QWEST CORP 10-Q

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Unless the context requires otherwise, references in this report to "QC" refer to Qwest Corporation, and references to "Qwest," "we," "us" and "our" refer to Qwest Corporation and its consolidated subsidiaries. All references to "Notes" in this Item 2 of Part I refer to the Notes to Consolidated Financial Statements included in Item 1 of Part I of this report. Certain statements in this report constitute forward-looking statements. See "Special Note Regarding Forward-Looking Statements" appearing at the beginning of this report and "Risk Factors" set forth or referenced in Item 1A of Part II of this report or other of our filings with the SEC for a discussion of certain factors that could cause our actual results to differ from our anticipated results or otherwise impact our business, financial condition, results of operations, liquidity or prospects. Overview Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") included herein should be read in conjunction with MD&A and the other information included in our annual report on Form 10-K for the year ended December 31, 2019 , and with the consolidated financial statements and related notes in Item 1 of Part I of this report. The results of operations for the first three months of the year are not necessarily indicative of the results of operations that might be expected for the entire year. We are an integrated communications company engaged primarily in providing an array of communications services to our business and residential customers. Our specific products and services are detailed in Note 7—Products and Services Revenue of this report. Our ultimate parent company, CenturyLink, Inc. ("CenturyLink"), has cash management arrangements between certain of its subsidiaries that include lines of credit, affiliate obligations, capital contributions and dividends. As part of these cash management arrangements, affiliates provide lines of credit to certain other affiliates. Amounts outstanding under these lines of credit and intercompany obligations vary from time to time. Under these arrangements, the majority of our cash balance is advanced on a daily basis for centralized management by CenturyLink's service company affiliate. From time to time we may declare and pay dividends to Qwest Services Corporation ("QSC"), our direct parent, using cash owed to us under these advances, which has the net effect of reducing the amount of these advances. We report the balance of these transfers on our consolidated balance sheet as advances to affiliates. At March 31, 2020 , we served approximately 3.0 million broadband subscribers. Our methodology for counting broadband subscribers may not be comparable to those of other companies. Impact of COVID-19 Pandemic In response to the safety and economic challenges arising out of the COVID-19 pandemic, we have taken a variety of steps to ensure the availability of our network infrastructure, to promote the safety of our employees, to enable us to continue to provide our products and services worldwide to our customers, and to strengthen our communities. These steps include: • CenturyLink taking the FCC’s “Keep Americans Connected Pledge,” which obligates us in certain circumstances to waive late fees and to forego certain service terminations; • establishing new protocols for the safety of our on-site technicians and customers, including our “Safe Connections” program; • adopting a rigorous employee work-from-home policy and substantially restricting non-essential business travel; • continuously monitoring our network to enhance its ability to respond to changes in usage patterns; • donating products or services in several of our communities to enhance their abilities to provide necessary support services; and 23 Table of Contents • taking steps to maintain our internal controls and the security of our systems and data in a remote work environment. As the crisis continues, we may revise our responses or take additional steps to adjust to changed circumstances. By the end of the first quarter of 2020, social distancing, travel restrictions, business and school closures, and other actions taken in response to the pandemic had begun to impact us, our customers and our business. In particular, the pandemic has reduced our late fee revenues. However, most of those changes impacted only the latter portions of the first quarter of 2020. We expect that pandemic-related changes will have a more pronounced impact on our second quarter 2020 operating results, especially if the economic slowdown adversely impacts our customers' ability and willingness to order and pay for our products and services. The impact of those changes after the second quarter of 2020 will materially depend on additional steps that we may take in response to the pandemic and various events outside of our control, including the duration of the health crisis, the length and severity of the economic slowdown, actions taken by governmental agencies or legislative bodies, and the impact of those events on our employees, suppliers and customers. For additional information, see the risk factor disclosures set forth or referenced in Item 1A of Part II of this report. For additional information on the impacts of the pandemic, see the remainder of this item, including "— Liquidity and Capital Resources — Pension and Post-retirement Benefit Obligations" and "Connect America Fund." For the reasons noted in Note 1—Background to our consolidated financial statements in Item 1 of Part I of this report, we believe we have one reportable segment. We categorize our products, services and revenue among the following six categories: • IP and Data Services , which include primarily VPN data networks, Ethernet, IP and other ancillary services; • Transport and Infrastructure , which include broadband, private line (including business data services) and other ancillary services; • Voice and Collaboration , which includes primarily local voice, including wholesale voice, and other ancillary service; • IT and Managed Services, which include information technology services and managed services, which may be purchased in conjunction with our other network services; • Regulatory Revenue, which consist of Connect America Fund ("CAF") support payments and other operating revenue. We receive federal support payments from the federal CAF program; and • Affiliate Services, which are telecommunication services that we also provide to external customers. In addition, we provide to our affiliates, computer system development and support services, network support and technical services. From time to time, we may change the categorization of our products and services. The following analysis is organized to provide the information we believe will be useful for understanding material trends affecting our business. Results of Operations The following table summarizes the results of our consolidated operations for the three months ended March 31, 2020 and 2019 : 24 Table of Contents Three Months Ended March 31, 2020 2019 (Dollars in millions) Operating revenue (1) $ 1,918 2,030 Operating expenses (1) 1,139 1,270 Operating income 779 760 Total other expense, net (99 ) (102 ) Income tax expense 177 171 Net income $ 503 487 _______________________________________________________________________________ (1) Reclassifications were made within certain 2019 comparative figures due to the retrospective application of an accounting policy election during the first quarter of 2020. Refer to Note 1—Background and our Form 8-K filing dated May 7, 2020 for further information. For a discussion of certain trends that impact our business, see the MD&A discussion of trends impacting CenturyLink's business included in CenturyLink's reports filed with the SEC, including most recently its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020. Operating Revenue The following table summarizes our consolidated operating revenue recorded under each of our six above-described revenue categories: Three Months Ended March 31, % Change 2020 2019 (1) (Dollars in millions) IP and Data Services $ 136 140 (3 )% Transport and Infrastructure 657 701 (6 )% Voice and Collaboration 395 418 (6 )% IT and Managed Services 1 1 — % Regulatory Revenue 46 48 (4 )% Affiliate Services 683 722 (5 )% Total operating revenue $ 1,918 2,030 (6 )% _______________________________________________________________________________ (1) Reclassifications were made within certain 2019 comparative figures due to the retrospective application of an accounting policy election during the first quarter of 2020, in addition to product reclassification changes. Refer to Note 1—Background and our Form 8-K filing dated May 7, 2020 for further information. Total operating revenue decreased by $112 million , or 6% , for the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 . The decrease in our operating revenue was primarily due to decreases in all of our revenue categories. 25 Table of Contents Operating Expenses The following table summarizes our consolidated operating expenses: Three Months Ended March 31, % Change 2020 2019 (Dollars in millions) Cost of services and products (exclusive of depreciation and amortization) (1) $ 473 582 (19 )% Selling, general and administrative 143 157 (9 )% Operating expenses - affiliates 195 195 — % Depreciation and amortization 328 336 (2 )% Total operating expenses (1) $ 1,139 1,270 (10 )% _______________________________________________________________________________ (1) Reclassifications were made within certain 2019 comparative figures due to the retrospective application of an accounting policy election during the first quarter of 2020. Refer to Note 1—Background and our Form 8-K filing dated May 7, 2020 for further information. Cost of Services and Products (exclusive of depreciation and amortization) Cost of services and products (exclusive of depreciation and amortization) decreased by $109 million , or 19% , for the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 . The decrease in our cost of services and products (exclusive of depreciation and amortization) was primarily due to reductions in salaries and wages and employee-related expenses resulting from lower headcount and professional services. These reductions were offset by higher customer installation expenses and equipment maintenance expense. Selling, General and Administrative Selling, general and administrative expenses decreased by $14 million , or 9% , for the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 . The decrease in our selling, general and administrative expenses was primarily due to reductions in salaries and wages and employee-related expenses from lower headcount, contract labor costs, marketing and advertising and an increase in the amount of labor capitalized or deferred. These reductions were partially offset by higher professional fees. Operating Expenses - Affiliates Operating expenses - affiliates remained unchanged for the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 . Depreciation and Amortization The following table provide details of our depreciation and amortization expense: Three Months Ended March 31, % Change 2020 2019 (Dollars in millions) Depreciation $ 204 199 3 % Amortization 124 137 (9 )% Total depreciation and amortization $ 328 336 (2 )% Depreciation expense is impacted by several factors, including changes in our depreciable cost basis, changes in our estimates of the remaining economic life of certain network assets and the addition of new plant. Depreciation expense increased by $5 million , or 3% , for the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 . The increase in depreciation expense was primarily due to net growth in depreciable assets which was partially offset by the impact of annual rate depreciable life changes. 26 Table of Contents Amortization expense decreased by $13 million , or 9% , for the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 . The decrease in amortization expense was primarily due to the effect of using an accelerated amortization method resulting in an incremental decline in expense as the intangible assets amortize. Other Consolidated Results The following table summarizes our total other (expense) income and income tax expense: Three Months Ended March 31, % Change 2020 2019 (Dollars in millions) Interest expense $ (75 ) (95 ) (21 )% Interest expense - affiliates, net (16 ) (16 ) — % Other (expense) income, net (8 ) 9 nm Total other expense, net $ (99 ) (102 ) (3 )% Income tax expense $ 177 171 4 % _______________________________________________________________________________ nm - Percentages greater than 200% and comparisons between positive and negative values or to/from zero values are considered not meaningful. Interest Expense Interest expense decreased by $20 million , or 21% , for the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 . The decrease was primarily due to a decrease in average long-term debt and lower variable interest rates. Interest Expense - Affiliates, Net Affiliated interest expense remained unchanged for the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 . Other (Expense) Income, Net Other income, net reflects certain items not directly related to our core operations, including interest income, gains and losses from non-operating asset dispositions and components of net periodic pension and post-retirement benefit costs. Other income, net decreased by $17 million for the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 . The decrease in other income, net was primarily due to a loss on the retirement of debt and a reduction of interest income. Income Tax Expense Income tax expense for the three months ended March 31, 2020 was $177 million compared to $171 million for the three months ended March 31, 2019 . Our effective tax rate was 26.0% , for both the three months ended March 31, 2020 and 2019 . Liquidity and Capital Resources Overview of Sources and Uses of Cash We are an indirectly wholly-owned subsidiary of CenturyLink. As such, factors relating to, or affecting, CenturyLink's liquidity and capital resources could have material impacts on us, including impacts on our credit ratings, our access to capital markets and changes in the financial market's perception of us. 27 Table of Contents CenturyLink has cash management arrangements between certain of its subsidiaries that include lines of credit, affiliate advances and obligations, capital contributions and dividends. As part of these cash management arrangements, affiliates provide lines of credit to certain other affiliates. Amounts outstanding under these lines of credit and intercompany obligations vary from time to time. Under these arrangements, the majority of our cash balance is advanced on a daily basis for centralized management by CenturyLink's service company affiliate. From time to time we may declare and pay dividends to our stockholder, QSC, sometimes in excess of our earnings to the extent permitted by applicable law, using cash owed to us under these advances, which has the net effect of reducing the amount of these advances. Our debt covenants do not currently limit the amount of dividends we can pay to QSC. Given our cash management arrangement with our ultimate parent, CenturyLink, and the resulting amounts due to us from CenturyLink, a significant component of our liquidity is dependent upon CenturyLink's ability to repay its obligation to us. We anticipate that our future liquidity needs will be met through (i) our cash provided by our operating activities, (ii) amounts due to us from CenturyLink, (iii) our ability to refinance QC's debt securities at maturity and (iv) capital contributions, advances or loans from CenturyLink or its affiliates if and to the extent they have available funds or access to available funds that they are willing and able to contribute, advance or loan. Capital Expenditures We incur capital expenditures on an ongoing basis in order to enhance and modernize our networks, compete effectively in our markets and expand and improve our service offerings. CenturyLink evaluates capital expenditure projects based on a variety of factors, including expected strategic impacts (such as forecasted impact on revenue growth, productivity, expenses, service levels and customer retention) and the expected return on investment. The amount of CenturyLink’s consolidated capital investment is influenced by, among other things, demand for CenturyLink’s services and products, cash flow generated by operating activities, cash required for other purposes and regulatory considerations (such as CenturyLink's CAF II infrastructure buildout requirements). For more information on CenturyLink’s total capital expenditures, please see its annual and quarterly reports filed with the SEC. For more information on our capital spending, see "Historical Information—Investing Activities" below and Item 1A of Part I of our annual report on Form 10-K for the year ended December 31, 2019 and Item 1A of Part II of this report. Debt and Other Financing Arrangements Subject to market conditions, and to the extent feasible, we expect to continue to issue debt securities, under Qwest Corporation, from time to time in the future primarily to refinance a substantial portion of our maturing debt. The availability, interest rate and other terms of any new borrowings will depend on the ratings assigned to Qwest Corporation by credit rating agencies, among other factors. We have no remaining debt maturities due in the next 12 months excluding finance lease obligations. As of the date of this report, the credit ratings for Qwest Corporation's senior unsecured debt were as follows: Agency Credit Ratings Standard & Poor's BBB- Moody's Investors Service, Inc. Ba2 Fitch Ratings BB+ CenturyLink, Inc.'s and Qwest Corporation's credit ratings are reviewed and adjusted from time to time by the rating agencies. For additional information regarding CenturyLink's and Qwest Corporation's funding arrangements, see "Risk Factors—Risk Related to CenturyLink's Recently-Completed Acquisition of Level 3" and "Risks Affecting Liquidity and Capital Resources" in Item 1A of Part I of our annual report on Form 10-K for the year ended December 31, 2019 and Item 1A of Part II of this report. 28 Table of Contents Term Loan In 2015, we entered into a term loan in the amount of $100 million with CoBank, ACB. The outstanding unpaid principal amount of this term loan plus any accrued and unpaid interest is due on February 20, 2025. Interest is paid monthly based upon either the London Interbank Offered Rate (“LIBOR”) or the base rate (as defined in the credit agreement) plus an applicable margin between 1.50% to 2.50% per annum for LIBOR loans and 0.50% to 1.50% per annum for base rate loans depending on our then current senior unsecured long-term debt rating. At both March 31, 2020 and December 31, 2019 , the outstanding principal balance on this term loan was $100 million . Note Payable - Affiliate On September 30, 2017, Qwest Corporation entered into an amended and restated revolving promissory note in the amount of $965 million with an affiliate of our ultimate parent company, CenturyLink, Inc. This note replaced and amended the original $1.0 billion revolving promissory note Qwest Corporation entered into on April 18, 2012 with the same affiliate. The outstanding principal balance owed by us under this revolving promissory note and the accrued interest thereon is due and payable on demand, but if no demand is made, then on June 30, 2022. Interest is accrued on the outstanding balance during an interest period using a weighted average per annum interest rate on the consolidated outstanding debt of CenturyLink and its subsidiaries. As of March 31, 2020 , the weighted average interest rate was 5.561% . As of March 31, 2020 and December 31, 2019 , the amended and restated revolving promissory note is reflected on our consolidated balance sheets as a current liability under note payable - affiliate. As of March 31, 2020 , $15 million of accrued interest is reflected in other current liabilities on our consolidated balance sheets. For additional information about our indebtedness, see Note 5—Long-Term Debt and Note Payable - Affiliate . Dividends We periodically pay dividends to our direct parent company. See Note 9—Dividends and the discussion above under the heading "Overview". Pension and Post-retirement Benefit Obligations CenturyLink is subject to material obligations under its existing defined benefit pension plans and post-retirement benefit plans. At December 31, 2019 , the accounting unfunded status of CenturyLink's qualified and non-qualified defined benefit pension plans and qualified post-retirement benefit plans was approximately $1.8 billion and approximately $3.0 billion , respectively. For additional information about CenturyLink's pension and post-retirement benefit arrangements, see "Critical Accounting Policies and Estimates—Pensions and Post-Retirement Benefits" in Item 7 of CenturyLink's annual report on Form 10-K for the year ended December 31, 2019 and see Note 9—Employee Benefits to the consolidated financial statements in Item 8 of Part II of the same report. A substantial portion of our active and retired employees participate in CenturyLink's qualified pension plan and post-retirement benefit plans. On December 31, 2014, the Qwest Communications International Inc. ("QCII") pension plan and a pension plan of an affiliate were merged into the CenturyLink Retirement Plan, which was renamed the CenturyLink Combined Pension Plan. Our contributions are not segregated or restricted to pay amounts due to our employees and may be used to provide benefits to other employees of our affiliates. Prior to the pension plan merger, the above-noted employees participated in the QCII pension plan. Benefits paid by CenturyLink's qualified pension plan are paid through a trust that holds all of the plan's assets. Based on current laws and circumstances, CenturyLink does not expect any contributions to be required for their qualified pension plan during 2020. The amount of required contributions to CenturyLink's qualified pension plan in 2021 and beyond will depend on a variety of factors, most of which are beyond their control, including earnings on plan investments, prevailing interest rates, demographic experience, changes in plan benefits and changes in funding laws and regulations. CenturyLink occasionally makes voluntary contributions in addition to required contributions. CenturyLink does not currently expect to make a voluntary contribution to the trust for its qualified pension plan in 2020. 29 Table of Contents Substantially all of CenturyLink's post-retirement health care and life insurance benefits plans are unfunded. Several trusts hold assets that have been used to help cover the health care costs of certain retirees. As of December 31, 2019 , assets in the post-retirement trusts had been substantially depleted and had a fair value of $13 million (a portion of which was comprised of investments with restricted liquidity), which has significantly limited CenturyLink's ability to continue paying benefits from the trusts; however, CenturyLink will continue to pay certain benefits through the trusts. Benefits not paid from the trusts are expected to be paid directly by CenturyLink with available cash. The affiliate obligations, net in current and noncurrent liabilities on our consolidated balance sheets primarily represents the cumulative allocation of expenses, net of payments, associated with QCII's pension plans and post-retirement benefits plans prior to the plan mergers. In 2015, we agreed to a plan to settle the outstanding pension and post-retirement affiliate obligations, net balance with QCII over a 30 year term. Under the plan, payments are scheduled to be made on a monthly basis. For the three months ended March 31, 2020 , we made settlement payments of $ 18 million to QCII in accordance with the plan. Changes in the affiliate obligations, net are reflected in operating activities on our consolidated statements of cash flows. For 2020, we expect to make aggregate settlement payments of $72 million to QCII under the plan. The capital markets have been volatile during 2020, partially as a result of the COVID-19 outbreak. Federal governmental actions to stimulate the economy have significantly impacted interest rates. These events could ultimately affect the funding levels of our pension plans and calculations of our liabilities under our pension and other post-employment benefit plans . For 2020, CenturyLink's estimated annual long-term rates of return, net of administrative costs, are 6% and 4% for the pension plan trust assets and post-retirement plans' trust assets, respectively, based on the assets currently held. However, actual returns could be substantially different. For additional information, see “Risk Factors—Risks Affecting Our Liquidity and Capital Resources—Adverse changes in the value of assets or obligations associated with CenturyLink’s qualified pension plan could negatively impact CenturyLink’s liquidity, which may in turn affect our business and liquidity” in Item 1A of Part I of our annual report on Form 10-K for the year ended December 31, 2019 and Item 1A of Part II of this report. Future Contractual Obligations For information regarding our estimated future contractual obligations, see the MD&A discussion included in Item 7 of Part II of our annual report on Form 10-K for the year ended December 31, 2019 . Connect America Fund As a result of accepting CAF II support payments, we must meet certain specified infrastructure buildout requirements in 13 states over the next several years. In order to meet these specified infrastructure buildout requirements, we may be obligated to make substantial capital expenditures. Due to governmental restrictions and potential supply delays related to the COVID-19 pandemic, we cannot provide any assurances that we will be able to timely meet our mandated buildout requirements. On January 30, 2020, the FCC approved an order creating the Rural Digital Opportunity Fund (the “RDOF”) which is a new federal support program designed to follow the CAF Phase II program. Through the RDOF, the FCC plans to award up to $20.4 billion in support payments over 10 years to bring broadband to unserved areas through multi-round reverse auctions conducted in two phases, the first of which is scheduled for October 2020. For CAF Phase II participants like our ultimate parent, CenturyLink, support payments awarded in the initial phase of RDOF would begin January 1, 2022. Qwest Corporation and CenturyLink are currently analyzing the opportunity to participate in the initial RDOF auction. In its January order, the FCC also clarified that CAF II recipients, like CenturyLink, would receive an additional year of CAF Phase II funding in 2021. We cannot assure you that the final terms of the RDOF will match those described above. For additional information on these programs, see (i) "Business—Regulation" in Item 1 of Part I of our annual report on Form 10-K for the year ended December 31, 2019 , (ii) "Risk Factors—Risks Affecting our Liquidity and Capital Resources" in Item 1A of Part I of our annual report on Form 10-K for the year ended December 31, 2019 and (iii) Item 1A Part II of this report. 30 Table of Contents Historical Information The following table summarizes our consolidated cash flow activities: Three Months Ended March 31, Change 2020 2019 (Dollars in millions) Net cash provided by operating activities $ 785 732 53 Net cash provided by (used in) investing activities 830 (375 ) 1,205 Net cash used in financing activities (1,609 ) (353 ) 1,256 Operating Activities Net cash provided by operating activities increased by $53 million for the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 primarily due to increased cash flows from accounts receivable and increased accrued income and other tax accruals partially offset by cash used for prepaid expenses and reductions of other current liabilities. Cash provided by operating activities is subject to variability period over period as a result of timing of the collection of receivables and payments related to interest expense, accounts payable and bonuses. Investing Activities Net cash provided by investing activities increased by $1.2 billion for the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 primarily due to funds received from advances to affiliates. Financing Activities Net cash used in financing activities increased by $1.3 billion for the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 primarily due to repayments of long-term debt. See Note 5—Long-Term Debt and Note Payable - Affiliate , for additional information on our outstanding debt securities and financing activities. Other Matters We are subject to various legal proceedings and other contingent liabilities that individually or in the aggregate could materially affect our financial condition, future results of operations or cash flows. See Note 8—Commitments, Contingencies and Other Items for additional information. CenturyLink is involved in several legal proceedings to which we are not a party that, if resolved against it, could have a material adverse effect on its business and financial condition. As a wholly owned subsidiary of CenturyLink, our business and financial condition could be similarly affected. You can find descriptions of these legal proceedings in CenturyLink's quarterly and annual reports filed with the SEC. Because we are not a party to any of the matters, we have not accrued any liabilities for these matters. Market Risk As of March 31, 2020 , we were exposed to market risk from changes in interest rates on our variable rate long-term debt obligations, amended and restated revolving promissory note and fluctuations in certain foreign currencies. We seek to maintain a favorable mix of fixed and variable rate debt in an effort to limit interest costs and cash flow volatility resulting from changes in rates. Management periodically reviews our exposure to interest rate fluctuations and periodically implements strategies to manage the exposure. From time to time, we have used derivative instruments to (i) lock-in or swap our exposure to changing or variable interest rates for fixed interest rates or (ii) to swap obligations to pay fixed interest rates for variable interest rates. As of March 31, 2020 , we had no such instruments outstanding nor held or issued derivative financial instruments for trading or speculative purposes. 31 Table of Contents We do not believe that there were any material changes to market risks arising from changes in interest rates for the three months ended March 31, 2020 , when compared to the disclosures provided in our annual report on Form 10-K for the year ended December 31, 2019 . Certain shortcomings are inherent in the method of analysis presented in the computation of exposures to market risks. Actual values may differ materially from those disclosed by us from time to time if market conditions vary from the assumptions used in the analyses performed. These analyses only incorporate the risk exposures that existed at March 31, 2020 . Off-Balance Sheet Arrangements As of March 31, 2020 , we had no special purpose or limited purpose entities that provide off-balance sheet financing, liquidity, or market or credit risk support, and we did not engage in leasing, hedging or other similar activities that expose us to any significant liabilities that are not (i) reflected on the face of the consolidated financial statements, (ii) disclosed in Note 16—Commitments, Contingencies and Other Items to our consolidated financial statements in Item 8 of Part II of our annual report on Form 10-K for the year ended December 31, 2019 , or in the Future Contractual Obligations table included in Item 7 of Part II of the same report, or (iii) discussed under the heading "Market Risk" above. Other Information CenturyLink's and our website is www.centurylink.com . We routinely post important investor information in the "Investor Relations" section of our website at ir.centurylink.com . The information contained on, or that may be accessed through, our website is not part of this quarterly report. You may obtain free electronic copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports in the "Investor Relations" section of our website ( ir.centurylink.com ) under the heading "SEC Filings." These reports are available on our website as soon as reasonably practicable after we electronically file them with the SEC. 32 Table of Contents ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Omitted pursuant to General Instruction H(2).