−Removed: The following discussion identifies the most significant risks or uncertainties that could (i) materially and adversely affect our business, financial condition, results of operations, liquidity or prospects or (ii) cause our actual results to differ materially from our anticipated results or other expectations.
+Added: The following discussion identifies material factors that could (i) materially and adversely affect our business, financial condition, results of operations, or prospects or (ii) cause our actual results to differ materially from our anticipated results, projections or other expectations.
The following information should be read in conjunction with the other portions of this report, including “Special Note Regarding Forward-Looking Statements”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 and our consolidated financial statements and related notes in Item 8.
−Removed: Please note that the following discussion is not intended to comprehensively list all risks or uncertainties faced by us.
−Removed: Our operations or actual results could also be similarly impacted by additional risks and uncertainties that are not currently known to us, that we currently deem to be immaterial, that arise in the future or that are not specific to us, such as general economic conditions.
−Removed: In addition, certain of the risks described below apply only to a part of our business.
−Removed: Risks Affecting Our Business
−Removed: Our failure to simplify our service support systems could adversely impact our competitive position.
−Removed: For many of our services, we can effectively compete only if we can quickly and efficiently (i) quote and accept customer orders, (ii) provision and initiate ordered services, (iii) provide customers with adequate means to manage their services and (iv) accurately bill for our services.
−Removed: To attain these objectives, we believe we must digitally transform our service support processes to permit greater automation and customer self-service options.
−Removed: This digital transformation is complex and will require a substantial amount of resources, especially in light of the multiplicity of our systems.
−Removed: Development of systems designed to support this transformation will continuously require our personnel and third-party vendors to, among other things, (i) adjust to changes in our offerings and customers’ preferences, (ii) simplify our processes, (iii) improve our data management capabilities, (iv) eliminate inconsistencies between our legacy and acquired operations, (v) eliminate older support systems that are costly or obsolete, (vi) develop uniform practices and procedures, and (vii) automate them as much as possible.
−Removed: These undertakings will be challenging and time consuming, and we cannot assure you that they will be successful.
−Removed: Our competitive position could be adversely impacted if we fail to continuously develop viable service support systems that are satisfactory to our current and potential customers.
−Removed: We could experience difficulties in consolidating, integrating, updating and simplifying our technical infrastructure.
−Removed: Our ability to consolidate, integrate, update and simplify our systems and information technology infrastructure in response to our growth and changing business needs is very important to our ability to develop and maintain attractive product and service offerings and to interface effectively with our customers.
−Removed: As discussed further under “Business-Our Network” in Item 1 of CenturyLink’s Annual Report on Form 10-K for the year ended December 31, 2019 , CenturyLink is currently undertaking several complex, costly and multi-year projects to simplify, consolidate and modernize its network, which combines our legacy network and other networks acquired in the past.
−Removed: Delays in the completion of these projects have hampered our progress, and any additional delays may lead to increased project costs or operational inefficiencies.
−Removed: In addition, there may be issues related to our expanded or updated infrastructure that are not identified by our testing processes, and which may only become evident after we have started to fully utilize the redesigned systems.
−Removed: Our failure to modernize, consolidate and upgrade our technology infrastructure could have adverse consequences, including the delayed implementation of new service offerings, decreased competitiveness of existing service offerings, network instabilities, increased operating or acquisition integration costs, service or billing interruptions or delays, service offering inconsistencies, customer dissatisfaction, and the diversion of development resources.
−Removed: In addition, our dedication of significant resources to these projects could divert attention from ongoing operations and other strategic initiatives.
−Removed: Any or all of the foregoing developments could have a negative impact on our business, results of operations, financial condition and cash flows.
−Removed: We may not be able to compete successfully against current or future competitors.
−Removed: Each of our offerings to our customers face increasingly intense competition from a wide variety of sources under evolving market conditions.
−Removed: In particular, (i) aggressive competition from a wide range of communications and technology companies has limited the prospects for several of our offerings to our customers;
−Removed: (ii) intense competition from wireless and other communications providers has led to a long-term systemic decline in the number of our wireline voice customers and (iii) strong competition from cable companies has impacted our customers.
−Removed: We also face competition from cloud companies, broadband providers, software developers, device providers, resellers, sales agents and facilities-based providers using their own networks as well as those leasing parts of our network.
−Removed: We expect these trends will continue.
−Removed: For more detailed information, see "Business—Competition" in Item 1 of this report.
−Removed: Some of our current and potential competitors (i) offer products or services that are substitutes for our traditional wireline voice services, including wireless voice and non-voice communication services, (ii) offer a more comprehensive range of communications products and services, (iii) offer products or services with features that we cannot readily match in some or all of our markets, (iv) install their services more quickly than we do, (v) have greater marketing, engineering, research, development, technical, provisioning, customer relations, financial or other resources, (vi) have larger or more diverse networks with greater transmission capacity, (vii) conduct operations or raise capital at a lower cost than us, (viii) are subject to less regulation, which we believe enables such competitors to operate more flexibly than us with respect to certain offerings, (ix) offer services nationally or internationally to a larger geographic area or larger base of customers, (x) have substantially stronger brand names, which may provide them with greater pricing power than ours, (xi) have deeper or more long standing relationships with key customers, or (xii) have larger operations than ours, which may enable them to compete more successfully in recruiting top talent, entering into operational or strategic partnerships or acquiring companies.
−Removed: Consequently, these competitors may be better equipped to provide more attractive offerings, to charge lower prices for their products and services, to develop and expand their communications and network infrastructure more quickly, to adapt more swiftly to changes in technologies or customer requirements, to devote greater resources to the marketing and sale of their products and services, to provide more comprehensive customer service, to provide greater resources to research and development initiatives and to take advantage of business or other opportunities more readily.
−Removed: Competition could adversely impact us in several ways, including (i) the loss of customers, market share or traffic on our networks, (ii) our need to expend substantial time or money on new capital improvement projects, (iii) our need to lower prices or increase marketing expenses to remain competitive and (iv) our inability to diversify by successfully offering new products or services.
−Removed: We are continually taking steps to respond to these competitive pressures, but these efforts may not be successful.
−Removed: Our operating results and financial condition would be adversely affected if these initiatives are unsuccessful or insufficient.
−Removed: Rapid technological changes could significantly impact our competitive and financial position.
−Removed: The communications industry has been and continues to be impacted by significant technological changes, which in general are enabling a much broader array of companies to compete with us.
−Removed: Many of these technological changes are (i) enabling customers to reduce or bypass use of our networks, (ii) displacing or reducing demand for our services, or (iii) enabling the development of competitive products or services.
−Removed: For years, the development of wireless and Internet-based voice and non-voice communications technologies and social media platforms have significantly reduced demand for our traditional voice services, and these trends continue.
−Removed: More recently, continuous improvements in wireless data technologies have enabled wireless carriers to offer competing data transmission products that are highly convenient to use, and we expect this trend to continue as technological advances enable these carriers to carry greater amounts of data faster and with less latency.
−Removed: Technological advancements have also permitted cable companies and other of our competitors to deliver generally faster average broadband transmission speeds than ours.
−Removed: Developments in software have permitted new competitors to offer affordable networking products that historically required more expensive hardware investment.
−Removed: To enhance the competitiveness of certain of our services, we will likely be required to spend additional capital to install more fiber optic cable or to augment the capabilities of our copper-based services.
−Removed: We may not be able to accurately predict or respond to changes in technology or industry standards, or to the introduction of newly-offered services.
−Removed: Any of these developments could make some or all of our offerings less desirable or even obsolete, which would place downward pressure on our market share and revenue.
−Removed: These developments could also require us to (i) expend capital or other resources in excess of currently contemplated levels to enhance our network or develop products or services, (ii) forego the development or provision of products or services that others can provide more efficiently, or (iii) make other changes to our operating plans, corporate strategies or capital allocation plans, any of which could be contrary to the expectations of our security holders or could adversely impact our business operating results.
−Removed: In addition to introducing new technologies and offerings, we may need, from time to time, to phase out outdated and unprofitable technologies and services.
−Removed: If we are unable to do so on a cost-effective basis, we could experience reduced profits.
−Removed: Similarly, if new market entrants are not burdened by an installed base of outdated equipment or obsolete technology, they may have a competitive advantage over us.
−Removed: For additional information on the risks of increased expenditures, see "Risk Factors—Risks Affecting our Liquidity and Capital Resources—Our business requires us to incur substantial capital and operating expenses, which reduces our available free cash flow."
−Removed: Our failure to meet the evolving needs of our customers could adversely impact our competitive position.
−Removed: In order to compete effectively and respond to changing market conditions, we must continuously offer products and services on terms and conditions that allow us to retain and attract customers and to meet their evolving needs.
−Removed: To do so, we must continuously (i) invest in our network, (ii) develop, test and introduce new products and services and (iii) rationalize and simplify our offerings by eliminating older or overlapping products or services.
−Removed: Our ability to maintain attractive products and services and to successfully introduce new product or service offerings on a timely and cost-effective basis could be constrained by a range of factors, including network limitations, support system limitations, limited capital, an inability to attract key personnel with the necessary skills, intellectual property constraints, inadequate digitization or automation, technological limits or an inability to act as quickly or efficiently as other competitors.
−Removed: Network service enhancements and product launches could take longer or cost more money than expected due to a range of factors, including software issues, supplier delays, testing delays, permitting delays, or network incompatibility issues.
−Removed: In addition, new product or service offerings may not be widely accepted by our customers.
−Removed: Our business could be materially adversely affected if we are unable to maintain competitive products and services and to timely and successfully develop and introduce new products or services.
−Removed: Several of our services continue to experience declining revenue, and our efforts to offset these declines may not be successful.
−Removed: Primarily as a result of the competitive and technological changes discussed above, we have experienced a prolonged systemic decline in our local voice, long-distance voice, network access and private line revenue.
−Removed: Consequently, we have experienced declining consolidated revenue for a prolonged period.
−Removed: More recently, we have experienced declines in revenue derived from the sale of certain other products and services.
−Removed: We have taken a variety of steps to counter these declines in revenue, including an increased focus on selling services in greater demand.
−Removed: However, for the reasons described elsewhere in this report, we have thus far been unable to reverse our annual revenue losses.
−Removed: In addition, most of our more recent product and service offerings generate lower profit margins than our traditional services, and some can be expected to experience slowing or no growth in the future.
−Removed: Accordingly, you should not assume that we will be successful in attaining our goal of achieving future revenue growth.
−Removed: We may not be able to successfully adjust to changes in our industry, our markets and our product mix.
−Removed: Ongoing changes in the communications industry have fundamentally changed consumers’ communications expectations and requirements.
−Removed: In response to these changes, we have substantially altered our product and service offerings through acquisitions and internal product development.
−Removed: Many of these changes have placed a higher premium on sales, marketing and product development functions, and necessitated ongoing changes in our processes and operating protocols, as well as periodic reorganizations of our sales and leadership teams.
−Removed: In addition, we now offer a much more complex range of products and services, operate larger and more complex networks and serve a much larger and more diverse set of global customers.
−Removed: Consequently, we now face greater challenges in effectively managing and administering our operations and allocating capital and other resources to our various offerings.
−Removed: For all these reasons, we cannot assure you that our efforts to adjust to these changes will be timely or successful.
−Removed: Our failure to hire and retain qualified personnel could harm our business.
−Removed: Our future success depends on our ability to identify, hire, train and retain executives, managers and employees with technological, engineering, software, product development, operational, provisioning, marketing, sales, customer service, administrative, managerial and other key skills.
−Removed: There is a shortage of qualified personnel in several of these fields particularly in certain growth markets, such as the areas adjoining our Denver and Seattle offices.
−Removed: We compete with several other companies for this limited pool of potential employees.
−Removed: As our industry increasingly becomes more competitive, it could become especially difficult to attract and retain top personnel with skills in high demand.
−Removed: Our workforce reduction and integration initiatives over the past couple of years have further increased the challenges of attracting and retaining talented individuals.
−Removed: In addition, subject to limited exceptions, none of our executives or domestic employees have long-term employment agreements.
−Removed: For all these reasons, there is no assurance that our efforts to recruit and retain qualified personnel will be successful.
−Removed: We could be harmed by security breaches or other significant disruptions or failures of networks, information technology infrastructure or related systems owned or operated by us.
−Removed: We are materially reliant upon our networks, information technology infrastructure and related technology systems (including our billing and provisioning systems) to provide products and services to our customers and to manage our operations and affairs.
−Removed: We face the risk, as does any company, of a security breach or significant disruption of our information technology infrastructure and related systems.
−Removed: As a communications company that transmits large amounts of information over communications networks, we face an added risk that a security breach or other significant disruption of our network, infrastructure or systems, or those that we operate or maintain for certain of our business customers, could lead to material interruptions or curtailments of service.
−Removed: Moreover, in connection with processing and storing sensitive and confidential customer data, we face a heightened risk that a security breach or disruption could result in unauthorized access to our customers' proprietary information.
−Removed: To safeguard our systems and data stored thereon, we strive to maintain effective security measures, disaster recovery plans, business contingency plans and employee training programs, and to continuously upgrade these safeguards.
−Removed: Nonetheless, we cannot assure you that our security efforts and measures will prevent unauthorized access to our systems, loss or destruction of data (including confidential customer information), account takeovers, unavailability of service, computer viruses, malware, ransomware, distributed denial-of-service attacks, or other forms of cyber-attacks or similar events.
−Removed: These threats may derive from human error, hardware or software vulnerabilities, aging equipment or accidental technological failure.
−Removed: These threats may also stem from fraud, malice or sabotage on the part of employees, third parties or foreign nations, including attempts by outside parties to fraudulently induce our employees or customers to disclose or grant access to our data or our customers’ data, potentially including information subject to stringent domestic and foreign data protection laws governing personally identifiable information, protected health information or other similar types of sensitive data.
−Removed: These threats may also arise from failure or breaches of systems owned, operated or controlled by other unaffiliated operators to the extent we rely on such other systems to deliver services to our customers.
−Removed: Various other factors could intensify these risks, including, (i) our maintenance of information in digital form stored on servers connected to the Internet, (ii) our use of open and software-defined networks, (iii) the complexity of our multi-continent network composed of legacy and acquired properties, (iv) growth in the size and sophistication of our customers and their service requirements, and (v) increased use of our network due to greater demand for data services.
−Removed: Similar to other large communications companies, we are a constant target of cyber-attacks of varying degrees.
−Removed: Although some of these attacks have resulted in security breaches, thus far, none of these breaches have resulted in a material adverse effect on our operating results or financial condition.
−Removed: You should be aware, however, that the risk of breaches is likely to increase due to several factors, including the increasing sophistication of cyber-attacks and the wider accessibility of cyber-attack tools.
+Added: Please note the following discussion is not intended to comprehensively list all risks or uncertainties faced by us.
+Added: Our operations or actual results could also be similarly impacted by additional risks and uncertainties that are not currently known to us, that we currently deem to be immaterial, that arise in the future or that are not specific to us.
+Added: In addition, certain of the risks described below apply only to a part or segment of our business.
+Added: All references to "Notes" in this Item 1A of Part I refer to the Notes to Consolidated Financial Statements included in Item 8 of Part II of this annual report.
+Added: Business Risks
+Added: We may not be able to create the global digital experience expected by customers.
+Added: Our customers expect us to create and maintain a global digital experience, including:
+Added: (i) automation and simplification of our offerings, (ii) customer self-service options, (iii) innovative solutions, and (iv) digital access to our products, services and customer support.
+Added: To do so, we must complete the digital transformation of our operations that is currently underway.
+Added: Effective digital transformation is a complex, dynamic process requiring efficient allocation and prioritization of resources, simplification of our product portfolio, faster product deployments, retirement of obsolete systems, migration of data and corresponding workforce and system development.
+Added: We cannot assure you we will be able to effect the successful digital transformation necessary to develop or deliver a global digital experience expected by our customers.
+Added: If we are unable to do so, we could lose customers to our competitors or fail to attract new customers.
+Added: Challenges with integrating or modernizing our existing applications and systems could harm our performance.
+Added: To succeed, we need to integrate, upgrade and evolve our existing applications and systems, including many legacy systems from past acquisitions.
+Added: We cannot assure you we will be able to integrate our legacy IT systems, modernize our infrastructure or deploy a master data management platform.
+Added: These modernization efforts will require efficient allocation of resources, development capacity, access to subject-matter experts, development of a sustainable operating model and successful collaboration between legal, privacy and security personnel.
+Added: Any failure or delay in accomplishing these initiatives may negatively affect our (i) customer and employee experiences, (ii)
+Added: ability to meet regulatory, legal or contractual obligations, (iii) network stability, (iv) ability to realize anticipated efficiencies or (v) ability to deliver value to our customers at required speed and scale.
+Added: We operate in an intensely competitive industry and existing and future competitive pressures could harm our performance.
+Added: Each of our business and consumer offerings faces increasingly intense competition from a wide variety of sources under evolving market conditions.
+Added: Some of our current and potential competitors:
+Added: (i) offer products or services that are substitutes for our traditional wireline voice services, including wireless voice and non-voice communication services, (ii) offer a more comprehensive range of communications products and services, (iii) have greater marketing, engineering, research, development, technical, provisioning, customer relations, financial or other resources, (iv) conduct operations or raise capital at a lower cost than we do, (v) are subject to less regulation than we are, (vi) have stronger brand names, (vii) have deeper or more long-standing relationships with key customers, or (viii) have larger operations than ours, any of which may enable them to compete more successfully for customers, strategic partners and acquisitions.
+Added: Competitive pressures have lowered market prices for many of our products and services in recent years and continued competitive pressures will likely place further downward pressure on market pricing.
+Added: Our ability to successfully compete could be hampered if we fail to develop and market innovative technology solutions.
+Added: The technology and communications industry has been and continues to be impacted by significant technological changes, which are enabling an increasing variety of companies to compete with us.
+Added: Many of these technological changes are (i) displacing or reducing demand for certain of our services, (ii) enabling the development of competitive products or services, (iii) enabling customers to reduce or bypass use of our networks, or (iv) reducing profit margins.
+Added: For example, as service providers continue to invest in 5G networks and services, their 5G services could reduce demand for our network services.
+Added: Increasingly, customers are demanding more technologically advanced products that suit their evolving needs.
+Added: To remain competitive, we will need to accurately predict, invest in and respond to changes in technology.
+Added: Also, we will need to continue developing products and services attractive to our customers.
+Added: Our ability to do so could be restricted by various factors, including limitations of our existing network, technology, capital or personnel.
+Added: If we fail at that, our competitors will likely provide our customers with more desirable products and services.
+Added: We may be unable to attract, develop and retain leaders and employees with the right skillsets and technical expertise.
+Added: We may be unable to attract and retain skilled and motivated leaders and employees who possess the right skillsets and technical, managerial and development expertise to execute on our plans for transformation, innovation and strategic growth.
+Added: We operate in a highly competitive and expanding industry.
+Added: We operate with a limited pool of employees and there is competition for highly qualified personnel in certain growth markets.
+Added: There is no assurance our efforts to recruit and retain qualified personnel will be successful.
+Added: If we are unable to do so, such failure could have a material adverse effect on our operations and financial condition.
+Added: We could be harmed by cyber-attacks.
+Added: Our vulnerability to cyber-attacks is heightened by our (i) material reliance on our networks to conduct our operations, (ii) our transmission of large amounts of data over our systems and (iii) our processing and storage of sensitive customer data.
+Added: Cyber-attacks on our systems may stem from a variety of sources, including fraud, malice or sabotage on the part of foreign nations, third parties, vendors, or employees and attempts by outside parties to gain access to sensitive data that is stored in or transmitted across our network.
+Added: Cyber-attacks can put at risk personally identifiable customer data or protected health information, thereby implicating stringent domestic and foreign data protection laws.
+Added: These threats may also arise from failure or breaches of systems owned, operated or controlled by other unaffiliated operators to the extent we rely on such other systems to deliver services to our customers or to operate our business.
+Added: Various other factors could intensify these risks, including, (i) our maintenance of information in digital form stored on servers connected to the Internet, (ii) our use of open and software-defined networks, (iii)
+Added: the complexity of our multi-continent network composed of legacy and acquired properties, (iv) growth in the size and sophistication of our customers and their service requirements, and (v) increased use of our network due to greater demand for data services.
+Added: Like other prominent technology and communications companies, we and our customers are constant targets of cyber-attacks of various kinds.
+Added: Although some of these attacks have resulted in security breaches, thus far none of these breaches has resulted in a material adverse effect on our operating results or financial condition.
+Added: You should be aware, however, that the risk of breaches is likely to continue to increase due to several factors, including the increasing sophistication of cyber-attacks and the wider accessibility of cyber-attack tools.
You should be further aware that defenses against cyber-attacks currently available to U.S.
companies are unlikely to prevent intrusions by a highly-determined, highly-sophisticated hacker.
−Removed: Consequently, you should assume that we will be unable to implement security barriers or other preventative measures that repel all future cyber-attacks.
−Removed: Any such future security breaches or disruptions could materially adversely affect our business, results of operations or financial condition, especially in light of the growing frequency, scope and well-documented sophistication of cyber-attacks and intrusions.
−Removed: Although CenturyLink maintains insurance coverage that may, subject to policy terms and conditions (including self-insured deductibles, coverage restrictions and monetary coverage caps), cover certain aspects of our cyber risks, such insurance coverage may be unavailable or insufficient to cover our losses.
−Removed: Additional risks to our network, infrastructure and related systems include, among others:
−Removed: capacity or system configuration limitations, including those resulting from changes in our customer's usage patterns, the introduction of new technologies or products, or incompatibilities between our newer and older systems;
−Removed: theft or failure of our equipment;
−Removed: software or hardware obsolescence, defects or malfunctions;
−Removed: power losses or power surges;
−Removed: physical damage, whether caused by fire, flood, adverse weather conditions, terrorism, sabotage, vandalism or otherwise;
−Removed: deficiencies in our processes or controls;
−Removed: our inability to hire and retain personnel with the requisite skills to adequately maintain or improve our systems;
−Removed: programming, processing and other human error;
−Removed: inadequate building maintenance by third-party landlords or other service failures of our third-party vendors.
−Removed: Due to these factors, from time to time in the ordinary course of our business we experience disruptions in our service.
−Removed: We could experience more significant disruptions in the future, especially if network traffic continues to increase and we continue to assume greater responsibility for managing our customers' critical systems and networks.
−Removed: Disruptions, security breaches and other significant failures of the above-described networks and systems could:
−Removed: disrupt the proper functioning of these networks and systems, which could in turn disrupt (i) our operational, billing or other administrative functions or (ii) the operations of certain of our customers who rely upon us to provide services critical to their operations;
−Removed: result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of proprietary, confidential, sensitive, classified or otherwise valuable information of ours, our customers or our customers' end users, including trade secrets, which others could use for competitive, disruptive, destructive or otherwise harmful purposes and outcomes;
−Removed: require us to notify customers, regulatory agencies or the public of data breaches;
−Removed: require us to provide credits for future service under certain service level commitments we have provided contractually to our customers or to offer expensive incentives to retain customers;
−Removed: subject us to claims for damages, fines, penalties, termination or other remedies under our customer contracts or service standards set by regulators, which in certain cases could exceed our insurance coverage;
−Removed: result in a loss of business, damage our reputation among our customers and the public generally, subject us to additional regulatory scrutiny or expose us to prolonged litigation;
−Removed: require significant management attention or financial resources to remedy the resulting damages or to change our systems, including expenses to repair systems, add new personnel or develop additional protective systems.
−Removed: Any or all of the foregoing developments could have a negative impact on our business, results of operations, financial condition and cash flows.
−Removed: Negative publicity may adversely impact us.
−Removed: We believe our industry is by its nature more prone to reputational risks than many other industries.
−Removed: Our ability to attract and retain customers depends in part upon external perceptions of our products, services, management integrity and financial performance.
−Removed: Customer complaints, governmental investigations, outages, or other service failures of networks operated by us could cause substantial adverse publicity affecting us.
−Removed: Similar events impacting other operators could indirectly harm us by causing substantial adverse publicity affecting our industry in general.
−Removed: In either case, press coverage, social media messaging or other public statements that insinuate improper actions by us or other operators, regardless of their factual accuracy or truthfulness, may result in negative publicity, litigation, governmental investigations or additional regulations.
−Removed: Addressing negative publicity and any resulting litigation or investigations may distract management, increase costs and divert resources.
−Removed: Negative publicity may have an adverse impact on our reputation and the morale of our employees.
−Removed: We could suffer similar adverse effects if shareholders, financial analysts or other financial professionals issue public statements that cast us or our industry in a negative light.
−Removed: Any of these developments could adversely affect our business, results of operations, financial condition, cash flows, prospects and the value of our securities.
−Removed: In mid-2017, a former employee alleged that we had engaged in sales-related misconduct.
−Removed: Later that year, a special committee of CenturyLink's independent directors formed to investigate these allegations concluded, among other things, that systems and human error had contributed to inaccurate consumer billings.
−Removed: Since then we have implemented several changes to improve our customers’ experience and have settled various claims with private and state litigants relating to our consumer billing practices.
−Removed: While we believe we have largely mitigated the issues identified by our 2017 investigation, we cannot assure you that all of our service support issues have been addressed to the full satisfaction of our customers.
−Removed: Nor can we assure you that customers, governmental agencies or employees will not raise further concerns about our operations in the future.
−Removed: Market prices for many of our services have decreased in the past, and any similar price decreases in the future will adversely affect our revenue and margins.
−Removed: Over the past several years, a range of competitive and technological factors, including robust network construction and intense competition, have lowered market prices for many of our products and services.
−Removed: If these market conditions persist, we may need to continue to reduce prices to retain customers and revenue.
−Removed: If future price reductions are necessary, our operating results will suffer unless we are able to offset these reductions by reducing our operating expenses or increasing our sales volumes.
−Removed: Our future growth potential will depend in part on the continued development and expansion of the Internet.
−Removed: Our future growth potential will depend in part upon the continued development and expansion of the Internet as a communication medium and marketplace for the distribution of data, video and other products by businesses, consumers and governments.
−Removed: The use of the Internet for these purposes may not grow and expand at the rate anticipated by us or others, or may be restricted by factors outside of our control, including (i) actions by other carriers or governmental authorities that restrict us from delivering traffic over other parties' networks, (ii) changes in regulations, (iii) technological stagnation, (iv) increased concerns regarding cyber threats or (v) changes in consumers' preferences or data usage.
−Removed: Increases in broadband usage may cause network capacity limitations, resulting in service disruptions, reduced capacity or slower transmission speeds for our customers.
−Removed: Video streaming services, gaming and peer-to-peer file sharing applications use significantly more bandwidth than other Internet activity such as web browsing and email.
−Removed: As use of these services continues to grow, our broadband customers will likely use much more bandwidth than in the past.
−Removed: If this occurs, we could be required to make significant capital expenditures to increase network capacity in order to avoid service disruptions, service degradation or slower transmission speeds for our customers.
−Removed: Alternatively, we could choose to implement network management practices to reduce the network capacity available to bandwidth-intensive activities during certain times in market areas experiencing congestion, which could negatively affect our ability to retain and attract customers in affected markets.
−Removed: Competitive or regulatory constraints may preclude us from recovering the costs of network investments designed to address these issues, which could adversely impact our operating margins, results of operations, financial condition and cash flows.
−Removed: We have been accused of infringing the intellectual property rights of others and will likely face similar accusations in the future, which could subject us to costly and time-consuming litigation or require us to seek third-party licenses.
−Removed: Like other communications companies, we have increasingly in recent years received a number of notices from third parties or have been named in lawsuits filed by third parties claiming we have infringed or are infringing upon their intellectual property rights.
−Removed: We are currently responding to several of these notices and claims and expect this industry-wide trend will continue.
−Removed: Responding to these claims may require us to expend significant time and money defending our use of the applicable technology, and divert management’s time and resources away from other business.
−Removed: In certain instances, we may be required to enter into licensing agreements requiring royalty payments.
−Removed: In the case of litigation, we could be required to pay significant monetary damages or cease using the applicable technology.
−Removed: If we are required to take one or more of these actions, our profit margins may decline or our operations could be materially impaired.
−Removed: In addition, in responding to these claims, we may be required to stop selling or redesign one or more of our products or services, which could significantly and adversely affect our business, results of operations, financial condition and cash flows.
−Removed: Similarly, from time to time, we may need to obtain the right to use certain patents or other intellectual property from third parties to be able to offer new products and services.
−Removed: If we cannot license or otherwise obtain rights to use any required technology from a third party on reasonable terms, our ability to offer new products and services may be prohibited, restricted, made more costly or delayed.
−Removed: We may not be successful in protecting and enforcing our intellectual property rights.
−Removed: We rely on various patents, copyrights, trade names, trademarks, service marks, trade secrets and other similar intellectual property rights, as well as confidentiality agreements and procedures, to establish and protect our proprietary rights.
−Removed: These steps, however, may not fully protect us.
−Removed: Others may independently develop technologies that are substantially equivalent, superior to, or otherwise competitive to the technologies we employ in our services, or may intentionally or unintentionally infringe on our intellectual property.
−Removed: Moreover, we may be unable to prevent our current or former employees from using or disclosing to others our proprietary information.
−Removed: Enforcement of our intellectual property rights may depend on initiating legal actions against parties who infringe or misappropriate our proprietary information, but these actions may not be successful, even when our rights have been infringed.
−Removed: If we are unsuccessful in protecting or enforcing our intellectual property rights, our business, competitive position, results of operations and financial condition could be adversely affected.
−Removed: Our operations, financial performance and liquidity are materially reliant on various third parties.
+Added: Consequently, you should assume we will be unable to implement security barriers or other preventative measures that repel all future cyber-attacks.
+Added: Although Lumen Technologies maintains insurance coverage that may, subject to policy terms and conditions (including self-insured deductibles, coverage restrictions and monetary coverage caps), cover certain aspects of our cyber risks, such insurance coverage may be unavailable or insufficient to cover our losses.
+Added: Cyber-attacks could (i) disrupt the proper functioning of our networks and systems, which could in turn disrupt the operations of our customers, (ii) result in the destruction, loss, theft, misappropriation or release of proprietary, confidential, sensitive, classified or otherwise valuable information of ours, our customers or our customers’ end users, (iii) require us to notify customers, regulatory agencies or the public of data breaches, (iv) require us to provide credits for future service to our customers or to offer expensive incentives to retain customers;
+Added: (v) subject us to claims by our customers or regulators for damages, fines, penalties, license or permit revocations or other remedies, (vi) damage our reputation or result in a loss of business, (vii) result in the loss of industry certifications or (viii) require significant management attention or financial resources to remedy the resulting damages or to change our systems.
+Added: Any or all of the foregoing developments could materially adversely impact us.
+Added: We could be harmed by outages in our network or various platforms, or other failures of our services.
+Added: We are also vulnerable to outages in our network, hosting, cloud or IT platforms, as well as failures of our products or services (including basic and enhanced 911 emergency services) to perform in the manner anticipated.
+Added: These outages or other failures could result in several of the same adverse effects listed above for cyber-attacks, including the loss of customers, the issuance of credits or refunds, and regulatory fines.
+Added: This vulnerability may be increased by several factors, including aging network elements, human error, vulnerabilities in our vendors or supply chain, aberrant employees and hardware and software limitations.
+Added: From time to time in the ordinary course of our business we experience disruptions in our service.
+Added: We could experience more significant disruptions in the future.
+Added: Such disruptions could have a negative impact on our business, results of operations, financial condition and cash flows.
+Added: Several of our services continue to experience declining revenue, and our efforts to offset these declines may not be successful.
+Added: Primarily as a result of the competitive and technological changes discussed above, we have experienced a prolonged systemic decline in our local voice, long-distance voice, network access and private line revenues.
+Added: Consequently, we have experienced declining consolidated revenues (excluding acquisitions) for a prolonged period and have not been able to realize cost savings sufficient to fully offset the decline.
+Added: More recently, we have experienced declines in revenue derived from a broader array of our products and services.
+Added: We have thus far been unable to reverse our annual revenue losses (excluding acquisitions).
+Added: In addition, most of our more recent product and service offerings generate lower profit margins and may have shorter lifespans than our traditional communication services, and some can be expected to experience slowing or no growth in the future.
+Added: Accordingly, we may not be successful in attaining our goal of achieving future revenue growth.
+Added: Our operations, financial performance and liquidity are materially reliant on key suppliers, vendors and other third parties.
+Added: Our ability to conduct our operations could be materially adversely affected if certain of our arrangements with third parties were terminated, including those further described below.
Reliance on other communications providers .
To offer certain services in certain of our markets, we must either purchase services or lease network capacity from, or interconnect our network with, the infrastructure of other communications carriers or cloud companies who typically compete against us in those markets.
−Removed: Our reliance on these supply or interconnection arrangements exposes us to multiple risks.
−Removed: Typically, these arrangements limit our control over the quality of our services and expose us to the risk that our ability to market our services could be adversely impacted by changes in the plans or properties of the carriers upon which we are reliant.
−Removed: In addition, we are exposed to the risk that the other carriers may be unwilling or unable to continue or renew these arrangements in the future on terms favorable to us, or at all.
−Removed: This risk is heightened when the other carrier is a competitor who may benefit from terminating the agreement or imposing price increases, or a carrier who suffers financial distress or bankruptcy.
−Removed: If we lose these arrangements and cannot timely replace them, our ability to provide services to our customers and conduct our business could be materially adversely affected.
−Removed: Moreover, many of our arrangements with other carriers are regulated by domestic or foreign agencies, which subject us to the additional risk that changes in regulation could increase our costs or otherwise adversely affect our ability to provide services.
−Removed: Finally, even when another carrier agrees or is obligated to provide services to us to permit us to obtain new customers, it is frequently expensive, difficult and time-consuming to switch the new customers to our network, especially if the other carrier fails to provide timely and efficient cooperation.
−Removed: Conversely, certain of our operations carry a significant amount of voice or data traffic for other communications providers.
−Removed: Their reliance on our services exposes us to the risk that they may transfer all or a portion of this traffic from our network to existing or newly-built networks, owned or leased by them, thereby reducing our revenue.
−Removed: For additional information, see "Management's Discussion and Analysis of Financial Condition included in Item 7 of this report.
−Removed: We also rely on reseller and sales agency arrangements with our affiliates and other communications companies to provide some of the services that we offer to our customers, including video and wireless services.
−Removed: As a reseller or sales agent, we do not control the availability, retail price, design, function, quality, reliability, customer service, marketing or branding of these products and services.
−Removed: Our operations and financial performance could be adversely affected if our relationships with any of these other communications companies are unable or unwilling to continue to engage with us for any reason, including financial distress, bankruptcy, strikes, regulatory impediments, legal disputes or commercial differences.
−Removed: Reliance on other key suppliers and vendors .
+Added: Our reliance on these supply or interconnection arrangements limits our control over the quality of our services.
+Added: In addition, we are exposed to the risk that other carriers may be unwilling or unable to continue or renew these arrangements in the future.
+Added: Those risks are heightened when the other carrier is a competitor who may benefit from terminating the agreement or imposing price increases.
+Added: Additionally, certain of our operations carry a significant amount of voice or data traffic for other communications providers.
+Added: Their reliance on our services exposes us to the risk that they may transfer all or a portion of this traffic from our network to alternative networks owned or leased by them, thereby reducing our revenue.
+Added: Reliance on key suppliers and vendors .
We depend on a limited number of suppliers and vendors for equipment and services relating to our network infrastructure, including fiber optic cable, software, optronics, transmission electronics, digital switches and related components.
−Removed: We also rely on a limited number of software vendors, content suppliers or other parties to assist us with operating, maintaining and administering our business.
−Removed: If any of these suppliers experience interruptions or other problems delivering their products or services on a timely basis, our operations could suffer significantly.
−Removed: To the extent that proprietary technology of a supplier is an integral component of our network, we may have limited flexibility to purchase key network components from alternative suppliers and may be adversely affected if third parties assert patent infringement claims against our suppliers or us.
−Removed: Similarly, in certain instances we have access to only a limited number of alternative suppliers or vendors.
−Removed: In the event it becomes necessary to seek alternative suppliers and vendors, we may be unable to obtain satisfactory replacement equipment, software, supplies, services, utilities or programming on economically attractive terms, on a timely basis, or at all, which could increase costs or cause disruptions in our services.
−Removed: Reliance on utility providers and landlords.
−Removed: Our energy costs can fluctuate significantly or increase for a variety of reasons, including changes in legislation and regulation.
−Removed: Several pending proposals designed to reduce greenhouse emissions could substantially increase our energy costs, which we may not be able to pass on to our customers.
−Removed: Reliance on governmental payments .
−Removed: We receive a material amount of revenue or government subsidies under various government programs, which are further described under the heading "Risk Factors—Risks Relating to Legal and Regulatory Matters." We also provide products or services to various federal, state and local agencies.
−Removed: Our failure to comply with complex governmental regulations and laws applicable to these programs, or the terms of our governmental contracts, could result in us being suspended or disbarred from future governmental programs or contracts for a significant period of time.
−Removed: Moreover, certain governmental agencies frequently reserve the right to terminate their contracts for convenience or if funding is unavailable.
−Removed: If our governmental contracts are terminated for any reason, or if we are suspended or debarred from governmental programs or contracts, our results of operations and financial condition could be materially adversely affected.
−Removed: Violating our government contracts could have other serious consequences.
−Removed: We provide services to various governmental agencies with responsibility for national security or law enforcement.
−Removed: These governmental contracts impose significant requirements on us relating to network security, information storage and other matters, and in certain instances impose on us additional heightened responsibilities, including requirements related to the composition of CenturyLink's Board of Directors.
−Removed: While we expect to continue to comply fully with all of our obligations under these contracts, we cannot assure you of this.
−Removed: The consequences of violating these contracts could be severe, potentially including the revocation of our Federal Communications Commission (the "FCC") licenses in the U.S.
−Removed: (in addition to being suspended or debarred from government contracting, as noted above.)
−Removed: If we fail to extend or renegotiate our collective bargaining agreements with our labor unions as they expire from time to time, or if our unionized employees were to engage in a strike or other work stoppage, our business and operating results could be materially harmed.
−Removed: As of December 31, 2019 , approximately 42% of our employees were members of various bargaining units represented by the Communications Workers of America or the International Brotherhood of Electrical Workers.
−Removed: From time to time, our labor agreements with unions expire.
−Removed: Although we typically are able to negotiate new bargaining agreements, we cannot predict the outcome of our future negotiations of these agreements.
−Removed: We may be unable to reach new agreements, and union employees may engage in strikes, work slowdowns or other labor actions, which could materially disrupt our ability to provide services and result in increased cost to us.
−Removed: Our mixed workforce of represented and non-represented personnel could induce additional organizational activities.
−Removed: In addition, new labor agreements may impose significant new costs on us, which could impair our financial condition or results of operations in the future.
−Removed: To the extent they contain benefit provisions, these agreements may also limit our flexibility to change benefits.
−Removed: In particular, retirement benefits provided under these agreements could cause us to incur costs not faced by many of our competitors, which could ultimately hinder our competitive position.
−Removed: Portions of our property, plant and equipment are located on property owned by third parties.
−Removed: We rely on rights-of-way, colocation agreements, franchises and other authorizations granted by governmental bodies, railway companies, utilities, carriers and other third parties to locate our cable, conduit and other network equipment on or under their respective properties.
+Added: We also rely on software and service vendors and other parties to assist us with operating, maintaining and administering our business, including billing, security, provisioning and general operations.
+Added: If any of these vendors experience interruptions, security breaches or other problems delivering their products or services on a timely basis, our operations could suffer significantly.
+Added: To the extent that proprietary technology of a supplier is an integral component of our network, we may have limited flexibility to purchase key network components from alternative suppliers.
+Added: Reliance on key customer contracts .
+Added: We have several complex high-value national and global customer contracts.
+Added: These contracts are frequently impacted by a variety of factors that could reduce or eliminate their profitability.
+Added: Moreover, we would be adversely impacted if we fail to renew major contracts upon their expiration.
+Added: Reliance on landowners.
+Added: We rely on rights-of-way, colocation agreements, franchises and other authorizations granted by governmental bodies, railway companies, utilities, carriers and other third parties to locate a portion of our network equipment over, on or under their respective properties.
A significant number of these authorizations are scheduled to lapse over the next five to ten years, unless we are able to extend or renew them.
−Removed: Our operations could be adversely affected if any of these authorizations terminate or lapse, or if the landowner requests price increases.
−Removed: Moreover, our ability to expand our network could depend in part on obtaining additional authorizations, the receipt of which is not assured.
−Removed: Over the past few years, certain utilities, cooperatives and municipalities in certain of the states in which we operate have requested significant rate increases for attaching our plant to their facilities.
−Removed: To the extent that these entities are successful in increasing the amount we pay for these attachments, our future operating costs will increase.
−Removed: We currently are, and in the past have been, subject to lawsuits challenging our use of rights-of-way.
−Removed: Similar suits are possible in the future.
−Removed: Plaintiffs in these suits typically seek to have them certified as class action suits.
−Removed: These suits are typically complex, lengthy and costly to defend, and expose us to each of the other general litigation risks described elsewhere herein.
−Removed: Our major contracts subject us to various risks.
−Removed: We furnish to and receive from our business customers indemnities relating to damages caused or sustained by us in connection with certain of our operations.
−Removed: Our customers’ changing views on risk allocation could cause us to accept greater risk to win new business or could result in us losing business if we are not prepared to take such risks.
−Removed: To the extent that we accept such additional risk, and seek to insure against it, our insurance premiums could rise.
−Removed: Asset dispositions could have a detrimental impact on us or the holders of our securities.
−Removed: We may consider disposing of other assets or asset groups from time to time in the future.
−Removed: We may not be able to divest any such assets on terms that are attractive to us, or at all.
−Removed: In addition, if we agree to proceed with any such divestitures of assets, we may experience operational difficulties segregating them from our retained assets and operations, which could impact the execution or timing for such dispositions and could result in disruptions to our operations or claims for damages, among other things.
−Removed: Moreover, such dispositions could reduce our cash flows and make it harder for us to fund all of our cash requirements.
−Removed: Unfavorable general economic conditions could negatively impact our operating results and financial condition.
−Removed: Unfavorable general economic conditions, including unstable economic and credit markets, or depressed economic activity caused by trade wars, epidemics, pandemics or other factors, could negatively affect our business.
−Removed: While it is difficult to predict the ultimate impact of these general economic conditions, they could adversely affect demand for some of our products and services and could cause customers to shift to lower priced products and services or to delay or forego purchases of our products and services.
−Removed: These conditions impact, in particular, our ability to sell discretionary products or services to business customers that are under pressure to reduce costs or to governmental customers operating under budgetary constraints.
−Removed: Any one or more of these circumstances could continue to depress our revenue.
−Removed: Also, our customers may encounter financial hardships or may not be able to obtain adequate access to credit, which could negatively impact their ability to make timely payments to us.
−Removed: In addition, as discussed further below, unstable economic and credit markets may preclude us from refinancing maturing debt at terms that are as favorable as those from which we previously benefited, at terms that are acceptable to us, or at all.
−Removed: For these reasons, among others, weak economic conditions could adversely affect our operating results, financial condition, and liquidity.
−Removed: For additional information about our business and operations, see "Business" in Item 1 of this report.
−Removed: Risks Relating to Legal and Regulatory Matters
−Removed: We operate in a highly regulated industry and are therefore exposed to restrictions on our operations and a variety of risks relating to such regulation.
−Removed: Our operations are regulated by the FCC, various state utility commissions and occasionally by local agencies.
−Removed: Our operations are also subject to potential investigation and legal action by the Federal Trade Commission ("FTC") and other federal and state regulatory authorities over issues such as consumer marketing, competitive practices, and privacy protections.
−Removed: Generally, we must obtain and maintain operating licenses from these bodies in most territories where we offer regulated services.
−Removed: We cannot assure you that we will be successful in obtaining or retaining all licenses necessary to carry out our business plan.
−Removed: Even if we are, the prescribed service standards and conditions imposed on us under these licenses may increase our costs and limit our operational flexibility.
+Added: Further, some of our operations are subject to licensing and franchising requirements imposed by municipalities or other governmental authorities.
+Added: Our operations could be adversely affected if any of these authorizations are cancelled, or otherwise terminate or lapse, or if the landowner requests price increases.
+Added: We cannot assure you we will be able to successfully extend these arrangements when their terms expire, or to enter into new arrangements that may be necessary to implement our network expansion opportunities.
+Added: We face risks from natural disasters and extreme weather, which can disrupt our operations and cause us to incur substantial additional capital and operating costs.
+Added: A substantial number of our domestic facilities are located in coastal states, which subjects them to the risks associated with severe tropical storms, hurricanes and tornadoes, and many other of our facilities are subject to the risk of earthquakes, floods, fires, tornadoes or other similar casualty events.
+Added: These events could cause substantial damages, including downed transmission lines, flooded facilities, power outages, fuel shortages, network delay or failure, damaged or destroyed property and equipment, and work interruptions.
+Added: Due to substantial deductibles, coverage limits and exclusions, and limited availability, we have typically recovered only a portion of our losses through insurance.
+Added: Moreover, many climate experts predict an increase in extreme weather events in the future, which would increase our exposure to such risks.
+Added: For all these reasons, any future hazard-related costs and work and interruptions could adversely affect our operations and our financial condition.
+Added: Future acquisitions or strategic investments and asset dispositions could have a detrimental impact on us or the holders of our securities.
+Added: In an effort to implement our and Lumen’s business strategies, Lumen from time to time in the future may attempt to pursue other acquisition or expansion opportunities, including strategic investments.
+Added: These types of transactions may present significant risks and uncertainties, including the difficulty of identifying appropriate companies to acquire or invest in on acceptable terms, potential violations of covenants in our and our affiliates’ debt instruments, insufficient revenue acquired to offset liabilities assumed, unexpected expenses, inadequate return of capital, regulatory or compliance issues, potential infringements, difficulties integrating the new properties into our and our affiliates’ operations, and other unidentified issues not discovered in due diligence.
+Added: In addition, in the past, we or Lumen Technologies have disposed of assets or asset groups for a variety of reasons, and we may consider disposing of other assets or asset groups from time to time in the future.
+Added: If we agree to proceed with any such divestitures of assets, we may experience operational difficulties segregating them from our retained assets and operations, which could result in disruptions to our operations or claims for damages, among other things.
+Added: Moreover, such dispositions could reduce our cash flows available to support our payment of dividends, capital expenditures, pension contributions, debt maturities or other commitments.
+Added: An outbreak of disease or similar public health threat, such as the recent COVID-19 pandemic, could have a material adverse impact on us.
+Added: An outbreak of disease or similar public health threat, such as the recent COVID-19 pandemic and its detrimental impact on the worldwide economy, could have a material adverse impact on our operating results and financial condition.
+Added: COVID-19 poses the risk that we or our employees, contractors, suppliers, customers and other business partners may be prevented from conducting business activities at expected levels through established processes for an indefinite period of time.
+Added: Future events regarding the pandemic, which are unpredictable and beyond our control, will likely continue impacting our operations and results by its effects on demand for our products and services and network usage, on our customers’ ability to continue to pay us in a timely manner, on other third parties we rely on, on our workforce, on our performance under our contracts, and on our supply chains or distribution channels for our products and services.
+Added: If the pandemic intensifies or economic conditions further deteriorate, the pandemic’s adverse impact on us could become pronounced in the future and could have a material adverse impact on our operating results and financial condition.
+Added: Moreover, to the extent any of these risks and uncertainties adversely impact us, they may also have the effect of heightening many of the other risks described in this section “Item 1A.
+Added: Risk Factors.”
+Added: We have taken certain precautions due to the uncertain and evolving situation relating to the spread of COVID-19 that could have a material adverse impact on us.
+Added: The precautionary measures described in this annual report we have taken to safeguard our employees and customers could make it more difficult to (i) timely and efficiently furnish products and services to our customers, (ii) devote sufficient resources to our ongoing network and product simplification projects, (iii) efficiently monitor and maintain our network, (iv) maintain effective internal controls, (v) mitigate information technology or cybersecurity related risks, and (vi) otherwise operate and administer our affairs.
+Added: As such, these measures ultimately could have a material adverse impact on our operating results and financial condition.
+Added: Adverse developments impacting our non-consolidated affiliates could indirectly impact us.
+Added: Our consolidated operations constitute only a portion of the consolidated operations of our corporate parent, Lumen.
+Added: We engage in various intercompany transactions with affiliates of Lumen that are not members of our consolidated group of companies.
+Added: Events or developments that adversely impact these non-consolidated affiliates will not directly impact our consolidated financial position or performance as reported under GAAP, but could nonetheless indirectly adversely impact us to the extent such developments interfere with the ability of such non-consolidated affiliates to provide services or pay amounts to which we or our subsidiaries are entitled.
+Added: For these reasons, you are urged to review the risk factor disclosures contained in Item 1A of Lumen’s Annual Report on Form 10-K for the year ended December 31, 2020.
+Added: We face other business risks.
+Added: We face other business risks, including among others:
+Added: • the risk that customer complaints, governmental investigations or other adverse publicity will adversely impact our brand and our business;
+Added: • the difficulties of managing and administering an organization that offers a complex set of products to a diverse range of customers.
+Added: Legal and Regulatory Risks
+Added: We are subject to an extensive, evolving regulatory framework that could create operational or compliance costs.
+Added: As explained in greater detail elsewhere in this annual report, our domestic operations are regulated by the FCC and other federal, state and local agencies.
+Added: We cannot assure you we will be successful in obtaining or retaining all regulatory licenses necessary to carry out our business in our various markets.
+Added: Even if we are, the prescribed service standards and conditions imposed on us under these licenses and related data storage, communication and transfer laws may increase our costs, limit our operational flexibility or result in third-party claims.
We are subject to numerous requirements and interpretations under various federal, state and local laws, rules and regulations, which are often quite detailed and occasionally in conflict with each other.
−Removed: Accordingly, we cannot ensure that we will always be considered to be in compliance with all these requirements at any single point in time (as discussed further elsewhere herein).
−Removed: Our inability or failure to comply with the telecommunications and other laws in territories where we operate could prevent us from commencing or continuing to provide service therein.
−Removed: The agencies responsible for the enforcement of these laws, rules and regulations may initiate inquiries or actions based on customer complaints or on their own initiative.
−Removed: Even if we are ultimately found to have complied with applicable regulations, such actions or inquiries could create adverse publicity that negatively impacts our business.
−Removed: Regulation of the telecommunications industry continues to change, and the regulatory environment varies substantially from jurisdiction to jurisdiction.
−Removed: A substantial portion of our local voice services revenue remains subject to FCC and state utility commission pricing regulation, which periodically exposes us to pricing or earnings disputes and could expose us to unanticipated price declines.
−Removed: In addition, from time to time carriers or other third parties refuse to pay for certain of our services, or challenge our rights to receive certain service payments.
−Removed: Our future revenue, costs, and capital investment could be adversely affected by material changes to or decisions regarding the applicability of government requirements, and we cannot assure you that future regulatory, judicial or legislative activities will not have a material adverse effect on our operations.
−Removed: Changes in the composition and leadership of the FCC, state commissions and other agencies that regulate our business could have significant impacts on our revenue, expenses, competitive position and prospects.
−Removed: Changes in the composition and leadership of these agencies are often difficult to predict, and make future planning more difficult.
−Removed: Risks associated with changes in regulation.
−Removed: Changes in regulation can have a material impact on our business, revenue or financial performance.
−Removed: Changes over the past couple of decades in federal regulations have substantially impacted our operations, including recent orders or laws overhauling intercarrier compensation, revamping universal service funding, and increasing our responsibilities to assist various governmental agencies and safeguard customer data.
−Removed: These changes, coupled with our participation in the new FCC support programs, have significantly impacted various aspects of our operations, financial results and capital expenditures, including the amount of revenue we collect from our wholesale customers and from federal support programs.
−Removed: We expect these impacts will continue in the future.
−Removed: For more information, see "Business—Regulation" in Item 1 of this report, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 of this report.
−Removed: Many of the FCC’s regulations adopted in recent years remain subject to judicial review and additional rulemakings, thus increasing the difficulty of determining the ultimate impact of these changes on us and our competitors.
−Removed: Federal and state agencies that dispense support program payments can, and from time to time do, reduce the amount of those payments to us and other carriers.
−Removed: Risks of higher costs.
−Removed: Regulations continue to create significant operating and capital costs for us.
−Removed: Regulatory challenges to our business practices or delays in obtaining certifications and regulatory approvals could cause us to incur substantial legal and administrative expenses, and, if successful, such challenges could adversely affect our operations.
−Removed: Our business also may be impacted by legislation and regulation imposing new or greater obligations related to regulations or laws related to regulating broadband services, storing records, fighting crime, bolstering homeland security or cyber security, increasing disaster recovery requirements, minimizing environmental impacts, enhancing privacy, restricting data collection, protecting intellectual property rights of third parties, or addressing other issues that impact our business.
−Removed: We expect our compliance costs to increase if future laws or regulations continue to increase our obligations.
−Removed: Risk of investigations and fines.
+Added: Accordingly, we cannot ensure we will always be considered to be in compliance with all these requirements at any single point in time.
Various governmental agencies, including state attorneys general, with jurisdiction over our operations have routinely in the past investigated our business practices either in response to customer complaints or on their own initiative, and are expected to continue to do the same in the future.
−Removed: These investigations can potentially result in enforcement actions, litigation, fines, settlements or reputational harm, or could cause us to change our sales practices or operations.
−Removed: We typically publicly disclose the existence or outcome of these investigations, or our own internal investigations, only when we determine these disclosures to be material to investors or otherwise required by applicable law.
−Removed: We have recently paid certain regulatory fines associated with network or service outages, particularly with respect to outages impacting the availability of emergency - 911 services.
−Removed: Federal and state regulators continue to be focused on 911 service reliability and we believe this trend will continue.
−Removed: Risks of reduced flexibility .
−Removed: As a diversified full service incumbent local exchange carrier in many of our operating markets, we have traditionally been subject to significant regulation that does not apply to many of our competitors.
−Removed: This regulation in many instances restricts our ability to change rates, to compete and to respond rapidly to changing industry conditions.
−Removed: As our business becomes increasingly competitive, regulatory disparities could continue to favor our competitors.
−Removed: Risks posed by other regulations .
−Removed: All of our operations are also subject to a variety of environmental, safety, health and other governmental regulations.
−Removed: In connection with our current operations, we use, handle and dispose of various hazardous and non-hazardous substances and wastes.
−Removed: In prior decades, certain of our current or former subsidiaries owned or operated, or are alleged to have owned or operated, former manufacturing businesses, for which we have been notified of certain potential environmental liabilities.
−Removed: We monitor our compliance with applicable regulations or commitments governing these current and past activities.
−Removed: Although we believe that we are in compliance with these regulations in all material respects, our use, handling and disposal of environmentally sensitive materials, or the prior operations of our predecessors, could expose us to claims or actions that could potentially have a material adverse effect on our business, financial condition and operating results.
−Removed: Our participation in the FCC's Connect America Fund ("CAF") II support program poses certain risks.
−Removed: Our participation in the FCC's CAF II support program subjects us to certain financial risks.
−Removed: If we fail to attain certain specified infrastructure buildout requirements, the FCC could withhold future CAF support payments until these shortcomings are rectified.
−Removed: In addition, if we are not in compliance with FCC measures by the end of the CAF II program, we would incur substantial penalties.
−Removed: To comply with the FCC's buildout requirements, we believe we will need to dedicate a substantial portion of our future capital expenditure budget to the construction of new infrastructure.
−Removed: The CAF-related expenditures could reduce the amount of funds we are willing or able to allocate to other initiatives or projects.
−Removed: The FCC has determined it will use reverse auctions to award support under a new fund following the completion of CAF Phase II.
−Removed: We cannot assure you that any funding that CenturyLink or we pursue and receive through these upcoming auctions will be sufficient to replace our current CAF support payments.
−Removed: Regulation of the Internet and data privacy could substantially impact us.
−Removed: Since the creation of the Internet, there has been extensive debate about whether and how to regulate Internet service providers.
−Removed: A significant number of U.S.
−Removed: congressional leaders, state elected officials and various consumer interest groups have long advocated in favor of extensive regulation.
−Removed: In 2015, the FCC adopted new regulations that regulated broadband services as a public utility under Title II of the Communications Act of 1934.
−Removed: The FCC voted to repeal most of those regulations in December 2017 and preempted states from imposing substantial regulations of their own, opponents of the rescission judicially challenged this action and continue to advocate in favor of re-instituting extensive federal regulation.
−Removed: In addition, California and other states have adopted, or are considering adopting, legislation or regulations that govern the terms of internet services.
−Removed: In October 2019, a federal court upheld the FCC’s classification decision but vacated a part of its preemption ruling.
−Removed: The court also remanded to the FCC for further findings relates to the classification decision.
−Removed: Numerous parties have sought further appellate review of this decision.
−Removed: The related result of these further appeals is pending.
−Removed: Depending on the scope of such current and future federal or state regulation and judicial proceedings regarding these matters, the imposition of heightened regulation of our Internet operations could hamper our ability to operate our data networks efficiently, restrict our ability to implement network management practices necessary to ensure quality service, increase the cost of operating, maintaining and upgrading our network, and otherwise negatively impact our current operations.
−Removed: As the significance of the Internet continues to expand, foreign governments similarly may adopt new laws or regulations governing the Internet.
−Removed: We cannot predict the outcome of any such changes.
−Removed: California and other states have adopted, or are considering adopting, data privacy laws.
−Removed: These laws are complex and not consistent across jurisdictions.
−Removed: Although we cannot predict the ultimate outcomes of this growing trend toward additional regulation, we expect it will increase our operating costs and heighten our regulatory risk.
−Removed: We may be liable for the material that content providers or distributors distribute over our network.
−Removed: The liability of private network operators for information stored or transmitted on their networks is impacted both by changing technology and evolving legal principles that remain unsettled in many jurisdictions.
−Removed: While we disclaim any liability for third-party content in our service contracts, as a private network provider we could be exposed to legal claims relating to third party content stored or transmitted on our networks.
+Added: Certain of these investigations have resulted in substantial fines in the past.
+Added: On occasion, we have resolved such matters by entering into consent decrees, which are court orders that frequently bind us to specific conduct going forward.
+Added: These consent decrees expose us not only to contractual remedies, but also to judicial enforcement via contempt of court proceedings, any of which could have material adverse consequences.
+Added: Additionally, future investigations can potentially result in enforcement actions, litigation, fines, settlements or reputational harm, or could cause us to change our sales practices or operations.
+Added: Our participation in the FCC's CAF Phase II and RDOF programs subjects us to certain financial risks.
+Added: If we are not in compliance with FCC measures by the end of the CAF Phase II and RDOF programs, we could incur substantial penalties.
+Added: We provide products or services to various federal, state and local agencies.
+Added: Our failure to comply with complex governmental regulations and laws applicable to these programs, or the terms of our governmental contracts, could result in us suffering substantial negative publicity, being suspended or debarred from future governmental programs or contracts for a significant period of time and in certain instances could lead to the revocation of our FCC licenses.
+Added: Moreover, certain governmental agencies frequently reserve the right to terminate their contracts for convenience or if funding is unavailable.
+Added: If our governmental contracts are terminated for any reason, or if we are suspended or debarred from governmental programs or contracts, our results of operations and financial condition would be materially adversely affected.
+Added: Adapting and responding to changing regulatory requirements has historically materially impacted our operations.
+Added: We believe evolving regulatory developments and regulatory uncertainty could continue to have a material impact on our business.
+Added: In particular, our business could be materially impacted if the U.S.
+Added: Congress amends or eliminates current federal law limitations on the liability of private network providers, such as us, against claims related to third party content stored or transmitted on private networks, as currently proposed by certain governmental officials, legislative leaders and consumer interest groups.
+Added: We could also be materially affected if currently pending proposals to increase the regulation of internet service providers or to further strengthen data privacy laws are implemented.
+Added: In addition, federal and state agencies that dispense support program payments can, and from time to time do, reduce the amount of those payments to us and other carriers.
+Added: The variability of these laws could also hamper the ability of us and our customers to plan for the future or establish long-term strategies.
+Added: Third-party content stored or transmitted on our networks could result in liability or otherwise damage our reputation.
+Added: While we disclaim any liability for third-party content in our service contracts, as a private network provider we potentially could be exposed to legal claims relating to third-party content stored or transmitted on our networks.
Such claims could involve, among others, allegations of defamation, invasion of privacy, copyright infringement, or aiding and abetting restricted activities such as online gambling or pornography.
−Removed: Although we believe our liability for these types of claims is limited, suits against other carriers have been successful and we cannot assure you that our defenses will prevail.
−Removed: If we decide to implement additional measures to reduce our exposure to these risks, or if we are required to defend ourselves against these kinds of claims, our operations and financial results could be negatively affected.
−Removed: Our pending legal proceedings could have a material adverse impact on our financial condition and operating results, the trading price of our securities and our ability to access the capital markets.
−Removed: There are several material proceedings pending against CenturyLink and its affiliates, as described in Note 19—Commitments and Contingencies to the consolidated financial statements included in Item 8 of Part II of CenturyLink's annual report on Form 10-K for the year ended December 31, 2019 , and certain material proceedings pending against us, as described in Note 16—Commitments, Contingencies and Other Items in Item 8 of this report.
+Added: Although we believe our liability for
+Added: these types of claims is limited under current law, suits against other carriers have been successful and we cannot assure you that our defenses will prevail.
+Added: Such third-party content could also result in adverse publicity and damage our reputation.
+Added: Our pending legal proceedings could have a material adverse impact on us.
+Added: There are several potentially material proceedings pending against us and our affiliates.
Results of these legal proceedings cannot be predicted with certainty.
−Removed: Irrespective of its merits, litigation may be both lengthy and disruptive to our operations and could cause significant expenditure and diversion of management attention.
−Removed: 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.
−Removed: 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.
−Removed: For each of these reasons, any of the proceedings described in Note 16—Commitments, Contingencies and Other Items in Item 8 of this report, as well as current litigation not described therein or future litigation, could have a material adverse effect on our business, reputation, financial position, operating results, the trading price of our securities and our ability to access the capital markets.
+Added: As of any given date we could have exposure to losses under proceedings in excess of our accrued liability.
+Added: For each of these reasons, any of the proceedings described in Note 16—Commitments, Contingencies and Other Items, as well as current litigation not described therein or future litigation, could have a material adverse effect on our business, reputation, financial position, operating results, the trading price of our securities and our ability to access the capital markets.
We can give you no assurances as to the ultimate impact of these matters on us.
−Removed: We are subject to franchising requirements that could impede our expansion opportunities or result in potential fines or penalties.
−Removed: We may be required to obtain from municipal authorities operating franchises to install or expand certain facilities related to our fiber transport operations, and certain of our other services.
−Removed: Some of these franchises may require us to pay franchise fees, and may require us to pay fines or penalties if we violate or terminate our related contractual commitments.
−Removed: In some cases, certain franchise requirements could delay us in expanding our operations or increase the costs of providing these services.
−Removed: We are exposed to risks arising out of recent legislation affecting U.S.
−Removed: public companies.
−Removed: Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, and related regulations implemented thereunder, have increased our legal and financial compliance costs and made some activities more time consuming.
−Removed: Any failure to comply with these laws and regulations, including any failure to timely complete annual assessments of our internal controls could subject us to sanctions or investigation by regulatory authorities.
−Removed: Any such action could adversely affect our financial results or our reputation with investors, lenders or others.
−Removed: Changes in any of the above-described laws or regulations may limit our ability to plan, and could subject us to further costs or constraints.
−Removed: From time to time, the laws or regulations governing us or our customers, or the government's policy of enforcing those laws or regulations, have changed frequently and materially.
−Removed: The variability of these laws could hamper the ability of us and our customers to plan for the future or establish long-term strategies.
−Removed: Moreover, future changes in these laws or regulations could further increase our operating or compliance costs, or further restrict our operational flexibility, any of which could have a material adverse effect on our results of operations, competitive position, financial condition or prospects.
−Removed: For a more thorough discussion of the regulatory issues that may affect our business, see "Business—Regulation" in Item 1 of this report.
−Removed: Risks Affecting Our Liquidity and Capital Resources
−Removed: CenturyLink's and our high debt levels expose us to a broad range of risks.
−Removed: Our ultimate parent, CenturyLink, and we continue to carry significant debt.
−Removed: As of December 31, 2019 , the aggregate principal amount of our consolidated long-term debt, excluding unamortized premiums and discounts, unamortized debt issuance costs and finance lease and other obligations, was $6.1 billion (excluding our note payable - affiliate of $1.1 billion ), which was included in CenturyLink's consolidated long-term debt of $34.8 billion as of that date.
−Removed: As of the filing date of this report, $7.0 billion aggregate principal amount of CenturyLink's consolidated debt securities is scheduled to become payable prior to December 31, 2022.
−Removed: While we currently believe that CenturyLink and we will have the financial resources to meet or refinance our obligations when they come due, we cannot fully anticipate our future performance or financial condition, the future condition of CenturyLink, the credit markets or the economy generally.
−Removed: Our significant levels of debt can adversely affect us in several other respects, including:
−Removed: limiting our ability to obtain additional financing for working capital, capital expenditures, acquisitions, refinancings or other general corporate purposes, particularly if, as discussed further in the risk factor disclosure below, (i) the ratings assigned to our debt securities by nationally recognized credit rating organizations are revised downward or (ii) we seek capital during periods of turbulent or unsettled market conditions;
−Removed: requiring us to dedicate a substantial portion of our cash flow from operations to the payment of interest and principal on our debt, thereby reducing the funds available to us for other purposes, including acquisitions, capital expenditures, strategic initiatives, dividends, marketing and other potential growth initiatives;
+Added: We may not be successful in protecting and enforcing our intellectual property rights.
+Added: We rely on various patents, copyrights, trade names, trademarks, service marks, trade secrets and other similar intellectual property rights, as well as confidentiality agreements and procedures, to establish and protect our proprietary rights.
+Added: For a variety of reasons, however, these steps may not fully protect us, including due to inherent limitations on the ability to enforce these rights.
+Added: If we are unsuccessful in protecting or enforcing our intellectual property rights, our business, competitive position, results of operations and financial condition could be adversely affected.
+Added: We have been accused of infringing the intellectual property rights of others and will likely face similar accusations in the future.
+Added: We have received a number of notices from third parties or have been named in lawsuits filed by third parties claiming we have infringed or are infringing their intellectual property rights.
+Added: We are currently responding to several of these notices and claims and expect this industry-wide trend will continue.
+Added: If these claims succeed, we could be required to pay significant monetary damages, to cease using the applicable technology or to make royalty payments to continue using the applicable technology.
+Added: If we are required to take one or more of these actions, our profit margins may decline, our operations could be materially impaired or we may be required to stop selling or redesign one or more of our products or services, which may adversely affect our business, results of operations, financial condition and cash flows.
+Added: Similarly, from time to time, we may need to obtain the right to use certain patents or other intellectual property from third parties to be able to offer new products and services.
+Added: If we cannot obtain rights to use any required technology from a third party on reasonable terms, our ability to offer new products and services may be prohibited, restricted, made more costly or delayed.
+Added: Failure to extend or renegotiate our collective bargaining agreements or work stoppages could have a material impact on us.
+Added: As of December 31, 2020, approximately 44% of our employees were members of various bargaining units represented by labor unions.
+Added: Although we have agreements with these labor unions, we cannot predict the outcome of our future negotiations of these agreements.
+Added: We may be unable to reach new agreements, and union employees may engage in strikes, work slowdowns or other labor actions, which could materially disrupt our ability to provide services and increase our costs.
+Added: Even if we succeed in reaching new or replacement agreements, they may impose significant new costs on us that impair our competitive position.
+Added: Financial Risks
+Added: Lumen's and our significant debt levels expose us to a broad range of risks.
+Added: As of December 31, 2020, we had approximately $3.4 billion of outstanding indebtedness (excluding finance leases, unamortized premiums, net and unamortized debt issuance costs).
+Added: Our significant levels of debt and related debt service obligations could adversely affect us in several respects, including:
+Added: • requiring us to dedicate a substantial portion of our cash flow from operations to the payment of interest and principal on our debt, thereby reducing the funds available to us for other purposes, including acquisitions, capital expenditures, strategic initiatives and dividends;
• hindering our ability to capitalize on business opportunities and to plan for or react to changing market, industry, competitive or economic conditions;
−Removed: increasing our future borrowing costs;
−Removed: limiting or precluding us from entering into commercial, hedging or other financial arrangements with vendors, customers or other business partners;
• making us more vulnerable to economic or industry downturns, including interest rate increases;
−Removed: placing us at a competitive disadvantage compared to less leveraged competitors;
−Removed: increasing the risk that we will need to sell securities or assets, possibly on unfavorable terms, or take other unfavorable actions to meet payment obligations;
−Removed: increasing the risk that we may not meet the financial covenants contained in our debt agreements or timely make all required debt payments, either of which could result in the acceleration of some or all of our outstanding indebtedness.
−Removed: The effects of each of these factors could be intensified if we increase our borrowings.
−Removed: A portion of our indebtedness continues to bear interest at variable rates.
−Removed: If market interest rates increase, our variable-rate debt will have higher debt service requirements, which could adversely impact our cash flows and financial condition.
−Removed: If such rate increases are significant and sustained, these impacts could be material.
−Removed: Any failure to make required debt payments could, among other things, adversely affect our ability to conduct operations or raise capital.
−Removed: Subject to certain limitations, our debt agreements and the debt agreements of CenturyLink and its other subsidiaries allow us to incur additional debt, which could exacerbate the other risks described in this report.
−Removed: Subject to certain limitations and restrictions, the current terms of our debt instruments and the debt instruments of CenturyLink and its other subsidiaries permit us or them to incur additional indebtedness, including additional borrowings under CenturyLink's revolving credit facility.
−Removed: Incremental borrowings that impose additional financial risks could exacerbate the other risks described in this report.
−Removed: We expect to periodically require financing, and we cannot assure you that we will be able to obtain such financing on terms that are acceptable to us, or at all.
−Removed: We have a significant amount of indebtedness that we intend to refinance over the next several years, principally through the issuance of debt securities or term loans by CenturyLink or one or more of our principal subsidiaries.
−Removed: We may also need to obtain additional financing under a variety of other circumstances, including if:
−Removed: we undertake substantial capital projects or other initiatives that increase our cash requirements;
−Removed: we become subject to significant judgments or settlements, including in connection with one or more of the matters discussed in Note 16—Commitments, Contingencies and Other Items to our consolidated financial statements included in this report;
−Removed: we otherwise require additional cash to fund our cash requirements described elsewhere herein.
+Added: • placing us at a competitive disadvantage compared to less leveraged companies;
+Added: • making it more difficult or expensive for us to obtain any necessary future financings or refinancings, including the risk that this could force us to sell assets or take other less desirable actions to raise capital;
+Added: • increasing the risk that we may not meet the financial or non-financial covenants contained in our debt agreements or timely make all required debt payments, either of which could result in the acceleration of some or all of our outstanding indebtedness.
+Added: The effects of each of these factors could be intensified if we increase our borrowings or experience any downgrade in our credit ratings or those of our affiliates.
+Added: Subject to certain limitations and restrictions, the current terms of our debt instruments and our subsidiaries’ debt instruments permit us or them to incur additional indebtedness.
+Added: We expect to periodically require financing, and we cannot assure you we will be able to obtain such financing on terms that are acceptable to us, or at all.
+Added: We expect to periodically require financing in the future to refinance existing indebtedness and potentially for other purposes.
Our ability to arrange additional financing will depend on, among other factors, our financial position, performance, and credit ratings, as well as prevailing market conditions and other factors beyond our control.
−Removed: Prevailing market conditions could be adversely affected by (i) general market conditions, such as disruptions in domestic or overseas sovereign or corporate debt markets, geo-political instabilities, contractions or limited growth in the economy or other similar adverse economic developments in the U.S.
+Added: Prevailing market conditions could be adversely affected by (i) general market conditions, such as disruptions in domestic or overseas sovereign or corporate debt markets, geo-political instabilities, trade restrictions, pandemics, contractions or limited growth in the economy or other similar adverse economic developments in the U.S.
or abroad, and (ii) specific conditions in the communications industry.
Instability in the domestic or global financial markets has from time to time resulted in periodic volatility and disruptions in capital markets.
−Removed: Uncertainty regarding worldwide trade, the strength of various global and supranatural governing bodies and other geopolitical evens could significantly affect global financial markets in 2020.
−Removed: Volatility in the global markets could limit our access to the credit markets, leading to higher borrowing costs or, in some cases, the inability to obtain financing on terms that are as favorable as those from which we previously benefited, on terms that are as favorable as those from which we previously benefited, on terms that are acceptable to us, or at all.
−Removed: In addition, our ability to borrow funds in the future will depend in part on the satisfaction of the covenants in our debt instruments, which are discussed further below.
−Removed: For all the reasons mentioned above, we can give no assurance that additional financing for any of these purposes will be available on terms that are acceptable to us, or at all.
−Removed: If we are unable to make required debt payments or refinance our debt, we would likely have to consider other options, such as selling assets, issuing additional debt securities, cutting or delaying costs or otherwise reducing our cash requirements, or negotiating with our lenders to restructure our applicable debt.
+Added: For these and other reasons, we can give no assurance additional financing for any of these purposes will be available on terms acceptable to us, or at all.
+Added: If we are unable to make required debt payments or refinance our debt, we would likely have to consider other options, such as selling assets, cutting or delaying costs or otherwise reducing our cash requirements, or negotiating with our lenders to restructure our applicable debt.
Our current and future debt instruments may restrict, or market or business conditions may limit, our ability to complete some of these actions on favorable terms, or at all.
−Removed: For these and other reasons, we cannot assure you that we could implement these steps in a sufficient or timely manner, or at all.
−Removed: Moreover, any steps taken to strengthen our liquidity, such as cutting costs, could adversely impact our business or operations.
−Removed: Our affiliates have a highly complex debt structure, which could impact the rights of our investors.
−Removed: CenturyLink, Inc.
−Removed: and various of its subsidiaries owe substantial sums pursuant to various debt and financing arrangements, certain of which are guaranteed by other principal subsidiaries.
−Removed: Over half of the debt of CenturyLink, Inc.
−Removed: is guaranteed by nine of its principal domestic subsidiaries, six of which have pledged substantially all of their assets (including certain of their respective subsidiaries) to secure their guarantees.
−Removed: The remainder of the debt of CenturyLink, Inc.
−Removed: is neither secured by collateral nor guaranteed by any of its subsidiaries.
+Added: For these and other reasons, we cannot assure you we could implement these steps in a sufficient or timely manner, or at all.
+Added: We are part of a highly complex debt structure, which could impact the rights of our investors.
+Added: Lumen Technologies and various of its subsidiaries owe substantial sums pursuant to various debt and financing arrangements, certain of which are guaranteed by other principal subsidiaries.
+Added: Almost half of the debt of Lumen Technologies, Inc.
+Added: is guaranteed by certain of its principal domestic subsidiaries, some of which have pledged substantially all of their assets (including certain of their respective subsidiaries) to secure their guarantees.
+Added: The remainder of the debt of Lumen Technologies, Inc.
+Added: is neither guaranteed nor secured.
Nearly half of the debt of Level 3 Financing, Inc.
1 unchanged sentence
The remainder of the debt of Level 3 Financing, Inc.
−Removed: is not secured by any of its assets, but is guaranteed by its parent.
+Added: is not secured by any of its assets, but is guaranteed by certain of its affiliates.
Substantial amounts of debt are also owed by two direct or indirect subsidiaries of Qwest Communications International Inc., including us, and by Embarq Corporation and one of its subsidiaries.
−Removed: Most of the approximately 400 subsidiaries of CenturyLink, Inc.
−Removed: have neither borrowed money nor guaranteed any of the debt of CenturyLink, Inc.
+Added: Most of the approximately 400 subsidiaries of Lumen Technologies, Inc.
+Added: have neither borrowed money nor guaranteed any of the debt of Lumen Technologies, Inc.
or its affiliates.
−Removed: As such, investors in our consolidated debt instruments should be aware that (i) determining the priority of their rights as creditors is a complex matter which is substantially dependent upon the assets and earning power of the entities that issued or guaranteed (if any) the applicable debt and (ii) a substantial portion of such debt is structurally subordinated to all liabilities of our subsidiaries to the extent of the value of those subsidiaries that are obligors.
−Removed: Our various debt agreements include restrictions and covenants that could (i) limit our ability to conduct operations or borrow additional funds (ii) restrict out ability to engage in inter-company transactions and (iii) lead to the acceleration of our repayment obligations in certain instances .
−Removed: We have borrowed substantial amounts of money from financial institutions or investors.
−Removed: Under the associated debt and financing arrangements, we are subject to various covenants and restrictions.
−Removed: CenturyLink's debt arrangements contain several significant limitations restricting our ability to, among other things:
−Removed: borrow additional money or issue guarantees;
+Added: As such, investors in our consolidated debt instruments should be aware that (i) determining the priority of their rights as creditors is a
+Added: complex matter which is substantially dependent upon the assets and earning power of the entities that issued or guaranteed (if any) the applicable debt and (ii) a substantial portion of such debt is structurally subordinated to all liabilities of the non-guarantor subsidiaries of Lumen Technologies, Inc.
+Added: to the extent of the value of those subsidiaries that are obligors.
+Added: Our and our affiliates' various debt agreements include restrictions and covenants that could (i) limit our ability to conduct operations or borrow additional funds, (ii) restrict our ability to engage in inter-company transactions, and (iii) lead to the acceleration of our repayment obligations in certain instances .
+Added: Under our and our affiliates' consolidated debt and financing arrangements the issuer of the debt is subject to various covenants and restrictions, the most restrictive of which pertain to the debt of Lumen Technologies, Inc.
+Added: and Level 3 Financing, Inc.
+Added: Lumen's senior secured credit facilities and secured notes contain several significant limitations restricting Lumen’s ability to, among other things, borrow additional money or issue guarantees;
pay dividends or other distributions to shareholders;
−Removed: make loans, advances or other investments;
create liens on assets;
−Removed: enter into transactions with affiliates;
−Removed: engage in mergers or consolidations.
−Removed: These above-listed restrictive covenants could materially adversely affect our ability to operate or expand our business, to pursue strategic transactions, or to otherwise pursue our plans and strategies.
−Removed: Our term loan requires us to maintain certain financial ratios.
−Removed: Our ability to comply with these provisions may be affected by events beyond our control.
−Removed: Increasingly in recent years, certain debt investors have sought to financially benefit themselves by identifying and seeking to enforce defaults under borrowers' debt agreements.
−Removed: This development could increase the risk of claims made under our debt agreements.
−Removed: Our failure to comply with the above-described restrictive or financial covenants could result in an event of default, which, if not cured or waived, could accelerate our debt repayment obligations.
+Added: transact with our affiliates and engage in mergers or consolidations.
+Added: These restrictive covenants could materially adversely affect our and our affiliates' ability to operate or reconfigure our business, to pursue acquisitions, divestitures, or other strategic transactions, or to otherwise pursue our plans and strategies.
+Added: The debt and financing arrangements of Level 3 Financing, Inc.
+Added: contain substantially similar limitations that restrict their operations on a standalone basis as a separate restricted group.
+Added: Consequently, certain of these covenants may significantly restrict our ability to receive cash from Level 3, to distribute cash from Level 3 to other of our affiliated entities, or to enter into other transactions among our wholly-owned entities.
+Added: Lumen’s senior secured credit facilities, as well as our term loan debt, contain financial maintenance covenants.
+Added: The failure of us or our affiliates to comply with the above-described restrictive or financial covenants could result in an event of default, which, if not cured or waived, could accelerate our or their debt repayment obligations.
Certain of our debt instruments have cross-default or 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.
−Removed: As noted elsewhere herein, we cannot assure you that we could adequately address any such defaults, cross-defaults or acceleration of our debt payment obligations in a sufficient or timely manner, or at all.
−Removed: For additional information, see Risks Affecting Our Liquidity and Capital Resources—“We expect to periodically require financing, and we cannot assure you that we will be able to obtain such financing on terms that are acceptable to us, or at all" and Note 5—Long-Term Debt and Revolving Promissory Note .
−Removed: Any downgrade in the credit ratings of us could limit our ability to obtain future financing, increase our borrowing costs and adversely affect the market price of our existing debt securities or otherwise impair our business, financial condition and results of operations.
−Removed: Nationally recognized credit rating organizations have issued credit ratings relating to the long-term debt of CenturyLink, Inc.
−Removed: Most of these ratings are below “investment grade”, which results in higher borrowing costs than "investment grade" debt as well as reduced marketability of our debt securities.
−Removed: There can be no assurance that any rating assigned to any of these debt securities will remain in effect for any given period of time or that any such ratings will not be lowered, suspended or withdrawn entirely by a rating agency if, in that rating agency’s judgment, circumstances so warrant.
−Removed: A downgrade of any of these credit ratings could:
−Removed: adversely affect the market price of some or all of our outstanding debt securities;
−Removed: limit our access to the capital markets or otherwise adversely affect the availability of other new financing on favorable terms, if at all;
−Removed: trigger the application of restrictive covenants or adverse conditions in our current or future debt agreements;
−Removed: increase our cost of borrowing;
−Removed: impair our business, financial condition and results of operations.
−Removed: For more information on the credit ratings of our secured and unsecured debt, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Debt and Other Financing Arrangements” in Item 7 of this report.
−Removed: Our business requires us to incur substantial capital and operating expenses, which reduces our available free cash flow.
+Added: Our cash flows may not adequately fund all of our cash requirements.
Our business is capital intensive.
−Removed: We expect to continue to require significant cash to maintain, upgrade and expand.
−Removed: Our network infrastructure as a result of several factors, including:
−Removed: changes in customers' service requirements, including increased demands by customers to transmit larger amounts of data at faster speeds;
−Removed: our above-described need to (i) consolidate and simplify our various legacy systems, (ii) strengthen and transform our customer support systems and (iii) support our development and launch of new products and services;
−Removed: technological advances of our competitors;
−Removed: our regulatory commitments, including infrastructure construction requirements arising out of our participation in the FCC's CAF II program, which are discussed further herein.
−Removed: We may be unable to expand or adapt our network infrastructure to respond to these developments in a timely manner, at a commercially reasonable cost or on terms producing satisfactory returns on our investment.
−Removed: In addition to investing in expanded networks, new products or new technologies, we must from time to time invest capital to (i) replace some of our aging equipment that supports many of our traditional services that are experiencing revenue declines or (ii) convert older systems to simplify and modernize our network.
−Removed: While we believe that our currently planned level of capital expenditures will meet both our maintenance and core growth requirements, this may not be the case if demands on our network continue to accelerate or other circumstances underlying our expectations change.
−Removed: Increased spending could, among other things, adversely affect our operating margins, cash flows, results of operations and financial position.
−Removed: Similarly, we continue to anticipate incurring substantial operating expenses to support and maintain our operations.
−Removed: If we are unable to attain our objectives for managing or reducing these costs, our operating margins will be adversely impacted.
−Removed: For additional information, see Note 5—Long-Term Debt and Revolving Promissory Note to our consolidated financial statements included in Item 8 of Part II of this report.
−Removed: 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.
−Removed: A substantial amount of our employees participate in a qualified pension plan sponsored by CenturyLink that has assumed the obligations under Qwest Communications International Inc.'s ("QCII") predecessor pension plan.
−Removed: The funded status of CenturyLink's qualified pension plan is the difference between the value of the plan's assets and the benefit obligation.
−Removed: The accounting unfunded status of CenturyLink's qualified pension plan was $1.7 billion as of December 31, 2019 .
−Removed: Adverse changes in interest rates or market conditions, among other assumptions and factors, could cause a significant increase in CenturyLink's benefit obligation or a significant decrease in the value of the plan's assets.
−Removed: These adverse changes could require CenturyLink to contribute a material amount of cash to its pension plan or could accelerate the timing of required cash payments.
−Removed: The amounts contributed by us through CenturyLink are not segregated or restricted and may be used to provide benefits to employees of CenturyLink's other subsidiaries.
−Removed: Based on current laws and circumstances, CenturyLink does not expect it will be required to make a contribution to its plan in 2020 .
−Removed: The actual amount of required contributions to its plan in 2020 and beyond will depend on earnings on plan investments, prevailing interest and discount rates, demographic experience, changes in plan benefits and changes in funding laws and regulations.
−Removed: Any future material cash contributions could have a negative impact on CenturyLink's liquidity by reducing their cash flows, which in turn could affect our liquidity.
−Removed: We regularly transfer our cash for centralized management by CenturyLink, which exposes us to certain risks.
−Removed: Under our cash management arrangement with CenturyLink, we regularly transfer the majority of our cash balance for centralized management by CenturyLink, which we recognize on our consolidated balance sheets as advances to affiliates.
−Removed: Although these advances are periodically repaid to fund our cash requirements throughout the year, at any given point in time we may be owed a substantial sum under this arrangement.
−Removed: Accordingly, developments that adversely impact CenturyLink could adversely impact our ability to collect these advances.
−Removed: Terrorist attacks and other acts of violence or war may adversely affect the financial markets and our business.
−Removed: Future terrorist attacks or armed conflicts may directly affect our physical facilities or those of our customers.
−Removed: These events could cause consumer confidence and spending to decrease or result in increased volatility in the U.S.
−Removed: and world financial markets and economy.
−Removed: Any of these occurrences could materially adversely affect our business.
−Removed: If conditions or assumptions differ from the judgments, assumptions or estimates used in our critical accounting policies or forward-looking statements, our consolidated financial statements and related disclosures could be materially affected.
−Removed: The preparation of financial statements and related disclosures in conformity with U.S.
−Removed: generally accepted accounting principles ("GAAP") requires management to make judgments, assumptions and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes including the judgments, assumptions and estimates applied pursuant to our critical accounting policies, which are described in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates" in Item 7 of this report.
−Removed: If future events or assumptions differ significantly from the judgments, assumptions and estimates applied in connection with preparing our historical financial statements, our future financial statements could be materially impacted.
−Removed: While frequently presented with numeric specificity, the forward-looking statements that we disseminate from time to time is based on numerous variables and assumptions (including, but not limited to, those related to industry performance and competition and general business, economic, market and financial conditions and additional matters specific to our business, as applicable) that are inherently subjective and speculative and are largely beyond our control.
−Removed: As a result, actual results may differ materially from our guidance or other forward-looking statements.
−Removed: Similarly, for a variety of reasons, we may change our intentions, strategies or plans at any time, which could materially alter our actual results from those previously anticipated.
−Removed: For additional information, see “Special Note Regarding Forward-Looking Statements” in Part I of this report.
−Removed: Lapses in our disclosure controls and procedures or internal control over financial reporting could materially and adversely affect our operations, profitability or reputation.
−Removed: We maintain (i) disclosure controls and procedures designed to provide reasonable assurances regarding the accuracy and completeness of our SEC reports and (ii) internal control over financial reporting designed to provide reasonable assurance regarding the reliability and compliance with GAAP of our financial statements.
−Removed: We cannot assure you that these measures will be effective.
−Removed: As of December 31, 2018, we concluded that we had a material weakness relating to our accounting for revenue transactions.
−Removed: Although we successfully remediated this material weakness during 2019, we cannot assure you that our remedial measures will avoid other control deficiencies in the future.
−Removed: There can be no assurance that our disclosure controls and procedures or internal control over financial reporting will be effective in the future.
−Removed: As a result, it is possible that our current or future financial statements or SEC reports may not comply with generally accepted accounting principles or other applicable requirements, will contain a material misstatement or omission, or will not be available on a timely basis, any of which could cause investors to lose confidence in us and lead to, among other things, unanticipated legal, accounting and other expenses, delays in filing required financial disclosures or reports, enforcement actions by regulatory authorities, fines, penalties, the delisting of our securities, liabilities arising from shareholder litigation, restricted access to the capital markets and lower valuations of our securities.
−Removed: If our goodwill or other intangible assets become impaired, we may be required to record a significant charge to earnings and reduce our stockholders' equity.
−Removed: As of December 31, 2019 , approximately 48% of our total consolidated assets reflected on the consolidated balance sheet included in this report consisted of goodwill, customer relationships and other intangible assets.
−Removed: generally accepted accounting principles, most of these intangible assets must be tested for impairment on an annual basis or more frequently whenever events or circumstances indicate that their carrying value may not be recoverable.
−Removed: From time to time, including in the fourth quarter of 2018 and the first quarter of 2019, our affiliates or predecessors have recorded large non-cash charges to earnings in connection with required reductions of the value of their intangible assets.
+Added: We expect to continue to require significant cash to maintain, upgrade and expand our network infrastructure as a result of several factors, including (i) changes in customers’ service requirements, (ii) our continuing need to expand and improve our network to remain competitive;
+Added: and (iii) our regulatory commitments.
+Added: We will also continue to need substantial amounts of cash to meet our fixed commitments and other business objectives, including without limitation funding our operating costs, maintenance expenses, debt repayments, tax obligations, periodic pension contributions and other benefits payments.
+Added: We cannot assure you our future cash flows from operating activities will be sufficient to fund all of our cash requirements in the manner currently contemplated.
+Added: Increases in costs for pension and healthcare benefits for our active and retired employees may have a material impact on us.
+Added: As of December 31, 2020, we had a substantial number of active employees participating in a qualified pension plan sponsored by Lumen Technologies that has assumed the obligations under Qwest Communications International Inc.'s predecessor pension plan.
+Added: As of such date, Lumen's pension plans and our other post-retirement benefit plans were substantially underfunded from an accounting standpoint.
+Added: The amounts contributed by us through Lumen Technologies are not segregated or restricted and may be used to provide benefits to employees of Lumen's other subsidiaries.
+Added: Lumen's cost of maintaining our pension and healthcare plans, and the future funding requirements for these plans, are affected by several factors, including investment returns on funds held by its applicable plan trusts;
+Added: changes in prevailing interest rates and discount rates or other factors used to calculate the funding status of its plans;
+Added: increases in healthcare costs generally or claims submitted under its healthcare plans specifically;
+Added: the longevity and payment elections of its plan participants;
+Added: changes in plan benefits;
+Added: and the impact of the continuing implementation, modification or potential repeal of current federal healthcare and pension funding
+Added: laws and regulations promulgated thereunder.
+Added: If interest rates remain depressed for sustained periods, our and Lumen's plan funding costs could substantially increase.
+Added: Increased costs under these plans could reduce Lumen's profitability and increase its funding commitments to its pension plans, which in turn could affect our liquidity.
+Added: See Note 10—Employee Benefits for additional information regarding the funded status of our pension plans and our other post-retirement benefit plans.
+Added: Lapses in our disclosure controls and procedures or internal control over financial reporting could materially and adversely affect us.
+Added: We maintain (i) disclosure controls and procedures designed to provide reasonable assurances regarding the accuracy and completeness of our SEC reports and (ii) internal control over financial reporting designed to provide reasonable assurance regarding the reliability and compliance with U.S.
+Added: generally accepted accounting principles (“GAAP”) of our financial statements.
+Added: We cannot assure you these measures will be effective.
+Added: Our and Lumen’s management previously identified a material weakness related to our accounting for revenue transactions.
+Added: Although we successfully remediated this material weakness during 2019, the deficiency was costly to remediate.
+Added: If we are required to record intangible asset impairments, we will be required to record a significant charge to earnings and reduce our stockholders' equity.
+Added: As of December 31, 2020, approximately 52% of our total consolidated assets reflected on the consolidated balance sheet included in this annual report consisted of goodwill, customer relationships and other intangible assets.
If our intangible assets are determined to be impaired in the future, we may be required to record additional significant, non-cash charges to earnings during the period in which the impairment is determined to have occurred.
−Removed: Any such charges could, in turn, have a material adverse effect on our results of operation, financial condition or ability to comply with financial covenants in our debt instruments.
−Removed: Moreover, even if we conclude that our intangible assets are recorded at carrying values that are recoverable, we cannot assure you of the amount of cash we would receive in the event of a voluntary or involuntary sale of these assets.
−Removed: The Tax Cuts and Jobs Act will continue to have a substantial impact on us.
−Removed: The Tax Cuts and Jobs Act (the "Act") enacted in December 2017 significantly changed U.S.
−Removed: tax law by reducing the U.S.
−Removed: corporate income tax rate and making certain changes to U.S.
−Removed: taxation of income earned by foreign subsidiaries, capital expenditures, interest expense and various other items.
−Removed: The net impact of this Act as applied to date, has been favorable to us.
−Removed: However, the Act is quite complex and the impacts could potentially change as additional regulatory guidance is received from the Internal Revenue Service.
−Removed: As a result, our views on the Act’s ultimate impact on us could change.
−Removed: Additional changes in tax laws or tax audits could adversely affect us.
−Removed: Like all large multinational businesses, CenturyLink is subject to multiple sets of complex and varying federal, state and local tax laws and rules.
−Removed: Legislators and regulators at various levels of government may from time to time change existing tax laws or regulations or enact new laws or regulations.
−Removed: In many cases, the application of existing, newly enacted or amended tax laws may be uncertain and subject to differing interpretations that could negatively impact our operating results or financial condition.
−Removed: We are also subject to frequent and regular audits by a broad range of federal, state and local tax authorities.
−Removed: These audits could subject us to tax liabilities if adverse positions are taken by these tax authorities.
−Removed: We believe that we have adequately provided for tax contingencies.
−Removed: However, CenturyLink's tax audits and examinations may result in tax liabilities that differ materially from those that we have recognized in our consolidated financial statements.
−Removed: Because the ultimate outcomes of all of these matters are uncertain, we can give no assurance as to whether an adverse result from one or more of them will have a material effect on our financial results.
−Removed: We face risks from natural disasters and extreme weather, which can disrupt our operations and cause us to incur substantial additional capital and operating costs.
−Removed: A substantial number of our facilities are subject to the risks associated with severe tropical storms, hurricanes, tornadoes, earthquakes, floods or other similar casualty events.
−Removed: These events could cause substantial damages, including downed telephone lines, flooded facilities, power outages, fuel shortages, damaged or destroyed property and equipment, and work interruptions.
−Removed: Although we maintain property and casualty insurance on our property (excluding our above ground outside plant) and may, under certain circumstances, be able to seek recovery of some additional costs through increased rates, only a portion of our additional costs directly related to such natural disasters have historically been recoverable.
−Removed: We cannot predict whether we will continue to be able to obtain insurance for catastrophic hazard-related losses or, if obtainable and carried, whether this insurance will be adequate to cover such losses.
−Removed: In addition, we expect any insurance of this nature to be subject to substantial deductibles, retentions and coverage exclusions, and the premiums to be based on our loss experience.
−Removed: Moreover, many climate experts have predicted an increase in extreme weather events in the future, which would increase our exposure to casualty risks.
−Removed: For all these reasons, any future hazard-related costs and work interruptions could adversely affect our operations and our financial condition.
−Removed: Adverse developments impacting our non-consolidated affiliates could indirectly impact us.
−Removed: Our consolidated operations constitute only a portion of the consolidated operations of our corporate parent, CenturyLink.
−Removed: We engage in various intercompany transactions with affiliates of CenturyLink.
−Removed: that are not members of our consolidated group of companies.
−Removed: Events or developments that adversely impact these non-consolidated affiliates will not directly impact our consolidated financial position or performance as reported under GAAP, but could nonetheless indirectly adversely impact us to the extent such developments interfere with the ability of such non-consolidated affiliates to provide services or pay amounts to which we or our subsidiaries are entitled.
−Removed: For these reasons, you are urged to review the risk factor disclosures contained in Item 1A of CenturyLink’s Annual Report on Form 10-K for the year ended December 31, 2019 .
+Added: Any such charges could, in turn, have a material adverse effect on our results of operation or financial condition.
+Added: We regularly transfer our cash for centralized management by Lumen Technologies, which exposes us to certain risks.
+Added: We are controlled by Lumen Technologies, our ultimate parent company.
+Added: Under our cash management arrangement with Lumen Technologies, we regularly transfer the majority of our cash balance for centralized management by Lumen Technologies, which we recognize on our consolidated balance sheets as advances to affiliates.
+Added: Although these advances are periodically repaid to fund our cash requirements throughout the year, at any given point in time we may be owed a substantial sum under this arrangement.
+Added: Accordingly, developments that adversely impact Lumen Technologies could adversely impact our ability to collect these advances.
+Added: In addition, we intend to continue to distribute to our direct stockholder a substantial portion of our consolidated cash flow, thereby reducing our capital resources for debt repayments or other purposes.
+Added: These and other risks of investing in our debt securities are more fully described in our disclosure documents distributed at the time of issuance.
+Added: We face other financial risks.
+Added: We face other financial risks, including among others, the risk that downgrades in our credit ratings could adversely impact the liquidity or market prices of our outstanding debt securities.
+Added: General Risk Factors
+Added: Unfavorable general economic, societal or environmental conditions could negatively impact us.
+Added: Unfavorable general economic, societal or environmental conditions, including unstable economic and credit markets, or depressed economic activity caused by trade wars, epidemics, pandemics, wars, societal unrest, rioting, civic disturbances, natural disasters, terrorist attacks, environmental disasters, political instability or other factors, could negatively affect our business or operations.
+Added: While it is difficult to predict the ultimate impact of these general economic, societal or environmental conditions, they could adversely affect demand for some of our products and services and could cause customers to shift to lower-priced products and services or to delay or forego purchases of our products and services.
+Added: Any one or more of these circumstances could continue to depress our revenue.
+Added: our customers may encounter financial hardships or may not be able to obtain adequate access to credit, which could negatively impact their ability to make timely payments to us.
+Added: Shareholder or debtholder activism efforts could cause a material disruption to our business.
+Added: Activist shareholders at the Lumen level may from time to time engage in proxy solicitations, advance shareholder proposals or otherwise attempt to effect changes or acquire control over Lumen and its affiliates, including us.
+Added: These adverse impacts could be exaggerated if activist shareholders advocate actions that are not supported by other shareholders, including Lumen’s board and management.
+Added: The recent increase in the activism of debtholders could increase the risk of claims being made under Lumen’s and our debt agreements.
+Added: Responding to the above actions can be costly and time-consuming and may disrupt Lumen’s and our operations and divert the attention of management.
+Added: We face other general risks.
+Added: As a large national business with complex operations, we face various other general risks, including among others:
+Added: • the risk that statements, political donations, advocacy positions or similar actions attributable to us or our operations could harm our reputation, brand or business;
+Added: • the risk that one or more of our ongoing tax audits or examinations could result in tax liabilities that differ materially from those we have recognized in our consolidated financial statements.
UNRESOLVED STAFF COMMENTS
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