
Jan. 01, 2021
Disaggregation of Revenue [Line Items]        
Amounts included in contract liability $ 148 $ 182    
Contract liabilities     $ 305 $ 385
Minimum        
Disaggregation of Revenue [Line Items]        
Contract term 1 year      
Maximum        
Disaggregation of Revenue [Line Items]        
Contract term 5 years      
Weighted Average | Business Customers        
Disaggregation of Revenue [Line Items]        
Length of customer life 34 months      
v3.22.4
Revenue Recognition - Remaining Performance Obligation (Details)
$ in Billions
Dec. 31, 2022
USD ($)
Revenue from Contract with Customer [Abstract]  
Remaining performance obligation $ 4.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation, percentage 87.00%
Remaining performance obligation, satisfaction period 3 years
v3.22.4
Revenue Recognition - Contract Costs (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Acquisition Costs    
Capitalized Contract Cost [Roll Forward]    
Beginning of period balance $ 76 $ 78
Costs incurred 61 58
Amortization (55) (60)
Classified as held for sale (6) 0
End of period balance 76 76
Fulfillment Costs    
Capitalized Contract Cost [Roll Forward]    
Beginning of period balance 99 122
Costs incurred 83 90
Amortization (76) (86)
Classified as held for sale 0 (27)
End of period balance $ 106 $ 99
v3.22.4
Leases - Lease Expense (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Leases [Abstract]      
Operating and short-term lease cost $ 348 $ 368 $ 440
Finance lease cost:      
Amortization of right-of-use assets 25 24 19
Interest on lease liability 11 12 11
Total finance lease cost 36 36 30
Total lease cost $ 384 $ 404 $ 470
v3.22.4
Leases - Additional Information (Details)
$ in Millions
 12 Months Ended
Dec. 31, 2022
USD ($)
property
Dec. 31, 2021
USD ($)
Dec. 31, 2020
USD ($)
Leases [Abstract]      
Number of properties ceased | property 13    
Accelerated lease cost $ 15    
Gross rental expense 384 $ 404 $ 470
Sublease rental income 14 12 8
Gross rental income $ 746 $ 802 $ 760
Rental income as percentage of operating revenue 10.00%    
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] Total operating revenue Total operating revenue Total operating revenue
v3.22.4
Leases - Supplemental Balance Sheet Information (Details) - USD ($)
$ in Millions
Dec. 31, 2022
Dec. 31, 2021
Assets    
Operating lease assets $ 1,168 $ 1,182
Finance lease assets 241 231
Total leased assets $ 1,409 $ 1,413
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] Other, net Other, net
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] Property, plant and equipment, net of accumulated depreciation $2,875 and $3,202 Property, plant and equipment, net of accumulated depreciation $2,875 and $3,202
Current    
Operating $ 326 $ 299
Finance 14 16
Noncurrent    
Operating 922 953
Finance 210 226
Total lease liabilities $ 1,472 $ 1,494
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] Current maturities of long-term debt Current maturities of long-term debt
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] LONG-TERM DEBT LONG-TERM DEBT
Weighted-average remaining lease term (years)    
Operating leases 6 years 8 months 12 days 6 years 10 months 24 days
Finance leases 10 years 10 months 24 days 11 years 1 month 6 days
Weighted-average discount rate    
Operating leases 5.23% 4.79%
Finance leases 4.97% 4.81%
Affiliated Entity    
Assets    
Operating lease assets $ 391 $ 294
Current    
Operating 125 82
Noncurrent    
Operating $ 286 $ 224
v3.22.4
Leases - Supplemental Cash Flow Information (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Leases [Abstract]    
Operating cash flows for operating leases $ 346 $ 360
Operating cash flows for finance leases 11 12
Financing cash flows for finance leases 84 38
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities 381 380
Right-of-use assets obtained in exchange for new finance lease liabilities $ 70 $ 28
v3.22.4
Leases - Maturities of Lease Liabilities (Details) - USD ($)
$ in Millions
Dec. 31, 2022
Dec. 31, 2021
Operating Leases    
2023 $ 379  
2024 274  
2025 228  
2026 168  
2027 92  
Thereafter 359  
Total lease payments 1,500  
Less: interest (252)  
Total 1,248  
Less: current portion (326) $ (299)
Operating lease liabilities 922 953
Finance Leases    
2023 25  
2024 25  
2025 26  
2026 26  
2027 27  
Thereafter 164  
Total lease payments 293  
Less: interest (69)  
Total 224  
Less: current portion (14) (16)
Long-term portion $ 210 $ 226
v3.22.4
Credit Losses on Financial Instruments (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Financing Receivable, Allowance for Credit Loss [Roll Forward]    
Balance at beginning of period $ 39 $ 45
Provision for expected losses 4 19
Write-offs charged against the allowance (22) (27)
Recoveries collected 3 5
Classified as held for sale (5) (3)
Foreign currency exchange rate changes adjustment 0 0
Balance at end of period $ 19 $ 39
v3.22.4
Long-Term Debt - Schedule of Long Term Debt (Details) - USD ($)
$ in Millions
 12 Months Ended
Nov. 27, 2019
Dec. 31, 2022
Dec. 31, 2021
Debt Instrument [Line Items]      
Finance leases and other obligations   $ 291 $ 319
Unamortized premiums, net   3 34
Unamortized debt issuance costs   (49) (57)
Total long-term debt   8,096 10,422
Less current maturities   (26) (26)
Long-term debt, excluding current maturities   8,070 10,396
Senior Notes | Senior Notes Maturing 2027-2029      
Debt Instrument [Line Items]      
Long-term debt, gross   $ 1,500 1,500
Senior Notes | Senior Notes Maturing 2027-2029 | Minimum      
Debt Instrument [Line Items]      
Stated interest rate   3.40%  
Senior Notes | Senior Notes Maturing 2027-2029 | Maximum      
Debt Instrument [Line Items]      
Stated interest rate   3.875%  
Senior Notes | Senior Notes Maturing 2025-2029      
Debt Instrument [Line Items]      
Long-term debt, gross   $ 3,940 5,515
Senior Notes | Senior Notes Maturing 2025-2029 | Minimum      
Debt Instrument [Line Items]      
Stated interest rate   3.625%  
Senior Notes | Senior Notes Maturing 2025-2029 | Maximum      
Debt Instrument [Line Items]      
Stated interest rate   4.625%  
Term Loan | Tranche B 2027 Term Loan      
Debt Instrument [Line Items]      
Long-term debt, gross   $ 2,411 $ 3,111
Effective percentage   6.134% 1.854%
Term Loan | Tranche B 2027 Term Loan | LIBOR      
Debt Instrument [Line Items]      
Basis spread on variable rate (as a percent) 1.00% 1.75%  
v3.22.4
Long-Term Debt - New Issuances (Details) - Senior Notes - 3.750% Senior Notes Due 2029
Jan. 13, 2021
USD ($)
Debt Instrument [Line Items]  
Aggregate principal amount $ 900,000,000
Stated interest rate 3.75%
v3.22.4
Long-Term Debt - Repayments (Details) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2022
Extinguishment of Debt [Line Items]    
Repayments of debt   $ 2,275
Term loan | Tranche B 2027 Term Loan    
Extinguishment of Debt [Line Items]    
Repayments of debt $ 700  
Senior Notes | 5.375% Senior Notes due 2025    
Extinguishment of Debt [Line Items]    
Stated interest rate 5.375%  
Repayments of debt $ 800  
Senior Notes | 5.250% Senior Notes due 2026    
Extinguishment of Debt [Line Items]    
Stated interest rate 5.25%  
Repayments of debt $ 775  
v3.22.4
Long-Term Debt - Redemption of Senior Notes (Details) - USD ($)
$ in Millions
 12 Months Ended
Feb. 12, 2021
Dec. 31, 2022
Debt Instrument [Line Items]    
Gain from extinguishment of debt   $ 8
Senior Notes    
Debt Instrument [Line Items]    
Gain from extinguishment of debt $ 16  
Senior Notes | 5.375% Senior Notes Due 2024    
Debt Instrument [Line Items]    
Amount of debt redeemed $ 900  
Stated interest rate 5.375%  
v3.22.4
Long-Term Debt - Interest Expense (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Debt Disclosure [Abstract]      
Gross interest expense $ 390 $ 376 $ 416
Capitalized interest (16) (15) (23)
Total interest expense $ 374 $ 361 $ 393
v3.22.4
Long-Term Debt - Senior Secured Term Loan (Details) - Term Loan - Tranche B 2027 Term Loan - USD ($)
$ in Millions
 12 Months Ended
Nov. 27, 2019
Dec. 31, 2022
Dec. 31, 2021
Debt Instrument [Line Items]      
Outstanding debt   $ 2,411 $ 3,111
Federal Funds Effective Rate      
Debt Instrument [Line Items]      
Basis spread on variable rate (as a percent) 0.50%    
LIBOR      
Debt Instrument [Line Items]      
Basis spread on variable rate (as a percent) 1.00% 1.75%  
Base Rate      
Debt Instrument [Line Items]      
Basis spread on variable rate (as a percent) 0.75%    
Eurodollar      
Debt Instrument [Line Items]      
Basis spread on variable rate (as a percent) 1.75%    
v3.22.4
Long-Term Debt - Senior Notes (Details) - Senior Notes
 12 Months Ended
Dec. 31, 2022
Minimum  
Debt Instrument [Line Items]  
Redemption period 10 days
Senior Notes Due 2025 and Senior Notes Due 2026 | Maximum  
Debt Instrument [Line Items]  
Redemption period 60 days
v3.22.4
Long-Term Debt - Maturities of Debt (Details)
$ in Millions
Dec. 31, 2022
USD ($)
Debt Disclosure [Abstract]  
2023 $ 26
2024 32
2025 37
2026 36
2027 4,181
2028 and thereafter 3,830
Total long-term debt $ 8,142
v3.22.4
Long-Term Debt - Letters of Credit (Details) - Letter of credit - USD ($)
$ in Millions
Dec. 31, 2022
Dec. 31, 2021
Debt Instrument [Line Items]    
Letters of credit outstanding $ 3 $ 9
Collateralized debt obligations    
Debt Instrument [Line Items]    
Letters of credit outstanding $ 3 $ 5
v3.22.4
Long-Term Debt - Covenants (Details)
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Redemption price, percentage 101.00%
v3.22.4
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($)
$ in Millions
Dec. 31, 2022
Dec. 31, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total accounts receivable $ 536 $ 681
Other receivables 2 2
Less: allowance for credit losses (19) (39)
Accounts receivable, less allowance 517 642
Trade receivables    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total accounts receivable 440 495
Earned and unbilled receivables    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total accounts receivable $ 94 $ 184
v3.22.4
Accounts Receivable - Allowance for Doubtful Accounts (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Accounts Receivable, Allowance for Credit Loss [Roll Forward]        
Beginning Balance $ 39 $ 45 $ 13  
Additions 4 19 41  
Deductions (24) (25) (9)  
Ending Balance 19 39 45 $ 13
Financing Receivable, Allowance for Credit Loss [Line Items]        
Income tax expense (benefit) 256 197 221  
Member's equity        
Financing Receivable, Allowance for Credit Loss [Line Items]        
Partners' capital $ 7,142 $ 13,360 13,139 13,724
Cumulative Effect, Period of Adoption, Adjustment | Member's equity        
Financing Receivable, Allowance for Credit Loss [Line Items]        
Partners' capital       (3)
Income tax expense (benefit)     $ (2) $ (2)
v3.22.4
Property, Plant and Equipment - Net Property, Plant and Equipment (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Property, Plant and Equipment, Net [Abstract]    
Gross property, plant and equipment $ 10,178 $ 12,244
Accumulated depreciation (2,875) (3,202)
Net property, plant and equipment 7,303 9,042
Land    
Property, Plant and Equipment, Net [Abstract]    
Gross property, plant and equipment 202 305
Fiber conduit and other outside plant    
Property, Plant and Equipment, Net [Abstract]    
Gross property, plant and equipment $ 4,133 5,531
Fiber conduit and other outside plant | Minimum    
Property, Plant and Equipment [Line Items]    
Depreciable Lives 15 years  
Fiber conduit and other outside plant | Maximum    
Property, Plant and Equipment [Line Items]    
Depreciable Lives 45 years  
Central office and other network electronics    
Property, Plant and Equipment, Net [Abstract]    
Gross property, plant and equipment $ 2,977 3,280
Central office and other network electronics | Minimum    
Property, Plant and Equipment [Line Items]    
Depreciable Lives 7 years  
Central office and other network electronics | Maximum    
Property, Plant and Equipment [Line Items]    
Depreciable Lives 10 years  
Support assets    
Property, Plant and Equipment, Net [Abstract]    
Gross property, plant and equipment $ 2,145 2,504
Support assets | Minimum    
Property, Plant and Equipment [Line Items]    
Depreciable Lives 3 years  
Support assets | Maximum    
Property, Plant and Equipment [Line Items]    
Depreciable Lives 30 years  
Construction-in-progress    
Property, Plant and Equipment, Net [Abstract]    
Gross property, plant and equipment $ 721 $ 624
v3.22.4
Property, Plant, and Equipment - Additional information (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Property, Plant and Equipment [Line Items]      
Depreciation expense $ 790 $ 874 $ 851
Disposal Group, Held-for-sale | EMEA Business      
Property, Plant and Equipment [Line Items]      
Property, plant and equipment classified as held for sale $ 1,900    
Disposal Group, Held-for-sale | Latin American Business      
Property, Plant and Equipment [Line Items]      
Property, plant and equipment classified as held for sale   $ 1,600  
v3.22.4
Property, Plant and Equipment - Asset Retirement Obligations (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]    
Balance at beginning of period $ 121 $ 122
Accretion expense 5 5
Liabilities settled (7) (10)
Change in estimate (4) 7
Classified as held for sale (30) (3)
Balance at end of period $ 85 $ 121
v3.22.4
Employee Benefits - Defined Contribution (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Defined Contribution Plan Disclosure [Line Items]      
Defined contribution plan, cost $ 31 $ 31 $ 29
All Other Defined Contribution      
Defined Contribution Plan Disclosure [Line Items]      
Defined contribution plan, cost $ 8    
v3.22.4
Employee Benefits - Defined Benefits (Details) - USD ($)
$ in Millions
Dec. 31, 2022
Dec. 31, 2021
Retirement Benefits [Abstract]    
Plan assets $ 112 $ 75
Benefit obligation $ 102 92
Unfunded status   $ 17
v3.22.4
Share-based Compensation (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Share-Based Payment Arrangement [Abstract]      
Share-based compensation expense $ 43 $ 47 $ 78
v3.22.4
Fair Value of Financial Instruments (Details) - USD ($)
$ in Millions
Dec. 31, 2022
Dec. 31, 2021
Level 2 | Carrying Amount    
Liabilities measured on a recurring basis    
Liabilities-Long-term debt, excluding finance leases and other obligations $ 7,805 $ 10,103
Level 2 | Fair Value    
Liabilities measured on a recurring basis    
Liabilities-Long-term debt, excluding finance leases and other obligations 6,581 10,090
Level 3 | Carrying Amount    
Liabilities measured on a recurring basis    
Indemnifications related to the sale of the Latin American business 86 0
Level 3 | Fair Value    
Liabilities measured on a recurring basis    
Indemnifications related to the sale of the Latin American business $ 86 $ 0
v3.22.4
Income Taxes - Components of Income Tax Expense (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Federal      
Current $ 0 $ 0 $ 0
Deferred 271 125 162
State and local      
Current 21 12 22
Deferred 4 28 42
Foreign      
Current 26 16 19
Deferred (66) 16 (24)
Total income tax expense $ 256 $ 197 $ 221
v3.22.4
Income Taxes - Allocation of Income Tax Expense (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Income tax expense in the consolidated statements of operations:      
Attributable to income $ 256 $ 197 $ 221
Member's equity:      
Tax effect of the change in accumulated other comprehensive loss $ (58) $ (30) $ 43
v3.22.4
Income Taxes - Reconciliation of Statutory Federal Income Tax Rate (Details)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Income Tax Disclosure [Abstract]      
Statutory federal income tax rate 21.00% 21.00% 21.00%
State income taxes, net of federal income tax benefit (0.30%) 4.10% 5.80%
Goodwill impairment (21.40%) 0.00% 0.00%
Tax law changes 0.00% 0.00% (1.50%)
Divestiture of business (5.10%) 0.00% 0.00%
Net foreign income tax 0.20% 1.60% 0.90%
Research and development credits 0.10% (0.40%) (0.60%)
Other, net (0.10%) (1.10%) (0.30%)
Effective income tax rate (5.60%) 25.20% 25.30%
v3.22.4
Income Taxes - Additional Information (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Components of Income Tax Expense (Benefit) [Line Items]      
Effective income tax rate (5.60%) 25.20% 25.30%
Unfavorable impact of non-deductible goodwill impairment     $ 969
Unfavorable impact related to GILTI     256
Net deferred tax liabilities $ 355 $ 136  
Uncertain tax benefits 813 876 $ 923
Deferred tax assets, valuation allowance 303 1,103  
Unrecognized tax benefits that would impact effective tax rate 5 34  
Unrecognized tax benefits, accrued interest 1 5  
Reasonably possible increase in unrecognized tax benefits for uncertain tax positions previously taken 3    
Other Noncurrent Liabilities      
Components of Income Tax Expense (Benefit) [Line Items]      
Deferred tax liabilities, long-term 387 212  
Other Noncurrent Assets      
Components of Income Tax Expense (Benefit) [Line Items]      
Deferred tax assets, net, noncurrent 32 $ 76  
Federal      
Components of Income Tax Expense (Benefit) [Line Items]      
Uncertain tax benefits 6,400    
State      
Components of Income Tax Expense (Benefit) [Line Items]      
Uncertain tax benefits $ 6,100    
v3.22.4
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($)
$ in Millions
Dec. 31, 2022
Dec. 31, 2021
Deferred tax assets    
Deferred revenue $ 261 $ 306
Net operating loss carry forwards 1,680 3,191
Property, plant and equipment 92 71
Other 448 267
Gross deferred tax assets 2,481 3,835
Less valuation allowance (303) (1,103)
Net deferred tax assets 2,178 2,732
Deferred tax liabilities    
Deferred revenue (5) (14)
Property, plant and equipment (1,142) (1,295)
Intangible assets (1,328) (1,539)
Other (58) (20)
Gross deferred tax liabilities (2,533) (2,868)
Net deferred tax liabilities $ (355) $ (136)
v3.22.4
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]    
Unrecognized tax benefits at beginning of period $ 876 $ 923
Tax positions of current year netted against deferred tax assets (34) 0
Tax positions of prior periods netted against deferred tax assets 0 (49)
Decrease in tax positions taken in the prior period (2) 0
Increase in tax positions taken in the current period 3 4
Decrease due to settlement/payments 0 (2)
Decrease from the lapse of statute of limitations (30) 0
Unrecognized tax benefits at end of period $ 813 $ 876
v3.22.4
Geographic and Customer Concentrations - Assets from Geographic Region (Details) - USD ($)
$ in Millions
Dec. 31, 2022
Dec. 31, 2021
Revenues from External Customers and Long-Lived Assets [Line Items]    
Assets $ 19,759 $ 28,095
North America    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Assets 18,061 23,296
Europe, Middle East and Africa    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Assets 1,698 2,830
Latin America    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Assets $ 0 $ 1,969
v3.22.4
Geographic and Customer Concentrations - Revenue from Geographical Region (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Disaggregation of Revenue [Line Items]      
Total operating revenue $ 7,493 $ 7,952 $ 7,933
North America      
Disaggregation of Revenue [Line Items]      
Total operating revenue 6,256 6,365 6,411
Europe, Middle East and Africa      
Disaggregation of Revenue [Line Items]      
Total operating revenue 734 805 785
Latin America      
Disaggregation of Revenue [Line Items]      
Total operating revenue $ 503 $ 782 $ 737
v3.22.4
Geographic and Customer Concentrations - Additional Information (Details)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Revenue Benchmark | Customer Concentration Risk | Top 10 Customers      
Disaggregation of Revenue [Line Items]      
Concentration risk, percentage 15.00% 17.00% 16.00%
v3.22.4
Affiliate Transactions (Details)
$ in Millions
 2 Months Ended 12 Months Ended
Feb. 23, 2023
USD ($)
Dec. 31, 2022
USD ($)
Number_of_extensions
Dec. 31, 2021
USD ($)
Subsequent event      
Related Party Transaction [Line Items]      
Distributions to parent $ 60    
Affiliated Entity | Lumen Technologies      
Related Party Transaction [Line Items]      
Notes receivable-affiliate   $ 1,500 $ 1,500
Interest rate   4.25%  
Number of allowed extensions of maturity date | Number_of_extensions   2  
Extension period   1 year  
v3.22.4
Commitments, Contingencies and Other Items - Additional Information (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
USD ($)
property
patent
Dec. 31, 2021
USD ($)
Loss Contingencies    
Estimated tax and litigation liability $ 40,000 $ 40,000
Patents allegedly infringed | patent 1  
Number of properties with potential environmental liability | property 175  
Purchase commitment $ 355,000  
Purchase obligation, due in 2023 138,000  
Purchase obligation, due in 2024 through 2025 119,000  
Purchase obligation, due in 2026 through 2027 33,000  
Purchase obligation, due in 2028 and thereafter 65,000  
Unfavorable Regulatory Action    
Loss Contingencies    
Estimate of possible loss $ 300  
v3.22.4
Commitments, Contingencies and Other Items - Right-of-Way Agreements (Details) - Future Rental Commitments and ROW Agreements
$ in Millions
Dec. 31, 2022
USD ($)
Other Commitments [Line Items]  
2023 $ 113
2024 49
2025 43
2026 41
2027 40
2028 and thereafter 360
Total future minimum payments $ 646
v3.22.4
Accumulated Other Comprehensive Loss - AOCI Activity (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Increase (Decrease) in Accumulated Other Comprehensive Income      
Beginning balance $ 13,009 $ 12,905  
Other comprehensive income (loss), net of tax (105) (117)  
Amounts reclassified in accumulated other comprehensive (loss) income 112    
Other comprehensive income (loss), net of tax 7 (117) $ (55)
Ending balance 6,798 13,009 12,905
Accumulated other comprehensive income      
Increase (Decrease) in Accumulated Other Comprehensive Income      
Beginning balance (351) (234)  
Ending balance (344) (351) (234)
Pension Plans      
Increase (Decrease) in Accumulated Other Comprehensive Income      
Beginning balance 3 (13)  
Other comprehensive income (loss), net of tax 18 16  
Amounts reclassified in accumulated other comprehensive (loss) income 0    
Other comprehensive income (loss), net of tax 18 16  
Ending balance 21 3 (13)
Foreign Currency Translation Adjustments and Other      
Increase (Decrease) in Accumulated Other Comprehensive Income      
Beginning balance (354) (221)  
Other comprehensive income (loss), net of tax (123) (133)  
Amounts reclassified in accumulated other comprehensive (loss) income 112    
Other comprehensive income (loss), net of tax (11) (133)  
Ending balance $ (365) $ (354) $ (221)
v3.22.4
Accumulated Other Comprehensive Loss - Reclassifications out of AOCI (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]      
Gain on sale of business $ 123 $ 0 $ 0
Income tax expense 256 197 221
NET (LOSS) INCOME (4,793) $ 586 $ 651
Decrease (Increase) in Net Income | Foreign Currency Translation Adjustments and Other      
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]      
Gain on sale of business 112    
Income tax expense 0    
NET (LOSS) INCOME $ 112    
v3.22.4
Other Financial Information (Details) - USD ($)
$ in Millions
Dec. 31, 2022
Dec. 31, 2021
Prepaid Expense and Other Assets, Current [Abstract]    
Prepaid expenses $ 99 $ 109
Contract assets 10 28
Other 2 9
Total other current assets 197 239
Other current assets reclassified as held for sale 56 81
Fulfillment Costs    
Prepaid Expense and Other Assets, Current [Abstract]    
Contract costs 44 48
Acquisition Costs    
Prepaid Expense and Other Assets, Current [Abstract]    
Contract costs $ 42 $ 45