What changed in this filing

/stocks — the workspaceLOADING

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2023-02-23 compared with 2022-02-24 · 173 added, 145 removed, 888 unchanged (26% of the section changed)

62 unchanged sentences

Interest expense ( 112 ) ( 181 ) ( 279 )

Interest expense - affiliates, net ( 105 ) ( 74 ) ( 62 )

Other (expense) income, net ( 6 ) ( 56 ) 26

Interest expense - affiliate, net ( 60 ) ( 105 ) ( 74 )

Other income (expense), net 7 ( 6 ) ( 56 )

Total other expense, net ( 165 ) ( 292 ) ( 409 )

9 unchanged sentences

Accounts receivable, less allowance of $ 36 and $ 38

Advances to affiliates 576 —

Other 120 187

52 unchanged sentences

( 26 ) ( 176 ) ( 220 )

Other current assets and liabilities - affiliates, net

Changes in other noncurrent assets and liabilities, net

( 28 ) ( 13 ) 52

Changes in affiliate obligations, net

10 unchanged sentences

Net proceeds from issuance of long-term debt — — 115

Payment of note payable - affiliate ( 1,215 ) — —

Payments of long-term debt ( 1 ) ( 1,186 ) ( 2,796 )

2 unchanged sentences

Net cash used in financing activities ( 1,271 ) ( 2,293 ) ( 3,814 )

Net (decrease) increase in cash, cash equivalents and restricted cash ( 11 ) 11 ( 3 )

Net increase (decrease) in cash, cash equivalents and restricted cash 6 ( 11 ) 11

Cash, cash equivalents and restricted cash at beginning of period 4 15 4

2 unchanged sentences

Income taxes paid, net $ ( 673 ) ( 697 ) ( 556 )

Interest paid (net of capitalized interest of $ 19 , $ 29 and $ 27 )

Interest paid, including affiliate interest (net of capitalized interest of $ 29 , $ 19 and $ 29 )

$ ( 113 ) ( 188 ) ( 310 )

13 unchanged sentences

Balance at end of period 10,050 10,050 10,050

RETAINED EARNINGS (ACCUMULATED DEFICIT)

RETAINED EARNINGS

Balance at beginning of period 1,585 48 67

1 unchanged sentence

Cumulative effect of adoption of ASU 2016-13 , Measurement of Credit losses, net of $( 1 ) tax

Cumulative net effect of adoption of ASU 2016-02 , Leases

Dividends ( 570 ) ( 1,725 ) ( 1,600 )

Dividends declared and paid to Qwest Services Corporation — ( 570 ) ( 1,725 )

Other — — ( 4 )

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Unless the context requires otherwise, references in this report to "QC" refer to Qwest Corporation, references to "Qwest," "we," "us," and "our" refer to Qwest Corporation and its consolidated subsidiaries, references to "QSC" refer to our direct parent company, Qwest Services Corporation, and its consolidated subsidiaries, references to "QCII" refer to QSC's direct parent company and our indirect parent company, Qwest Communications International Inc., and its consolidated subsidiaries, and references to "Lumen" or "Lumen Technologies" refer to QCII's direct parent company and our ultimate parent company, Lumen Technologies, Inc., and its consolidated subsidiaries.

Unless the context requires otherwise, references in this report to "QC" refer to Qwest Corporation, references to "Qwest," "we," "us," and "our" refer to Qwest Corporation and its consolidated subsidiaries, references to "QSC" refer to our direct parent company, Qwest Services Corporation, and its consolidated subsidiaries, and references to "Lumen Technologies" or "Lumen" refer to our ultimate parent company, Lumen Technologies, Inc., and its consolidated subsidiaries including Level 3 Parent, LLC, referred to as "Level 3".

(1) Background and Summary of Significant Accounting Policies

We are an integrated communications company engaged primarily in providing a broad array of communications services to our mass markets and business customers.

We are an integrated facilities-based communications company focused on providing our business and mass markets customers with a broad array of communications products and services.

Our specific products and services are detailed in Note 3—Revenue Recognition of this report.

44 unchanged sentences

These advance payments include certain activation and certain installation charges.

If the activation and installation charges are not separate performance obligations, we recognize them as revenue over the actual or expected contract term using historical experience, which ranges from one to five years depending on the service.

If the activation and installation charges are not separate performance obligations, we recognize them as revenue over the actual or expected contract term using historical experience, which typically ranges from one to five years depending on the service.

In most cases, termination fees or other fees on existing contracts that are negotiated in conjunction with new contracts are deferred and recognized over the new contract term.

7 unchanged sentences

The revenue associated with each performance obligation is then recognized as earned.

We periodically sell optical capacity on our network.

These transactions are structured as indefeasible rights of use, commonly referred to as IRUs, which are the exclusive right to use a specified amount of capacity or fiber for a specified term, typically 10 to 20 years.

In most cases, we account for the cash consideration received on transfers of optical capacity as ASC 606 revenue, which is adjusted for the time value of money and is recognized ratably over the term of the agreement.

We periodically sell transmission capacity on our network.

In most cases, we account for the cash consideration received on transfers of transmission capacity as ASC 606 revenue, which is adjusted for the time value of money and is recognized ratably over the term of the agreement.

Cash consideration received on transfers of dark fiber is accounted for as non-ASC 606 lease revenue, which we also recognize ratably over the term of the agreement.

We do not recognize revenue on any contemporaneous exchanges of our optical capacity assets for other non-owned optical capacity assets.

We do not recognize revenue on any contemporaneous exchanges of our transmission capacity assets for other non-owned transmission capacity assets.

In connection with offering products and services provided to the end user by third-party vendors, we review the relationship between us, the vendor and the end user to assess whether revenue should be reported on a gross or net basis.

1 unchanged sentence

We have service level commitments pursuant to contracts with certain of our customers.

To the extent that such service levels are not achieved or are otherwise disputed due to performance or service issues or other service interruptions or conditions, we will estimate the amount of credits to be issued and record a corresponding reduction to revenue in the period that the service level commitment was not met.

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

28 unchanged sentences

It is our policy to record asset transfers based on carrying values.

Qwest Corporation is currently indebted to an affiliate of our ultimate parent company, Lumen Technologies, Inc., under a revolving promissory note.

transactions may reduce our capital resources for debt repayments and other purposes.

On September 30, 2022, Qwest Corporation repaid the outstanding principal and interest on the Note Payable - Affiliate to an affiliate of our ultimate parent company, Lumen Technologies, Inc., under a revolving promissory note.

For additional information, see "Note Payable - Affiliate" in Note 6—Long-Term Debt and Note Payable - Affiliate.

50 unchanged sentences

Expenditures for maintenance and repairs are expensed as incurred.

Interest is capitalized during the construction phase of network and other internal-use capital projects.

Employee-related costs for construction of network and other internal use assets are also capitalized during the construction phase.

During the construction phase of network and other internal-use capital projects, we capitalize related employee and interest costs.

Property, plant and equipment supplies used internally are carried at average cost, except for significant individual items for which cost is based on specific identification.

21 unchanged sentences

Capitalized software is included in other intangible assets, net, in our consolidated balance sheets.

We are required to assess goodwill for impairment at least annually, or more frequently, if an event occurs or circumstances change that would indicate an impairment may have occurred.

We are required to write-down the value of goodwill in periods in which the carrying amount of the reporting unit equity exceeds the estimated fair value of the equity of the reporting unit limited to the goodwill balance.

We are required to assess our goodwill for impairment annually, or more frequently if an event occurs or circumstances change that would indicate an impairment may have occurred.

We are required to write-down the value of goodwill of the reporting unit in periods in which the carrying amount of the reporting unit equity exceeds the estimated fair value of the equity of the reporting unit limited to the goodwill balance.

The impairment assessment is performed at the reporting unit level.

3 unchanged sentences

A substantial portion of our active and retired employees participate in the Lumen Combined Pension Plan.

On December 31, 2014, the QCII pension plan and a pension plan of an affiliate were merged into the CenturyLink Retirement Plan, The CenturyLink Retirement Plan is now named the Lumen Combined Pension Plan.

On December 31, 2014, the QCII pension plan and a pension plan of an affiliate were merged into the CenturyLink Retirement Plan, and the CenturyLink Retirement Plan is now named the Lumen Combined Pension Plan.

Prior to the pension plan merger, the above-noted employees participated in the QCII pension plan.

3 unchanged sentences

The allocation of the service costs to us is based upon our employees who are currently earning benefits under the plans.

For further information on qualified pension, post-retirement and other post-employment benefit plans, see Lumen's annual report on Form 10-K for the year ended December 31, 2021.

For further information on qualified pension, post-retirement and other post-employment benefit plans, see Note 11—Employee Benefits to the consolidated financial statements in Item 8 of Part II of Lumen's annual report on Form 10-K for the year ended December 31, 2022.

Recently Adopted Accounting Pronouncements

During 2021, we adopted Accounting Standards Update ("ASU") 2020-09 " Debt (Topic 470) Amendments to SEC Paragraphs Pursuant to SEC Release No.

During 2022, we adopted Accounting Standards Update ("ASU") 2021-10, " Government Assistance (Topic 832):

Disclosures by Business Entities about Government Assistance ” (“ASU 2021-10”) and ASU 2021-05, “ Leases (Topic 842):

Lessors—Certain Leases with Variable Lease Payments ” (“ASU 2021-05”).

During 2021, we adopted ASU 2020-09 " Debt (Topic 470) Amendments to SEC Paragraphs Pursuant to SEC Release No.

33-10762 ," ("ASU 2020-09"), ASU 2020-01 " Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815) " ("ASU 2020-01") and ASU 2019-12 " Simplifying the Accounting for Income Taxes (Topic 740).

("ASU 2019-12")" During 2020, we adopted ASU 2016-13, "Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13").

During 2019, we adopted ASU 2016-02, "Leases (ASC 842)" ("ASU 2016-02").

Each of these is described further below.

Government Assistance

On January 1, 2022, we adopted ASU 2021-10.

This ASU requires business entities to disclose information about certain types of government assistance they receive.

Please refer to Note 3—Revenue Recognition for more information.

On January 1, 2022, we adopted ASU 2021-05.

This ASU (i) amends the lease classification requirements for lessors to align them with practice under ASC Topic 840, (ii) provides criteria for lessors to classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease, and (iii) provides guidance with respect to net investments by lessors under operating leases and other related topics.

The adoption of ASU 2021-05 did not have a material impact to our consolidated financial statements.

On January 1, 2021, we adopted ASU 2020-09.

This ASU amends and supersedes various SEC guidance to reflect SEC Release No.

33-10762, which includes amendments to the financial disclosure requirements applicable to registered debt offerings that include credit enhancements, such as subsidiary guarantees.

The adoption of ASU 2020-09 did not have an impact to our consolidated financial statements.

The adoption of ASU 2020-09 did not have a material impact to our consolidated financial statements.

On January 1, 2021, we adopted ASU 2020-01.

This ASU, among other things, clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments - Equity Method and Joint Ventures , for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method.

As of December 31, 2021, we determined there was no application or discontinuation of the equity method during the reporting periods covered in this report.

As of December 31, 2022, we determined there was no application or discontinuation of the equity method during the reporting periods covered by this report.

The adoption of ASU 2020-01 did not have an impact to our consolidated financial statements.

5 unchanged sentences

Please refer to Note 5—Credit Losses on Financial Instruments for more information.

We adopted ASU 2016-02 on January 1, 2019, using the non-comparative transition option pursuant to ASU 2018-11, and recognized ASC 842's cumulative effect transition adjustment (discussed below) as of January 1, 2019.

In addition, we elected to apply the practical expedients permitted under the transition guidance within the new standard, which among other things (i) allowed us to carry forward the historical lease classification;

(ii) did not require us to reassess whether any expired or existing contracts are or contain leases under the new definition of a lease;

and (iii) did not require us to reassess whether previously capitalized initial direct costs for any existing leases would qualify for capitalization under ASC 842.

We also elected to apply the practical expedient related to land easements, allowing us to carry forward our accounting treatment for land easements on existing agreements.

We did not elect to apply the hindsight practical expedient regarding the likelihood of exercising a lessee purchase option or assessing any impairment of right-of-use assets for existing leases.

On March 5, 2019, the Financial Accounting Standards Board ("FASB") issued ASU 2019-01, "Leases (ASC 842):

Codification Improvements" ("ASU 2019-01"), effective for public companies for fiscal years beginning after December 15, 2019.

The new ASU aligns the guidance in ASC 842 for determining fair value of the underlying asset by lessors that are not manufacturers or dealers, with that of existing guidance.

As a result, the fair value of the underlying asset at lease commencement is its cost, reflecting any volume or trade discounts that may apply.

However, if there has been a significant lapse of time between when the underlying asset is acquired and when the lease commences, the definition of fair value (in ASC 820, " Fair Value Measurement ") should be applied.

We adopted ASU 2019-01 as of January 1, 2019.

In addition, we recorded a $ 22 million cumulative adjustment to accumulated deficit as of January 1, 2019, for the impact of the new accounting standards.

Recently Issued Accounting Pronouncements

In November 2021, the FASB issued ASU 2021-10, “Government Assistance (Topic 832):

Disclosures by Business Entities about Government Assistance” (“ASU 2021-10”).

These amendments are expected to increase transparency in financial reporting by requiring business entities to disclose information about certain types of government assistance they receive.

In December 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-06, “Reference Rate Reform (Topic 848) – Deferral of the Sunset Date of Topic 848" ("ASU 2022-06").

These amendments extend the period of time preparers can utilize the reference rate reform relief guidance in Topic 848, which defers the sunset date from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848.

ASU 2022-06 is effective upon issuance.

Based on our review of our key material contracts through December 31, 2022, we do not expect ASU 2022-06 to have a material impact to our consolidated financial statements.

In September 2022, the FASB issued ASU 2022-04, “ Liabilities-Supplier Finance Program (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations” (“ASU 2022-04”).

These amendments require that a company that uses a supplier finance program in connection with the purchase of goods or services disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, program activity during the period, changes from period to period and potential magnitude of program transactions.

ASU 2022-04 will become effective for us in the first quarter of fiscal 2023.

As of December 31, 2022, we are reviewing our supplier finance agreements to determine the impact to disclosures in our consolidated financial statements.

In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions” (“ASU 2022-03”).

These amendments clarify that a contractual restriction on the sales of an investment in equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.

ASU 2022-03 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted.

As of December 31, 2021, we do not expect the cumulative effect of initially applying ASU 2021-10 in the first quarter of fiscal 2022 will have a material impact to our consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”), which requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination.

As of December 31, 2022, we do not expect ASU 2022-03 to have an impact to our consolidated financial statements.

In March 2022, the FASB issued ASU 2022-02, “Financial Instruments-Credit Losses (Topic 326):

Troubled Debt Restructurings (“TDR”) and Vintage Disclosures” (“ASU 2022-02”).

These amendments eliminate the TDR recognition and measurement guidance, enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty.

ASU 2022-02 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted.

As of December 31, 2021, we do not expect the cumulative effect of initially applying ASU 2021-08 on January 1, 2023 will have a material impact to our consolidated financial statements.

In July 2021, the FASB issued ASU 2021-05, “Leases (Topic 842):

Lessors—Certain Leases with Variable Lease Payments” (“ASU 2021-05”), which amends the lease classification requirements for lessors to align them with practice under ASC Topic 840.

Under this ASU, lessors should classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease if certain criteria are met;

and when a lease is classified as operating, the lessor does not recognize a net investment in the lease, does not derecognize the underlying asset, and, therefore, does not recognize a selling profit or loss.

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

In March 2022, the FASB issued ASU 2022-01, “Derivatives and Hedging (Topic 815):

Fair Value Hedging-Portfolio Layer Method” ("ASU 2022-01").

The ASU expands the current single-layer method to allow multiple hedged layers of a single closed portfolio under the method.

ASU 2022-01 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted.

As of December 31, 2021, we do not expect the cumulative effect of initially applying ASU 2021-05 on January 1, 2022 will have a material impact to our consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, “Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under the current ASC.

Consequently, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument with no separate accounting for embedded conversion features.

As of December 31, 2022, we do not expect ASU 2022-01 to have an impact to our consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805):

ASU 2021-08 will become effective for us in the first quarter of fiscal 2023 and early adoption is permitted.

As of December 31, 2021, we do not expect the cumulative effect of initially applying ASU 2020-06 on January 1, 2022 will have a material impact to our consolidated financial statements.

As of December 31, 2022, we do not expect ASU 2021-08 to have an impact to our consolidated financial statements.

In January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848):

Scope" ("ASU 2021-01"), which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition.

ASU 2021-01 also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition.

These amendments may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022.

ASU 2021-01 provides optional expedients for a limited time to ease the potential burden in accounting for reference rate reform.

Based on our review of our key material contracts through December 31, 2022, ASU 2021-01 will not have a material impact to our consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, " Reference Rate Reform (Topic 848):

3 unchanged sentences

ASU 2020-04 provides optional guidance for a limited time to ease the potential burden in accounting for reference rate reform.

Based on our review of our key material contracts through December 31, 2021, we do not expect ASU 2020-04 will have a material impact to our consolidated financial statements.

Based on our review of our key material contracts through December 31, 2022, we do not expect ASU 2020-04 to have a material impact to our consolidated financial statements.

(2) Goodwill, Customer Relationships and Other Intangible Assets

6 unchanged sentences

Total other intangible assets, net $ 138 199

_______________________________________________________________________________

(1) Customer relationships with a gross carrying value of $ 5.7 billion became fully amortized during 2021 and were retired during the first quarter of 2022.

As of December 31, 2022, the gross carrying amount of goodwill, customer relationships and other intangible assets was $ 11.4 billion.

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

We assess our goodwill for impairment annually, or under certain circumstances, more frequently, such as when events or changes in circumstances indicate there may be impairment.

We are required to assess our goodwill for impairment annually, or under certain circumstances, more frequently, such as when events or changes in circumstances indicate there may be impairment.

We are required to write down the value of goodwill only when our assessment determines the carrying value of equity of our reporting unit exceeds its fair value.

6 unchanged sentences

We concluded that goodwill was not impaired as of October 31, 2022, 2021 and 2020.

Because Lumen's low stock price was a trigger for impairment testing, we estimated the fair value of our operations using only the market approach in the quarter ended March 31, 2019.

Applying this approach, we utilized company comparisons and analyst reports within the telecommunications industry.

The market multiples approach that we used in the quarter ended March 31, 2019 incorporated significant estimates and assumptions related to the forecasted results for the remainder of the year, including revenues, expenses, and the achievement of certain cost synergies.

In developing the market multiple, we also considered observed trends of our industry participants.

As of March 31, 2019, based on our assessments performed as described above, we concluded that our goodwill was not impaired.

Our fair value estimates for evaluating goodwill incorporated significant judgements and assumptions including forecast revenues and expenses, cost of capital, and control premiums.

Our fair value estimates for evaluating goodwill incorporated significant judgments and assumptions including forecast revenues and expenses, cost of capital, and control premiums.

In developing market multiples, we also considered observed trends of our industry participants and other qualitative factors that required significant judgment.

Alternative estimates, judgements, and interpretations of these factors could have resulted in different conclusions regarding the need for an impairment charge.

Alternative estimates, judgments, and interpretations of these factors could have resulted in different conclusions regarding the need for an impairment charge.

We annually review the estimated lives and methods used to amortize our other intangible assets.

6 unchanged sentences

(3) Revenue Recognition

Beginning in the first quarter of 2021, we categorize our products, services and revenue among the following categories:

We categorize our products, services and revenue among the following categories:

• Voice and Other , which include primarily local voice services, private line and other legacy services.

This category also includes Connect America Fund Phase II ("CAF II") support payments and other operating revenue.

We receive support payments from the federal CAF II program.

These support payments are government subsidies designed to compensate us for providing certain broadband and telecommunications services in high-cost areas or at discounts to low-income, educational, and healthcare customers.

During the twelve months ended December 31, 2021 we recorded approximately $ 145 million of revenue from the CAF II program that ended December 31, 2021.

• Fiber Infrastructure Services , which include high speed fiber-based and lower speed DSL-based broadband services, and optical network services;

This category also includes federal and state support payments.

These support payments are government subsidies designed to compensate us for providing certain broadband and communications services in high-cost areas or at discounts to low-income, educational, and healthcare customers.

This revenue included the FCC's Connect America Fund Phase II ("CAF II") support payments, which we received through December 31, 2021, when the program ended.

• Fiber Infrastructure Services , which include high speed, fiber-based and lower speed DSL-based broadband services to residential and small business customers, and optical network services;

• IP and Data Services , which consist primarily of Ethernet services;

47 unchanged sentences

Customer Receivables and Contract Balances

The following table provides balances of customer receivables, contract assets and contract liabilities as of December 31, 2021 and December 31, 2020:

The following table provides balances of customer receivables, contract assets and contract liabilities as of December 31, 2022 and 2021:

December 31, 2022 December 31, 2021

11 unchanged sentences

Performance Obligations

As of December 31, 2021, our estimated revenue expected to be recognized in the future related to performance obligations associated with existing customer contracts that are partially or wholly unsatisfied is approximately $ 188 million.

We expect to recognize approximately 97 % of this revenue through 2024, with the balance recognized thereafter.

As of December 31, 2022, we expect to recognize approximately $ 1.7 billion of revenue in the future related to performance obligations associated with existing customer contracts that are partially or wholly unsatisfied.

We expect to recognize approximately 91 % of this revenue through 2025.

These amounts exclude (i) the value of unsatisfied performance obligations for contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed (for example, uncommitted usage or non-recurring charges associated with professional or technical services to be completed), and (ii) contracts that are classified as leasing arrangements that are not subject to ASC 606 .

21 unchanged sentences

The amount of deferred costs expected to be amortized beyond the next 12 months is included in other non-current assets on our consolidated balance sheets.

Deferred acquisition and fulfillment costs are assessed for impairment on an annual basis.

Deferred acquisition and fulfillment costs are assessed for impairment on a quarterly basis.

Governmental Funding

Lumen participates in various U.S.

federal and state programs under which government support payments are received to offset costs associated with providing services in targeted locations such as unserved or underserved high-cost or rural areas, or for certain types of customers, including non-profit organizations, educational institutions and local governmental bodies.

Support payments may be conditioned on specified infrastructure buildouts by milestone deadlines or provision of services at specified locations and speed requirements.

Commitments may be made annually, on a multi-year basis ranging from one to ten years or be on-going subject to periodic change or termination.

Consistent with customary practice and as referenced in ASC 832 Government Assistance , Lumen applies a grant model of accounting by which it accounts for these transactions as non-ASC 606 revenue over the periods in which the costs for which the funding is intended to compensate are incurred.

This non-ASC 606 revenue is included in operating revenue in our consolidated statements of operations.

Corresponding receivables are recorded when services have been provided to the customers and costs incurred, but the cash has not been received.

These amounts are included in our accounts receivable, less allowance in our consolidated balance sheets.

Certain programs are subject to audits of compliance with program commitments and, subject to the outcomes of those assessments, Lumen may be required to reimburse the government entity for cash previously received, or, in some cases, pay a penalty.

Lumen evaluates each program and establishes a liability under the principles of ASC 450 if it is probable support payments will be recaptured or a penalty will be imposed.

For the year ended December 31, 2022, Lumen recorded non-customer revenue of $ 22 million under government assistance programs, of which 34 % was associated with state universal service fund support programs.

Between 2015 and 2021, Lumen received approximately $ 500 million annually through the FCC's Connect America Fund II ("CAF II"), a federal multi-year recurring subsidy program for more extensive broadband deployment in price-cap ILEC territories.

This program ended on December 31, 2021.

Our share of this CAF II funding was approximately $ 145 million annually.

In connection with the CAF II funding, we were required to meet certain specified infrastructure buildout requirements in 13 states by the end of 2021, which required substantial capital expenditures.

In the first quarter of 2022, we recognized $ 13 million of previously deferred revenue related to the conclusion of the CAF II program based upon our final buildout and filing submissions.

The government has the right to audit our compliance with the CAF II program and the ultimate outcome of any remaining examinations is unknown, but could result in a liability to us in excess of our reserve accruals established for these matters.

In early 2020, the FCC created the Rural Digital Opportunity Fund (the “RDOF”), which is a federal support program designed to replace the CAF II program.

On December 7, 2020, the FCC allocated in its RDOF Phase I auction $ 9.2 billion in support payments over 10 years to deploy high speed broadband to over 5.2 million unserved locations.

Lumen Technologies started receiving support payments under this program in the second quarter of 2022, but our share of these payments is not material.

We participate in multiple state sponsored programs for broadband deployment in unserved and underserved areas for which the states have state universal service funds sourced from fees levied on telecommunications providers and passed on to consumers.

During the year ending December 31, 2022, we participated in these types of programs primarily in the states of Minnesota, Nebraska, and New Mexico .

We primarily lease to or from third parties various office facilities, colocation facilities and equipment.

Leases with an initial term of 12 months or less are not recorded on the balance sheet;

Leases with an initial term of 12 months or less are not recorded on our consolidated balance sheets;

we recognize lease expense for these leases on a straight-line basis over the lease term.

13 unchanged sentences

Many of our lease agreements contain renewal options;

however, we do not recognize right-of-use assets or lease liabilities for renewal periods unless it is determined that we are reasonably certain of renewing the lease at inception or when a triggering event occurs.

however, we do not recognize right-of-use assets or lease liabilities for renewal periods unless we determine that we are reasonably certain of renewing the lease.

Certain leases also include options to purchase the leased property.

The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain to be exercised.

Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Our lease agreements do not generally contain any material residual value guarantees or material restrictive covenants.

Lease expense consisted of the following:

Years Ended December 31,

2022 2021 2020

(Dollars in millions)

2 unchanged sentences

Amortization of right-of-use assets 1 1 5

Interest on lease liability — —

Total finance lease cost 1 1 5

28 unchanged sentences

Operating cash flows for operating leases $ 40 36

Operating cash flows for financing leases — 5

Operating cash flows for finance leases — —

Financing cash flows for finance leases 1 1

1 unchanged sentence

Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 23 18

Right-of-use assets obtained in exchange for new finance lease liabilities 1 —

As of December 31, 2022, maturities of lease liabilities were as follows:

6 unchanged sentences

Long-term portion $ 58 $ 2

As of December 31, 2021, we had less than $1 million of operating or finance leases that had not yet commenced.

Operating Lease Income

1 unchanged sentence

Lease and sublease income are included in operating revenue in the consolidated statements of operations.

See "Revenue Recognition" in Note 1—Background and Summary of Significant Accounting Policies.

For the years ended December 31, 2022 , 2021 and 2020, our gross rental income was $ 346 million, $ 324 million and $ 312 million, respectively which represents 5 %, 5 % and 4 %, respectively, of our operating revenue for the years ended December 31, 2022, 2021 and 2020.

(5) Credit Losses on Financial Instruments

In accordance with ASC 326, "Financial Instruments - Credit Losses," we aggregate financial assets with similar risk characteristics to align our expected credit losses with the credit quality or deterioration over the life of such assets.

To assess our expected credit losses on financial instruments, we aggregate financial assets with similar risk characteristics to monitor their credit quality or deterioration over the life of such assets.

We periodically monitor certain risk characteristics within our aggregated financial assets and revise their composition accordingly, to the extent internal and external risk factors change.

Financial assets that do not share risk characteristics with other financial assets are evaluated separately.

We separately evaluate financial assets that do not share risk characteristics with other financial assets.

Our financial assets measured at amortized cost primarily consist of accounts receivable.

6 unchanged sentences

To determine our current allowance for credit losses, we combine the historical and expected credit loss rates and apply them to our period end accounts receivable.

If there is an unexpected deterioration of a customer's financial condition or an unexpected change in economic conditions (including changes caused by COVID-19 or other macroeconomic events), we assess the need to adjust the allowance for credit losses.

If there is an unexpected deterioration of a customer's financial condition or an unexpected change in economic conditions, including macroeconomic events, we assess the need to adjust the allowance for credit losses.

Any such resulting adjustments would affect earnings in the period that adjustments are made.

The assessment of the correlation between historical observed default rates, current conditions and forecasted economic conditions requires judgment.

Alternative interpretations of these factors could have resulted in different conclusions regarding the allowance for credit losses.

Alternative interpretations of these factors could have resulted in different conclusions regarding our allowance for credit losses.

The amount of credit loss is sensitive to changes in circumstances and forecasted economic conditions.

Our historical credit loss experience, current conditions and forecast of economic conditions may also not be representative of the customers' actual default experience in the future, and we may use methodologies that differ from those used by other companies.

In conjunction with an internal reorganization in the first quarter of 2021, as referenced in Note 3—Revenue Recognition, we pooled certain assets with similar credit risk characteristics based on the nature of our customers, their industry, policies used to grant credit terms and their historical and expected credit loss patterns.

Additionally, we reassessed our historical loss period for the portfolio reorganization.

The following tables presents the activity of our allowance for credit losses for our accounts receivable portfolio for the years ended December 31, 2021 and December 31, 2020:

The following table presents the activity of our allowance for credit losses by accounts receivable portfolio for the years ended December 31, 2022 and December 31, 2021:

Business Mass Markets Total

4 unchanged sentences

Recoveries collected 3 1 4

Ending Balance at December 31, 2021 $ 19 19 38

Business Consumer Total

(Dollars in millions)

Beginning balance at January 1, 2020 (1)

Beginning balance at December 31, 2021 $ 19 19 38

Provision for expected losses 13 47 60

3 unchanged sentences

______________________________________________________________________

(1) The beginning balance includes the cumulative effect of the adoption of the new credit loss standard.

(1) Due to an internal reorganization of our reporting categories on January 1, 2021, our accounts receivable portfolios were changed to align with changes to how we manage our customers.

Allowance for credit losses previously included in the Consumer and Business portfolio of $ 32 million and $ 4 million, respectively, were reclassified to the Mass Markets allowance for credit losses on January 1, 2021, as a result of this change.

For the year ended December 31, 2021, we decreased our allowance for credit losses for our business and mass markets accounts receivable portfolio primarily due to higher write-off activity in 2021, along with the easing of prior delays due to COVID-19 related restrictions from 2020 and lower receivable balances.

For the year ended December 31, 2020, we increased our allowance for credit losses for our business and consumer accounts receivable portfolios due to an increase during the period in historical and expected loss experience in certain classes of aged balances, which were predominantly attributable to the COVID-19 induced economic slowdown.

Decreased write-offs (net of recoveries) were driven by COVID-19 regulations and programs further contributed to the increase in our allowance for credit losses for the year ended December 31, 2020.

For the year ended December 31, 2022, we decreased our allowance for credit losses for our Mass Markets accounts receivable portfolio primarily due to higher write-off activity.

(6) Long-Term Debt and Note Payable - Affiliate

The following chart reflects (i) the consolidated long-term debt of Qwest Corporation and its subsidiaries, including finance leases, unamortized premiums, net, and unamortized debt issuance costs and (ii) note payable-affiliate:

The following chart reflects (i) the consolidated long-term debt of Qwest Corporation and its subsidiaries, including finance lease and other obligations, unamortized premiums, net, unamortized debt issuance costs and (ii) note payable-affiliate:

As of December 31,

6 unchanged sentences

LIBOR + 2.25 %

Finance leases Various Various 2 6

Finance lease and other Various Various 3 2

Unamortized premiums, net 5 6

5 unchanged sentences

_______________________________________________________________________________

(1) Qwest Corporation's Term Loan had interest rates of 2.110 % and 2.150 % as of December 31, 2021 and December 31, 2020.

(1) As of December 31, 2022.

(2) Qwest Corporation's Term Loan had interest rates of 6.640 % and 2.110 % as of December 31, 2022 and December 31, 2021.

On December 1, 2021, Qwest Corporation paid at maturity the $ 950 million principal amount of its 6.750 % Senior Notes.

1 unchanged sentence

On February 16, 2021, Qwest Corporation fully redeemed all $ 235 million aggregate principal amount of its outstanding 7.000 % Senior Notes due 2056.

On December 14, 2020, Qwest Corporation fully redeemed all $ 775 million aggregate principal amount of its outstanding 6.125 % Senior Notes due 2053 (the " 6.125 % Notes").

On October 26, 2020, Qwest Corporation redeemed all of the remaining $ 160 million aggregate principal amount of its outstanding 6.625 % Senior Notes due 2055 (the " 6.625 % Notes").

On September 16, 2020, Qwest Corporation partially redeemed $ 250 million aggregate principal amount of its outstanding 6.625 % Senior Notes.

On August 7, 2020, Qwest Corporation redeemed all of the remaining $ 300 million aggregate principal amount of its outstanding 6.875 % Senior Notes due 2054 (the " 6.875 % Notes").

On June 29, 2020, Qwest Corporation partially redeemed $ 200 million aggregate principal amount of its outstanding 6.875 % Senior Notes.

On January 15, 2020, Qwest Corporation fully redeemed (i) all $ 850 million aggregate principal amount of its outstanding 6.875 % S enior Notes due 2033, and (ii) all $ 250 million aggregate principal amount of its outstanding 7.125 % Senior Notes due 2043.

For the year ended December 31, 2021 and 2020, redemptions of Senior Notes resulted in a loss of $ 8 million and $ 63 million, respectively.

In 2015, we entered into a term loan in the amount of $ 100 million with CoBank ACB.

On October 23, 2020, we borrowed $ 215 million under a variable-rate term loan with CoBank ACB and used the resulting net proceeds to pay off its previous $ 100 million term loan with CoBank ACB.

Additionally, on October 26, 2020, we used the remaining net proceeds to partially facilitate the above-mentioned redemption of our remaining 6.625 % Notes.

The outstanding unpaid principal amount of this new term loan plus any accrued and unpaid interest is due on October 23, 2027.

This redemption resulted in a loss of $ 8 million.

In the fourth quarter of 2020, we borrowed $ 215 million under a variable-rate term loan with CoBank ACB.

The outstanding unpaid principal amount of this term loan plus any accrued and unpaid interest is due on October 23, 2027.

Interest is paid at least quarterly based upon either the LIBOR or the base rate (as defined in the credit agreement) plus an applicable margin between 1.50 % to 2.50 % per annum for LIBOR loans and 0.50 % to 1.50 % per annum for base rate loans depending on Qwest Corporation's then current senior unsecured long-term debt rating.

5 unchanged sentences

Note Payable - Affiliate

Qwest Corporation is currently indebted to an affiliate of our ultimate parent company, Lumen Technologies, Inc., under a revolving promissory note that provides Qwest Corporation with a funding commitment of up to $ 965 million in aggregate principal amount (the "Intercompany Note").

The outstanding principal balance owed by Qwest Corporation under the Intercompany Note and the accrued interest thereon is due and payable on demand, but if no demand is made, then on June 30, 2022.

On June 30, 2022, Qwest Corporation entered into an amended and restated revolving promissory note ("Note Payable - Affiliate") with an affiliate of our ultimate parent company, Lumen Technologies, Inc.

("Lender"), that replaces the previous revolving promissory agreement that was scheduled to mature on June 30, 2022 ("Prior Note Payable - Affiliate").

The Note Payable - Affiliate, as amended, provides Qwest Corporation with a funding commitment of up to $ 2.0 billion.

Any outstanding principal balance owed by Qwest Corporation under the Note Payable - Affiliate and the accrued interest thereon is due and payable on demand, but if no demand is made, then on the maturity date.

The Note Payable - Affiliate has an initial maturity date of June 30, 2027, but will automatically renew for an unlimited number of successive twelve -month periods unless the Lender provides notice of its intent not to renew at least 30 days prior to the initial maturity date or each subsequent maturity date.

In accordance with the terms of the amended Note Payable - Affiliate, interest is assessed every six months ending on June 30 th and December 31 st (an "Interest Period") and is payable within 30 days of the end of the respective Interest Period.

Interest is accrued on the outstanding principal balance during the respective Interest Period using a weighted average per annum interest rate on the consolidated outstanding debt of Lumen Technologies, Inc.

and its subsidiaries.

As of December 31, 2021 and 2020, the Intercompany Note is reflected on our consolidated balance sheets as a current liability under "Note payable - affiliate".

In accordance with the terms of the Intercompany Note, interest shall be assessed on June 30th and December 31st (an "Interest Period").

Any assessed interest for an Interest Period that remains unpaid on the last day of the subsequent Interest Period is to be capitalized on such date and is to begin accruing interest.

Through December 31, 2021, $ 223 million of such interest has been capitalized since entering into the Intercompany Note.

As of December 31, 2021 and 2020, $ 29 million and $ 28 million of accrued interest is reflected in other current liabilities on our consolidated balance sheet, respectively.

On September 30, 2022, Qwest Corporation repaid the outstanding principal and interest on the Note Payable - Affiliate of approximately $ 1.2 billion and $ 43 million, respectively.

As of December 31, 2022, there was no outstanding principal or accrued interest under the Note Payable - Affiliate.

Interest Expense

15 unchanged sentences

These indentures do not contain any financial covenants or restrictions on our ability to issue new securities thereunder.

Except for a limited number of series of our notes, we generally can redeem our senior notes, at our option, typically at a fixed price.

Except for our notes maturing in 2027 or before, we can redeem our senior notes, at our option, at par plus accrued and unpaid interest.

Under our term loan, we must maintain a debt to EBITDA (earnings before interest, taxes, depreciation and amortization) ratio of not more than 2.85 :1.0, as determined and calculated in the manner described in the term loan documentation.

46 unchanged sentences

(1) Fiber, conduit and other outside plant consists of fiber and metallic cable, conduit, poles and other supporting structures.

Fiber, conduit and other outside plant decreased at December 31, 2021 compared to December 31, 2020 due to the retirement of a portion of our copper-based infrastructure being replaced with our Quantum Fiber infrastructure.

(2) Central office and other network electronics consists of circuit and packet switches, routers, transmission electronics and electronics providing service to customers.

4 unchanged sentences

Pension and Post-Retirement Benefits

QCII's post-retirement benefit plans were merged into Lumen's post-retirement benefit plans on January 1, 2012 and on December 31, 2014, QCII's qualified pension plan and a pension plan of an affiliate were merged into the CenturyLink Retirement Plan, which is now named the Lumen Combined Pension Plan.

Based on current laws and circumstances, (i) Lumen Technologies was not required to make a cash contribution to the Lumen Combined Pension Plan in 2021 and (ii) Lumen Technologies does not expect it will be required to make a contribution in 2022.

The amount of required contributions to the Lumen Combined Pension Plan in 2022 and beyond will depend on earnings on plan investments, prevailing discount rates, demographic experience, changes in plan benefits and changes in funding laws and regulations.

Based on current laws and circumstances, (i) Lumen Technologies was not required to make a cash contribution to the LCPP in 2022 and (ii) Lumen Technologies does not expect it will be required to make a contribution in 2023.

The amount of required contributions to the LCPP in 2023 and beyond will depend on earnings on plan investments, prevailing discount rates, demographic experience, changes in plan benefits and changes in funding laws and regulations.

Lumen Technologies occasionally makes voluntary contributions in addition to required contributions.

Lumen Technologies did no t make a voluntary contribution in 2021 or 2020.

The unfunded status of Lumen's qualified pension plan for accounting purposes was $ 1.1 billion and $ 1.7 billion as of December 31, 2021 and 2020, which includes the merged QCII qualified pension plan.

Lumen Technologies did no t make a voluntary contribution to the LCPP in 2022 or 2021.

The unfunded status of Lumen's qualified and non-qualified pension plans for accounting purposes was approximately $ 615 million and $ 1.2 billion as of December 31, 2022 and 2021, which includes the merged QCII qualified pension plan.

The unfunded status of Lumen's post-retirement benefit plans for accounting purposes was $ 2.0 billion and $ 2.8 billion as of December 31, 2022 and 2021.

13 unchanged sentences

Lumen Technologies sponsors a noncontributory qualified defined benefit pension plan that covers certain of our eligible employees.

The Lumen Combined Pension Plan also provides survivor and disability benefits to certain employees.

The LCPP also provides survivor and disability benefits to certain employees.

In November 2009, and prior to the plan merger, the pension plan was amended to no longer provide pension benefit accruals for active non-represented employees after December 31, 2009.

27 unchanged sentences

We recognized $ 27 million, $ 29 million and $ 34 million in expense related to this plan for the years ended December 31, 2022, 2021 and 2020, respectively.

(10) Share-based Compensation

Share-based compensation expenses are included in cost of services and products, and selling, general, and administrative expenses in our consolidated statements of operations.

For the years ended December 31, 2021, 2020 and 2019, we recorded share-based compensation expense of approximately $ 15 million, $ 21 million and $ 26 million, respectively.

(10) Stock-based Compensation

Stock-based compensation expenses are included in cost of services and products, and selling, general, and administrative expenses in our consolidated statements of operations.

For the years ended December 31, 2022, 2021 and 2020, we recorded stock-based compensation expense of approximately $ 13 million, $ 15 million and $ 21 million, respectively.

We recognized an income tax benefit from our compensation expense of approximately $ 3 million, $ 4 million and $ 5 million during the years ended December 31, 2022, 2021 and 2020, respectively.

3 unchanged sentences

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between independent and knowledgeable parties who are willing and able to transact for an asset or liability at the measurement date.

We use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs when determining fair value and then we rank the estimated values based on the reliability of the inputs used following the fair value hierarchy set forth by the FASB.

We determined the fair values of our long-term debt, including the current portion, based on quoted market prices where available or, if not available, based on discounted future cash flows using current market interest rates.

We determined the fair values of our long-term debt, including the current portion, based on quoted market prices where available or, if not available, based on inputs other than quoted market prices in active markets that are either directly or indirectly observable such as discounted future cash flows using current market interest rates.

The three input levels in the hierarchy of fair value measurements are defined by the FASB generally as follows:

3 unchanged sentences

Level 3 Unobservable inputs in which little or no market data exists.

The following table presents the carrying amounts and estimated fair values of our long-term debt, excluding finance lease and other obligations, as well as the input level used to determine the fair values indicated below:

The following table presents the carrying amounts and estimated fair values of our financial liabilities as of December 31, 2022, as well as the input level used to determine the fair values indicated below:

As of December 31, 2022 As of December 31, 2021

39 unchanged sentences

Net deferred tax liabilities $ ( 1,280 ) ( 1,274 )

At December 31, 2021, we have established a valuation allowance of $ 8 million as it is not more likely than not that this amount of deferred tax assets will be realized.

As of December 31, 2021 and 2020, the $ 1.3 billion and $ 1.2 billion net deferred tax liability are reflected as a $ 1.3 billion and $ 1.2 billion long-term liability and $ 2 million and $ 2 million are reflected as a noncurrent deferred tax asset in other, net on our consolidated balance sheets.

At December 31, 2022, we had no established valuation allowance based on our assessment of whether it is not more likely than not that our deferred tax assets will be realized.

As of both December 31, 2022 and 2021, the $ 1.3 billion net deferred tax liabilities are included in long-term liabilities on our consolidated balance sheet.

With few exceptions, we are no longer subject to U.S.

2 unchanged sentences

The Internal Revenue Service and state and local taxing authorities reserve the right to audit any period where net operating loss carryforwards are available.

A reconciliation of the change in our gross unrecognized tax benefits (excluding both interest and any related federal benefit) from January 1 to December 31 for 2021 and 2020 are as follows:

A reconciliation of the change in our gross unrecognized tax benefits (excluding both interest and any related federal benefit) from January 1 st to December 31 st for 2022 and 2021 are as follows:

Years ended December 31,

1 unchanged sentence

Unrecognized tax benefits at beginning of period $ 360 388

Increase due to tax positions taken in a prior year — —

Decrease due to tax positions taken in a prior year ( 28 ) ( 28 )

26 unchanged sentences

Our affiliates charge us for these services based on FDC.

Qwest Corporation is currently indebted to an affiliate of our ultimate parent company, Lumen Technologies, under a revolving promissory note.

For additional information, see "Note Payable - Affiliate" in Note 6—Long-Term Debt And Note Payable - Affiliate.

(14) Commitments, Contingencies and Other Items

16 unchanged sentences

CenturyLink Sales Practices and Securities Litigation.

Lumen Technologies has settled the consumer and securities investor class actions, those settlements are final.

Lumen Technologies has settled the consumer and securities investor class actions.

Those settlements are final.

The derivative actions remain pending.

1 unchanged sentence

While Lumen Technologies does not agree with allegations raised in these matters, it has been willing to consider reasonable settlements where appropriate.

AT&T Proceedings

In August 2022, certain of our indirect affiliates filed a complaint in federal district court in Colorado captioned Central Telephone Company of Virginia, et al, v.

AT&T Corp., et al.

The suit seeks relief and damages for AT&T’s failure to pay amounts for services it receives.

AT&T disputes those claims and has asserted counterclaims alleging breach of contract and seeking declaratory relief.

It has requested the court to enjoin the plaintiffs (including us) from terminating services for its failure to pay, and it has requested the court transfer the case to federal court in the southern district of New York for further proceedings.

Also in August 2022, AT&T filed a separate lawsuit in federal court in the western district of Louisiana against Central Telephone Company of Virginia, us, and other of our indirect affiliates alleging, among other claims, breach of contract provisions pertaining to network architecture.

We and the other plaintiff entities dispute AT&T’s claims.

Other Proceedings, Disputes and Contingencies

1 unchanged sentence

We are currently defending several patent infringement lawsuits asserted against us by non-practicing entities, many of which are seeking substantial recoveries.

These cases have progressed to various stages and one or more may go to trial within the next 12 months if they are not otherwise resolved.

These cases have progressed to various stages and one or more may go to trial within the next twelve months if they are not otherwise resolved.

Where applicable, we are seeking full or partial indemnification from our vendors and suppliers.

7 unchanged sentences

The ultimate outcome of the above-described matters may differ materially from the outcomes anticipated, estimated, projected or implied by us in certain of our statements appearing above in this Note, and proceedings currently viewed as immaterial by us may ultimately materially impact us.

At December 31, 2021, our future rental commitments and Right-of-Way agreements were as follows:

Right-of-Way Agreements

At December 31, 2022, our future rental commitments and Right-of-Way ("ROW") agreements were as follows:

Future Rental Commitments and ROW Agreements

(Dollars in millions)

15 unchanged sentences

Total other current assets $ 120 187

Other Current Liabilities

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

As of December 31,

(Dollars in millions)

Current affiliate obligation $ 57 74

Current operating lease liability 21 33

Total other current liabilities $ 130 $ 182

Other Noncurrent Liabilities

3 unchanged sentences

Unrecognized tax benefits $ 427 435

Deferred revenue 111 108

Noncurrent operating lease liability 58 63

Other 169 172

Total other noncurrent liabilities $ 654 670

1 unchanged sentence

As of December 31, 2022, approximately 43 % of our employees were represented by the Communication Workers of America ("CWA") or the International Brotherhood of Electrical Workers ("IBEW").

There are no collective bargaining agreements that are scheduled to expire over the twelve month period ending December 31, 2022.

We believe that relations with our employees continue to be generally good.

Approximately 1 % of our represented employees are subject to collective bargaining agreements that are scheduled to expire within the 12 month period ending December 31, 2023.

We believe relations with our employees continue to be generally good.

(17) Stockholder's Equity

14 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk